<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 11, 1997.
REGISTRATION NO. 33-22127
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
GREATER NEW YORK BANCORP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 6036 13-3930370
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
ONE PENN PLAZA
NEW YORK, NEW YORK 10119
(212) 613-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT P. CARLSON
SENIOR VICE PRESIDENT, COUNSEL AND SECRETARY
GREATER NEW YORK BANCORP INC.
ONE PENN PLAZA
NEW YORK, NEW YORK 10119
(212) 613-4000
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
MARK J. MENTING
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective time of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [x]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per
share(1) (including rights to
purchase shares of Junior
Participating Preferred Stock, par
value $1.00 per share).............. 13,850,000 shs.(1) $14.00(3) $193,900,000(3) $ 58,757.58(5)
Series A ESOP Convertible Preferred
Stock, par value $1.00 per share
(including an indeterminate amount
of Common Stock, par value $1.00 per
share, issuable upon conversion
thereof, and the attached rights to
purchase shares of Junior
Participating Preferred Stock, par
value $1.00 per share).............. 1,536,391 shs.(2) $13.00(4) $ 19,973,083(4) $ 6,052.45(5)
</TABLE>
(footnotes on next page)
________________________________________________________________________________
<PAGE>
<PAGE>
(footnotes from cover page)
(1) The number of shares of common stock of Greater New York Bancorp Inc.
('Bancorp Common Stock') to be issued in the share exchange described herein
(the 'share exchange') cannot be precisely determined at the time this
Registration Statement becomes effective because shares of common stock of
The Greater New York Savings Bank ('Bank Common Stock') may be issued
thereafter and prior to the effective time of the share exchange pursuant to
the Bank's Employee Stock Ownership Plan, Long-Term Incentive Program, 1996
Non-Employee Directors Stock Option Plan and 1996 Equity Incentive Plan.
This Registration Statement covers a number of shares of Bancorp Common
Stock which is estimated to be at least as large as the number of shares of
Bank Common Stock which are expected to be outstanding at the effective time
of the share exchange. See the undertaking in Item 22(4) in Part II of this
Registration Statement.
(2) The number of shares of Series A ESOP Convertible Preferred Stock of Bancorp
('Bancorp Series A Preferred Stock') to be issued in the share exchange
cannot be precisely determined at the time this Registration Statement
becomes effective because shares of Series A ESOP Convertible Preferred
Stock of the Bank ('Bank Series A Preferred Stock') may be retired
thereafter and prior to the effective time of the share exchange pursuant to
the Bank's Employee Stock Ownership Plan. This Registration Statement covers
a number of shares of Bancorp Series A Preferred Stock which is estimated to
be at least as large as the number of shares of Bank Series A Preferred
Stock which are expected to be outstanding at the effective time of the
share exchange. See the undertaking in Item 22(4) in Part II of this
Registration Statement.
(3) Estimated pursuant to Rule 457(f)(1) of the Securities Act of 1933 (the
'Securities Act'), based upon the per share market value of the shares of
Bank Common Stock to be exchanged in the share exchange, which is deemed to
be the average of the reported high and low sales prices of a share of Bank
Common Stock on the National Association of Securities Dealers Automated
Quotation System on February 14, 1997.
(4) Estimated pursuant to Rule 457(f)(2) of the Securities Act, based upon the
book value of such shares of stock on February 19, 1997.
(5) Registration Fee previously paid.
<PAGE>
<PAGE>
GREATER NEW YORK BANCORP INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND HEADING LOCATION IN PROSPECTUS
------------------------------------------------------- ------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus.................. Facing Page of Registration Statement;
Outside Front Cover Page of Proxy
Statement/Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus...................................... Available Information; Incorporation of
Certain Documents by Reference; Table of
Contents
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information........................... Summary of Certain Information
4. Terms of the Transaction.......................... Summary of Certain Information; Plan of
Reorganization; Reasons for
Reorganization; Description of
Reorganization; Description of Bancorp
Capital Stock; Bancorp Rights Plan
5. Pro Forma Financial Information................... *
6. Material Contacts with the Company Being
Acquired........................................ *
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters... *
8. Interests of Named Experts and Counsel............ *
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities..................................... Not Required in Prospectus
10. Information with Respect to S-3 Registrants....... Available Information; Incorporation of
Certain Documents by Reference
11. Incorporation of Certain Information by
Reference....................................... Available Information; Incorporation of
Certain Documents by Reference
12. Information with Respect to S-2 or S-3
Registrants..................................... *
13. Incorporation of Certain Information by
Reference....................................... *
14. Information with Respect to Registrants Other Than
S-1 or S-3 Registrants.......................... *
15. Information with Respect to S-3 Companies......... *
16. Information with Respect to S-2 or S-3
Companies....................................... *
17. Information with Respect to Companies Other than
S-2 or S-3 Companies............................ *
18. Information if Proxies, Consents or Authorizations
are to be Solicited............................. Outside Front Cover Page of Proxy
Statement Prospectus; Summary of Certain
Information; Introduction; Election of
Directors; Beneficial Ownership of the
Bank's Voting Stock; Director
Compensation; Report on Executive
Compensation of the Compensation
Committee; Compensation Committee
Interlocks and Insider Participation;
Performance Graph; Executive
Compensation; Stock Options/SAR Grants
in 1996; Aggregated Stock Options/SAR
Exercises in 1996 and 1996 Year-end
Option/SAR Value; Certain Differences
in Stockholder Rights; Rights of
Dissenting Stockholders in the
Reorganization
19. Information if Proxies, Consents or Authorizations
are not to be Solicited or in an Exchange
Offer........................................... *
</TABLE>
- ------------
* Indicates that Item is not applicable or answer is in the negative.
<PAGE>
<PAGE>
[LOGO]
THE GREATER NEW YORK SAVINGS BANK
Administrative Headquarters
One Penn Plaza, New York, NY 10119
Telephone (212) 613-4000
March 14, 1997
Dear Stockholder:
It is with great pleasure that I extend to you a cordial invitation to attend
the 1997 Annual Meeting of Stockholders of The Greater New York Savings Bank.
The Annual Meeting will be held on Friday, April 25, 1997, at 10:00 a.m. at The
Grand Prospect Hall, 263 Prospect Avenue, Brooklyn, New York 11215.
Enclosed are a Notice of Annual Meeting, Proxy Statement/Prospectus, form of
proxy and a copy of the Bank's Annual Report for the year ended December 31,
1996. Please review these materials carefully. Among the specific issues to be
voted upon, a list of which appears in the Notice of Annual Meeting, is a
proposed structural reorganization pursuant to which the Bank will become a
wholly-owned subsidiary of a holding company which the Bank has incorporated
under the laws of Delaware. We believe that the holding company structure will
provide greater financial, investment and operating flexibility. The new holding
company is named Greater New York Bancorp Inc. The proposed reorganization will
require the vote of at least two-thirds of the aggregate outstanding shares of
the Bank's common stock and Series A ESOP Convertible Preferred Stock entitled
to vote at the Annual Meeting, voting as a single class.
Whether or not you plan to attend the Annual Meeting in person, your shares
should be represented and voted at the meeting. Accordingly, after reading the
enclosed Proxy Statement/Prospectus, kindly fill in, sign, date and promptly
return the proxy in the enclosed postage-paid envelope. If you later decide to
attend the Annual Meeting in person and wish to vote your shares personally, you
may revoke your proxy at any time before it is exercised.
If you have any questions, please call us at (212) 613-4073 (collect). I look
forward to seeing you on Friday, April 25, 1997.
Sincerely,
/s/ GERARD C. KEEGAN
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
<PAGE>
<PAGE>
[Logo]
The Greater New York Savings Bank
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on Friday, April 25, 1997
The 1997 Annual Meeting of Stockholders (including any adjournments thereof, the
'Annual Meeting') of The Greater New York Savings Bank (the 'Bank') will be held
on Friday, April 25, 1997 at 10:00 a.m. at The Grand Prospect Hall, 263 Prospect
Avenue, Brooklyn, New York 11215, for the following purposes:
1 To elect three nominees to the Bank's Board of Directors for three-year
terms expiring in 2000;
2 To approve a proposed Agreement and Plan of Reorganization pursuant to
which a newly-formed Delaware corporation, Greater New York Bancorp Inc.
('Bancorp'), will become a holding company for the Bank and (i) each
outstanding share of common stock, par value $1.00 per share, of the Bank
(the 'Bank Common Stock') will be converted into one share of common
stock, par value $1.00 per share, of Bancorp, (ii) each outstanding share
of Series A ESOP Convertible Preferred Stock, par value $1.00 per share,
of the Bank (the 'Bank Series A Preferred Stock') will be converted into
one share of Series A ESOP Convertible Preferred Stock, par value $1.00
per share, of Bancorp, and (iii) each outstanding share of 12%
Noncumulative Perpetual Preferred Stock, Series B, par value $1.00 per
share, of the Bank will be converted into one share of 12% Noncumulative
Perpetual Preferred Stock, Series B, par value $1.00 per share, of
Bancorp;
3 To ratify the appointment of the firm of KPMG Peat Marwick LLP as
independent auditors for the Bank for the fiscal year ending December 31,
1997; and
4 To transact such other business as may properly come before the Annual
Meeting.
Pursuant to the Bank's bylaws, the Bank's Board of Directors has fixed the close
of business on Thursday, March 6, 1997 as the record date for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting. Only
holders of record of Bank Common Stock and Bank Series A Preferred Stock at the
close of business on that date are entitled to notice of and to vote at the
Annual Meeting. Any holder of Bank Common Stock or Bank Series A Preferred Stock
entitled to vote on the proposed Agreement and Plan of Reorganization who does
not vote in favor thereof has the right to receive payment of the fair value of
such holder's shares of Bank Common Stock or Bank Series A Preferred Stock upon
compliance with the provisions of Section 6022 of the New York Banking Law.
Failure to comply strictly with the procedures set forth in that section will
cause the stockholder to lose dissenters' rights.
IT IS IMPORTANT THAT YOUR SHARES BE VOTED. PLEASE FILL IN, SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
IF YOU DECIDE TO ATTEND THE ANNUAL MEETING, YOU CAN REVOKE YOUR PROXY AND VOTE
PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING.
By Order of the Board of Directors,
/s/ ROBERT P. CARLSON
Robert P. Carlson
Secretary
New York, New York
March 14, 1997
<PAGE>
<PAGE>
PROXY STATEMENT
OF
THE GREATER NEW YORK SAVINGS BANK
------------------------
PROSPECTUS
OF
GREATER NEW YORK BANCORP INC.
------------------------
ANNUAL MEETING OF STOCKHOLDERS OF
THE GREATER NEW YORK SAVINGS BANK
TO BE HELD ON FRIDAY, APRIL 25, 1997
------------------------
This Proxy Statement/Prospectus (this 'Proxy Statement/Prospectus') is
being furnished to stockholders of The Greater New York Savings Bank, a New York
State-chartered capital stock savings bank (the 'Bank' or 'The Greater'), in
connection with the solicitation of proxies by the Bank's Board of Directors for
use at the annual meeting of stockholders of the Bank (including any
adjournments thereof, the 'Annual Meeting') to be held on April 25, 1997, at
10:00 a.m. at The Grand Prospect Hall, 263 Prospect Avenue, Brooklyn, New York
11215. At the Annual Meeting, holders of the common stock, par value $1.00 per
share, of the Bank, (the 'Bank Common Stock') and holders of the Series A ESOP
Convertible Preferred Stock, par value $1.00 per share, of the Bank (the 'Bank
Series A Preferred Stock') are being asked to consider and vote upon the
following three proposals: (i) a proposal to elect three nominees to the Bank's
Board of Directors for three-year terms expiring in 2000, (ii) a proposal to
approve an Agreement and Plan of Reorganization (the 'Plan of Reorganization')
pursuant to which Greater New York Bancorp Inc., a Delaware corporation
('Bancorp'), a newly-formed wholly-owned subsidiary of the Bank, will become the
holding company for the Bank (the 'Reorganization') and (iii) a proposal to
ratify the appointment of KPMG Peat Marwick LLP as independent auditors for the
Bank for the fiscal year ending December 31, 1997. A copy of the Plan of
Reorganization is attached hereto as Appendix A and is incorporated herein by
reference.
On the effective date of the Reorganization, a newly formed wholly-owned
New York State-chartered interim capital stock savings bank named The Greater
Interim Savings Bank will merge with and into the Bank with the Bank being the
surviving bank and (i) each outstanding share of Bank Common Stock will be
converted into one share of common stock, par value $1.00 per share, of Bancorp
(the 'Bancorp Common Stock'), (ii) each outstanding share Bank Series A
Preferred Stock will be converted into one share of Series A ESOP Convertible
Preferred Stock, par value $1.00 per share, of Bancorp (the 'Bancorp Series A
Preferred Stock') and (iii) each outstanding share of 12% Noncumulative
Perpetual Preferred Stock, Series B, par value $1.00 per share, of the Bank,
(the 'Bank Series B Preferred Stock') will be converted into one share of 12%
Noncumulative Perpetual Preferred Stock, Series B, par value $1.00 per share, of
Bancorp (the 'Bancorp Series B Preferred Stock').
This Proxy Statement/Prospectus also constitutes a prospectus of Bancorp
with respect to (i) the Bancorp Common Stock issuable to holders of the Bank
Common Stock and (ii) the Bancorp Series A Preferred Stock issuable to holders
of Bank Series A Preferred Stock, in each case upon consummation of the
Reorganization. Copies of this Proxy Statement/Prospectus are being furnished to
the holders of the Bank Series B Preferred Stock for informational purposes, but
proxies are not being solicited from such holders and such holders are not
entitled, and are not being asked, to vote at the Annual Meeting.
All references to Bank Common Stock in this Proxy Statement/Prospectus
include the Bank Rights (as defined herein) attached thereto and issued pursuant
to the Bank Rights Plan (as defined herein). All references to Bancorp Common
Stock in this Proxy Statement/Prospectus include the Bancorp Rights (as defined
herein) to be attached thereto and to be issued pursuant to the Bancorp Rights
Plan (as defined herein).
This Proxy Statement/Prospectus and the accompanying forms of proxies for
the Annual Meeting are first being mailed to the stockholders of the Bank on or
about March 14, 1997.
------------------------
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND, THE
SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY AND
ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.
The date of this Proxy Statement/Prospectus is March 11, 1997.
<PAGE>
<PAGE>
AVAILABLE INFORMATION
The Bank is, and prior to the effective date of the Reorganization (the
'Effective Date') will remain, subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and, in
accordance therewith, files and will continue to file, prior to the Effective
Date, reports, proxy statements and other information (including an Annual
Report on Form F-2 for the year ended December 31, 1996 (the '1996 Form F-2
Annual Report')) with the Federal Deposit Insurance Corporation (the 'FDIC').
Such information may be inspected at the Registration and Disclosure Section of
the FDIC at 550 Seventeenth Street, N.W., Washington D.C. 20429 (telephone
202-898-8913). Copies of such material can be obtained from the FDIC at the
above location at prescribed rates. In addition, Bancorp has filed the Bank's
1996 Form F-2 Annual Report with the Securities and Exchange Commission (the
'Commission') as an exhibit to Bancorp's Form S-4 Registration Statement
referred to in the immediately following paragraph. The Bank's 1996 Form F-2
Annual Report filed by Bancorp with the Commission as an exhibit to Bancorp's
Form S-4 Registration Statement (along with other exhibits to the Form S-4
Registration Statement) may be inspected and copies may be made at the
Commission's public reference room located at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the public reference facilities
in the Commission's regional offices located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60621. Copies of such material may be obtained at
prescribed rates by writing to the Securities and Exchange Commission, Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549. If available,
such information may also be accessed through the Commission's electronic data
gathering, analysis and retrieval system via electronic means, including the
Commission's web site on the Internet (http://www.sec.gov).
The 1996 Form F-2 Annual Report is available without charge upon request to
the Investor Relations Department of The Greater New York Savings Bank, One Penn
Plaza, New York, New York 10119. Telephone requests may be directed to the
Investor Relations Department at (212) 613-4073. In order to ensure timely
delivery, any request should be submitted not later than April 18, 1997.
This Proxy Statement/Prospectus is included as part of a registration
statement on Form S-4 (together with all amendments and exhibits thereto,
including documents and information incorporated by reference, the 'Registration
Statement') filed with the Commission by Bancorp, relating to the registration
under the Securities Act of 1933, as amended, of shares of Bancorp Common Stock
and Bancorp Series A Preferred Stock to be issued in the Reorganization. This
Proxy Statement/Prospectus does not contain all of the information set forth in
the Registration Statement, certain portions of which have been omitted pursuant
to the rules and regulations of the Commission, and to which reference is hereby
made for further information with respect to Bancorp and the Bank and the
Bancorp Common Stock and Bancorp Series A Preferred Stock to be issued in the
Reorganization. Statements contained herein concerning any documents are not
necessarily complete and, in each instance, reference is made to the copies of
such documents filed as exhibits to Bancorp's Registration Statement or the
Bank's 1996 Form F-2 Annual Report referred to above. Each such statement is
qualified in its entirety by such reference.
2
<PAGE>
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST TO THE INVESTOR RELATIONS DEPARTMENT OF THE GREATER NEW YORK
SAVINGS BANK, ONE PENN PLAZA, NEW YORK, NEW YORK 10119. TELEPHONE REQUESTS MAY
BE DIRECTED TO THE INVESTOR RELATIONS DEPARTMENT AT (212) 613-4073. IN ORDER TO
ENSURE TIMELY DELIVERY OF SUCH DOCUMENTS, ANY REQUEST FOR DOCUMENTS SHOULD BE
SUBMITTED NOT LATER THAN APRIL 18, 1997.
The Bank's 1996 Form F-2 Annual Report filed with the FDIC and with the
Commission as an Exhibit to the Registration Statement is incorporated herein by
reference.
In addition, all documents filed by the Bank or Bancorp pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act (which will also be filed as
exhibits to the Registration Statement) subsequent to the date hereof and prior
to the Annual Meeting shall be deemed to be incorporated herein by reference and
to be a part hereof from the date of such filing. Any statement contained herein
or in a document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein or in any other subsequently filed document
which also is, or is deemed to be, incorporated herein by reference modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part hereof, except as so modified or superseded.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION IN CONNECTION WITH THE REORGANIZATION OTHER THAN THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE BANK OR BANCORP. THIS PROXY STATEMENT/PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION TO ANY PERSON IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE DELIVERY OF THIS PROXY
STATEMENT/PROSPECTUS SHALL UNDER NO CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE BANK OR BANCORP SINCE THE DATE AS
OF WHICH INFORMATION IS FURNISHED OR THE DATE HEREOF.
3
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Certain Information............................................................................. 6
Introduction............................................................................................... 12
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS................................................................... 13
Information Regarding the Bank's Board of Directors........................................................ 15
Meetings and Committees............................................................................... 15
Audit Committee....................................................................................... 15
Supervising Agency Reports Committee.................................................................. 16
Real Estate Committee................................................................................. 16
Investment Committee.................................................................................. 16
Search Committee...................................................................................... 16
Benefits Committee.................................................................................... 16
Compensation Committee................................................................................ 16
CRA Committee......................................................................................... 16
Attendance at Board and Committee Meetings................................................................. 17
Beneficial Ownership of the Bank's Voting Stock............................................................ 17
By Directors and Executive Officers................................................................... 17
By Others............................................................................................. 19
Director Compensation...................................................................................... 20
Report on Executive Compensation of the Compensation Committee............................................. 22
Compensation Committee Interlocks and Insider Participation................................................ 24
Performance Graph.......................................................................................... 25
Executive Compensation..................................................................................... 26
Stock Option/SAR Grants in 1996............................................................................ 27
Aggregated Stock Option/SAR Exercises in 1996 and 1996 Year-end Option/SAR Values.......................... 28
Employment Agreements................................................................................. 28
'Change in Control' Severance Agreements.............................................................. 28
Employee Benefit Plans................................................................................ 29
Certain Transactions.................................................................................. 32
PROPOSAL NUMBER 2: APPROVAL OF THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION........................... 33
Plan of Reorganization................................................................................ 33
Reasons for Reorganization............................................................................ 33
Description of Reorganization......................................................................... 34
Treatment of the Bank Stock Certificates.............................................................. 34
Resale of Shares...................................................................................... 35
Market for Bancorp Common Stock....................................................................... 35
Effect of Reorganization on Capitalization of the Bank; Capitalization of Bancorp..................... 35
Rights of Dissenting Stockholders in the Reorganization............................................... 36
Conditions to the Reorganization...................................................................... 37
Effective Date........................................................................................ 37
Amendment of Plan of Reorganization................................................................... 37
Effect of Reorganization on Benefit Plans............................................................. 37
Accounting Treatment of Reorganization................................................................ 38
Tax Consequences of Reorganization.................................................................... 38
Payment of Dividends; Holding Company Structure....................................................... 39
Certain Differences in Stockholder Rights............................................................. 40
Limitation of Director and Officer Liability.......................................................... 40
</TABLE>
4
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Required Vote for Authorization of Certain Actions.................................................... 40
Business Combination Provisions....................................................................... 41
Appraisal Rights...................................................................................... 41
Other Constituencies.................................................................................. 41
Indemnification of Directors and Officers............................................................. 42
Description of Bancorp Capital Stock.................................................................. 42
Bancorp Rights Plan................................................................................... 54
Management of Bancorp................................................................................. 55
Regulation of Bancorp and Acquisitions of Its Stock................................................... 56
PROPOSAL NUMBER 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS..................................... 59
Other Matters.............................................................................................. 60
Stockholder Proposals...................................................................................... 60
Securities and Exchange Commission Position on Indemnification............................................. 60
Experts.................................................................................................... 60
Annual Report.............................................................................................. 60
Appendix A Agreement and Plan of Reorganization
Exhibit 1 Bancorp Amended and Restated Certificate of Incorporation
Exhibit 2 Bancorp Bylaws
Appendix B New York Banking Law Section 6022
</TABLE>
5
<PAGE>
<PAGE>
SUMMARY OF CERTAIN INFORMATION
The following is a summary of certain information contained in this Proxy
Statement/Prospectus. This summary is not complete and is qualified in its
entirety by the more detailed information appearing in this Proxy
Statement/Prospectus and the appendices hereto and appearing in the documents
incorporated in this Proxy Statement/Prospectus by reference. Stockholders
should carefully review this entire Proxy Statement/Prospectus and the Bank's
1996 Annual Report to Stockholders enclosed herewith.
GENERAL INFORMATION CONCERNING THE ANNUAL MEETING
<TABLE>
<S> <C>
Date, Time and Place of Meeting.......... April 25, 1997 at 10:00 A.M. at The Grand Prospect Hall, 263 Prospect
Avenue, Brooklyn, New York 11215.
Matters to Be Considered at the
Meeting................................ At the Annual Meeting stockholders will consider proposals relating to
the election of directors, the adoption of a holding company structure
and the ratification of the Bank's independent auditors.
Record Date.............................. Only holders of record of shares of Bank Common Stock and Bank Series A
Preferred Stock, at the close of business on March 6, 1997 are entitled
to vote at the Annual Meeting.
</TABLE>
THE REORGANIZATION
<TABLE>
<S> <C>
Introduction............................. Greater New York Bancorp Inc. ('Bancorp') was recently incorporated by
The Greater New York Savings Bank (the 'Bank' or 'The Greater') under
Delaware law. Pursuant to the Agreement and Plan of Reorganization (the
'Plan of Reorganization') attached hereto as Appendix A and subject to
the conditions set forth therein, Bancorp will become the holding
company for the Bank. Upon completion of the transactions contemplated
by the Plan of Reorganization (the 'Reorganization'), the business
activities of Bancorp will initially consist solely of owning all of
the outstanding capital stock of the Bank. It is possible that
additional businesses may be acquired or commenced by Bancorp after the
Reorganization, although no new business activities or specific
acquisitions are currently planned. After the Reorganization, the Bank
will continue its current business and operations as a New York
State-chartered capital stock savings bank under its existing name. The
Bank's existing restated organization certificate (the 'Bank Restated
Organization Certificate') and bylaws (the 'Bank Bylaws') will be not
affected by the Reorganization. See 'Proposal 2 -- Approval of the
Proposed Agreement and Plan of Reorganization.' The principal offices
of Bancorp and the administrative headquarters of the Bank are located
at One Penn Plaza, New York, New York 10119, and their telephone number
is (212)613-4000.
The Bank................................. The Bank is a New York State-chartered capital stock savings bank which
was originally organized as a New York State-chartered mutual savings
bank in 1897 in the Park Slope section of Brooklyn, New York. At
December 31, 1996, the Bank had total assets of $2.54 billion, deposits
of $1.67 billion, borrowed funds of $640.4 million and stockholders'
equity of $209.6 million.
As of December 31, 1996, the Bank conducted its retail banking
activities through nine full-service branch offices located in
Brooklyn, New York, three full-service branch offices in Nassau County,
New York and one full-service branch office in each of Queens and
Suffolk Counties, New York. The Bank has its
</TABLE>
6
<PAGE>
<PAGE>
<TABLE>
<S> <C>
administrative headquarters in Manhattan and its lending office in
Mineola, New York. The Bank's deposits are insured by the Bank
Insurance Fund of the Federal Deposit Insurance Corporation ('FDIC').
The Reorganization....................... Bancorp is currently a direct wholly-owned shell subsidiary of the
Bank. To effect the Reorganization, The Greater Interim Savings Bank
will be formed as a New York State-chartered interim capital stock
savings bank ('Interim Bank'), and will be a direct wholly-owned shell
subsidiary of Bancorp. Pursuant to the Plan of Reorganization, Interim
Bank will be merged with and into the Bank with the Bank as the
surviving bank. As a result of the Reorganization, (i) each outstanding
share of common stock, par value $1.00 per share, of the Bank (the
'Bank Common Stock') will be converted into one share of common stock,
par value $1.00 per share, of Bancorp (the 'Bancorp Common Stock'),
(ii) each outstanding share of Series A ESOP Convertible Preferred
Stock, par value $1.00 per share, of the Bank (the 'Bank Series A
Preferred Stock') will be converted into one share of Series A ESOP
Convertible Preferred Stock, par value $1.00 per share, of Bancorp (the
'Bancorp Series A Preferred Stock') and (iii) each outstanding share of
12% Noncumulative Perpetual Preferred Stock, Series B, par value $1.00
per share, of the Bank (the 'Bank Series B Preferred Stock') will be
converted into one share of 12% Noncumulative Perpetual Preferred
Stock, Series B, par value $1.00 per share, of Bancorp (the 'Bancorp
Series B Preferred Stock'). The Bank Common Stock, Bank Series A
Preferred Stock and Bank Series B Preferred Stock are referred to
herein, collectively, as 'Bank Capital Stock'. The Bancorp Common
Stock, Bancorp Series A Preferred Stock and Bancorp Series B Preferred
Stock are referred to herein, collectively, as 'Bancorp Capital Stock'.
See 'Proposal 2: Approval of the Proposed Agreement and Plan of
Reorganization -- Plan of Reorganization' and 'Proposal 2: Approval of
the Proposed Agreement and Plan of Reorganization -- Description of
Bancorp Capital Stock'.
Recommendation and Reasons............... The Bank's Board of Directors has unanimously approved the Plan of
Reorganization and recommends that holders of Bank Common Stock and
Bank Series A Preferred Stock vote to approve the Plan of
Reorganization. The Bank's Board of Directors believes a holding
company structure offers significant advantages in comparison to the
Bank's present corporate structure. These advantages include greater
financial, investment and operating flexibility. See 'Proposal 2:
Approval of the Proposed Agreement and Plan of Reorganization --
Reasons for Reorganization.'
Certain Considerations................... There can be no assurances that the Bank's efforts in forming Bancorp
and obtaining regulatory approvals will be successful. There also can
be no assurances that Bancorp will experience any beneficial results
from using the holding company structure.
Vote Required for Approval of Plan of
Reorganization......................... The affirmative vote of the holders of at least 10,102,762 shares of
Bank Common Stock and Bank Series A Preferred Stock, voting together as
a single class, constituting a two-thirds majority of the total of such
shares outstanding on the record date, is required to approve the
proposed Plan of Reorganization. The Bank's directors and executive
officers (and their affiliates) (22 persons) beneficially own and have
the power to vote 271,109 shares of Bank Common Stock, beneficially
own, but do not have the right to vote approximately 83,868 shares of
Bank Common Stock held in
</TABLE>
7
<PAGE>
<PAGE>
<TABLE>
<S> <C>
the Bank Incentive Savings Plan and have a beneficial interest in, and
the right to direct the voting of, approximately 143,044 shares of Bank
Common Stock and Bank Series A Preferred Stock held in Employee Stock
Ownership Plan accounts. Such shares of Bank Common Stock and Bank
Series A Preferred Stock, which the Bank's directors and executive
officers (and their affiliates) have the right to vote, represent
approximately 2.73% of the outstanding Bank Common Stock and Bank
Series A Preferred Stock which may be voted at the Annual Meeting. Such
persons have indicated their intention to vote, or direct the voting
of, all of such shares, in favor of this proposal. The Trustee of the
Bank's Employee Stock Ownership Plan is obligated to vote unallocated
shares and shares for which no direction has been received in the same
proportion as shares for which such voting directions have been
received from participants.
Conditions and Regulatory Approvals...... The consummation of the Reorganization is conditioned upon the
fulfillment of certain conditions set forth in the Plan of
Reorganization, including approval by the Office of Thrift Supervision
('OTS'), the Federal Deposit Insurance Corporation and the New York
State Superintendent of Banks (the 'Superintendent') as well approval
of the holders of Bank Common Stock and Bank Series A Preferred Stock
voting together as a single class. See 'Proposal 2: Approval of the
Proposed Agreement and Plan of Reorganization -- Conditions to the
Reorganization.'
Exchange of Stock Certificates........... After the Reorganization is consummated, Bank stock certificates (other
than those representing dissenting shares) will automatically represent
the same number of shares of Bancorp Common Stock, Bancorp Series A
Preferred Stock or Bancorp Series B Preferred Stock as the number of
shares of Bank Common Stock, Bank Series A Preferred Stock and Bank
Series B Preferred Stock, respectively, previously represented by such
stock certificates, and the holders of such certificates (other than
those representing dissenting shares) will have all of the rights of
holders of Bancorp Common Stock, Bancorp Series A Preferred Stock and
Bancorp Series B Preferred Stock, as the case may be. Holders of record
of Bank Capital Stock may exchange Bank stock certificates for Bancorp
stock certificates. See 'Proposal Number 2: Approval of the Proposed
Agreement and Plan of Reorganization -- Treatment of the Bank Stock
Certificates.'
Market for Bancorp Capital Stock......... It is anticipated that the Bancorp Common Stock to be received by
stockholders of the Bank in the Reorganization will be quoted on the
Nasdaq National Market, effective as of the consummation of the
Reorganization, thus enabling the holders of Bancorp Common Stock to
trade without interruption. See 'Proposal Number 2: Approval of the
Proposed Agreement and Plan of Reorganization -- Market for Bancorp
Common Stock.' As is currently the case with respect to the Bank Series
A Preferred Stock and the Bank Series B Preferred Stock, Bancorp does
not intend to list the Bancorp Series A Preferred Stock or the Bancorp
Series B Preferred Stock on a national securities exchange or to
qualify such stock for trading on the automated quotation system of the
National Association of Securities Dealers.
Management of Bancorp.................... Upon consummation of the Reorganization, the directors of Bancorp will
be the same persons who serve as directors of the Bank and the
executive officers of Bancorp will be the executive officers of the
Bank indicated herein. See 'Proposal
</TABLE>
8
<PAGE>
<PAGE>
<TABLE>
<S> <C>
Number 2: Approval of the Proposed Agreement and Plan of
Reorganization -- Management of Bancorp.'
Federal Income Tax Consequences.......... The Reorganization is expected to qualify as a tax-free exchange for
the purpose of United States Federal income taxation and no gain or
loss is expected to be recognized by holders of Bank Capital Stock
whose shares are converted into Bancorp Capital Stock. Cash received in
redemption of the Bank Rights will likely be treated as a dividend
taxable as ordinary income. See 'Proposal 2: Approval of the Proposed
Agreement and Plan of Reorganization -- Tax Consequences of
Reorganization.'
Accounting............................... The assets, liabilities and stockholders' equity of the Bank will be
carried forward on the consolidated financial statements of Bancorp at
the respective amounts carried on the Bank's books as of the
consummation of the Reorganization.
Rights of Dissenting Stockholders........ Any holder of Bank Common Stock or Bank Series A Preferred Stock
entitled to vote on the Plan of Reorganization who does not vote in
favor thereof has the right to receive payment of the fair value of
such holder's shares of Bank Common Stock or Bank Series A Preferred
Stock upon compliance with the provisions of Section 6022 of the New
York Banking Law (the 'NYBL'). Failure to comply strictly with the
procedures set forth in that section will cause the stockholder to lose
dissenters' rights. See 'Proposal 2: Approval of the Proposed Agreement
and Plan of Reorganization -- Rights of Dissenting Stockholders in the
Reorganization.'
Regulation and Supervision............... After the Reorganization, Bancorp, as a savings and loan holding
company, will be subject to federal law pertaining to such entities and
will be regulated by the OTS. See 'Proposal Number 2: Approval of the
Proposed Agreement and Plan of Reorganization -- Regulation of
Bancorp.' Bancorp will also be subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the
'Exchange Act'), and in accordance therewith will be required to file
reports, proxy statements and other information with the Securities and
Exchange Commission (the 'Commission'). See 'Available Information'.
The Bank, as a New York State-chartered capital stock savings bank,
will continue to be regulated by the New York State Banking Department
and the FDIC. Under certain circumstances as described under 'Proposal
Number 2: Approval of the Proposed Agreement and Plan of
Reorganization -- Regulation of Bancorp and Acquisitions of Its Stock,'
Bancorp may become a bank holding company under the Bank Holding
Company Act of 1956.
Certain Differences in Stockholder
Rights................................. The Bank is a New York State-chartered capital stock savings bank
subject to the provisions of the NYBL. Bancorp is a Delaware
corporation subject to the provisions of the Delaware General
Corporation Law ('DGCL'). Holders of Bank Capital Stock, whose rights
are governed by the Bank Restated Organization Certificate and the Bank
Bylaws and the NYBL, who have not properly exercised dissenters' rights
will, upon consummation of the Reorganization, become holders of
Bancorp Capital Stock and, on the Effective Date, their rights as
stockholders will be determined by Bancorp's amended and restated
certificate of incorporation (the 'Bancorp Amended and Restated
Certificate of Incorporation'), Bancorp's bylaws (the 'Bancorp Bylaws')
and the DGCL. The privileges and rights of the holders of Bancorp
Common Stock under the Bancorp Amended and Restated Certificate of
Incorporation
</TABLE>
9
<PAGE>
<PAGE>
<TABLE>
<S> <C>
and Bancorp Bylaws are substantially the same as the privileges and
rights of the holders of the Bank Common Stock under the Bank Restated
Organization Certificate and Bank Bylaws. The terms, designations,
preferences, limitations, privileges and rights of the holders of
Bancorp Series A Preferred Stock and the Bancorp Series B Preferred
Stock under the Bancorp Amended and Restated Certificate of
Incorporation and Bancorp Bylaws are substantially identical to those
of the Bank Series A Preferred Stock and Bank Series B Preferred Stock
under the Bank Restated Organization Certificate and Bank ByLaws.
Nonetheless, certain differences will exist, for the most part between
the Bancorp Common Stock and the Bank Common Stock. For a description
of these differences, see 'Proposal Number 2: Approval of the Proposed
Agreement and Plan of Reorganization -- Certain Differences in
Stockholder Rights.'
Rights Plans............................. The Bank's stockholder rights plan (the 'Bank Rights Plan') has been
amended to exclude the Reorganization and the stockholder rights (the
'Bank Rights') issued pursuant to the Bank Rights Plan will be redeemed
in compliance with the terms of the Bank Rights Plan prior to the
consummation of the Reorganization. The consideration for the
redemption of the Bank Rights is expected to be $.01 in cash per Bank
Right outstanding as of the Effective Date. As a result of such
payment, Bancorp may reduce its dividend on shares of Bancorp Common
Stock payable on or about the time of the consummation of the
Reorganization by $.01 per share. Prior to the consummation of the
Reorganization, Bancorp will adopt a stockholder rights plan (the
'Bancorp Rights Plan') substantially similar to the Bank Rights Plan
(except that it is with respect to Bancorp Capital Stock) and each
share of Bancorp Common Stock issued in the Reorganization will have
one right (each a 'Bancorp Right') attached to it, as is the case with
Bank Common Stock.
Effect of the Reorganization on Benefit
Plans.................................. Upon consummation of the Reorganization, Bancorp is expected to assume
the rights and obligations of the Bank under the Bank's various
director and employee benefit plans. See 'Proposal Number 2: Approval
of the Proposed Agreement and Plan of Reorganization Plans -- Effect of
Reorganization on Benefit Plans.
</TABLE>
CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
For the fiscal years ended December 31, 1996, 1995, 1994, 1993 and 1992,
the Bank's consolidated ratios of earnings to combined fixed charges and
preferred stock dividend requirements, computed as set forth below, were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements:
Excluding Interest on Deposits........................................... 1.31 0.38 0.92 * 1.42
Including Interest on Deposits........................................... 1.14 0.72 0.97 0.71 1.08
</TABLE>
- ------------
*Not meaningful
10
<PAGE>
<PAGE>
For the purposes of computing these consolidated ratios, earnings represent
income (loss) before income taxes, cumulative effect of accounting change and
equity in undistributed income (loss) of unconsolidated subsidiaries and
affiliates, plus fixed charges. Fixed charges represent all interest expense
(ratios are presented both excluding and including interest on deposits) and the
portion of net rental expense that is deemed representative of the interest
factor. Fixed charges are then combined with preferred stock dividend
requirements, adjusted to a pretax basis, on outstanding preferred stock. For
the years ended December 31, 1995, 1994 and 1993, earnings, as defined, did not
cover combined fixed charges and preferred stock dividend requirements,
excluding and including interest on deposits, by $34.6 million, $3.5 million and
$28.9 million, respectively. These shortfalls were primarily attributable to the
costs associated with nonperforming assets, particularly the special provisions
for credit losses of $36 million in 1995 and $15 million in 1993.
11
<PAGE>
<PAGE>
INTRODUCTION
This Proxy Statement/Prospectus and the accompanying form of proxy are
being furnished to the stockholders of The Greater, in connection with the
solicitation by the Bank's Board of Directors of proxies to be used at the 1997
Annual Meeting of Stockholders to be held on Friday, April 25, 1997, at 10:00
a.m. at The Grand Prospect Hall, 263 Prospect Avenue, Brooklyn, New York 11215,
and at any adjournments thereof (the 'Annual Meeting'). The principal office of
The Greater is located at 451 Fifth Avenue, Brooklyn, New York 11215. Its
Administrative Headquarters is located at One Penn Plaza, New York, New York
10119. The approximate date on which this Proxy Statement/Prospectus and the
accompanying form of proxy are first being sent to stockholders is March 14,
1997.
Only holders of Bank Common Stock and holders of Bank Series A Preferred
Stock, as of the close of business on Thursday, March 6, 1997 will be entitled
to vote at the Annual Meeting. On that date, there were 13,676,065 shares of
Bank Common Stock and 1,478,077 shares of Bank Series A Preferred Stock
outstanding. Each outstanding share of Bank Common Stock and Bank Series A
Preferred Stock shall be entitled to one vote, and shall be voted together as a
single class, on all matters to be voted on at the Annual Meeting. Shares of
Bank Series B Preferred Stock are not entitled to vote at the Annual Meeting.
A proxy in the accompanying form that is properly executed, duly returned
and not revoked will be voted in accordance with the instructions contained
thereon. If no instructions are given with respect to the matters to be acted
on, proxies will be voted as follows:
1. To elect the three nominees named herein to the Bank's Board of
Directors for three-year terms expiring in 2000;
2. To approve a proposed Agreement and Plan of Reorganization pursuant
to which Bancorp, a newly-formed Delaware corporation, will become the
holding company for the Bank;
3. To ratify the appointment of the firm of KPMG Peat Marwick LLP as
independent auditors for the Bank for the fiscal year ending December 31,
1997; and
4. To transact such other business as may properly come before the
Annual Meeting.
A stockholder who executes his proxy may revoke it at any time before it is
exercised by delivering to the Secretary of the Bank written notice of
revocation, by filing a later dated proxy or by attending the Annual Meeting and
voting in person.
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of the Bank Common Stock and Bank Series A
Preferred Stock is necessary to constitute a quorum at the Annual Meeting.
Directors shall be elected by a plurality of the votes cast at the meeting by
the holders of Bank Common Stock and Bank Series A Preferred Stock, voting
together as a single class. Holders of Bank Common Stock and Bank Series A
Preferred Stock may not vote their shares cumulatively for election of
directors. The approval of the proposed Plan of Reorganization requires the
affirmative vote of not less than two-thirds of the aggregate outstanding shares
of Bank Common Stock and Bank Series A Preferred Stock, voting together as a
single class. The ratification of the appointment of KPMG Peat Marwick LLP as
the Bank's independent auditors requires the affirmative vote of a majority of
the votes present in person or by proxy and entitled to vote at the Annual
Meeting.
If a quorum is not obtained, or if fewer shares are voted in favor of
approval of the proposed Plan of Reorganization than the number required for
approval, it is expected that the Annual Meeting will be postponed or adjourned
for the purpose of allowing additional time for obtaining additional proxies or
votes, and, at any subsequent reconvening of the Annual Meeting, all proxies
will be voted in the same manner as such proxies would have been voted at the
original convening of the Annual Meeting (except for any proxies which have
theretofore effectively been revoked or withdrawn).
All shares entitled to be voted at the Annual Meeting that are represented
by properly executed proxies received prior to or at the Annual Meeting and not
revoked will be voted in accordance with instructions indicated on such proxies.
If no instructions are indicated on properly executed proxies, shares
represented by proxies solicited by the Bank's Board of Directors will be voted
'FOR' the election of the nominees to the Bank's Board of Directors, 'FOR' the
approval of the proposed Plan of Reorganization, 'FOR' the ratification of the
appointment of KPMG Peat Marwick LLP as
12
<PAGE>
<PAGE>
independent auditors and otherwise in the discretion of proxy holders as to any
other matter which may come before the Annual Meeting or any adjournment or
postponement thereof 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; provided, however, that no proxy
which is voted against the proposal to approve the Plan of Reorganization will
be voted in favor of any such adjournment or postponement.
As of the date of this Proxy Statement/Prospectus, the Bank knows of no
business which will be presented for consideration at the Annual Meeting other
than the matters described in this Proxy Statement/Prospectus. If, however,
other matters are duly brought before the Annual Meeting, or any adjournments or
postponements thereof, the persons appointed as proxies will have the discretion
to vote or act thereon according to their best judgment.
The expenses of the preparation of proxy materials and the solicitation of
proxies will be borne by the Bank. In addition to the solicitation of proxies by
mail, proxies may also be solicited personally or by telephone by certain of the
Bank's employees. Employees will receive no additional compensation for such
solicitation. The Bank will also request persons, firms and corporations holding
shares in their names or in the name of their nominees, which are beneficially
owned by others, to send proxy materials to and obtain proxies from such
beneficial owners and will reimburse such holders for their reasonable expenses
in doing so. The Bank has also retained Georgeson & Company Inc., a proxy
soliciting firm, to assist in the solicitation of proxies at an estimated fee of
$20,000 plus reimbursement of certain out-of-pocket expenses authorized by the
Bank.
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS
The Bank's Board of Directors is divided into three classes with respect to
term of office. Pursuant to the Bank Restated Organization Certificate and Bank
Bylaws, the number of directors of the Bank is determined by a resolution of the
Bank's Board of Directors. One class of directors has a term of office expiring
at the 1997 Annual Meeting; the second class has a term of office expiring at
the 1998 Annual Meeting; and the third class has a term of office expiring at
the 1999 Annual Meeting. The term of each director elected at an annual meeting
is three years. In all cases, directors will serve until their successors are
elected and qualified. There are no arrangements or understandings between The
Greater and any person pursuant to which such person has been elected or
nominated as a director.
The Bank's Board of Directors has nominated three persons to serve as
directors for the class of directors whose terms are expiring at the Annual
Meeting. Each such person, if elected at the Annual Meeting, will be elected to
a term expiring at the Annual Meeting of Stockholders to be held in 2000. The
names of the three nominees of the Bank's Board of Directors for election as
directors (all of whom are presently directors of the Bank) are set forth below,
along with the names of the other directors and certain other information, some
of which has been supplied by the nominees. Management believes that such
nominees will stand for election and will serve if elected as directors.
However, if any person nominated by the Bank's Board of Directors fails to stand
for election or is unable to accept election, proxies received from stockholders
to be voted at the Annual Meeting may
13
<PAGE>
<PAGE>
be voted at the Annual Meeting for the election of such other person or persons
as the Bank's Board of Directors may recommend.
<TABLE>
<CAPTION>
AGE AT MEMBER
APRIL 25, OF BOARD POSITIONS CURRENTLY HELD
NAME 1997 SINCE* WITH THE GREATER
- --------------------------------------------------- --------- -------- ---------------------------------
<S> <C> <C> <C>
Nominees for three-year terms expiring in 2000:
Gerard C. Keegan.............................. 50 1988 Director, Chairman of the Board,
President and Chief Executive
Officer
Nicholas A. Marshall.......................... 64 1983 Director
Peter C. Haeffner, Jr......................... 58 1992 Director
Directors with terms expiring in 1999:
Philip F. Ruppel.............................. 68 1978 Director
George H. Sorter.............................. 69 1983 Director
Gwendolyn Calvert Baker....................... 65 1992 Director
Directors with terms expiring in 1998:
William F. de Neergaard....................... 73 1962 Director
James G. Peel................................. 68 1973 Director
C. Stephen Connolly........................... 63 1976 Director
William F. Ward............................... 68 1992 Director
</TABLE>
- ------------
* Includes term (if any) as trustee of The Greater prior to the Greater's
conversion to stock form on June 24, 1987.
The principal occupation and business experience during the last five years
of each nominee is set forth below.
Gerard C. Keegan has been Chairman, President and Chief Executive Officer
of the Bank since December of 1991. He had served as the President and Chief
Operating Officer of the Bank from July, 1988, and had previously been the
Bank's Group President -- Retail Banking.
Nicholas A. Marshall is a private investor and was previously principal in
Trilogy Management, an investment advisory firm, and Senior Vice President of
Yeager, Wood & Marshall, Inc., an investment advisory firm.
Peter C. Haeffner, Jr. is Co-National Director, Financial Services Group,
of Cushman & Wakefield, Inc., a real estate firm. Mr. Haeffner had served as
Eastern Regional Director, Financial Services Group from May 1994 to December
1994. Previously, Mr. Haeffner was President and Managing Director of
Sonnenblick-Goldman Company, a real estate firm, for eight years. Mr. Haeffner
also serves as a director of Stewart Title Insurance Company of New York and as
a director of World Mae Association LLC, a global mortgage banking firm.
The principal occupation and business experience during the last five years
of each of the other directors of the Bank is set forth below.
William F. de Neergaard prior to his retirement was President of Neergaard
Pharmacies, a retail pharmacy chain located in Brooklyn, New York, with which he
had been associated for approximately 40 years.
James G. Peel is a real estate consultant and was previously President of
James G. Peel Associates Inc., a real estate consulting firm, for 18 years.
C. Stephen Connolly, M.D. is a physician in private practice and a medical
consultant to Price Waterhouse and Organization Resources Counselors. Dr.
Connolly is an Assistant Professor of Medicine at Cornell University Medical
College.
Philip F. Ruppel is President of Carpe Diem Group, Inc. and was previously
Vice President Corporate Relations for Ogden Corporation for 18 years.
George H. Sorter is University Professor, Vincent C. Ross Professor of
Accounting and Professor of Law at New York University where he has taught for
the past 22 years.
14
<PAGE>
<PAGE>
William F. Ward is Chairman of Realicam, Inc., a real estate consulting
firm. Mr. Ward also served as President of Realicam, Inc. from 1985 through
1995. Mr. Ward was Commander-and-Chief of the U.S. Army Reserves from December
1986 to September 1991.
Gwendolyn Calvert Baker is president of Calvert Baker & Associates Inc., an
educational consulting firm. Previously, she was the President and Chief
Executive Officer of the United States Committee for UNICEF (United Nations
Children's Fund) from September 1993 to December 1996 and was national executive
director of the Young Women's Christian Association (YWCA) of the United States
from January 1991 through September 1993. Ms. Baker served as a member of the
New York City Board of Education from 1986 to 1991 and was elected President of
the Board of Education in 1990.
Each of the directors of the Bank also serves as a director of The Greater
New York Financial Corporation, a subsidiary of the Bank. Messrs. Keegan and
Ruppel and Dr. Connolly also serve as directors of the Greater Investment
Services Inc., a subsidiary of The Greater New York Financial Corporation,
headquartered in Mineola, New York.
THE BANK'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ITS
NOMINEES FOR DIRECTORS (MESSRS. KEEGAN, MARSHALL AND HAEFFNER) UNDER PROPOSAL
NUMBER 1.
INFORMATION REGARDING THE BANK'S BOARD OF DIRECTORS
MEETINGS AND COMMITTEES
Regular meetings of the Bank's Board of Directors are held at least once
each month. Special meetings of the Bank's Board of Directors may be called at
any time by or at the request of the Chairman of the Board (the 'Chairman') or
upon the written request of at least a majority of the Bank's Board of
Directors. The Bank's Board of Directors met 29 times during 1996.
The Bank's Board of Directors acts as a nominating committee for selecting
the nominees for election to the Bank's Board of Directors. The Bank's Board of
Directors met on January 22, 1997 and nominated three candidates for election at
the Annual Meeting as directors, each to serve for a three-year term ending in
2000. Stockholders may independently nominate individuals to serve as directors
by following the prescribed procedures and providing timely notice to the
Secretary of the Bank, as outlined in the Bank's Bylaws.
There are currently eight standing committees of the Bank's Board of
Directors: an Audit Committee, a Supervising Agency Reports Committee, a Real
Estate Committee, an Investment Committee, a Search Committee, a Benefits
Committee, a Compensation Committee and a CRA Committee. Members of each
standing committee are elected by the Bank's Board of Directors upon the
recommendation of the Chairman. These elections take place at the annual meeting
of the Bank's Board of Directors which is held immediately following the Annual
Meeting. The Chairman may appoint, with the approval of the Bank's Board of
Directors, such other or special committees as are deemed necessary. The
Chairman and Chief Executive Officer of the Bank is chairman and a member of all
standing committees of the Bank's Board of Directors except the Audit Committee
and the Compensation Committee.
The following is a brief description of each of the standing committees and
the number of times each committee met in 1996:
AUDIT COMMITTEE (10 MEETINGS)
The Audit Committee examines the records and affairs of the Bank once each
year for the purpose of determining the financial condition of the Bank and
delivers a report of each such examination to the Bank's Board of Directors and
the Bank's regulatory authorities as prescribed by law. In addition, the Audit
Committee receives and reviews quarterly reports from the Bank's Auditor and
supervises that officer's activities. The Audit Committee currently consists of
Messrs. de Neergaard, Peel, Ruppel and Dr. Connolly and Dr. Sorter, none of whom
is an officer or a salaried employee of the Bank. The Committee elects its own
chairman, currently Dr. Sorter, and meets at least quarterly at his call.
15
<PAGE>
<PAGE>
SUPERVISING AGENCY REPORTS COMMITTEE (2 MEETINGS)
The Chairman refers to the Supervising Agency Reports Committee the reports
and official communications of the Superintendent, the FDIC and any other
supervising agency with respect to examinations of the Bank. The Supervising
Agency Reports Committee examines and reviews such reports and makes such
studies and investigations of the assets, affairs and management of the Bank as
may be required or necessary to respond to such reports, and reports its
findings and recommendations to the Bank's Board of Directors. The Supervising
Agency Reports Committee currently consists of Messrs. Keegan, Peel, Marshall,
Ward and Dr. Sorter.
REAL ESTATE COMMITTEE (15 MEETINGS)
The Real Estate Committee reviews the Bank's nonperforming and other
problem assets and approves strategies for the resolution of these assets. The
Real Estate Committee also reviews proposals for the modification of commercial
real estate loans and oversees the real estate joint ventures and the
disposition of real estate acquired by the Bank in foreclosure or similar
proceedings. The Real Estate Committee reviews proposals for new loans in excess
of limits determined by the Bank's Board of Directors. The Real Estate Committee
meets at least monthly and currently consists of Messrs. Keegan, de Neergaard,
Peel, Ward, Haeffner and Dr. Baker.
INVESTMENT COMMITTEE (12 MEETINGS)
The Investment Committee reviews the Bank's security transactions, its
current and prospective liquidity and interest rate sensitivity positions and
changes to the composition of the Bank's investment portfolio. The Investment
Committee also reviews and approves the Bank's investment policy and strategy.
The Investment Committee meets monthly and currently consists of Messrs. Keegan,
Ruppel, Marshall, and Dr. Connolly and Dr. Sorter.
SEARCH COMMITTEE (0 MEETINGS)
The Search Committee meets as necessary to recruit, interview and recommend
to the Bank's Board of Directors candidates for director, Chairman, President,
and senior officers of the Bank. The Search Committee currently consists of
Messrs. Keegan, Peel, Ruppel and Marshall.
BENEFITS COMMITTEE (2 MEETINGS)
The Benefits Committee administers the Bank's Pension Plan, Incentive
Savings Plan, Directors' Retirement Plan and the Supplemental Executive
Retirement Plan and carries out the provisions thereof. The Benefits Committee
currently consists of Messrs. Keegan, de Neergaard, Marshall, Haeffner and Dr.
Connolly.
COMPENSATION COMMITTEE (6 MEETINGS)
The Compensation Committee reviews and recommends the cash compensation of
each officer and employee of the Bank whose annual salary is $75,000 or greater.
The Compensation Committee also approves the annual incentive plans and reviews
performance under such plans. In addition, the Compensation Committee
administers the Bank's Long-Term Incentive Program and the 1996 Equity Incentive
Plan and is responsible for granting stock options, stock appreciation rights
and other awards thereunder. The Compensation Committee currently consists of
Mr. de Neergaard, Dr. Connolly, Dr. Sorter and Dr. Baker, none of whom is an
officer or salaried employee of the Bank. The Committee elects its own Chairman,
currently Mr. de Neergaard.
CRA COMMITTEE (3 MEETINGS)
The CRA Committee reviews the Bank's performance under the Community
Reinvestment Act and the regulations issued thereunder. The CRA Committee
currently consists of Messrs. Keegan, de Neergaard, Ward and Dr. Baker.
16
<PAGE>
<PAGE>
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During 1996, each director attended at least 75% of the aggregate of the
total number of meetings of the Bank's Board of Directors held during the period
for which he or she was a director and the total number of meetings held by all
committees on which such director served.
BENEFICIAL OWNERSHIP OF THE BANK'S VOTING STOCK
BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information in respect of the shares of Bank
Common Stock and Bank Series A Preferred Stock beneficially owned by each
director of the Bank, by each named executive officer of the Bank identified in
the Summary Compensation Table included below and by all directors and executive
officers of the Bank as a group as of February 28, 1997.
<TABLE>
<CAPTION>
SHARES OF BANK
SHARES OF SERIES A
BANK COMMON PERCENT OF PREFERRED PERCENT OF BANK
STOCK BANK COMMON STOCK SERIES A
BENEFICIALLY STOCK BENEFICIALLY PREFERRED STOCK
NAME TITLE OWNED(1)(2) OUTSTANDING OWNED(3) OUTSTANDING(3)
- -------------------------------------- ----------------------- ----------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
Gerard C. Keegan...................... Chairman. President and
Chief Executive
Officer, Director 258,088 1.86% 15,906 1.08%
William F. de Neergaard............... Director 59,000 * 0 0
James G. Peel......................... Director 12,400(4) * 0 0
C. Stephen Connolly, M.D.............. Director 90,972(5) * 0 0
Philip F. Ruppel...................... Director 7,000 * 0 0
George H. Sorter...................... Director 43,350 * 0 0
Nicholas A. Marshall.................. Director 17,000 * 0 0
William F. Ward....................... Director 17,967(6) * 0 0
Peter C. Haeffner, Jr................. Director 17,000 * 0 0
Gwendolyn Calvert Baker............... Director 18,024(6) * 0 0
Michael J. Henchy..................... Executive Vice
President and Chief
Administration
Officer 85,502 * 12,278 *
Daniel J. Harris...................... Executive Vice
President and Chief
Lending Officer 44,587 * 5,089 *
Philip A. Cimino...................... Senior Vice President
and Chief Investment
Officer 66,892 * 10,814 *
Philip T. Spies....................... Senior Vice President
and Controller 55,531 * 11,552 *
960,332 6.75% 93,435 6.32%
All directors and executive officers
as a group (22 persons)(7)..........
<CAPTION>
PERCENT OF BANK
COMMON STOCK AND BANK
SERIES A PREFERRED
NAME STOCK OUTSTANDING
- -------------------------------------- ---------------------
<S> <C>
Gerard C. Keegan......................
1.79%
William F. de Neergaard............... *
James G. Peel......................... *
C. Stephen Connolly, M.D.............. *
Philip F. Ruppel...................... *
George H. Sorter...................... *
Nicholas A. Marshall.................. *
William F. Ward....................... *
Peter C. Haeffner, Jr................. *
Gwendolyn Calvert Baker............... *
Michael J. Henchy.....................
*
Daniel J. Harris......................
*
Philip A. Cimino......................
*
Philip T. Spies.......................
*
6.71%
All directors and executive officers
as a group (22 persons)(7)..........
</TABLE>
- ------------
* Less than 1%.
(1) For purposes of this and the following table, under the rules of the FDIC, a
person is considered to 'beneficially own' any shares of common stock (a)
over which that person exercises sole or shared voting or investment power
or (b) of which that person has the right to acquire beneficial ownership at
any time within sixty days. As used herein, 'voting power' is the power to
vote or direct the voting of shares and 'investment power' is the power to
dispose of or direct the disposition of shares. Unless otherwise indicated,
all persons named in the table above have sole voting and investment power
or share voting and investment power with members of their immediate family.
(2) The total number of shares shown includes shares beneficially owned in the
Bank Stock Fund (the 'Bank Stock Fund') by Mr. Keegan (42,801), Mr. Henchy
(10,229), Mr. Cimino (11,931), Mr. Spies (4,714) and by the executive
officers who are not directors (14,193) under The Greater New York Savings
Bank Incentive Savings Plan (the 'Savings Plan'). Directors who are not
officers are not eligible to participate in the Savings Plan. All shares in
the Bank Stock Fund are voted by the
(footnotes continued on next page)
17
<PAGE>
<PAGE>
(footnotes continued from previous page)
trustee of the Savings Plan in its sole discretion. The total number of
shares includes shares beneficially owned by Mr. Keegan (11,872), Mr. Henchy
(8,316), Mr. Harris (1,012), Mr. Cimino (7,086), Mr. Spies (7,832) and by
the other executive officers who are not directors (13,491) under The
Greater New York Savings Bank Employee Stock Ownership Plan (the 'ESOP').
Directors who are not officers are not eligible to participate in the ESOP.
These shares are voted by the beneficial owners of such shares. The total
number of shares shown also includes 4,000 shares for each non-employee
director, which shares are subject to options exercisable on April 26, 1997,
and shares subject to exercise of presently exercisable options held by Mr.
Keegan (191,250), Mr. Henchy (66,430), Mr. Harris (42,375), Mr. Cimino
(47,875), Mr. Spies (36,875) and by the other executive officers who are not
directors (170,450).
(3) As of February 28, 1997, the Bank's current named executive officers and
approximately 500 other current or former officers and employees of the
Bank, had in the aggregate beneficial ownership of 649,045 shares of Bank
Series A Preferred Stock which have been allocated to their respective
accounts under the ESOP. Of these shares, 93,435 have been allocated to the
Bank's executive officers which is 14.4% of the allocated shares (not
including certain forfeitures to be allocated on December 31, 1997).
Pursuant to the terms of the ESOP, the balance of the unallocated shares of
Bank Series A Preferred Stock held in the ESOP's suspense account will be
allocated to the accounts of employees of the Bank as the debt incurred by
the ESOP to purchase such shares is paid. For a more complete description of
the ESOP including voting and investment powers of employees, including such
officers, with respect to such shares, see 'Employee Stock Ownership Plan'
below.
(4) Mr. Peel disclaims beneficial ownership of 2,400 shares held jointly with
his wife which are included in the total number of shares shown.
(5) Dr. Connolly disclaims beneficial ownership of 19,500 shares owned by his
wife or his wife's IRA which are included in the number of shares shown.
(6) Includes 5,524 phantom stock units held for Dr. Baker and 1,967 phantom
stock units held for Mr. Ward in The Greater New York Savings Bank
Non-Employee Director's Deferred Compensation Plan.
(7) One executive officer disclaims beneficial ownership of 1,000 shares owned
by a member of his immediate family which are included in the number of
shares shown.
------------------------
The FDIC Rules and Regulations require the Bank's directors, executive
officers and holders of more than 10% of the Bank Common Stock to file with the
FDIC initial reports of ownership and reports of changes in ownership of common
stock and other equity securities of the Bank. The Bank believes that during the
fiscal year ended December 31, 1996, its directors, executive officers and
holders of more than 10% of the Bank Common Stock complied with all filing
requirements.
18
<PAGE>
<PAGE>
BY OTHERS
As of February 28, 1997, management of the Bank knew of no person, except
as set forth below, who is the beneficial owner of more than 5% of any class of
the Bank's voting securities:
<TABLE>
<CAPTION>
PERCENT OF
COMBINED
AMOUNT AND COMMON STOCK
NATURE OF AND SERIES A
BENEFICIAL PERCENT PREFERRED
TITLE OF CLASS NAME AND ADDRESS OWNERSHIP(1) OF CLASS STOCK
- ------------------- ---------------------------------------- ----------------------- -------- ------------
<S> <C> <C> <C> <C>
Bank Common Merrill Lynch & Co., Inc. 1,000,600 shares 7.32%(2) 6.60%(2)
Stock............ 800 Scudders Mill Road (shared voting and/or
Plainsboro, New Jersey 08536 dispositive power)
Bank Common Dimensional Fund Advisors Inc. 787,00 shares (sole 5.75%(3) 5.19%(3)
Stock............ 1299 Ocean Ave., 11th Floor voting and/or
Santa Monica, California 90401 dispositive power)
Bank Series A United States Trust Company of New York, 1,478,077 shares 100.0%(4) 12.22%(4)
Preferred solely as Trustee (shares voted by ESOP
Stock............ under The Greater New York participants)
Savings Bank Employee Stock
Ownership Plan Trust
114 West 47th Street
New York, New York 10036
</TABLE>
- ------------
(1) Based upon current filing with the FDIC pursuant to the Exchange Act.
(2) According to such filing Merrill Lynch & Co., Inc., Merrill Lynch Group,
Inc., Princeton Services, Inc., Merrill Lynch Asset Management, L.P. and
Merrill Lynch Variable Series Fund, Inc. (Basic Value Focus) share voting
and dispositive power with regard to all or a portion of such shares.
Merrill Lynch & Co., Inc., Merrill Lynch Group, Inc. and Princeton Services,
Inc. disclaim beneficial ownership of all of such shares.
(3) Dimensional Fund Advisors Inc. ('Dimensional'), a registered investment
advisor, is deemed to have beneficial ownership of 787,000 shares of Bank
Common Stock as of February 28, 1997, all of which shares are held in
portfolios of the DFA Investment Dimensions Group Inc. and the DFA
Investment Trust Company, registered open-end investment companies, or in
series of the DFA Investment Trust Company, a Delaware business trust, or in
the DFA Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans, all of which are served by Dimensional
Fund Advisors Inc. as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
(4) The Bank Series A Preferred Stock votes with Bank Common Stock as a single
class, except as otherwise required by law, and represents 9.75% of the
voting power of the Bank's voting securities. The Bank Series A Preferred
Stock is presently convertible into approximately 1,396,487 shares of Bank
Common Stock, which would represent 9.27% of the Bank Common Stock after
giving effect to such conversion. See 'Employee Stock Ownership Plan' below.
19
<PAGE>
<PAGE>
DIRECTOR COMPENSATION
Directors, other than those who are officers of the Bank, currently receive
an annual retainer of $24,000 and a fee of $600 per Board meeting or committee
meeting attended. The Chairman of the Audit Committee and the Chairman of the
Compensation Committee receive a fee of $700 for each meeting of such
committees. Non-employee directors who also serve as directors of the Greater
Investment Services Inc. receive an additional annual retainer of $4,000 and a
fee of $600 for each meeting of the subsidiary's board of directors attended.
Non-employee directors who serve as directors of other subsidiaries of the Bank
receive a fee of $600 for each meeting of the board of directors of such
subsidiaries which they attend. The Greater maintains The Greater New York
Savings Bank Non-Employee Directors' Deferred Compensation Plan pursuant to
which non-employee directors may elect to defer payment of their annual retainer
and/or meeting fees until the earlier of the date the non-employee director
ceases to be a member of the Bank's Board of Directors, or a date elected by the
non-employee director. Amounts deferred are credited with a rate of return
elected by the non-employee director of either (i) the rate of return received
on shares of Bank Common Stock, or (ii) the prime interest rate announced by
Citibank, N.A. Non-employee directors are provided with life insurance equal to
three times their annual retainer, which insurance is reduced to 60%, 45% and
30% of such amount at ages 65, 70 and 75, respectively, and are offered the
option of participation in the Bank's medical insurance plan which covers all of
the Bank's full time employees. Directors who are also officers of the Bank do
not receive any compensation as directors.
The Greater maintains the Retirement Plan of The Greater New York Savings
Bank for Non-Employee Directors ('Directors' Retirement Plan'), pursuant to
which each non-employee director who retires from the Bank's Board of Directors
with at least five years of service as a non-employee director is eligible for
an annual retirement benefit equal in amount to the basic annual retainer in
effect at the director's retirement. The benefit will commence upon termination
of service as a non-employee director at or after attainment of age 65. If a
non-employee director retires after he has attained age 65 and has completed
five or more years of service, the retirement benefit shall be equal to the
actuarial equivalent of the normal annual retirement benefit based upon interest
rate and mortality assumptions specified in the plan. If a non-employee director
who has completed five or more years of service retires from the Bank's Board of
Directors, such director may elect to receive an early retirement benefit. This
early retirement benefit is payable to retired directors who have attained age
55 and is subject to a 5% reduction for each year (prorated for partial years)
that his or her pension commencement date precedes age 65. In the event of a
'change in control' (as defined in the Directors' Retirement Plan), each
non-employee director upon termination of service as a director shall be
entitled to receive an annual retirement benefit (as described above)
irrespective of whether he has completed five years of service and without
reduction for commencement thereof prior to attainment of age 65. The benefits,
which are secured by an irrevocable trust with United States Trust Company of
New York, are payable in the form of a joint and survivor annuity if the
non-employee director is married to an eligible spouse on the date that benefits
commence. A benefit of equal value is paid to the surviving spouse for life. If
a non-employee director with five years of service has not attained age 55 at
the time of his death, the surviving spouse shall commence receiving benefits
upon the date such director would have attained age 55 subject to the 5%
reduction factor discussed above. Each non-employee director, however, may elect
to receive the actuarial equivalent of the annual pension benefit described
above in the form of a lump sum distribution, a life annuity option or an
installment payment option. If a non-employee director is not married to an
eligible spouse on the date benefits commence, the non-employee director will
receive benefits in equal monthly installments. The Directors' Retirement Plan
is administered by the Benefits Committee of the Bank's Board of Directors. The
Bank has transferred funds from its general assets to the trust to fund the
benefits payable under the Directors' Retirement Plan. As of February 28, 1997,
the trust had assets valued at $6,119,117.
The Greater has also established the 1996 Non-Employee Directors Stock
Option Plan (the 'Directors Option Plan'), which was approved by the
Superintendent and the Bank's stockholders in 1996. The Directors Option Plan
was adopted to encourage qualified persons to become and remain non-employee
directors of the Bank and to provide the non-employee directors with a more
direct stake in its success.
20
<PAGE>
<PAGE>
Under the terms of the Directors Option Plan, 200,000 shares of authorized
but unissued Bank Common Stock have been reserved for issuance to members of the
Board of Directors, who are not also serving as employees of the Bank or any of
its subsidiaries as of the date of the option grant. The members of the Bank's
Board of Directors who were not officers of the Bank received options to
purchase 4,000 shares of Common Stock at an exercise price of $11.50, which
represented the closing price of the Bank Common Stock on April 26, 1996, the
date of the Bank's 1996 Annual Meeting of Stockholders. At the 1997 Annual
Meeting of Stockholders and at each subsequent Annual Meeting of Stockholders
thereafter, each non-employee director will automatically be granted options to
purchase 4,000 shares of Bank Common Stock at an exercise price equal to the
Fair Market Value (as defined in the Directors Option Plan) of the Bank's Common
Stock on the date of such grant. All options granted are exercisable on the
earlier of the first anniversary of the grant date of such option or the
director's death or disability, provided in each case, the grantee remained a
director at all times since such grant. There were no options exercised during
the year ended December 31, 1996.
All options granted under the Directors Option Plan expire 10 years
following the date of grant. However, if a person ceases to be a director while
holding an unexpired option, such option shall terminate, provided that such
option may be exercised, to the extent vested, by such person, or in the event
of the director's death or incompetence by the appropriate legal representative,
at any time up to the earlier of (i) 30 days after the date such person ceased
to be a director (if for any reason other than death), (ii) one year after the
death of the director or (iii) the expiration of the term of the option.
The Directors Option Plan may be amended from time to time by the Bank's
Board of Directors. Any such amendment shall be subject to the approval of the
Superintendent. The rights and obligations under any option granted before an
amendment shall not be altered or impaired by any such amendment without the
written consent of the optionee. If the Directors Option Plan is subsequently
amended, such amendment will be presented to the stockholders for ratification
for any amendment which (i) increases the number of options which would be
granted to a director (subject to certain antidilution provisions contained in
the Plan), (ii) increases the maximum number of shares for which options may be
granted under the Directors Option Plan (subject to certain antidilution
provisions contained in the plan), (iii) changes the vesting conditions, terms
of exercisability, timing, amount, or exercise price (subject to certain
antidilution provisions contained in the plan) at which options may be
exercised, (iv) extends the period during which options may be granted or
exercised beyond that originally provided, (v) changes the persons eligible to
participate in the Directors Option Plan or (vi) requires amendment to the Bank
Restated Organization Certificate.
21
<PAGE>
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
OF THE COMPENSATION COMMITTEE
The Compensation Committee (the 'Compensation Committee' or the
'Committee') is presently comprised of four non-employee directors, each of whom
is a 'Non-Employee Director' within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934, as amended. The Committee and its legal counsel meet
regularly at the call of its Chairman and in conjunction with its employee
benefits advisor, the Actuarial and Benefits Consulting Group of Deloitte &
Touche ('D&T'). The Committee has responsibility to review benefits for all
employees and all compensation matters impacting all officers earning more than
$75,000 a year.
The overall compensation structure of The Greater is aimed at establishing
a total compensation package that remains competitive with compensation levels
at similar institutions and that rewards strong individual performance only if
there is strong Bank performance. The objectives of this strategy are to attract
and retain the best possible executive talent, to motivate these executives to
achieve the goals contained in the Bank's strategic plan, to align executive and
stockholder interests through equity-based plans, and to provide a compensation
package that recognizes and rewards individual contributions.
Compensation Philosophy. For executive officers, it is the intent of the
Compensation Committee to utilize significant incentive compensation linked to
the annual and long-term performance of the Bank. The purpose is to attract and
retain the best available talent by employing compensation programs which help
to achieve Bank and stockholder goals. Underlying the Committee's compensation
philosophy is a careful cost/benefit analysis of each element of executive
compensation. Base compensation is designed to ensure the retention of high
performing officers in a competitive marketplace. The Annual Incentive Plans are
intended to provide an annual cash award which is dependent on the achievement
of the goals by both the Bank and the individual officer. The Long-Term
Incentive Program and the 1996 Equity Incentive Plan are stock option plans that
directly link the long-term compensation of the officer with the long-term
performance of the Bank's common stock.
------------------------
During a period commencing with the imposition by the FDIC of a Cease and
Desist Order in January, 1992 until the FDIC replaced it with a Memorandum of
Understanding in May, 1994, the Committee did not regularly adjust executive
compensation. Although the Cease and Desist Order did not require it, executive
officers' salaries were frozen throughout the pendency of the Cease and Desist
Order and no bonuses were paid during that period. This was consistent with the
Board's strategy to effect appropriate changes in The Greater's financial
position.
In 1994, D&T was retained to advise and assist the Compensation Committee
in establishing revised compensation levels for the executive officers. The 1994
review of base and incentive compensation performed for the Compensation
Committee noted that The Greater's traditional compensation philosophy (the 75th
percentile of financial institutions) had been reduced to closer to the 50th
percentile, primarily because of the salary freeze and the absence of bonus
payments referred to above. Accordingly, once The Greater had been relieved of
the requirements of the Cease and Desist Order, the Committee determined that
compensation was to be targeted at the 75th percentile of similarly sized banks
in the United States.
To determine base compensation for the last two quarters of 1996 and the
first two quarters of 1997, the Compensation Committee, in it efforts to insure
that the performance of the officers is consistent with the goals and objectives
of The Greater, focused on the 75th percentile of a New York City-based peer
group. The intent was to have the base compensation of officers set at this
level and the incentive compensation (both long-term and short-term) to be keyed
to (i) the overall profitability of the Bank and its efficiency, as compared
with its peers, and (ii) the accomplishment of individual performance goals
evaluated by the officer's direct supervisors and, in the case of Mr. Keegan,
the Compensation Committee.
The Bank's executive compensation program provides for base salaries,
annual incentive bonuses linked to pre-established financial goals pursuant to
an annual incentive plan, long-term stock incentives designed to promote equity
ownership in the Bank by its executive officers pursuant to stock option
22
<PAGE>
<PAGE>
plans and retirement benefits. The following is a discussion of each of the
components of the executive compensation program.
Salaries. In determining the base salary of all executive officers, the
Compensation Committee considers a variety of factors, including the executive's
level of responsibility and individual performance, internal fairness, salary
levels for comparable positions at the 75th percentile at institutions within
the Bank's peer group and market conditions. Executive salaries are reviewed
annually.
Annual Incentive Awards. Annual incentive compensation consists of bonuses
paid pursuant to the 1996 Annual Incentive Plan covering all officers. The
Bank's 1996 Annual Incentive Plan is conditioned on the Bank's net income before
extraordinary items and tax benefits being higher in 1996 than during 1995 and
is based on the extent to which the Bank's 'efficiency ratio' exceeds the
efficiency ratio of a peer group over the twelve month period ending with the
third quarter of 1996 and the officer's achievement of individual goals.
'Efficiency ratio' means 'other operating expenses' as a percentage of net
revenue. The maximum award payable under the plan's formula ranges from 7.5% to
45% of the officer's 1996 base salary (as defined in the plan). A similar plan,
which is described under 'Employee Benefits Plans' on page 29 of the Proxy
Statement/Prospectus, has been adopted for 1997.
Long-Term Incentive Compensation. Another component of the Bank's executive
compensation strategy is the Long-Term Incentive Program, a stock option plan
which was adopted in 1987 (the '1987 Plan'). Under the 1987 Plan the
Compensation Committee may grant to executives stock options and other
stock-based awards offering them the possibility of future value, depending on
the executive's continued employment by the Bank and the long-term price
appreciation of the Bank Common Stock. The size of the grants are based in part
on peer institution comparables and in part on the executive officer's
performance and position in the organization. There were 1,031,235 shares of
Bank Common Stock reserved for issuance under the 1987 Plan. As of December 31,
1996, 23,095 shares remained available for issuance under the 1987 Plan. The
balance of the shares have been the subject of Compensation Committee grants to
Bank officers, 649,000 shares of which have been granted to the current
executive officers.
The Greater also established the 1996 Equity Incentive Plan (the '1996
Plan'), a stock option plan which was approved by the New York State
Superintendent of Banks and the Bank's stockholders in 1996. The 1996 Plan
reserved 1,000,000 shares of authorized but unissued Bank Common Stock to be
issued as part of the Bank's executive compensation strategy. The 1996 Plan is
administered by the Compensation Committee. The Compensation Committee may grant
stock options and other stock-based awards offering the possibility of future
value, depending on the executive's continued employment by the Bank and the
long-term price appreciation of the Bank Common Stock. As of December 31, 1996,
619,000 shares remained available for issuance under the 1996 Plan. The balance
of the shares have been the subject of Compensation Committee grants to Bank
officers, 265,000 shares of which have been granted to the current executive
officers.
Retirement Benefits. Retirement benefits are designed to provide for an
adequate level of income to an officer following his or her retirement from the
Bank based upon length of service with the organization and are deemed to be an
integral component in the compensation package for any executive officer.
Retirement benefits are provided under The Greater New York Savings Bank
Employee Stock Ownership Plan, the Plan of Pensions and Retirement Benefits of
The Greater New York Savings Bank, The Greater New York Savings Bank
Supplemental Executive Retirement Plan, and The Greater New York Savings Bank
Incentive Savings Plan. See 'Executive Compensation -- Employee Benefit Plans'
starting on page 29 of the Proxy Statement/Prospectus for a description of such
plans.
Compensation of Chief Executive Officer. In assessing appropriate types and
amounts of compensation for the Chief Executive Officer, the Compensation
Committee evaluates both corporate and individual performance. Factors included
in such evaluation are: maximizing stockholder wealth, development and
maintenance of an active and participatory interaction between the Bank's Board
of Directors and management, initiation and implementation of successful
business strategies, formation and management of an effective management team,
overall direction, administration, and coordination of the activities of the
Bank, establishment and maintenance of policies that insure adequate
23
<PAGE>
<PAGE>
management development and provide for capable management succession,
development and maintenance of a sound plan of corporate organization,
interaction with regulatory agencies, representation of the Bank to the
financial community, industry groups and the general public and
interrelationship with the Bank's Board of Directors.
In June 1996, the Compensation Committee recommended to the Bank's Board of
Directors that the Chief Executive Officer's base salary for the remainder of
1996 and the first half of 1997 be $550,000. The Committee's recommendation was
based upon its evaluation of the Bank's and Mr. Keegan's performance in terms of
the criteria listed above. The Board of Directors concurred with the Committee's
analysis and with its recommendation to increase Mr. Keegan's salary. This
increase is reflective of the Compensation Committee's philosophy that executive
officers of the Bank, including the Chief Executive Officer, should be
compensated at a level commensurate with the 75th percentile of the financial
institutions comprising its peer group. When the Compensation Committee met in
June, 1996, to consider stock option grants for Bank officers, it granted Mr.
Keegan an option to purchase 100,000 shares of Bank Common Stock (with in tandem
limited stock appreciation rights) with an exercise price equal to the fair
market value of such stock on the date of grant. In granting the option to Mr.
Keegan, the Compensation Committee reviewed the guidelines described above under
'Long-Term Incentive Compensation', evaluated his performance against the
performance criteria described above and considered data showing total
compensation for Mr. Keegan and comparable chief executive officers at competing
institutions.
After reviewing the Bank's 1996 results in the context of the Bank's
financial goals, the Compensation Committee concluded, based on its evaluation
of performance factors, that Mr. Keegan performed with skill and diligence
during 1996. Mr. Keegan successfully implemented the Bank's business strategies
and the result was improved operating financial performance for the Bank in
1996. The Compensation Committee determined that Mr. Keegan was integral to the
progress of the Bank, including the termination of the Memorandum of
Understanding, and deserved a significant amount of the credit for the Bank's
success. For performance in 1996 and in accordance with the 1996 Annual
Incentive Plan, the Compensation Committee approved and recommended a cash bonus
of $165,000 for Mr. Keegan. The Board of Directors concurred and such amount was
paid in February, 1997.
CONCLUSION
The Compensation Committee believes that the compensation amounts and
awards recently established for the Bank's executive officers reflect
appropriate levels, given the significant achievements of the Bank and the
individual contributions of management in 1996.
William F. de Neergaard, Chairman
C. Stephen Connolly
George H. Sorter
Gwendolyn Calvert Baker
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of the four above-named outside
directors. None of these directors was a party to any reportable interlock
during 1996.
24
<PAGE>
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
return on the Bank Common Stock from December 31, 1991 to December 31, 1996 with
the cumulative returns of both a broad-market index and a peer group index. The
broad-market index chosen was the Nasdaq U.S. Public Companies Index and the
peer group index chosen was the Nasdaq Banking Index. There can be no assurance
that stock performance will continue into the future with the same or similar
trends depicted in the performance graph.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
FISCAL YEARS ENDED DECEMBER 31*
------------------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C>
The Greater New York Savings Bank.................... $100 $369 $725 $875 $1,200 $1,368
Nasdaq U.S. Public Companies Index................... 100 116 134 131 185 227
Nasdaq Banking Index................................. 100 146 166 165 246 326
</TABLE>
- ------------
* All returns reflect reinvestment of dividends.
25
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to the Bank for the fiscal years ended December 31,
1996, 1995 and 1994 of those persons who were at December 31, 1996 (i) the Chief
Executive Officer of the Bank and (ii) the other four most highly compensated
executive officers of the Bank (collectively with the Chief Executive Officer,
the 'named executive officers').
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS
ANNUAL COMPENSATION -----------------------
---------------------------------- RESTRICTED SECURITIES PAYOUTS
OTHER ANNUAL STOCK UNDERLYING ---------- ALL OTHER
BONUS COMPENSATION AWARD(S) OPTIONS/ LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) ($)(3) SARS(#) PAYOUTS($) ($)(4)
- --------------------------------- ---- --------- ------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerard C. Keegan ................ 1996 512,500 165,000 -- -- 100,000 -- 93,774
Chairman, President and Chief 1995 420,000 213,750 -- -- 50,000 -- 58,157
Executive Officer 1994 365,000 300,000 -- -- -- -- 48,013
Michael J. Henchy ............... 1996 222,500 47,000 -- -- 20,000 -- 36,394
Executive Vice President and 1995 195,000 63,000 -- -- 20,000 -- 26,991
Chief Administrative Officer 1994 180,000 150,000 -- -- -- -- 23,678
Daniel J. Harris ................ 1996 222,500 47,000 -- -- 20,000 -- 36,962
Executive Vice President and 1995 195,000 63,000 -- -- 20,000 -- 26,991
Chief Lending Officer 1994 150,000 60,000 -- -- -- -- 19,876
Philip A. Cimino ................ 1996 157,500 21,450 -- -- 15,000 -- 23,958
Senior Vice President and Chief 1995 142,500 30,000 -- -- 10,000 -- 19,680
Investment Officer 1994 135,000 90,000 -- -- -- -- 17,884
Philip T. Spies ................. 1996 157,000 20,930 -- -- 15,000 -- 23,833
Senior Vice President and 1995 147,750 30,600 -- -- 10,000 -- 20,419
Controller 1994 142,500 50,000 -- -- -- -- 18,882
</TABLE>
- ------------
(1) The bonuses reported for 1995 and 1996 consist of payments made under
short-term incentive plans covering all Bank officers and are reported in
the years during which the named executive officers rendered services to
which the bonuses relate, even though the amounts shown were actually paid
during the next calendar years. The bonuses reported for 1994 were made in
recognition of the efforts of the named executive officers to eliminate the
conditions which gave rise to a Cease and Desist Order ('Order'). Such
bonuses were contingent upon the termination or setting aside of such Order,
which was terminated in June, 1994. In granting the 1994 bonuses. the Board
also considered the fact that the named executive officers had been subject
to a salary and bonus freeze since January 1, 1991.
(2) For 1996, 1995 and 1994, there were no (i) perquisites over the lesser of
$50,000 or 10% of the individual's total salary and bonus for the year, (ii)
payments of above-market or preferential earnings on deferred compensation,
(iii) payments of earnings with respect to long-term incentive plans prior
to settlement or maturation, (iv) tax payment reimbursements, or (v)
preferential discounts on stock.
(3) No restricted common stock was granted to any of the named executive
officers in 1996, 1995 or 1994.
(4) Includes value of allocations (including forfeitures) of cash, Bank Common
Stock and Bank Series A Preferred Stock to the ESOP during 1996, 1995 and
1994, respectively, for Messrs. Keegan: $19,072, $20,758 and $19,876;
Henchy: $19,072, $20,758 and $19,876; Harris: $19,072, $20,758 and $19,876;
Cimino: $19,072, $19,680 and $17,884; and Spies: $19,072, $20,419 and
$18,882. Also includes allocations to the Bank's Supplemental Executive
Retirement Plan for contributions that could not be made to the ESOP due to
the limitations of the Internal Revenue Code during 1996, 1995 and 1994,
respectively, for Messrs. Keegan: $74,702, $37,399 and $28,282; Henchy:
$17,322, $6,233 and $3,946; Harris: $17,890, $6,233 and $0; Cimino: $4,886,
$0 and $0; and Spies: $4,761, $0 and $0. The Bank Series A Preferred Stock
was valued at $14.00, $14.00 and $13.00 at December 31, 1996, 1995 and 1994,
respectively. The Common Stock was valued at $13.625, $12.00 and $8.75 at
December 31, 1996, 1995 and 1994, respectively.
26
<PAGE>
<PAGE>
STOCK OPTION/SAR GRANTS IN 1996
The following table provides information concerning the grant of options
under the 1996 Equity Incentive Plan to purchase Bank Common Stock and in tandem
limited stock appreciation rights (the 'SARs') to the named executive officers
during the year ended December 31, 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------
% OF TOTAL GRANT DATE
NUMBER OF OPTIONS/SARS VALUE
SECURITIES GRANTED TO ----------
UNDERLYING EMPLOYEES IN EXERCISE GRANT DATE
OPTIONS/SARS FISCAL PRICE PRESENT
NAME GRANTED (#)(1) YEAR(2) (PER SHARE) EXPIRATION DATE VALUE(3)
- --------------------------------------- -------------- ------------ ----------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Gerard C. Keegan....................... 100,000 26.04% $ 11.125 June 26, 2006 $344,000
Michael J. Henchy...................... 20,000 5.21 11.125 June 26, 2006 68,800
Daniel J. Harris....................... 20,000 5.21 11.125 June 26, 2006 68,800
Philip A. Cimino....................... 15,000 3.91 11.125 June 26, 2006 51,600
Philip T. Spies........................ 15,000 3.91 11.125 June 26, 2006 51,600
</TABLE>
- ------------
(1) The options granted in 1996 are non-qualified stock options and are
exercisable 40% after the first year from the grant date, 55% on January 1,
1998, 70% on January 1, 1999, 85% on January 1, 2000 and 100% on January 1,
2001. Under the terms of the 1996 Equity Incentive Plan, the Compensation
Committee retains discretion, subject to plan limits, to modify the terms of
outstanding options.
(2) The Bank granted options representing 384,000 shares of Bank Common Stock to
employees in 1996.
(3) The estimated value shown was determined by application of the Black-Scholes
option pricing model, which model was considered the most appropriate for
purposes of comparative disclosure in accordance with the regulations of the
FDIC and the Securities and Exchange Commission. The estimated value does
not necessarily reflect the Bank's view of the appropriate value for
purposes of financial reporting. Use of this model should not be viewed in
any way as a forecast of the future performance of the Bank Common Stock,
volatility or dividend policy. The following assumptions were made for
purposes of calculating the original Grant Date Present Value: an option
term of 6 years, volatility at .2345, dividend yield at 2.32% and an
interest rate of 6.76%. The real value of the options in this table depends
on the actual performance of the Bank Common Stock during the applicable
period.
27
<PAGE>
<PAGE>
AGGREGATED STOCK OPTION/SAR EXERCISES IN 1996
AND 1996 YEAR-END OPTION/SAR VALUES
The following table provides information on option/SAR exercises in 1996 by
the named executive officers and the values of such officers' unexercised
options/SARs under the 1987 Plan and the 1996 Plan at December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS/SARS AT THE-MONEY OPTIONS/SARS
SHARES FISCAL YEAR-END(#) AT YEAR-END($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gerard C. Keegan.............. 0 0 180,000 137,500 1,522,186 436,563
Michael J. Henchy............. 6,570 18,889 61,930 35,000 487,523 124,625
Daniel J. Harris.............. 0 0 34,500 38,000 290,359 154,016
Philip A. Cimino.............. 6,000 17,250 45,250 23,250 370,119 82,219
Philip T. Spies............... 12,465 33,063 38,785 23,250 349,108 82,219
</TABLE>
- ------------
(1) The value of unexercised options is based upon the difference between the
exercise price and the $13.625 per share price of the Bank Common Stock on
December 31, 1996.
EMPLOYMENT AGREEMENTS
The Greater has entered into employment agreements with Mr. Keegan and the
other four named executive officers. The initial term of Mr. Keegan's agreement
is five years (three years in the case of the agreements with the other named
executive officers) with automatic one-year renewals at the end of each year of
the agreement unless the Bank notifies the named executive officer to the
contrary at least three months prior to a scheduled renewal, but in no event
will the term (including renewals) extend beyond the earlier of a named
executive officer's actual retirement date or upon attainment of age 65. Each
agreement specifies the compensation and benefits, and duties and
responsibilities applicable to such individual during the employment.
Upon involuntary termination of the named executive officer's employment by
the Bank, other than for 'cause' (as defined in each agreement), or termination
by the named executive officer following a breach by the Bank of any material
provision of the agreement, the named executive officer will be entitled to (i)
an amount equal to the base salary due to the named executive officer over the
remainder of the employment term, such amount payable in equal bi-weekly
payments over the remaining term of the agreement; (ii) an amount in respect of
his outstanding stock options (whether or not then vested) equal to the spread
between the option price and the market price of the Bank's stock upon the date
of termination in exchange for surrender of the stock option; (iii) continued
welfare benefit plan coverage for the remainder of the employment term; and (iv)
a lump sum payment equal in amount to the present value of the additional
benefits, if any, which would have been contributed or accrued, as the case may
be, under the Bank's tax-qualified plans and Supplemental Executive Retirement
Plan had the named executive officer continued in employment to the end of his
employment term. In the event of the death of a named executive officer during
the term of his employment agreement, his designated beneficiary (or if none,
his estate) shall receive a lump sum death benefit equal to three times his
annual base salary then in effect. Payments under the employment agreement will
be offset by any payments made under the 'Change in Control' Severance Agreement
between the Bank and the named executive officer.
Each agreement requires the named executive officer covered thereby to
mitigate damages by seeking comparable employment within six months of the date
that his employment with the Bank terminates.
'CHANGE IN CONTROL' SEVERANCE AGREEMENTS
The Greater has entered into agreements with Mr. Keegan and the other named
executive officers, which agreements become operative only in the event of a
'change in control' of the Bank (as defined
28
<PAGE>
<PAGE>
in each agreement) and a subsequent involuntary termination of the named
executive officer's employment by the Bank, other than for 'cause' (as defined
in each agreement), or termination by the officer for 'good reason' (as defined
in each agreement). The agreement for Mr. Keegan provides that, in the event of
such a termination of employment during the term of the agreement or, if later,
within two years following a 'change in control' that occurs during the term of
the agreement, he will be entitled to (i) an amount equal to three times the
aggregate of his then current base salary plus his highest annual bonus awarded
in the three years preceding the 'change in control'; (ii) an amount in respect
of his outstanding stock options (whether or not then vested) equal to the
spread between the option price and the greater of market price or the highest
price paid in connection with the 'change in control'; (iii) an amount equal to
the unvested portion of his accrued benefit or account balance, as the case may
be, under the Bank's tax-qualified and non-qualified defined benefit plans and
defined contribution plans; (iv) two years of continuing coverage, at the Bank's
expense, under the Bank's health and welfare plans; (v) an amount equal to the
prorated value of outstanding performance units, if any, under the Bank's 1987
Plan; and (vi) if Mr. Keegan, at the time of his termination of employment, is
age 55 or older and has satisfied the early retirement eligibility standard set
forth in the Retirement Plan maintained by the Bank, an amount equal to the
amount by which the present value of his benefits under the Retirement Plan and
the Supplemental Plan would have increased had there been no actuarial reduction
in his benefits because of early retirement. The agreement also provides for a
tax 'gross-up' payment in the event that any portion of the benefits is taxable
under Section 4999 of the Internal Revenue Code of 1986, as amended (the
'Code'). The term of Mr. Keegan's agreement is for three years with automatic
one-year renewals at the end of each year of the agreement unless the Bank
notifies Mr. Keegan to the contrary at least three months prior to a scheduled
renewal.
The Bank has also entered into similar agreements with the other four named
executive officers of the Bank. These agreements provide for a severance payment
equal to two times salary and bonus (as determined in clause (i) of the
preceding paragraph). In all other material respects, the agreements of other
named executive officers are identical to the agreement for Mr. Keegan.
EMPLOYEE BENEFIT PLANS
1997 Annual Incentive Plan. The Board of Directors established an Incentive
Plan covering all officers of the Bank on January 1, 1997. Under the plan, such
officers may receive cash awards based upon the achievement of certain measures
of performance by the individual officer and the Bank during 1997. The Bank's
performance will be measured by comparing its 'efficiency ratio,' adjusted for
extraordinary items, to the efficiency ratio of a peer group over the
twelve-month period ending with the third quarter of 1997. The individual's
performance will be measured by his or her achievement of agreed-upon goals. The
maximum award payable under the plan's formula ranges from 7.5% to 45% of the
officer's base salary at year end 1997. Payments may range from $0 to the
maximum described above. The maximum payout will be made only if the Bank and
the individual officer achieve the highest levels of performance under the plan.
No payout will be made unless the Bank's annual net income before extraordinary
items ('annual net income') for 1997 exceeds its annual net income for 1996.
Retirement Plan. The Plan of Pensions and Retirement Benefits of The
Greater New York Savings Bank (the 'Retirement Plan') is maintained for the
benefit of all employees who have completed at least 1,000 hours of service
during the 12 consecutive month period commencing on their first day of
employment or any anniversary thereof. Directors who are not officers of the
Bank are not eligible to participate in the Retirement Plan. The Retirement Plan
is administered by the Benefits Committee of the Board of Directors. Fiduciary
Trust Company International serves as Plan Trustee for the Retirement Plan. The
Retirement Plan is designed to be qualified under Section 401(a) of the Code.
The Retirement Plan provides normal retirement benefits for each
participant who terminates employment with the Bank upon or after attaining the
normal retirement age, which is the later of (i) age 65 or (ii) if the employee
is hired after age 60, the earlier of (x) the completion of five years of
credited service or (y) the fifth anniversary of participation in the plan. The
amount of the normal retirement allowance, when paid in the form of a
single-life annuity, is equal to 2% of the participant's average annual
compensation during the 60 consecutive months of highest compensation multiplied
by
29
<PAGE>
<PAGE>
the number of years of credited service with The Greater. Benefits are not
subject to any deduction for social security or other offsets. The normal
retirement allowance under the Retirement Plan may not be more than 60% of the
participant's average annual compensation during the three consecutive years in
which the participant's compensation, as defined in the Retirement Plan, was the
highest. Retirement Plan benefits are also payable upon death, disability (as
defined in the Retirement Plan) and upon qualified early retirement (subject to
actuarial reduction).
The following table sets forth the estimated annual benefits payable under
the Retirement Plan upon retirement at age 65 in calendar year 1997, expressed
in the form of single-life annuity, in the compensation and credited service
classifications specified.
<TABLE>
<CAPTION>
ANNUAL BENEFITS FOR YEARS OF CREDITED SERVICE
INDICATED(1)(2)
------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 75,000
150,000 45,000 60,000 75,000 90,000 90,000
175,000 52,500 70,000 87,500 105,000 105,000
200,000 60,000 80,000 100,000 120,000 120,000
225,000 67,500 90,000 112,500 135,000 135,000
250,000 75,000 100,000 125,000 150,000 150,000
300,000 90,000 120,000 150,000 180,000 180,000
400,000 120,000 160,000 200,000 240,000 240,000
500,000 150,000 200,000 250,000 300,000 300,000
600,000 180,000 240,000 300,000 360,000 360,000
700,000 210,000 280,000 350,000 420,000 420,000
800,000 240,000 320,000 400,000 480,000 480,000
900,000 270,000 360,000 450,000 540,000 540,000
</TABLE>
- ------------
(1) Normal retirement benefits are limited to 60% of the average annual
compensation during the three consecutive years in which the participant's
compensation was the highest.
(2) These are hypothetical benefits based upon the Retirement Plan's normal
benefit formula. Any portion of such benefits not payable under the
Retirement Plan due to the limitations imposed by the Code on tax-qualified
plans are payable under The Greater New York Savings Bank Supplemental
Executive Retirement Plan.
------------------------
The following table sets forth the years of credited service under the
Retirement Plan as of March 31, 1997 for each of the individuals named in the
Cash Compensation Table.
<TABLE>
<CAPTION>
CREDITED SERVICE
----------------------------
YEARS MONTHS
----------- ---------------
<S> <C> <C>
Gerard C. Keegan................................................. 26 1
Michael J. Henchy................................................ 26 8
Daniel J. Harris................................................. 5 2
Philip A. Cimino................................................. 24 3
Philip T. Spies.................................................. 11 7
</TABLE>
Savings Plan. The Bank maintains the Savings Plan, which is a defined
contribution plan, for the benefit of employees who have completed at least one
year of service with the Bank. Directors who are not officers of the Bank are
not eligible to participate in the Savings Plan. The Savings Plan is intended to
be qualified under Sections 401(a) and (k) of the Code.
The Savings Plan provided for pre-tax participant contributions and
matching contributions by the Bank through March 10, 1989. Prior to March 11,
1989, participants could elect to contribute up to nine percent of their base
pay on a pre-tax basis, subject to the requirements of Section 401(k) of the
Code. Pre-tax participant contributions have not been permitted after March 10,
1989.
30
<PAGE>
<PAGE>
Prior to March 11, 1989, matching contributions were made by the Bank to
the Savings Plan equal in amounts to 100 percent of participant's pre-tax
contributions, but not in excess of six percent of the participant's
compensation for the year. As of March 10, 1989, the Bank ceased making any
further matching contributions to the Savings Plan, as a result of the adoption
of the ESOP.
Separate accounts are maintained for participant pre-tax contributions,
participant after-tax contributions (which were permitted prior to January 1,
1989) and the Bank's matching contributions. All contributions are held by
United States Trust Company of New York, the trustee of the Savings Plan.
Participants direct the investment of amounts credited to their accounts among
six types of investment funds, including a 'Bank Stock Fund' which invests only
in Bank Common Stock. Purchases of Bank Common Stock by the trustee are made in
the open market. The trustee votes all shares in the Bank Stock Fund in its sole
discretion.
Employee Stock Ownership Plan. The Bank has established the ESOP for
employees who have completed one year of service with the Bank. The ESOP is
intended to qualify under Sections 401(a) and 4975(e)(7) of the Code. The Bank's
Board of Directors authorized Marine Midland Bank, N.A., the former trustee of
the ESOP, to undertake a 15-year loan in the amount of $22.9 million from a
consortium of five third-party lenders, the proceeds of which were used by the
trustee to purchase 1,761,538 shares of Bank Series A Preferred Stock from The
Greater. The Bank also made an initial contribution to the ESOP of 2,775 shares
of Bank Series A Preferred Stock with respect to which approximately five shares
per participant were immediately allocated to participants' accounts. As the
ESOP loan is repaid each year, approximately one-fifteenth of the shares
originally purchased will be released from a special ESOP suspense account at
the end of that year and allocated to participants' accounts in a
nondiscriminatory manner in accordance with the Code. Repayment of the ESOP loan
has been guaranteed by the Bank, and that guarantee has been secured by the
Bank's pledge of FNMA and FHLMC certificates to the trustee.
The Bank Series A Preferred Stock pays cumulative dividends of $1.0725 per
share per year, has one vote per share and votes with the Bank's Common Stock as
a single class except as otherwise required by law. Bank Series A Preferred
Stock is convertible into shares of Bank Common Stock at a conversion price of
$13.76 with each share of Bank Series A Preferred Stock valued at $13.00 for
such purpose. This conversion price is subject to standard anti-dilution
adjustments. The Bank Series A Preferred Stock is subject to redemption by The
Greater after July 1, 1992 at prices declining ratably from $13.70 per share at
that time to $13 per share after July 1, 1999. The Bank Series A Preferred Stock
is not transferable without the consent of The Greater.
Each year, the Bank is obligated to make contributions to the ESOP in an
amount equal to the principal and interest which must be repaid to the lenders
for such year. Subject to certain limitations under the Code, the contributions
by the Bank are tax deductible. At the election of the Bank, dividends paid on
the unallocated shares held by the ESOP and purchased with the loan proceeds may
be used to repay the loan, for which the Bank would receive a tax deduction. In
addition, the Bank may make additional contributions to the ESOP at its
discretion. No employee contributions are permitted under the ESOP.
Separate accounts are maintained for each participant in the ESOP. The
shares credited to a participant's account become 20% vested after two years of
vesting service, and an additional 20% vested for each year thereafter, so a
participant is fully vested after six years of vesting service. Credit is given
for all service with the Bank (and its subsidiaries and affiliated
corporations), including for periods prior to the effective date of the ESOP.
The ESOP provides that each participant has the right to instruct the ESOP
trustee confidentially how to vote the shares allocated to his account. The
unallocated shares and the allocated shares for which no participant
instructions are received are voted proportionally based upon the voting
instructions received on the allocated shares. Pass-through voting rights also
apply with respect to tender or exchange offers made for the Bank's stock.
However, in such cases, allocated shares for which no participant instructions
are received are not tendered or exchanged. The unallocated shares are tendered
or exchanged in the same proportion as the allocated shares.
31
<PAGE>
<PAGE>
Distributions from the ESOP following termination of employment are made in
a lump sum or in installments over a period not to exceed five years. A
participant entitled to a distribution from his account has the right to direct
the trustee to either (i) sell to the Company the Bank Series A Preferred Stock,
or (ii) convert such shares into Bank Common Stock, whichever shall result in
greater value to the participant. The cash or the Bank Series A Preferred Stock
so converted to Bank Common Stock is distributed to such participants.
Terminated participants who have fewer than 100 shares in their accounts may
elect to receive their distributions in cash rather than shares of Bank Common
Stock. The ESOP is administered by the ESOP Administrative Committee, comprised
of senior officers of the Bank.
Supplemental Executive Retirement Plan. The Greater New York Savings Bank
Supplemental Executive Retirement Plan (the 'Supplemental Plan') is a
supplemental retirement plan intended (i) to compensate participants in the
Retirement Plan whose benefits thereunder are limited pursuant to Sections
401(a)(17) or 415 of the Code, and (ii) to compensate participants in the ESOP
whose benefits are limited under the aforementioned sections of the Code. The
normal form of supplemental pension benefit is an actuarially reduced joint and
survivor annuity for married participants and an actuarially reduced 15 year
term certain annuity for unmarried participants. However, participants may elect
to receive their supplemental pension benefit in a lump sum, life annuity or
installment payment option, each of which is the actuarial equivalent of the
normal form of supplemental pension benefit. Supplemental pension benefits are
payable in a lump sum in the event of a 'change in control' of the Bank. See
'Employee Benefit Plans -- Retirement Plan' and the table therein setting forth
the estimated annual benefits payable under the Retirement Plan for an
illustration of the benefits that may be accrued under the Retirement Plan
absent the limitations of Sections 401(a)(17) and 415 of the Code.
A participant in the Supplemental Plan is also entitled to receive a
supplemental ESOP benefit equal to the fair market value of (i) the number of
shares of stock that would have been contributed to the ESOP on behalf of the
participant but for Sections 415 and 401(a)(17) of the Code over (ii) the number
of shares of stock actually contributed to the ESOP on behalf of the
participant. Fair market value will be determined as of December 31st of each
year. Interest will be credited semi-annually on the fair market value on all
supplemental ESOP benefits and all interest earned thereon at an annual interest
rate of 8 1/4%. Supplemental ESOP benefits are payable in a lump sum on the
earlier of (i) the participant's termination of service or (ii) the
participant's death.
The Supplemental Plan is administered by the Benefits Committee of the
Board of Directors. The Bank has established an irrevocable trust with United
States Trust Company of New York as Trustee to which the Bank has transferred
funds from its general assets to be used to fund supplemental pension benefits
and supplemental ESOP benefits under the Supplemental Plan. Under the terms of
the Trust Agreement, the assets of the trust established for the Supplemental
Plan will be used for paying benefits under the Supplemental Plan. As of
February 28, 1997, the trust had assets valued at $1,853,481.
CERTAIN TRANSACTIONS
From time to time, the Bank makes loans to its officers (other than its
executive officers) and employees, as well as to members of their immediate
families and their associates, to the extent consistent with applicable laws and
regulations. The Bank makes loans to full time employees and officers in
connection with the purchase or refinance of their primary residence or a home
equity loan at a reduced interest rate and with reduced fees ('Employee Loans').
Upon termination of employment, the interest rate will revert to the otherwise
applicable rate. All other loans are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and do not involve more than the
normal risk of collection or present other unfavorable features. The Bank as a
matter of policy does not make loans to its directors and executive officers.
32
<PAGE>
<PAGE>
PROPOSAL NUMBER 2: APPROVAL OF THE PROPOSED
AGREEMENT AND PLAN OF REORGANIZATION
PLAN OF REORGANIZATION
Pursuant to the Reorganization, Bancorp will become the holding company for
the Bank and all outstanding Bank Common Stock, Bank Series A Preferred Stock
and Bank Series B Preferred Stock will be converted, on a one-for-one basis,
into all of the outstanding Bancorp Common Stock, Bancorp Series A Preferred
Stock and Bancorp Series B Preferred Stock, respectively. A copy of the Plan of
Reorganization is attached as Appendix A and is incorporated herein by
reference. The following discussion is qualified in its entirety by reference to
the Plan of Reorganization.
Bancorp is a newly-organized Delaware corporation that was formed by the
Bank for the purpose of effecting the Reorganization, and therefore it has no
operating history. As part of the Reorganization, Bancorp will organize Interim
Bank as its wholly-owned subsidiary. If the Plan of Reorganization is approved
by the holders of the Bank Common Stock and the holders of the Bank Series A
Preferred Stock, voting together as a single class, and all other conditions set
forth in the Plan of Reorganization are satisfied, on the Effective Date (as
defined below) of the Reorganization, Interim Bank will be merged with and into
the Bank, with the Bank as the surviving savings bank.
After the Reorganization, the Bank will continue its existing business and
operations, as a subsidiary of Bancorp. The consolidated capitalization, assets,
liabilities, income, stockholders' equity and financial statements immediately
following the Reorganization will be substantially the same as those of the Bank
immediately prior to the consummation of the Reorganization. Immediately
following the Reorganization, Bancorp's Board of Directors will be identical to
that of the Bank and the Directors will hold the same term of office on the
Bancorp Board as they hold on the Bank Board of Directors and the senior
executive officers of Bancorp will be certain officers of the Bank. It is also
expected that the organization of Bancorp's Board of Directors and its
committees will be substantially similar to that of the Bank's Board of
Directors as discussed under 'Proposal Number 1: Election of Directors.' The
Bank Restated Organization Certificate and Bank Bylaws will continue in effect
and will not be affected in any manner by the Reorganization. The Bank will
continue to operate under the name 'The Greater New York Savings Bank.' The
Bank's deposit accounts will continue to be insured under the Bank Insurance
Fund of the FDIC. The corporate existence of the Bank will continue unaffected
and unimpaired by the Reorganization, except that all of the outstanding capital
stock of the Bank will be owned by Bancorp.
The holders of Bank Common Stock, Bank Series A Preferred Stock and Bank
Series B Preferred Stock will own all of the outstanding Bancorp Common Stock,
Bancorp Series A Preferred Stock and Bancorp Series B Preferred Stock,
respectively, after the Effective Date of the Reorganization, having received
that stock in exchange for their shares of Bank Capital Stock.
REASONS FOR REORGANIZATION
The Board of Directors believes that the Reorganization will provide
greater financial, investment and operating flexibility than is currently
enjoyed by the Bank.
Under Section 593(e) of the Internal Revenue Code, any amounts paid by the
Bank to its stockholders to repurchase shares of Bank Common Stock, Bank Series
A Preferred Stock or Bank Series B Preferred Stock would result in adding the
aggregate repurchase price to the Bank's taxable income and thereby result in a
Federal tax liability to the Bank of approximately 35% of such purchase price.
These repurchase provisions do not apply to a holding company such as Bancorp.
After the Reorganization, Bancorp would have greater flexibility to undertake a
repurchase program without suffering such adverse tax consequences and would
expect to consider such a program.
Immediately following the Reorganization, Bancorp will be a 'unitary'
savings and loan holding company (i.e., a savings and loan holding company with
only one depository institution subsidiary) and as such generally will not be
restricted in the types of businesses in which it may engage. For additional
information regarding the implications of being a savings and loan holding
company, see 'Regulation of Bancorp and Acquisitions of Its Stock.' While the
Bank, as a New York State-chartered capital stock
33
<PAGE>
<PAGE>
savings bank, enjoys certain 'leeway' authority that permits equity and other
investments in a broad range of businesses and activities, this leeway authority
is subject to a limitation of 1% of assets in any one leeway investment and an
aggregate of 5% of assets in all leeway investments. The Bank's leeway authority
is further encumbered by provisions of the Federal Deposit Insurance Corporation
Improvement Act of 1992 that limit the ability of nonmember state banks to make
investments, or engage as principal in activities, that would not be permissible
for a national bank. Bancorp would not be subject to such limitation on its
investments in non-banking activities. In addition, Bancorp would not be subject
to the limitations on investments in and lending to service corporations to
which the Bank is currently subject. Although there are no plans at present for
Bancorp to diversify into businesses that are not currently permitted for the
Bank itself or to invest in businesses conducted by the Bank beyond the Bank's
current authority, the Bank's Board of Directors believes that, if it is deemed
appropriate in the future, the holding company structure will provide greater
flexibility and facilitate such diversification or expansion.
In addition, Bancorp (directly or through subsidiaries other than the Bank)
may be able to conduct certain businesses currently conducted by the Bank or its
subsidiaries without certain of the capital costs or other regulatory
restrictions currently imposed on the Bank and its subsidiaries. Although it is
not expected that Bancorp, after the Reorganization, will initially have
significant assets other than the capital stock of the Bank, the Bank in the
future could transfer portions of its existing operations to separate
subsidiaries of Bancorp. There are no plans at present with respect to the
transfer of any such operations or the establishment of separate operating
subsidiaries of Bancorp. Any transactions between the Bank and Bancorp will be
subject to substantial regulatory limitations. See 'Regulation of Bancorp and
Acquisitions of Its Stock.'
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PROPOSED REORGANIZATION
AND RECOMMENDS A VOTE FOR THE APPROVAL OF THE PLAN OF REORGANIZATION.
DESCRIPTION OF REORGANIZATION
The Reorganization will be accomplished through the following steps:
1. Bancorp has been incorporated under the laws of the State of
Delaware as a wholly-owned subsidiary of the Bank.
2. Bancorp will organize Interim Bank as its wholly-owned subsidiary.
3. Interim Bank will be merged into the Bank, with the Bank as the
receiving and surviving savings bank.
4. As part of the merger, shares of Bank Common Stock, Bank Series A
Preferred Stock and Bank Series B Preferred Stock outstanding prior to the
merger (other than shares of Bank Common Stock or Bank Series A Preferred
Stock held by persons who perfect their dissenters' rights in accordance
with the New York Banking Law) will be converted, on a one-for-one basis,
into shares of Bancorp Common Stock, Bancorp Series A Preferred Stock and
Bancorp Series B Preferred Stock, respectively, with the result that Bank
stockholders (other than those who have exercised their dissenters' rights)
will become the sole stockholders of Bancorp.
5. The shares of Bancorp Common Stock held by the Bank will be
canceled.
6. The shares of common stock of Interim Bank outstanding prior to the
merger will be converted into shares of common stock of the Bank, with the
result that after the merger all of the issued and outstanding capital
stock of the Bank will be owned by Bancorp.
TREATMENT OF THE BANK STOCK CERTIFICATES
After the Reorganization is consummated, Bank stock certificates (other
than those representing dissenting shares) will automatically represent the same
number of shares of Bancorp Common Stock, Bancorp Series A Preferred Stock or
Bancorp Series B Preferred Stock as the number of shares of Bank Common Stock,
Bank Series A Preferred Stock or Bank Series B Preferred Stock, respectively,
previously represented by such stock certificates, and the holders of such
certificates (other than those
34
<PAGE>
<PAGE>
representing dissenting shares) will have all of the rights of holders of
Bancorp Common Stock, Bancorp Series A Preferred Stock or Bancorp Series B
Preferred Stock, as the case may be. After the Reorganization is consummated,
Bank stockholders (other than dissenting stockholders) will be entitled, but not
required, to exchange their Bank stock certificates for new certificates
evidencing the same number of shares of Bancorp Common Stock, Bancorp Series A
Preferred Stock or Bancorp Series B Preferred Stock. ChaseMellon Stockholder
Services, L.L.C., Overpeck Centre, 85 Challenger Road, Ridgefield Park, NJ 07660
is the transfer agent and registrar for Bank Common Stock and Bank Series B
Preferred Stock and will act in the same capacity for Bancorp Common Stock and
Bancorp Series B Preferred Stock. The Greater is the transfer agent and
registrar for the Bank Series A Preferred Stock. After the Reorganization,
Bancorp will act in such capacity for the Bancorp Series A Preferred Stock.
RESALE OF SHARES
The Bancorp Common Stock and Bancorp Series A Preferred Stock have been
registered under the Securities Act, thereby allowing, except in the case of
'affiliates' of the Bank or Bancorp, such shares to be traded freely and without
restriction by those holders of Bank Common Stock and Bank Series A Preferred
Stock who receive such shares following consummation of the Reorganization and
who are not deemed to be 'affiliates' (as defined under the Securities Act, but
generally including directors, certain executive officers and persons who are
beneficial owners of more than 10 per centum of such stock) of Bancorp or the
Bank. Bancorp Series A Preferred Stock is to be issued only to the ESOP trustee
and is subject to restrictions on transfer contained in the Bancorp Amended and
Restated Certificate of Incorporation. The Registration Statement on Form S-4,
of which this Proxy Statement/Prospectus is a part, does not cover any resales
by 'affiliates' of Bancorp or the Bank.
MARKET FOR BANCORP COMMON STOCK
Bancorp will apply to have Bancorp Common Stock approved for quotation on
the Nasdaq National Market. It is anticipated that the shares of Bancorp Common
Stock received by holders of Bank Common Stock in the Reorganization will be so
quoted, under the trading symbol 'GRTR', after the Effective Date of the
Reorganization. As a result, it is anticipated that the holders of Bank Common
Stock will be able to trade their shares of Bancorp Common Stock without
interruption. As is currently the case with respect to the Bank Series A
Preferred Stock and the Bank Series B Preferred Stock, Bancorp does not intend
to list the Bancorp Series A Preferred Stock or the Bancorp Series B Preferred
Stock on a national securities exchange or to qualify such stock for trading on
the automated quotation system of the National Association of Securities
Dealers.
EFFECT OF REORGANIZATION ON CAPITALIZATION OF THE BANK; CAPITALIZATION OF
BANCORP
The principal effect of the Reorganization on the capitalization of the
Bank will be that its stockholders' equity relating to the Bank Series A
Preferred Stock and the Bank Series B Preferred Stock will become Bank Common
Stock stockholder's equity and its stockholder's equity will be reduced by
approximately $1 million that will be contributed to Bancorp prior to the
Reorganization for expenses relating to the Reorganization and Bancorp's initial
operations. The expenses incurred in connection with the Reorganization are
expected to be capitalized and amortized over a period of five years. On a pro
forma basis after giving effect to the Reorganization, the Bank's Tier 1
regulatory capital ratios will increase because the resulting stockholder's
equity from the exchange of the Bank Series A Preferred stock will become Bank
Common Stock stockholder's equity, whereas the Series A Preferred Stock does not
qualify as Tier 1 capital of the Bank because it is cumulative. Although as a
savings and loan holding company, Bancorp will not be subject to any specific
regulatory capital requirements, its consolidated regulatory capital ratios
would approximate those of the Bank on a pro forma basis as of December 31,
1996. As of December 31, 1996, the Bank had Tier 1 and total risk-based capital
ratios of 12.99% and 14.62%, respectively, and a Tier 1 leverage ratio of 7.06%
which resulted in it being considered 'well-capitalized' for regulatory
purposes. The historical and pro forma
35
<PAGE>
<PAGE>
capitalization of the Bank and the pro forma capitalization of Bancorp after
giving effect to the Reorganization as of December 31, 1996 is as follows ($ in
thousands):
<TABLE>
<CAPTION>
BANK
----------------------- BANCORP
HISTORICAL PRO FORMA PRO FORMA
---------- --------- ---------
<S> <C> <C> <C>
Series A Preferred Stock.......................................... $ 19,336 $ -- $ 19,336
ESOP Debt Guarantee............................................... (14,230) (14,230) (14,230)
Series B Preferred Stock.......................................... 47,312 -- 47,312
Common Stock...................................................... 13,534 1 13,534
Common Stock Paid in Capital...................................... 102,883 182,065 102,883
Surplus and Undivided Profits..................................... 40,843 40,843 40,843
Net Unrealized (Loss) Gain on Securities Available for Sale, Net
of Taxes........................................................ (30) (30 ) (30 )
---------- --------- ---------
Total Stockholder('s)(s') Equity........................ $ 209,648 $208,649 $209,648
---------- --------- ---------
---------- --------- ---------
</TABLE>
RIGHTS OF DISSENTING STOCKHOLDERS IN THE REORGANIZATION
Any holder of Bank Common Stock or Bank Series A Preferred Stock entitled
to vote on the Plan of Reorganization who does not vote in favor thereof has the
right to receive payment of the fair value of such stockholder's shares of Bank
Common Stock or Bank Series A Preferred Stock upon compliance with the
provisions of section 6022 of the NYBL. Failure to comply strictly with the
procedures set forth in that section will cause the stockholder to lose
dissenters' rights. The following summary of the applicable provisions of
section 6022 of the NYBL is not intended to be a complete statement thereof and
is qualified in its entirety by reference to the full text of section 6022 of
the NYBL, which is attached as Appendix B.
Any Bank stockholder intending to enforce his or her right to receive
payment for shares of Bank Common Stock or Bank Series A Preferred Stock may not
vote in favor of the Plan of Reorganization and must file with The Greater
before or at the annual meeting (but before the stockholders' vote), written
objection to the Plan of Reorganization and to the related exchange of Bank
Common Stock for Bancorp Common Stock and Bank Series A Preferred Stock for
Bancorp Series A Preferred Stock. The objection must state that the stockholder
intends to demand payment for his or her shares of Bank Common Stock or Bank
Series A Preferred Stock if the reorganization is consummated. Each stockholder
who has filed such an objection will be notified of the approval of the plan
within ten (10) days following the date of any approval by the Bank
stockholders. Any such stockholder who elects to dissent must, within twenty
(20) days of the giving of such notice, file with The Greater a written notice
of such election containing the information required under section 6022 of the
NYBL, and simultaneously or within one month thereafter, must submit the
certificate representing shares of Bank Common Stock or Bank Series A Preferred
Stock for placement of the appropriate legend thereon. A stockholder may not
dissent as to less than all of the shares of Bank Common Stock and Bank Series A
Preferred Stock held by the stockholder.
Upon filing a Notice of Election to dissent, a stockholder will cease to
have any of the rights of a stockholder of Bank Common Stock or Bank Series A
Preferred Stock, including dividend rights, except the right to be paid the fair
value of his or her shares and such other rights as are granted under the NYBL.
Withdrawal of any election to dissent will require the written consent of The
Greater. If the Reorganization is not consummated, dissenting stockholders will
have no right to payment for shares and will be reinstated with all rights of a
stockholder of Bank Common Stock and/or Bank Series A Preferred Stock.
Within seven (7) days after the later of the expiration of the period
within which stockholders may file their written election to dissent or the
consummation of the reorganization, The Greater may make a written offer to all
dissenting stockholders of the Bank to pay a specified amount, which it
considers to be a fair amount, for each share of Bank Common Stock or Bank
Series A Preferred Stock held by dissenting stockholders. If, within thirty (30)
days of such offer, any dissenting stockholder and The Greater agree on the
price to be paid for the stockholder's shares of Bank Common Stock or Bank
36
<PAGE>
<PAGE>
Series A Preferred Stock, the agreed upon payment will be made within sixty (60)
days of the written offer and upon surrender of the certificates representing
such shares.
If a written offer is not made within the specified period or if there is
no agreement with the dissenting stockholder on the price to be paid, then The
Greater may institute a special court proceeding to determine the rights of
dissenting stockholders and to fix the fair value of shares of Bank Common Stock
or Bank Series A Preferred Stock. If such proceeding is not instituted, then any
dissenting stockholder who has not accepted an offer must initiate a similar
court proceeding within thirty (30) days of the last date on which The Greater
could have initiated such a court proceeding. If the required court proceeding
is not instituted within the thirty (30) day period, a dissenting stockholder
shall lose all dissenters' rights unless the court directs otherwise.
CONDITIONS TO THE REORGANIZATION
The Plan of Reorganization sets forth several conditions that must be met
before the Reorganization will be consummated, including the following: (i) all
required approvals of the stockholders of the Bank, Bancorp and Interim Bank
shall have been obtained; (ii) approval of the Reorganization by the OTS, the
FDIC, the Superintendent and any other governmental agency having jurisdiction;
and (iii) receipt of an opinion of counsel to the Bank or a ruling from the
Internal Revenue Service (the 'IRS') generally to the effect that the
Reorganization will be treated as a non-taxable transaction under the Code. See
'Tax Consequences of Reorganization' below. The Plan of Reorganization may be
terminated at any time prior to the Effective Date at the option of the Bank's
Board of Directors for any reason, whether before or after any Bank stockholder
approval of the Plan of Reorganization. For example, the Bank's Board of
Directors will have the right to terminate the Plan of Reorganization if the
number of stockholders exercising dissenter's rights would necessitate payments
in amounts greater than the Bank's Board of Directors may deem appropriate.
THE MANAGEMENT OF THE BANK HAS NO REASON TO BELIEVE THAT THE REQUIRED
REGULATORY APPROVALS WILL NOT BE OBTAINED. HOWEVER, THERE CAN BE NO ASSURANCE
THAT SUCH REGULATORY APPROVALS WILL BE OBTAINED, AND, IF THE REORGANIZATION IS
APPROVED, THERE CAN BE NO ASSURANCE AS TO THE DATE OF ANY SUCH APPROVALS. THERE
CAN ALSO BE NO ASSURANCE THAT SUCH APPROVALS WILL NOT CONTAIN A CONDITION OR
REQUIREMENT WHICH CAUSES THE BANK'S BOARD OF DIRECTORS TO BELIEVE THAT THE
REORGANIZATION, AS SO MODIFIED, IS NOT IN THE BEST INTEREST OF THE BANK AND ITS
STOCKHOLDERS.
EFFECTIVE DATE
The 'Effective Date' of the Reorganization will be the later of (i) the
date designated by The Greater to the Superintendent as the date on which the
Reorganization shall be effective or (ii) the date on which the Superintendent
files the Plan of Reorganization. Management expects the Effective Date to occur
in the second quarter of 1997.
AMENDMENT OF PLAN OF REORGANIZATION
The Boards of Directors of the Bank, Bancorp and Interim Bank may amend the
Plan of Reorganization if they determine for any reason that such amendment
would be advisable. Such amendment may occur at any time prior to the
consummation of the Reorganization, whether before or after approval of the Plan
of Reorganization by the holders of Bank Common Stock and the holders of Bank
Series A Preferred Stock, except that, after such approval, the Plan of
Reorganization will not be amended in any respect deemed by the Bank's Board of
Directors to be materially adverse to either the holders of Bank Common Stock or
Bank Series A Preferred Stock.
EFFECT OF REORGANIZATION ON BENEFIT PLANS
Upon consummation of the Reorganization, Bancorp is expected to assume the
rights and obligations of the Bank under the Bank's Supplemental Plan, ESOP,
Savings Plan, 1987 Plan, Directors' Retirement Plan, Retirement Plan,
Non-Employee Directors' Deferred Compensation Plan, 1996 Plan, 1997 Annual
Incentive Plan and the Directors Option Plan (providing for the granting of
options to
37
<PAGE>
<PAGE>
purchase 4,000 shares of Bank Common Stock at the 1997 Annual Meeting of
Stockholders and at each subsequent Annual Meeting of Stockholders thereafter).
In addition, following the consummation of the Reorganization, Bancorp is
expected to assume the obligations of the Bank to deliver or make available
shares of Bank Common Stock under any other agreement, plan or program to which
The Greater or any of its subsidiaries is a party. In accordance with the
foregoing, upon the consummation of the Reorganization, any reference to Bank
Common Stock or Bank Series A Preferred Stock under any such assumed agreement,
plan or program maintained by The Greater or any of its subsidiaries is expected
to become a reference to Bancorp Common Stock or Bancorp Series A Preferred
Stock, as the case may be.
ACCOUNTING TREATMENT OF REORGANIZATION
The assets, liabilities and stockholders' equity of the Bank will be
carried forward on the consolidated financial statements of Bancorp at the
respective amounts carried on the Bank's books on the Effective Date of the
Reorganization.
TAX CONSEQUENCES OF REORGANIZATION
The following discussion assumes that the Bank will have current or
accumulated earnings and profits in excess of the aggregate amount of cash
payments received by holders of Bank Common Stock in redemption of Bank Rights.
The Plan of Reorganization is expected to have the following federal income
tax consequences:
1. No gain or loss will be recognized by holders of Bank Common Stock
upon the exchange of their Bank Common Stock solely for Bancorp Common
Stock. See ' -- Taxation of Rights Redemption', below.
2. No gain or loss will be recognized by holders of Bank Series A
Preferred Stock upon the exchange of their Bank Series A Preferred Stock
solely for Bancorp Series A Preferred Stock.
3. No gain or loss will be recognized by holders of Bank Series B
Preferred Stock upon the exchange of their Bank Series B Preferred Stock
solely for Bancorp Series B Preferred Stock.
4. No gain or loss will be recognized by The Greater, Bancorp or
Interim Bank as a result of the merger of Interim Bank with and into The
Greater, with The Greater as the surviving savings bank.
5. The aggregate basis of the Bancorp stock received by each Bank
stockholder in the Reorganization will be the same as the aggregate basis
of the Bank stock exchanged therefor.
6. The holding period of the Bancorp Stock received by each Bank
stockholder in the Reorganization will include the holding period of Bank
stock exchanged therefor, provided that such stockholder held such Bank
stock as a capital asset on the date of the Reorganization.
Consummation of the Reorganization is conditioned upon, among other things,
the receipt by the Bank of an opinion of counsel or a ruling from the IRS
generally to the effect set forth above. Sullivan & Cromwell, counsel to Bancorp
and the Bank, has indicated that based on customary certificates to be delivered
by management of Bancorp and the Bank, it expects to be able to render such an
opinion.
If the Bank does not have sufficient earnings and profits as described
above, it is possible that a holder of Bancorp Common Stock would recognize gain
to the extent of, or such holder's basis in the Bancorp Common Stock received in
the Reorganization would be reduced by, the amount of cash received by such
holder in redemption of Rights.
The exchange of Bank Common Stock or Bank Series A Preferred Stock for cash
by a holder of such stock who exercises dissenters' appraisal rights will be a
taxable transaction to such holder for federal income tax purposes (and may also
be a taxable transaction under applicable state, local, foreign and other tax
laws). To the extent that the Bank pays dissenters for their shares of Bank
Common Stock or Bank Series A Preferred Stock, the Bank will be subject to tax
on amounts paid to dissenters according to Section 593(e)(2) of the Code.
38
<PAGE>
<PAGE>
Taxation of Rights Redemption. Receipt of a cash payment in redemption of a
Bank Right should be treated as a dividend taxable as ordinary income if the
Bank has sufficient earnings and profits as described above. In the absence of
such earnings and profits, it is possible such amounts would be non-taxable
return of basis or taxable gain.
The foregoing constitutes only a general description of certain tax
consequences of the Reorganization without regard to the particular facts and
circumstances of specific stockholders. Each Bank stockholder should consult his
or her own tax counsel or advisor as to the specific foreign, federal, state and
local tax consequences of the Reorganization to such stockholder.
PAYMENT OF DIVIDENDS; HOLDING COMPANY STRUCTURE
The ability of the Bank to pay dividends on Bank Common Stock, Bank Series
A Preferred Stock and Bank Series B Preferred Stock is restricted by the NYBL
and FDIC rules, regulations and policy. Under the NYBL, dividends may be
declared and paid by the Bank only out of its net profits, determined under
regulatory accounting practices. The approval of the Superintendent is required
if the total of all dividends declared in any calendar year will exceed net
profits for that year plus retained net profits for the preceding two years less
any required transfer to surplus. Under these restrictions, as of December 31,
1996, the Bank could pay dividends of approximately $22 million.
The NYBL further provides that no dividends may be declared, credited or
paid that would reduce stockholders' equity below the amount required in the
liquidation account that was established upon the Bank's conversion from mutual
to stock form. The required amount of the liquidation account stood at $2.8
million as of December 31, 1996 and is reduced annually. According to FDIC
rules, regulations and policy, no dividends may be paid on Bank Common Stock,
Bank Series A Preferred Stock or Bank Series B Preferred Stock if the Bank is
not in compliance with all applicable capital requirements or if the payment of
such dividends would cause the Bank's capital to fall below required levels or
exceed operating earnings. In addition, no dividends may be declared or paid on
Bank Common Stock unless full dividends have been paid on the outstanding Bank
Series A Preferred Stock and Bank Series B Preferred Stock for the most recently
concluded dividend period.
After the Reorganization, Bancorp's ability to pay dividends will not be
directly subject to the restrictions on the Bank's ability to pay dividends
described above. Bancorp will instead be limited by certain restrictions
generally imposed on Delaware corporations (i.e., dividends may be paid only out
of a Delaware corporation's surplus, as defined by Delaware law, or if there
should be no surplus, its net profits for the fiscal year in which the dividend
is declared and/or the preceding fiscal year) and, with respect to dividends on
the Bancorp Common Stock, by provisions of the Bancorp Amended and Restated
Certificate of Incorporation to the effect that no dividends may be declared or
paid on Bancorp Common Stock unless full dividends have been paid on the
outstanding Bancorp Series A Preferred Stock and Bancorp Series B Preferred
Stock for the most recently concluded dividend period.
The principal (and initially exclusive) source of income of Bancorp,
however, is expected to consist of dividends, if any, from the Bank, which will
continue to be subject to the existing regulatory restrictions on the Bank's
ability to pay dividends. Accordingly, Bancorp's ability to pay dividends will
depend on whether the Bank is permitted to, and actually does, pay dividends to
Bancorp. Any dividend that the Bank may pay to Bancorp following the
Reorganization may be used by Bancorp for purposes other than the payment of
dividends to Bancorp stockholders.
Because Bancorp is a newly-organized corporation, Bancorp's Board of
Directors has not considered or adopted a dividend policy with respect to the
Bancorp Common Stock it will issue in the Reorganization. However, it is
expected that the dividend policy of Bancorp will be similar to that of the
Bank. Based on the number of shares of Bank Series A Preferred Stock and Bank
Series B Preferred Stock outstanding as of December 31, 1996, the aggregate
annual dividends estimated to be payable on the Bancorp Series A Preferred Stock
and the Bancorp Series B Preferred Stock would be $7.6 million.
Because Bancorp is a holding company, the rights of Bancorp to participate
in any distribution of assets of any subsidiary, including the Bank, upon its
liquidation or reorganization or otherwise (and thus the ability of Bancorp's
stockholders to benefit indirectly from such distribution) would be subject
39
<PAGE>
<PAGE>
to the prior claims of creditors of that subsidiary, except to the extent that
Bancorp itself may be a creditor of that subsidiary with recognized claims.
Claims on Bancorp subsidiaries by creditors other than Bancorp will include
substantial obligations with respect to deposit liabilities and purchased funds.
CERTAIN DIFFERENCES IN STOCKHOLDER RIGHTS
The Bank is a New York State-chartered capital stock savings bank subject
to the provisions of the NYBL. Bancorp is a Delaware corporation subject to the
provisions of the DGCL. Holders of Bank Capital Stock, whose rights are governed
by the Bank Restated Organization Certificate, the Bank Bylaws and the NYBL, and
who have not properly exercised dissenters' rights will, upon consummation of
the Reorganization, become holders of Bancorp Capital Stock and, on the
Effective Date, their rights as stockholders will be determined by the Bancorp
Amended and Restated Certificate of Incorporation, the Bancorp Bylaws and the
DGCL. The privileges and rights of the holders of Bancorp Common Stock under the
Bancorp Amended and Restated Certificate of Incorporation and Bancorp Bylaws are
substantially the same as the privileges and rights of the holders of the Bank
Common Stock under the Bank Restated Organization Certificate and Bank Bylaws.
The terms, designations, preferences, limitations, privileges and rights of the
holders of Bancorp Series A Preferred Stock and the Bancorp Series B Preferred
Stock under the Bancorp Amended and Restated Certificate of Incorporation and
Bancorp ByLaws are substantially identical to those of the Bank Series A
Preferred Stock and Bank Series B Preferred Stock under the Bank Restated
Organization Certificate and Bank ByLaws. Nonetheless, certain differences will
exist, for the most part between the Bancorp Common Stock and the Bank Common
Stock.
The following is a summary of the material differences in the rights of
stockholders of the Bank under the Bank Restated Organization Certificate, the
Bank Bylaws and the NYBL, on the one hand, and the rights of stockholders of
Bancorp under the Bancorp Amended and Restated Certificate of Incorporation, the
Bancorp Bylaws and the DGCL, on the other hand. The following discussion does
not purport to be a complete discussion of, and is qualified in its entirety by
reference to, the governing laws, the Bank Restated Organization Certificate,
the Bank Bylaws, the Bancorp Amended and Restated Certificate of Incorporation
and the Bancorp Bylaws. The Bancorp Amended and Restated Certificate of
Incorporation and the Bancorp Bylaws are attached as Exhibits 1 and 2,
respectively, to Appendix A.
LIMITATION OF DIRECTOR AND OFFICER LIABILITY
Bancorp. Section 102(b)(7) of the DGCL permits the inclusion of a provision
in the certificate of incorporation of a Delaware corporation which eliminates
or limits the personal liability of a director of such corporation to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision does not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) for a breach of the DGCL provision relating to unlawful payment of
dividends or redemptions; or (iv) for any transaction from which the director
derived an improper personal benefit. The Bancorp Amended and Restated
Certificate of Incorporation contains a provision so eliminating the liability
of Bancorp directors to Bancorp or its stockholders for monetary damages for
breach of fiduciary duty as a director, except to the extent such exemption is
not permitted under the DGCL. Such provision absolves Bancorp directors from
liability for monetary damages to Bancorp or Bancorp's stockholders for
breaches of their duty of due care, even if it involved gross negligence, unless
the conduct falls within one of the statutory limitations.
Bank. There is no analogous provision in the Bank Restated Organization
Certificate as such a provision is not permitted under the NYBL.
REQUIRED VOTE FOR AUTHORIZATION OF CERTAIN ACTIONS
Bancorp. Under the DGCL, the approval of the Bancorp Board and the holders
of a majority of the outstanding shares of capital stock of Bancorp entitled to
vote are required for Bancorp to merge or consolidate with another corporation
or sell all or substantially all of its assets or voluntarily liquidate,
40
<PAGE>
<PAGE>
except as described below. Bancorp may, however, acquire another corporation or
bank (including through a merger with the Bank or another subsidiary of
Bancorp), for cash or stock, in a transaction that does not require any
stockholder approval.
Bank. The NYBL provides that a merger, a voluntary liquidation, or a sale
of assets by the Bank must be approved by the vote of at least two-thirds
(66 2/3%) of the stock of the Bank unless, in the case of a merger into the
Bank, the total assets of the merging entity do not exceed 10% of the total
assets of the Bank and the plan of merger does not change the name or the
authorized shares of capital stock of the Bank or make or require any other
change or amendment for which the approval or consent of shareholders of the
Bank would be required under the NYBL.
BUSINESS COMBINATION/STOCKHOLDER RIGHTS PLAN PROVISIONS
Bancorp. Section 203 of the DGCL provides that a person or entity that owns
15% or more of the outstanding voting stock of a Delaware corporation (an
'Interested Stockholder') may not consummate a merger or other business
combination transaction with such corporation at any time during the three-year
period following the date such person or entity became an Interested
Stockholder, unless an exemption described below is applicable. The term
'business combination' is defined broadly to cover a wide range of corporate
transactions including mergers, sales of assets, issuances of stock,
transactions with subsidiaries and the receipt of disproportionate financial
benefits.
The statute exempts the following transactions from the requirements of
Section 203: (i) any business combination if, prior to the date a person became
an Interested Stockholder, the board of directors approved either the business
combination or the transaction that resulted in the stockholder becoming an
Interested Stockholder, (ii) any business combination involving a person who
acquired at least 85% of the outstanding voting stock in the transaction in
which he or she became an Interested Stockholder, with the number of shares
outstanding calculated without regard to those shares owned by the corporation's
directors who are also officers or by certain employee stock plans, (iii) any
business combination with an Interested Stockholder that is approved by the
board of directors and by a two-thirds vote of the outstanding voting stock not
owned by the Interested Stockholder, (iv) business combinations with Interested
Stockholders who become interested when the corporation is not covered by the
statute and (v) certain business combinations that are proposed after the
corporation had received other acquisition proposals and that are approved or
not opposed by a majority of certain continuing members of the board of
directors.
Under the DGCL there is no statutory minimum beneficial ownership threshold
requirement for a stockholder rights plan to be authorized as there is under the
NYBL as described below.
Bank. The NYBL has no comparable business combination statute which is
applicable to the Bank. For a stockholder rights plan to be authorized under the
NYBL the beneficial ownership threshold at which a stockholder's rights may
become void must be at least 20%. See "Bancorp Rights Plan".
APPRAISAL RIGHTS
Bancorp. Pursuant to Section 262 of the DGCL, a stockholder of Bancorp,
including those not entitled to vote, will generally be entitled to appraisal
rights in connection with a merger, consolidation or similar transaction in
which the vote of the stockholders of Bancorp is required. No such appraisal
rights, however, are available for the shares of any class or series of stock if
(i) such class or series is either (a) listed on a stock exchange or quoted on
the Nasdaq National Market (as the Bancorp Common Stock is expected to be) or
(b) held of record by more than 2,000 holders and (ii) such class or series
receives stock in such transaction.
Bank. Pursuant to Section 6022 of the NYBL, a stockholder of the bank who
is entitled to vote on a merger, consolidation or similar transaction, and who
does not vote in favor of such action, is generally entitled to appraisal
rights, pursuant to which such stockholder has the right to demand payment of
the fair or appraised value of the stock. See 'Rights of Dissenting Stockholders
in the Reorganization,' below.
OTHER CONSTITUENCIES
Bancorp. The Bancorp Amended and Restated Certificate of Incorporation
contains a provision similar to that contained in Section 7015 of the NYBL
entitling the Bancorp Board of Directors to consider in taking any action,
including action relating to a potential change of control transaction, both
41
<PAGE>
<PAGE>
long term and short term interests of Bancorp and its stockholders and the
effect on constituencies other than the stockholders of Bancorp. The DGCL does
not contain such a provision.
Bank. The Bank Restated Organization Certificate contains a provision
requiring the Bank's Board of Directors, when evaluating a change of control
proposal presented to the Bank, to give due consideration to, among other
things, the possible effects on constituencies other than the stockholders of
the Bank. In addition, Section 7015 of the NYBL as described above contains a
provision specifically permitting the Bank's Board of Directors to consider in
taking any action, including in the context of a change in control, both the
long term and short term interests of the Bank and its stockholders and various
constituencies.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Bancorp. Under Section 145 of the DGCL, a Delaware corporation may fully
indemnify its directors, officers, employees and agents if such persons have
acted in good faith and in a manner such persons reasonably believed to be in or
not opposed to the best interests of the corporation and with respect to any
criminal action or proceeding, have no reasonable cause to believe such person's
conduct was unlawful. The Bancorp Bylaws provide that Bancorp shall indemnify
its directors, officers, employees and agents to the full extent permitted by
law.
Bank. Section 7019 of the NYBL allows indemnification of directors and
officers (but not employees) unless such persons have breached their duty under
Section 7015 of the NYBL. Section 7015 of the NYBL provides that directors and
officers shall discharge the duties of their respective positions in good faith
and with that degree of diligence, care and skill which an ordinarily prudent
man would exercise under similar circumstances, in like positions. The Bank
Bylaws provide for the full indemnification of the Bank's directors, officers
and employees to the extent permitted by law.
The NYBL requires that (i) stockholders be notified of any expenses or
other amounts paid to a director or officer by way of indemnification otherwise
than by court order or stockholder action and (ii) the Superintendent be
notified of any amounts to be paid to a director or officer by way of
indemnification at least 30 days prior to such payment.
DESCRIPTION OF BANCORP CAPITAL STOCK
General. The Bancorp Amended and Restated Certificate of Incorporation
authorizes the issuance of capital stock consisting of up to 45 million shares
of common stock, $1.00 par value, and up to 10 million shares of preferred
stock, $1.00 par value, including up to 1,800,000 shares of Bancorp Series A
Preferred Stock, up to 2,000,000 shares of Bancorp Series B Preferred Stock and
up to 150,000 shares of junior preferred stock. The Bancorp Board of Directors
has the power from time to time to issue additional shares of Bancorp Common
Stock or preferred stock authorized by the Bancorp Amended and Restated
Certificate of Incorporation without obtaining approval of Bancorp's
stockholders. The rights, qualifications, limitations and restrictions on each
series of preferred stock issued will be determined by Bancorp Board of
Directors and approved as required by the Delaware General Corporation Law or
otherwise, at the time of issuance and may include, among other things, rights
in liquidation, rights to participating dividends, voting and convertibility to
Bancorp Common Stock. The following descriptions of Bancorp Capital Stock are
qualified in their entirety by reference to the Bancorp Amended and Restated
Certificate of Incorporation and exhibits attached thereto which are a part
thereof.
Bancorp Common Stock. Shares of Bancorp Common Stock will be fully-paid and
non-assessable. Upon consummation of the Reorganization, holders of Bancorp
Common Stock along with holders of the Bancorp Series A Preferred Stock, voting
together as a class, will be entitled to one vote per share on all matters upon
which stockholders have the right to vote. With the exception of the limited
voting rights of holders of Bancorp Series B Preferred Stock described below and
certain limited class voting rights of the Bancorp Series A Preferred Stock
described below, the holders of Bancorp Common Stock and Bancorp Series A
Preferred Stock will possess exclusive voting rights in Bancorp. Stockholders
will not be entitled to cumulate their votes for the election of directors.
42
<PAGE>
<PAGE>
In the event of any liquidation, dissolution, or winding up of Bancorp, the
holders of the Bancorp Common Stock will be entitled to receive, after payment
of all debts and liabilities of Bancorp (including all deposits and accrued
interest thereon), after the rights, if any, of preferred stockholders, all
assets of Bancorp available for distribution in cash or in kind. Holders of the
Bancorp Common Stock will not be entitled to preemptive rights with respect to
any shares of Bancorp that may be issued. The Bancorp Common Stock will not be
subject to redemption and is not convertible.
As is the case with the Bank Restated Organization Certificate and Bank
Bylaws, the Bancorp Amended and Restated Certificate of Incorporation and
Bancorp Bylaws contain a number of provisions that may be deemed to have the
effect of discouraging or delaying attempts to gain control of Bancorp,
including provisions (i) classifying the Bancorp Board of Directors into three
classes with each class to serve for three years with one class being elected
annually; (ii) authorizing the Bancorp Board of Directors to fix the size of the
Bancorp Board between seven (7) and thirty (30) directors; (iii) authorizing
directors to fill Bancorp Board of Directors vacancies up to a maximum of
one-third of the entire Board of Directors that occur between annual meetings;
(iv) providing that the directors may be removed only for cause and only by the
affirmative vote of at least eighty (80) percent of the shares entitled to be
voted in the election of directors; (v) requiring that any action taken by
written consent of the stockholders without a meeting be unanimous; (vi)
allowing the Bancorp Board of Directors to give due consideration to
constituencies other than the Bancorp stockholders in evaluating acquisition or
merger proposals; (vii) providing that certain of the foregoing provisions may
only be amended by the affirmative vote of 66 2/3 percent or eighty (80) percent
of the shares entitled to be voted; and (viii) setting forth specific conditions
under which: (a) business may be transacted at an annual meeting of
stockholders; and (b) persons may be nominated for election as directors of
Bancorp at an annual meeting of stockholders.
The foregoing provisions could impede a change of control of Bancorp. In
particular, classification of the Bancorp Board of Directors has the effect of
decreasing the number of directors that could be elected in a single year by any
person who seeks to elect its designees to a majority of the seats on the
Bancorp Board of Directors. Furthermore, allowing the Bancorp Board of Directors
to consider non-stockholder constituencies may have the effect of increasing the
Bancorp Board of Directors' discretion to reject acquisition or merger
proposals.
In addition to the foregoing, in certain instances the issuance of
authorized but unissued shares of Bancorp Common Stock and Bancorp preferred
stock may have an anti-takeover effect. The authority of the Bancorp Board of
Directors to issue Bancorp preferred stock with rights and privileges, including
voting rights, as it may deem appropriate, may enable the Bancorp Board of
Directors to prevent a change of control despite a shift in ownership of Bancorp
Common Stock. In addition, the Bancorp Board of Directors' authority to issue
additional shares of Bancorp Common Stock may help deter or delay a change of
control by increasing the number of shares needed to gain control.
Bancorp Series A Preferred Stock. The Bancorp Amended and Restated
Certificate of Incorporation authorizes Bancorp to issue up to 1,800,000 shares
of Series A ESOP Convertible Preferred Stock. The terms of the Bancorp Series A
Preferred Stock are virtually identical (except for the fact the Bank is
replaced as the issuer by Bancorp) to those of the Bank Series A Preferred
Stock. The Bancorp Series A Preferred Stock, upon issuance in the
Reorganization, will be fully paid and nonassessable. The holders of Bancorp
Series A Preferred Stock will be subordinate to the rights of Bancorp's general
creditors. The Bancorp Series A Preferred Stock will not be subject to any
mandatory redemption, sinking fund, or other obligation of Bancorp to redeem or
retire the Bancorp Series A Preferred Stock. Such Stock will be issued pursuant
to The Greater New York Savings Bank ESOP, which was established to benefit
employees of Bancorp and its subsidiaries, and will be held exclusively by the
Bancorp ESOP Trustee for the benefit of participating employees of Bancorp and
its subsidiaries.
Rank. The Bancorp Series A Preferred Stock will rank senior to the Bancorp
Common Stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding-up. The Bancorp Series A Preferred Stock
will not rank junior to any other series of Bancorp's preferred stock as to the
payment of dividends or the distribution of assets on liquidation, dissolution
or winding-up.
43
<PAGE>
<PAGE>
As used below, 'Parity Stock' refers to issuances of equity securities by
Bancorp ranking on a parity with the Bancorp Series A Preferred Stock. 'Junior
Stock' refers to issuances of equity securities by Bancorp which do not
constitute Parity Stock.
Cumulative Dividends. The holders of shares of Bancorp Series A Preferred
Stock are entitled to receive cash dividends in an amount equal to $1.0725 per
share per annum, payable in equal proportions on the first day of January and
July of each year (the 'Series A Dividend Payment Date') commencing on the first
such date occurring after the date on which Bancorp acquires all of the
outstanding shares of capital stock of The Greater (the 'Holding Company
Formation'). Preferred dividends accrue on outstanding shares of the Bancorp
Series A Preferred Stock from the date of the last dividend payment date on the
Bank Series A Preferred Stock. Preferred dividends will accrue on a daily basis
whether or not Bancorp shall have earnings or surplus at the time, but preferred
dividends accrued for any period less than a full semi-annual period will be
computed on the basis of a 360-day year of 30-day months. Accumulated but
unpaid preferred dividends will cumulate as of the Series A Dividend Payment
Date on which they first become payable, but no interest will accrue on
accumulated but unpaid preferred dividends. So long as any Bancorp Series A
Preferred Stock is outstanding, no dividend will be declared or paid or set
apart for payment on any Parity Stock, unless there will have been or
contemporaneously are declared and paid or set apart for payment on the Bancorp
Series A Preferred Stock, like dividends for all dividend payment periods of the
Bancorp Series A Preferred Stock ending on or before the dividend payment date
of such Parity Stock, ratably in proportion to the respective amounts of
dividends accumulated and unpaid through such dividend payment period on such
Parity Stock next preceding such dividend payment date. Bancorp may not declare
or pay or set apart for payment any dividends or make any other distributions
on, or make any payment on account of the purchase, redemption or other
retirement of, any Junior Stock until full cumulative dividends on the Bancorp
Series A Preferred Stock will have been paid or declared and set apart.
There can be no assurance that any dividend on Bancorp Series A Preferred
Stock will be declared or, if so, in what amount. Further, there can be no
assurance that dividends, once declared, will continue for any future period.
The declaration and payment of future dividends on Bancorp Series A Preferred
Stock will be subject to business conditions, the earnings and financial
condition of Bancorp and the judgment of the Bancorp Board. Dividends will also
be affected by dividend restrictions and limitations imposed by the Delaware
General Corporation Law and by the ability of The Greater to pay dividends to
Bancorp. See 'Payment of Dividends.'
Liquidation Preference. In the event of any liquidation, dissolution or
winding up of Bancorp, voluntary or involuntary, the holders of Bancorp Series A
Preferred Stock will be entitled to receive out of the assets of Bancorp
available for distribution to stockholders, before any distribution of assets is
made to the holders of Bancorp Common Stock or other Junior Stock, liquidating
distributions in the amount of $13.00 per share, plus an amount equal to all
accumulated and unpaid dividends thereon to the date fixed for distribution. If,
upon any voluntary or involuntary liquidation, dissolution or winding up of
Bancorp, the amounts payable with respect to the Bancorp Series A Preferred
Stock and any Parity Stock are not paid in full, the holders of the Bancorp
Series A Preferred Stock and of such Parity Stock will share ratably in any such
distribution of assets of Bancorp in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidation distribution and all accumulated and unpaid dividends
to which they are entitled, the holders of Bancorp Series A Preferred Stock will
not be entitled to any further participation in any distribution of assets of
Bancorp. All distributions made with respect to the Bancorp Series A Preferred
Stock in connection with such liquidation, dissolution or winding up of Bancorp
will be made pro rata to the holders entitled thereto. Neither the merger or
consolidation of Bancorp with or into any other corporation, nor the merger or
consolidation of any other corporation with or into Bancorp, nor the sale,
transfer or lease of all or any portion of the assets of Bancorp, will be deemed
to be a dissolution, liquidation or winding-up of the affairs of Bancorp.
Optional Redemption. The Bancorp Series A Preferred Stock is redeemable at
the option of Bancorp for cash, in whole or in part, at any time and from time
to time, at the following redemption
44
<PAGE>
<PAGE>
prices per share if redeemed during the 12-month period beginning July 2, in
each of the following years, to the extent that Bancorp has funds legally
available therefor:
<TABLE>
<CAPTION>
DURING THE TWELVE-MONTH PERIOD PRICE PER
BEGINNING JULY 2 SHARE
- ----------------------------------------------------------------------------------- ---------
<S> <C>
1996.......................................................................... $ 13.30
1997.......................................................................... $ 13.20
1998.......................................................................... $ 13.10
</TABLE>
and thereafter at $13.00 per share, plus, in each case, an amount equal to all
accumulated and unpaid dividends thereon to the date fixed for redemption.
Payment of the redemption price will be made by Bancorp in cash or shares of
Bancorp Common Stock, or a combination thereof. From and after the date fixed
for redemption, dividends on shares of Bancorp Series A Preferred Stock called
for redemption will cease to accrue, such shares will no longer be deemed to be
outstanding and all rights in respect of such shares of Bancorp will cease,
except the right to receive the redemption price. If less than all of the
outstanding shares of Bancorp Series A Preferred Stock are to be redeemed,
Bancorp will either redeem a portion of the shares of each holder determined pro
rata based on the number of shares held by each holder or will select the shares
to be redeemed by lot, as may be determined by the Bancorp Board.
Notice of redemption will be sent to the holders of Bancorp Series A
Preferred Stock at the address shown on the books of Bancorp or any transfer
agent for the Bancorp Series A Preferred Stock by first-class mail, postage
prepaid, mailed not less than twenty (20) days nor more than sixty (60) days
prior to the redemption date. In the event of a modification to the Internal
Revenue Code of 1986, as amended, which has the effect of precluding Bancorp
from claiming a tax deduction for dividends paid on the Bancorp Series A
Preferred Stock when such dividends are used as provided under Section 404(k)(2)
of the Internal Revenue Code of 1986, as amended and in effect on the date
shares of Bancorp Series A Preferred Stock are initially issued, Bancorp may, in
its sole discretion and notwithstanding anything to the contrary described
above, elect to redeem such shares for the amount payable in respect of the
shares upon liquidation of Bancorp as described above in 'Liquidation
Preference'. Upon surrender of the certificates for any shares so called for
redemption and not previously converted, such shares will be redeemed by Bancorp
at the date fixed for redemption and at the redemption price.
Conversion Rights. A holder of shares of Bancorp Series A Preferred Stock
will be entitled, at any time prior to the close of business on the date fixed
for redemption of such shares, to cause any or all of such shares to be
converted into shares of Bancorp Common Stock, at a conversion price equal to
$13.76 per share of Bancorp Common Stock, with each share of Bancorp Series A
Preferred Stock being valued at $13.00 for such purpose, and which price will be
adjusted as hereinafter provided (and, as so adjusted, is hereinafter sometimes
referred to as the 'Conversion Price').
In addition, a holder of shares of Bancorp Series A Preferred Stock will be
entitled to cause any or all of such shares to be converted into shares of
Bancorp Common Stock at a conversion rate equal to the quotient of (a) $13.00
per share of Bancorp Series A preferred Stock plus accumulated and unpaid
dividends thereon to the date fixed for conversion, divided by (b) the Common
Stock Market Value (as defined below), at any time and from time to time upon
notice to Bancorp given not less than five (5) business days prior to the date
fixed by the holder in such notice for such conversion, but only when and to the
extent unavoidably necessary (i) for such holder to provide for distributions
required to be made under, or to satisfy an investment election provided to
participants in accordance with the Bancorp ESOP to participants in the Bancorp
ESOP; (ii) for such holder to make payment of principal, interest or premium due
and payable (whether as scheduled or upon acceleration) on any indebtedness
incurred for the benefit of the Bancorp ESOP by the holder, the Bancorp ESOP or
a trust under the Bancorp ESOP; or (iii) in the event the Bancorp ESOP is
determined by the Internal Revenue Service not to be qualified within the
meaning of Sections 401(a), the applicable provisions of 409, and 4975(e)(7) of
the Internal Revenue Code of 1986, as amended; provided, however, that if the
'fair market value' of a share of Bancorp Series A Preferred Stock (the
'Preferred Stock Fair Market Value') exceeds $13.00 at
45
<PAGE>
<PAGE>
the time of any such conversion, then such shares of Bancorp Series A Preferred
Stock will be converted into shares of Bancorp Common Stock at a conversion rate
equal to the quotient of (a) the Preferred Stock Fair Market Value plus
accumulated and unpaid dividends thereon to the date fixed for conversion,
divided by (b) the Common Stock Market Value (as defined below); provided,
however, that Bancorp may at its election substitute for any such conversion a
cash payment per share of Bancorp Series A Preferred Stock sought to be
converted equal to the greater of (x) $13.00 and (y) the Preferred Stock Fair
Market Value, plus, in either case, accumulated and unpaid dividends thereon.
'Common Stock Market Value' means the average of the last reported sales
prices quoted on the Nasdaq National Market (or, in case no sale occurs on a
given day, the average of the reported closing bid and asked prices shall be
substituted for the last reported sales price), regular way, of publicly traded
shares of Bancorp Common Stock over the five consecutive trading days
immediately preceding the date of conversion.
Bancorp is not obligated to deliver fractional share or shares of Bancorp
Common Stock upon conversion, but a cash adjustment will be paid in respect of
such fractional interests.
Whenever Bancorp issues shares of Bancorp Common Stock upon conversion,
Bancorp will also issue together with each share of Bancorp Common Stock any
options, warrants or other rights theretofore issued and then outstanding with
respect to any shares of Bancorp Common Stock.
Consolidation, Merger or Similar Transactions. In the event that Bancorp
consummates any consolidation or merger or similar transaction, however named,
pursuant to which the outstanding shares of Bancorp Common Stock are by
operation of law exchanged solely for or changed, reclassified or converted
solely into stock of any successor or resulting company (including Bancorp) that
constitutes 'qualifying employer securities' with respect to a holder of Bancorp
Series A Preferred Stock within the meaning of Section 409(l) of the Internal
Revenue Code of 1986, as amended, and Section 407(d)(5) of the Employee
Retirement Income Security Act of 1974, as amended, or any successor provisions
of law, and, if applicable, for a cash payment in lieu of fractional shares, if
any, the shares of Bancorp Series A Preferred Stock of such holder will be
assumed by and will become preferred stock of such successor or resulting
company, having in respect of such company insofar as possible the same powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions thereon, that the Bancorp Series
A Preferred Stock had immediately prior to such transaction, except that after
such transaction each share of the Bancorp Series A Preferred Stock will be
convertible into the qualifying employer securities so receivable by a holder of
the number of shares of Bancorp Common Stock into which such shares of Bancorp
Series A Preferred Stock could have been converted immediately prior to such
transaction if such holder of Bancorp Common Stock failed to exercise any rights
of election to receive any kind or amount of stock, securities, cash or other
property (other than such qualifying employer securities and a cash payment, if
applicable, in lieu of fractional shares) receivable upon such transaction
(provided that, if the kind or amount of qualifying employer securities
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount of qualifying employer securities receivable upon such
transaction for each non-electing share will be the kind and amount so
receivable per share by a plurality of the non-electing shares). The rights of
the Bancorp Series A Preferred Stock as preferred stock of such successor or
resulting company will successively be subject to adjustments pursuant to the
ESOP after any such transaction as nearly equivalent to the adjustments provided
for by the ESOP prior to such transaction. Bancorp will not consummate any such
merger, consolidation or similar transaction unless all then outstanding shares
of the Bancorp Series A Preferred Stock will be assumed and authorized by the
successor or resulting company as aforesaid.
In addition, in the event that Bancorp consummates any consolidation or
merger or similar transaction, however named, pursuant to which the outstanding
shares of Bancorp Common Stock are by operation of law exchanged for or changed,
reclassified or converted into other stock or securities or cash or any other
property, or any combination thereof, other than any such consideration which is
constituted solely of qualifying employer securities (as referred to above) and
cash payments, if applicable, in lieu of fractional shares, outstanding shares
of Bancorp Series A Preferred Stock will, without any action on the part of
Bancorp or any holder thereof, be deemed converted by virtue of such merger,
consolidation or similar transaction immediately prior to such consummation into
the number
46
<PAGE>
<PAGE>
of shares of Bancorp Common Stock into which such shares of Bancorp Series A
Preferred Stock could have been converted at such time if the Conversion Price
were the same as the redemption price then in effect pursuant to the table set
forth above plus an amount equal to all accumulated and unpaid dividends thereon
to the date fixed for such deemed conversion (the 'Merger Conversion Price') and
each share of Bancorp Series A Preferred Stock will, by virtue of such
transaction and on the same terms as apply to the holders of Bancorp Common
Stock, be converted into or exchanged for the aggregate amount of stock,
securities, cash or other property (payable in like kind) receivable by a holder
of the number of shares of Bancorp Common Stock into which such shares of
Bancorp Series A Preferred Stock could have been converted immediately prior to
such transaction at the Merger Conversion Price if such holder of Bancorp Common
Stock failed to exercise any rights of election as to the kind or amount of
stock, securities, cash or other property receivable upon such transaction
(provided that, if the kind or amount of stock, securities, cash or other
property receivable upon such transaction is not the same for each non-electing
share, then the kind and amount of stock, securities, cash or other property
receivable upon such transaction for each non-electing share will be the kind
and amount so receivable per share by a plurality of the non-electing shares).
Anti-dilution Adjustments. The Conversion Price is subject to adjustment in
certain events, including: (i) the issuance of Bancorp Common Stock as a
dividend or distribution on Bancorp Common Stock; (ii) the combination,
subdivision or reclassification of the Bancorp Common Stock; (iii) the issuance
to holders of Bancorp Common Stock of rights or warrants entitling them to
subscribe for or purchase Bancorp Common Stock at less than the Fair Market
Value (as hereinafter defined) of the Bancorp Common Stock on the date of such
issuance; (iv) the issuance, sale or exchange of shares of Bancorp Common Stock
(other than pursuant to any right or warrant to purchase or acquire shares of
Bancorp Common Stock and other than pursuant to any employee or director
incentive or benefit plan or arrangement of Bancorp or any subsidiary thereof)
for a consideration having a Fair Market Value on the date of such issuance,
sale or exchange less than the Fair Market Value of such shares on the date of
such issuance, sale or exchange; (v) the issuance, sale or exchange of any right
or warrant to purchase or acquire shares of Bancorp Common Stock (including as
such a right or warrant to purchase any security convertible into or
exchangeable for shares of Bancorp Common Stock), other than any such issuance
to holders of shares of Bancorp Common Stock as a dividend or distribution and
other than pursuant to any employee or director incentive or benefit plan or
arrangement of Bancorp or any subsidiary thereof, for a consideration having a
Fair Market Value on the date of such issuance, sale or exchange less than the
Non-Dilutive Amount (as hereinafter defined); (vi) the making of an
Extraordinary Distribution (as hereinafter defined) in respect of the Bancorp
Common Stock; or (vii) the effecting of a Pro Rata Repurchase (as hereinafter
defined) of Bancorp Common Stock. In addition to the foregoing adjustments, if
Bancorp makes any dividend or distribution on the Bancorp Common Stock or issues
any Bancorp Common Stock, other capital stock or other security of Bancorp or
any rights or warrants to purchase or acquire any such security, which
transaction does not result in an adjustment to the Conversion Price pursuant to
the conditions described above, the Bancorp Board of Directors may, but will not
be required to, make such adjustments in the Conversion Price as it considers to
be equitable. In addition, Bancorp is entitled to make such additional
adjustments in the Conversion Price as are necessary in order that any dividend
or distribution in shares of capital stock of Bancorp, subdivision,
reclassification or combination of shares of Bancorp stock or any
recapitalization of Bancorp shall not be taxable to holders of Bancorp Common
Stock. Bancorp is not required to make any adjustment of the Conversion Price
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Conversion Price. Any lesser adjustment will be carried
forward and will be made no later than the time of, and together with, the next
subsequent adjustment so carried forward that will amount to an increase or
decrease of at least one percent (1%) in the Conversion Price.
'Extraordinary Distribution' is any dividend or other distribution
(effected while any of the shares of Bancorp Series A Preferred Stock are
outstanding) (i) of cash, where the aggregate amount of such cash dividend or
distribution together with the amount of all cash dividends and distributions
made during the preceding period of 12 months, when combined with the aggregate
amount of all Pro Rata Repurchases (for this purpose, including only that
portion of the aggregate purchase price of such Pro Rata Repurchase which is in
excess of the Fair Market Value of the Common Stock repurchased as
47
<PAGE>
<PAGE>
determined on the applicable expiration date (including all extensions thereof)
of any tender offer or exchange offer which is a Pro Rata Repurchase, or the
date of purchase with respect to any other Pro Rata Repurchase which is not a
tender offer or exchange offer made during such period), exceeds twelve and
one-half percent (12 1/2%) of the aggregate Fair Market Value of all shares of
Bancorp Common Stock outstanding on the record date for determining the
stockholders entitled to receive such Extraordinary Distribution and (ii) of any
shares of Bancorp capital stock (other than shares of Bancorp Common Stock),
certain other securities of Bancorp, evidences of indebtedness of Bancorp or any
other person or any other property (including shares of any subsidiary of
Bancorp), or any combination thereof. The Fair Market Value of an Extraordinary
Distribution will be the sum of the Fair Market Value of such Extraordinary
Distribution plus the amount of any cash dividends which are not Extraordinary
Distributions made during such twelve-month period and not previously included
in the calculation of an adjustment.
'Fair Market Value' means, as to shares of Bancorp Common Stock or any
other class of capital stock or securities of Bancorp or any other issuer which
are publicly traded, the average of the Current Market Prices (as hereinafter
defined) of such shares or securities for each day of the Adjustment Period (as
hereinafter defined). The 'Current Market Price' of publicly traded shares of
Bancorp Common Stock or any other class of capital stock or other security of
Bancorp or any other issuer for a day means the last reported sales price,
regular way, or, in case no sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in either case as reported
on the New York Stock Exchange Composite Tape or, if such security is not listed
or admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such security is listed or admitted to trading or,
if not listed or admitted to trading on any national securities exchange, on the
Nasdaq National Market or, if such security is not quoted on such National
Market, the average of the closing bid and asked prices on each such day in the
over-the-counter market as reported by Nasdaq or, if bid and asked prices for
such security on each such day have not been reported through Nasdaq, the
average of the bid and asked prices for such day as furnished by any New York
Stock Exchange member firm regularly making a market in such security selected
for such purpose by the Bancorp Board of Directors or a committee thereof on
each trading day during the Adjustment Period. The 'Adjustment Period' means the
period of five consecutive trading days, selected by the Bancorp Board of
Directors or a committee thereof, during the twenty trading days preceding, and
including, the date as of which the Fair Market Value of a security is to be
determined. The 'Fair Market Value' of any security which is not publicly traded
or of any other property means the fair value thereof as determined by an
independent investment banking or appraisal firm experienced in the valuation of
such securities or property selected in good faith by the Bancorp Board of
Directors or a committee thereof, or, if no such investment banking or appraisal
firm is in the good faith judgment of the Bancorp Board of Directors or such
committee available to make such determination, as determined in good faith by
the Bancorp Board of Directors or such committee.
'Non-Dilutive Amount' in respect of an issuance, sale or exchange by
Bancorp of any right or warrant to purchase or acquire shares of Bancorp Common
Stock (including any security convertible into or exchangeable for shares of
Bancorp Common Stock) means the remainder of (i) the product of the Fair Market
Value of a share of Bancorp Common Stock on the day preceding the first
announcement of such issuance, sale or exchange multiplied by the maximum number
of shares of Bancorp Common Stock which could be acquired on such date upon the
exercise in full of such rights and warrants (including upon the conversion or
exchange of all such convertible or exchangeable securities), whether or not
exercisable (or convertible or exchangeable) at such date, minus (ii) the
aggregate amount payable pursuant to such right or warrant to purchase or
acquire such maximum number of shares of Bancorp Common Stock; provided,
however, that in no event will the Non-Dilutive Amount be less than zero. For
purposes of the foregoing sentence, in the case of a security convertible into
or exchangeable for shares of Bancorp Common Stock, the amount payable pursuant
to a right or warrant to purchase or acquire shares of Bancorp Common Stock will
be the Fair Market Value of such security on the date of the issuance, sale or
exchange of such security by Bancorp.
'Pro Rata Repurchase' means any purchase of shares of Bancorp Common Stock
by Bancorp or any subsidiary thereof, whether for cash, shares of Bancorp
capital stock, other securities of Bancorp, evidences of indebtedness of Bancorp
or any other person or any other property (including shares of a
48
<PAGE>
<PAGE>
Bancorp subsidiary), or any combination thereof, effected while any of the
shares of Bancorp Series A Preferred Stock are outstanding, pursuant to any
tender offer or exchange offer subject to Section 13(e) of the Exchange Act, or
any successor provision of law, or any similar provisions of any law or
regulation applicable to companies having the same regulatory status as does
Bancorp, or pursuant to any other offer available to substantially all holders
of Bancorp Common Stock; provided, however, that no purchase of shares by
Bancorp or any subsidiary thereof made in open market transactions will be
deemed a Pro Rata Repurchase. Shares are deemed to have been purchased by
Bancorp or any subsidiary thereof 'in open market transactions' if they have
been purchased substantially in accordance with the requirements of Rule 10b-18
as in effect under the Exchange Act, on the date shares of Bancorp Series A
Preferred Stock are initially issued by Bancorp or on such other terms and
conditions as the Bancorp Board of Directors or a committee thereof shall have
determined are reasonably designed to prevent such purchases from having a
material effect on the trading market for the Bancorp Common Stock.
Whenever an adjustment to the Conversion Price of the Bancorp Series A
Preferred Stock is required, Bancorp will place on file with the transfer agent
for the Bancorp Common Stock and the Bancorp Series A Preferred Stock, if any,
and with the Secretary of Bancorp, a statement signed by two officers of Bancorp
stating the adjusted Conversion Price and the resulting conversion ratio of the
Bancorp Series A Preferred Stock. Such statement will set forth in reasonable
detail such facts as are necessary as to the reason and manner of computing such
adjustment, including any determination of Fair Market Value involved in such
computation. Promptly after each adjustment, Bancorp will mail a notice thereof
and of the then prevailing conversion ratio to each holder of shares of Bancorp
Series A Preferred Stock.
Voting Rights. The holders of Bancorp Series A Preferred Stock will be
entitled to vote on all matters submitted to a vote of the holders of Bancorp
Common Stock, voting together with the holders of Bancorp Common Stock as one
class. Each share of the Bancorp Series A Preferred Stock will be entitled to
one vote per share.
Holders of Bancorp Series A Preferred Stock will have no special voting
rights and their consent will not be required (except to the extent they are
entitled to vote with holders of Bancorp Common Stock) for the taking of any
corporate action; provided, however, that the vote of at least two-thirds of the
outstanding shares of Bancorp Series A Preferred Stock, voting separately as a
series, will be necessary to adopt any alteration, amendment or repeal of any
provision of the Amended and Restated Certificate of Incorporation (including
any such alteration, amendment or repeal effected by any merger or consolidation
in which Bancorp is the surviving or resulting corporation) if such amendment,
alteration or repeal would alter or change the powers, preferences or special
rights of the shares of Bancorp Series A Preferred Stock so as to affect them
adversely.
The ESOP provides that each participant has the right to instruct the ESOP
trustee confidentially how to vote the shares allocated to his account. The
unallocated shares and the allocated shares for which no participant
instructions are received are voted proportionally based upon the voting
instructions received on the allocated shares. Pass-through voting rights also
apply with respect to tender or exchange offers made for the Bank's stock.
However, in such cases, allocated shares for which no participant instructions
are received are not tendered or exchanged. The unallocated shares are tendered
or exchanged in the same proportion as the allocated shares.
Bancorp Series B Preferred Stock. The Bancorp Amended and Restated
Certificate of Incorporation authorizes Bancorp to issue up to 2,000,000 shares
of Bancorp Series B Preferred Stock. Except for its issuer, the Bancorp Series B
Preferred Stock is substantially identical to the Bank Series B Preferred Stock.
The Bancorp Series B Preferred Stock, upon issuance in the Reorganization will
be fully paid and nonassessable. The holders of Bancorp Series B Preferred Stock
will have no preemptive rights. The rights of the holders of Bancorp Series B
Preferred Stock will be subordinate to the rights of Bancorp's general
creditors. The Bancorp Series B Preferred Stock will not be subject to any
mandatory redemption, sinking fund, or other obligation of Bancorp to redeem or
retire the Bancorp Series B Preferred Stock.
Rank. The Bancorp Series B Preferred Stock will rank prior to Bancorp
Common Stock and to all other classes and series of equity securities of Bancorp
(collectively, 'Junior Stock'), now or hereafter
49
<PAGE>
<PAGE>
authorized, other than Parity Stock and Senior Stock (as hereinafter defined)
with respect to dividend rights and rights upon the voluntary or involuntary
liquidation, dissolution or winding up of Bancorp. 'Parity Stock' means any
class or series of equity securities of Bancorp expressly designated as ranking,
with respect to dividend rights and rights upon the voluntary or involuntary
liquidation, dissolution or winding up of Bancorp, on a parity with the Bancorp
Series B Preferred Stock. 'Senior Stock' means any class or series of equity
securities of Bancorp expressly designated as ranking, with respect to dividend
rights and rights upon the liquidation, dissolution or winding up of Bancorp, as
senior to the Bancorp Series B Preferred Stock. Bancorp Series A Preferred Stock
is designated as Senior Stock and Bancorp Junior Preferred Stock is designated
as Junior Stock.
Noncumulative Dividends. Holders of shares of Bancorp Series B Preferred
Stock will be entitled to receive, when, as and if declared by the Board or a
duly authorized committee thereof out of funds of Bancorp legally available for
payment therefor, noncumulative cash dividends at an annual rate of 12% of the
$25.00 liquidation preference per share ($3.00 per share per annum), and no
more. Such noncumulative dividends, payable only in cash, will be declared and
payable quarterly in equal amounts in arrears, at the rate of $0.75 per share
per quarter, to be paid on January 15, April 15, July 15 and October 15 of each
year or, if such day is not a business day, on the next business day (each such
date, a 'Series B Dividend Payment Date'). The first Series B Dividend Payment
Date will be July 15, 1997. Each declared dividend shall be payable to holders
of record of the Bancorp Series B Preferred Stock as they appear on the stock
books of Bancorp (or of any transfer agent for the Bancorp Series B Preferred
Stock) at the close of business on such record dates, not more than fifty (50)
calendar days nor less than ten (10) calendar days preceding the Series B
Dividend Payment Date therefor, as determined by the Board of Directors (each
such date, a 'Record Date'). The initial period for which dividends shall be
paid (the 'Initial Dividend Period') shall commence on the last "Dividend
Period Commencement Date" that occurred under the Bank Series B Preferred Stock
and shall end on and include the date next preceding the first Dividend Period
Commencement Date (as defined below) to occur after the Holding Company
Formation. A full dividend shall be paid for the Initial Dividend Period.
Thereafter, quarterly dividend periods (each, a 'Dividend Period') shall
commence on and include March 1, June 1, September 1 and December 1 of each
year (each such date, a 'Dividend Period Commencement Date') and shall end on
and include the date next preceding the Dividend Period Commencement Date of
the following Dividend Period.
The right of holders of Bancorp Series B Preferred Stock to receive
dividends is noncumulative. Accordingly, if the Bancorp Board fails to declare a
dividend payable on a Series B Dividend Payment Date, then holders of the
Bancorp Series B Preferred Stock will have no right to receive a dividend in
respect of the Dividend Period ending on such Series B Dividend Payment Date,
and Bancorp will have no obligation to pay the dividend accrued for such period,
whether or not dividends are declared and payable on any future Series B
Dividend Payment Dates.
No full dividends may be declared or paid or set apart for payment on any
Parity Stock for any dividend period unless full dividends on the Bancorp Series
B Preferred Stock for the Dividend Period ending on the same day as such
dividend period will have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof is set apart for such
payment. If, with respect to any Dividend Period, dividends are not paid in full
(or declared and a sum sufficient for such full payment is not so set apart) on
the Bancorp Series B Preferred Stock and any other Parity Stock, dividends
declared on the Bancorp Series B Preferred Stock and other Parity Stock shall
only be declared pro rata, such that the amount of dividends declared per share
on the Bancorp Series B Preferred Stock and other Parity Stock shall bear to
each other the same ratio that, at the time of such declaration, all accrued and
payable but unpaid dividends for such Dividend Period per share on shares of the
Bancorp Series B Preferred Stock (which shall not include any accumulation in
respect of unpaid dividends for prior Dividend Periods) and other Parity Stock
bear to each other. Full dividends on the Bancorp Series B Preferred Stock must
be declared and paid or set apart for payment for the most recently concluded
Dividend Period before (i) any dividends (other than dividends payable in
Bancorp Common Stock or other Junior Stock) may be declared or paid or set aside
for payment, or other distribution made upon the Bancorp Common Stock or on any
other Junior Stock or (ii) any Junior Stock is redeemed (or any monies are paid
to or made available for a sinking fund for the redemption
50
<PAGE>
<PAGE>
of any shares of any such Junior Stock) or any Junior Stock is purchased or
otherwise acquired by Bancorp for any consideration except by conversion into or
exchange for Junior Stock.
There can be no assurance that any dividend on the Bancorp Series B
Preferred Stock will be declared or, if so, in what amount. Further, there can
be no assurance that dividends, once declared, will continue for any future
Dividend Period. The declaration and payment of future dividends on the Bancorp
Series B Preferred Stock will be subject to business conditions, the earnings
and financial condition of Bancorp and the judgment of the Bancorp Board.
Dividends will also be affected by dividend restrictions and limitations imposed
by the Delaware General Corporation Law and by the ability of The Greater to pay
dividends to Bancorp. See Payment of Dividends; Holding Company Structure.'
Liquidation Preference. In the event of any liquidation, dissolution or
winding up of Bancorp, voluntary or involuntary, the holders of Bancorp Series B
Preferred Stock will be entitled to receive out of the assets of Bancorp
available for distribution to stockholders, before any distribution of assets is
made to the holders of Bancorp Common Stock or other Junior Stock, liquidating
distributions in the amount of $25.00 per share, plus an amount per share equal
to all accrued, undeclared and unpaid dividends thereon from the Dividend Period
Commencement Date next preceding the date fixed for such liquidation,
dissolution or winding up; provided, however, that the holders of Bancorp Series
B Preferred Stock and any Parity Stock will be entitled to such liquidating
distributions only after payment in full of liquidating distributions of holders
of shares of any Senior Stock. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of Bancorp, the amounts payable with
respect to the Bancorp Series B Preferred Stock and any Parity Stock are not
sufficient to satisfy the full liquidation rights of all the outstanding shares
thereof, the holders of the Bancorp Series B Preferred Stock and of such Parity
Stock will share ratably in any such distribution of assets of Bancorp in
proportion to the full respective preferential amounts to which they are
entitled (which, in the case of Parity Stock, may include accumulated
dividends). After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of Bancorp Series B Preferred Stock will
not be entitled to any further participation in any distribution of assets of
Bancorp. All distributions made with respect to the Bancorp Series B Preferred
Stock in connection with such liquidation, dissolution or winding up of Bancorp
will be made pro rata to the holders entitled thereto. Neither the merger or
consolidation of Bancorp with or into any other entity, nor the merger or
consolidation of any other entity with or into Bancorp, nor the sale, transfer
or lease of all or any portion of the assets of Bancorp, will be deemed to be a
liquidation, dissolution or winding up of Bancorp.
Optional Redemption. The Bancorp Series B Preferred Stock will not be
redeemable before October 1, 2003. On or after October 1, 2003, the Bancorp
Series B Preferred Stock is redeemable at the option of Bancorp, in whole or in
part, at any time and from time to time, at the redemption prices set forth
below in cash, plus in each case, an amount in cash equal to all accrued and
unpaid dividends thereon, whether or not declared, from the Dividend Period
Commencement Date next preceding the date fixed for redemption (the 'Redemption
Date') to, but excluding, the Redemption Date (without accumulation of unpaid
dividends for prior Dividend Periods):
<TABLE>
<CAPTION>
REDEMPTION PRICE REDEMPTION PRICE
YEAR PER SHARE YEAR PER SHARE
- ----- ---------------- -------------------- ----------------
<S> <C> <C> <C>
2003 $ 27.250 2009 $ 25.900
2004 27.025 2010 25.675
2005 26.800 2011 25.450
2006 26.575 2012 25.225
2007 26.350 2013 and thereafter 25.000
2008 26.125
</TABLE>
If fewer than all the outstanding shares of the Bancorp Series B Preferred Stock
are to be redeemed, Bancorp will select those to be redeemed pro rata, by lot,
or by such other method as the Bancorp Board of Directors, in its sole
discretion, determines to be equitable.
Notice of any redemption shall be given by first-class mail, postage
prepaid, mailed at least twenty (20) days but not more than sixty (60) days
prior to the Redemption Date to each holder of record of
51
<PAGE>
<PAGE>
Bancorp Series B Preferred Stock to be redeemed at such holder's address as the
same shall appear on the stock books of Bancorp (or of any transfer agent for
the Bancorp Series B Preferred Stock). If on or before the Redemption Date
specified in such notice, all funds necessary for such redemption have been set
aside by Bancorp, separate and apart from its other funds, in trust for the
account of holders of shares of Bancorp Series B Preferred Stock to be redeemed,
then, on and after the Redemption Date, notwithstanding that any certificates
for shares of Bancorp Series B Preferred Stock so called for redemption shall
not have been surrendered for cancellation, the shares of Bancorp Series B
Preferred Stock so called for redemption will be deemed to be no longer
outstanding and the holders of such shares will cease to be stockholders of
Bancorp and shall have no voting or other rights with respect to such shares,
except for the right to receive out of the funds so set aside in trust the
amount payable on redemption thereof, without interest, upon surrender of their
certificates.
Conversion Rights. The holders of shares of Bancorp Series B Preferred
Stock will not have any rights to convert such shares into shares of any other
class or series of capital stock or into any other securities of, or any
interest in, Bancorp.
Voting Rights. Except as indicated below and except as required by
applicable law, the holders of the Bancorp Series B Preferred Stock will not be
entitled to vote for any purpose.
As long as any shares of the Bancorp Series B Preferred Stock remain
outstanding, unless the vote of the holders of a greater number of such shares
is required by law, the affirmative vote of the holders of at least two-thirds
of the votes entitled to be cast with respect to the then-outstanding shares of
the Bancorp Series B Preferred Stock, voting as a class, will be necessary to
(i) amend, alter or repeal or otherwise change any provision of the Bancorp
Amended and Restated Certificate of Incorporation (including any such amendment,
alteration, repeal or change effected by any merger or consolidation in which
Bancorp is the surviving or resulting corporation) if such amendment,
alteration, repeal or change would materially and adversely affect the rights,
preferences, powers or privileges of the Bancorp Series B Preferred Stock, or
(ii) authorize, create or issue or increase the authorized or issued amount of
any class or series of Senior Stock or any warrants, options or other rights
convertible into or exchangeable for any class or series of Senior Stock. The
creation or issuance of Parity Stock or Junior Stock, or the distribution of
assets upon a voluntary or involuntary liquidation, dissolution or winding up of
Bancorp, or a merger, consolidation, reorganization or other business
combination in which Bancorp is not the surviving or resulting corporation, or
an amendment which substitutes the surviving or resulting corporation in a
merger or consolidation for Bancorp or which increases the number of shares of
preferred stock which Bancorp is authorized to issue, shall not be deemed to be
a material and adverse change to the rights, preferences, powers or privileges
of the Bancorp Series B Preferred Stock requiring a vote of the holders thereof.
No vote of the Bancorp Series B Preferred Stock will be required if the Bancorp
Series B Preferred Stock is to be redeemed in whole on a Redemption Date
occurring on or prior to the date of occurrence of any event otherwise requiring
a class vote by the Bancorp Series B Preferred Stock.
If six full quarterly dividends on the Bancorp Series B Preferred Stock,
whether or not consecutive, are not paid, the holders of Bancorp Series B
Preferred Stock and the holders of any other class or series of Parity Stock as
to which the payment of dividends is in arrears and unpaid in an aggregate
amount equal to or exceeding the amount of dividends payable for six quarterly
dividend periods (or if dividends are payable other than on a quarterly basis,
the number of dividend periods, whether or not consecutive, containing in the
aggregate not less than five hundred forty (540) calendar days) and upon which
by its terms the same right to elect two directors has been conferred and is
exercisable (the 'Voting Parity Stock'), will have the exclusive right, voting
together as a single class, to elect two directors for newly created
directorships of Bancorp, each director to be in addition to the number of
directors constituting the Bancorp Board immediately prior to the accrual of
such right (the remaining directors to be elected by the other class or classes
of stock entitled to vote therefor), at each meeting of stockholders duly held
for the purpose of electing directors. At any time when the right to elect such
directors is vested, Bancorp may, and upon the written request of the holders of
record of not less than twenty percent (20%) of the total number of shares of
the Bancorp Series B Preferred Stock and such Voting Parity Stock then
outstanding will, call a special meeting of the holders of such shares to fill
such newly-created directorships. The right of holders of Bancorp Series B
Preferred Stock to elect directors
52
<PAGE>
<PAGE>
will continue until dividends on the Bancorp Series B Preferred Stock have been
paid for four consecutive Dividend Periods, at which time such voting rights of
the holders of the Bancorp Series B Preferred Stock and the Voting Parity Stock
will, without further action, terminate, subject to revesting in the event of
each and every subsequent failure of Bancorp to pay such dividends for the
requisite number of periods as described above; provided, however, that if, at
the time of termination of the election right of the holders of the Bancorp
Series B Preferred Stock, there will be outstanding any Voting Parity Stock
having similar voting rights which remain in effect, the term of any directors
elected by the holders of the Bancorp Series B Preferred Stock and such Voting
Parity Stock shall continue until such time as the voting right of the holders
of such Voting Parity Stock shall terminate by its terms.
The term of office of all directors elected by the holders of the Bancorp
Series B Preferred Stock and the Voting Parity Stock in office at any time when
the aforesaid voting right is vested in such holders will terminate upon the
election of their successors at any meeting of stockholders for the purpose of
electing directors; provided, however, that, without further action and unless
otherwise required by law, any directors who shall have been elected by the
holders of the Bancorp Series B Preferred Stock and the Voting Parity Stock as
provided herein may be removed at any time, either with or without cause by the
affirmative vote of the holders of record of a majority of the outstanding
shares of the Bancorp Series B Preferred Stock and the Voting Parity Stock,
voting together as a single class. Upon termination of the aforesaid voting
right in accordance with the foregoing provisions, the term of office of all
directors elected by the holders of the Bancorp Series B Preferred Stock and the
Voting Parity Stock pursuant thereto then in office will, without further
action, terminate unless otherwise required by law. Upon such termination, the
number of directors constituting the Bancorp Board will, without further action,
be reduced by two, subject always to the increase of the number of directors
pursuant to the foregoing provisions in the case of the future right of such
holders of the Bancorp Series B Preferred Stock and the Voting Parity Stock to
elect directors as provided above.
Unless otherwise required by law, in the case of any vacancy occurring
among the directors so elected, the remaining director who shall have been so
elected may appoint a successor to hold office for the unexpired term of the
director whose place shall be vacant, and if all directors so elected by the
holders of the Bancorp Series B Preferred Stock and the Voting Parity Stock
shall cease to serve as directors before their term shall expire, the holders of
the Bancorp Series B Preferred Stock and the Voting Parity Stock then
outstanding may, at a meeting of such holders duly held, elect successors to
hold office for the unexpired terms of the directors whose places shall be
vacant.
The directors elected by the holders of the Bancorp Series B Preferred
Stock and the Voting Parity Stock in accordance with the foregoing provisions
will be entitled to one vote per director on any matter.
The Bancorp Amended and Restated Certificate of Incorporation provides that
the Bancorp Board of Directors will be divided into three classes and that the
number of directors in each class will be as nearly equal in number as possible.
The Bancorp Amended and Restated Certificate of Incorporation also provides that
the directors to be elected by the Bancorp Series B Preferred Stock and the
Voting Parity Stock, voting together as a class, will not become members of the
three classes of directors otherwise required by the Bancorp Amended and
Restated Certificate of Incorporation. The Bancorp Amended and Restated
Certificate of Incorporation provides that if for any reason the holders of the
Bancorp Series B Preferred Stock and the Voting Parity Stock would not be able
to elect the specified number of directors at the next annual meeting of
stockholders in the manner described above, Bancorp will use its best efforts to
take all actions necessary to permit the full exercise of such voting rights
which will include, if necessary, taking action to increase the authorized
number of directors standing for election at such next annual meeting of
stockholders or seeking to amend, alter or change the Bancorp Amended and
Restated Certificate of Incorporation and By-laws. If such directors were
required by law to be classified, then such directors could not be removed from
office except for cause and then only with the vote of 80% of the votes eligible
to be cast, and any vacancies would be required to be filled by a majority of
the directors then in office.
In connection with any matter on which holders of the Bancorp Series B
Preferred Stock are entitled to vote as one class or otherwise pursuant to law
or the provisions of the Bancorp Amended and Restated Certificate of
Incorporation, including, without limitation, the election of directors as set
53
<PAGE>
<PAGE>
forth above, each holder of the Bancorp Series B Preferred Stock will be
entitled to one vote for each share of the Bancorp Series B Preferred Stock held
by such holder.
No Other Rights. The shares of Bancorp Series B Preferred Stock will not
have any preferences, voting powers or relative, participating, optional or
other special rights except as set forth above and in the Bancorp Amended and
Restated Certificate of Incorporation or as otherwise required by law.
Bancorp Junior Preferred Stock. The Bancorp Amended and Restated
Certificate of Incorporation authorizes the issuance of Bancorp Junior Preferred
Stock. Bancorp Junior Preferred Stock is only issuable in connection with the
Bancorp Rights Plan. See 'Bancorp Rights Plan'. When issued, the Bancorp Junior
Preferred Stock will rank junior to all other series of Bancorp's preferred
stock as to the payment of dividends and the distribution of assets, unless the
terms of any such series provide otherwise. The Bancorp Junior Preferred Stock
will rank junior to the Bancorp Series A Preferred Stock and the Bancorp Series
B Preferred Stock.
Dividends on the Bancorp Junior Preferred Stock will be cumulative to the
greater of (a) $1.00 or (b) subject to adjustment, 100 times the aggregate per
share amount of all cash dividends declared on Bancorp Common Stock, and 100
times the aggregate per share amount of all non-cash dividends or other
distributions declared on Bancorp Common Stock other than a dividend payable in
shares of Bancorp Common Stock or a subdivision of the outstanding shares of
Bancorp Common Stock.
The holders of Bancorp Junior Preferred Stock shall have no voting rights
except as required by law.
The Bancorp Junior Preferred Stock has preference over the Bancorp Common
Stock with respect to the distribution of assets in the event of a liquidation,
dissolution, or winding up of Bancorp. The liquidation preference of the Bancorp
Junior Preferred Stock is $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions.
If Bancorp enters into any consolidation, merger, combination or other
transaction in which shares of Bancorp Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then the shares
of Bancorp Junior Preferred Stock will at the same time be similarly
exchangeable or changeable in an amount equal to 100 times the aggregate amount
of consideration received by the holders of Bancorp Common Stock. Holders of the
Bancorp Junior Preferred Stock are not entitled to preemptive rights with
respect to any shares of Bancorp that may be issued.
BANCORP RIGHTS PLAN
Rights Agreement. On June 14, 1990, the Bank's Board of Directors adopted
the Bank Rights Plan and declared a dividend distribution of one Bank Right for
each outstanding share of Bank Common Stock to holders of record at the close of
business on June 25, 1990. Each Bank Right entitles the registered holder to
purchase from the Bank, upon the occurrence of certain triggering events, one-
hundredth of a share of Junior Participating Preferred Stock, par value $1.00
per share of the Bank, at a purchase price of $24, subject to adjustment. The
Bank Rights Plan has been amended to exclude the Reorganization from the
provisions of the Bank Rights Plan and the Bank Rights will be redeemed in
compliance with the terms of the Bank Rights Plan prior to the Effective Date of
the Reorganization. The consideration for such redemption is expected to be $.01
in cash payable on each share of Bank Common Stock as of the Effective Date. As
a result of such payment, Bancorp may reduce its next dividend on shares of
Bancorp Common Stock payable on or about the time of the consummation of the
Reorganization by $.01 per share. Prior to the consummation of the
Reorganization, Bancorp will adopt the Bancorp Rights Plan which is
substantially similar to the Bank Rights Plan (except that it will be with
respect to Bancorp Capital Stock) and each share of Bancorp Common Stock issued
in the Reorganization will have one Bancorp Right attached to it.
Under the Bancorp Rights Plan, the Bancorp Rights will be attached to all
Bancorp Common Stock certificates representing shares then outstanding, and no
separate rights certificates will be distributed. The Bancorp Rights will
separate from the Bancorp Common Stock upon the earlier of (i) 10 days following
a public announcement that a person (an 'Acquiring Person') has, individually or
with or through its affiliates or associates, acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding shares of
Bancorp Common Stock (the 'Stock
54
<PAGE>
<PAGE>
Acquisition Date'), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 20% or more of such outstanding shares of Bancorp Common
Stock. The Bancorp Rights are not exercisable until the distribution date and
will expire at the close of business on June 25, 2000, unless earlier redeemed
by Bancorp as described below.
In the event that a person becomes the beneficial owner of 20% or more of
the then outstanding shares of Bancorp's voting stock (a 'Flip-in Event'), each
holder of a Bancorp Right (other than Acquiring Persons and certain related
parties) will thereafter have the right to receive, upon exercise, one-hundredth
of a share of Bancorp Junior Preferred Stock (or, in certain circumstances,
cash, property or other securities of Bancorp). However, Bancorp Rights are not
exercisable following the occurrence of a Flip-in Event until such time as the
Bancorp Rights are no longer redeemable by Bancorp as set forth below. Although
the minimum Flip-In Event threshold under the NYBL is 20%, there is no minimum
under the DGCL.
The Bancorp Rights Plan further provides that in the event that, at any
time following the Stock Acquisition Date, (i) Bancorp is acquired in a merger
or other business combination transaction in which Bancorp is not the surviving
corporation or (ii) 50% or more of Bancorp's assets or earning power is sold or
transferred, each holder of a Bancorp Right (other than Bancorp Rights held by
Acquiring Persons and certain related parties) shall thereafter have the right
to receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Bancorp Right.
At any time until ten days following the Stock Acquisition Date, Bancorp
may redeem the Bancorp Rights in whole, but not in part, at a price of $.01 per
Bancorp Right. Immediately upon the action of Bancorp's Board of Directors
ordering redemption of the Bancorp Rights, the Bancorp Rights will terminate and
the only right of the holders of Bancorp Rights will be to receive the $.01
redemption price.
In addition, at any time after the occurrence of a Flip-in Event, Bancorp's
Board of Directors may exchange the Bancorp Rights (other than Bancorp Rights
owned by an Acquiring Person and certain related parties, which will become
void), in whole or in part, at an exchange ratio of one Bancorp Common Share,
and/or other equity securities deemed to have the same value as one Bancorp
Common Share, per Bancorp Right, subject to adjustment.
MANAGEMENT OF BANCORP
The directors of Bancorp upon consummation of the Reorganization will be
the same as the directors of The Greater on the Effective Date. The terms of the
Bancorp directors upon consummation of the Reorganization will correspond with
each such director's remaining term as a director of The Greater. See 'Election
of Directors.' Approximately one-third of the members of Bancorp's Board of
Directors and the Bank's Board of Directors are to be elected each year.
Upon consummation of the Reorganization, the executive officers of Bancorp
will be the following persons, each of whom is also an executive officer of the
Bank:
<TABLE>
<CAPTION>
NAME OFFICE WITH BANCORP
- ------------------------------ ------------------------------------------------------------------------
<S> <C>
Gerard C. Keegan.............. Chairman of the Board, President and Chief Executive Officer
Michael J. Henchy............. Executive Vice President and Chief Administrative Officer
Daniel J. Harris.............. Executive Vice President
Philip A. Cimino.............. Senior Vice President
Gary DiLorenzo................ Senior Vice President
Michael D. Gornicki........... Senior Vice President
Philip T. Spies............... Senior Vice President and Controller
Robert P. Carlson............. Senior Vice President, Counsel and Secretary
</TABLE>
The principal occupation and business experience during the last five years
of each executive officer is set forth below.
Gerard C. Keegan has been Director, Chairman, President and Chief Executive
Officer of the Bank since November 1991. He previously served as Director,
President and Chief Operating Officer since July 1988.
55
<PAGE>
<PAGE>
Michael J. Henchy has been Executive Vice President and Chief
Administrative Officer of the Bank since January 1992. Prior to that, he was an
Executive Vice President -- Banking Operations since July 1988.
Daniel J. Harris has been Executive Vice President and Chief Lending
Officer of the Bank since February 1996. Prior to that, he was an Executive Vice
President and Chief Credit Officer of the Bank since January 1995, and Senior
Vice President -- Special Assets of the Bank since February 1992.
Philip A. Cimino has been Senior Vice President and Chief Investment
Officer of the Bank since January 1989.
Gary DiLorenzo has been Senior Vice President and Chief Credit Officer of
the Bank since February 1996. Prior to that, he was Senior Vice President and
Auditor of the Bank since January 1992. Mr. DiLorenzo is a Certified Public
Accountant.
Michael D. Gornicki has been Senior Vice President and Auditor of the Bank
since February 1996. Prior to that, he was Senior Vice President in charge of
Strategic Planning and Risk Management of the Bank from January 1995. Prior to
that, he served as a First Vice President from June 1992 in The Office of The
Chairman and as a Second Vice President of the Bank from February 1989 in the
Controllers Department. Mr. Gornicki is a Certified Public Accountant.
Philip T. Spies has been Senior Vice President and Controller of the Bank
since September 1985. Mr. Spies is a Certified Public Accountant.
Robert P. Carlson has been Senior Vice President, Counsel and Secretary of
the Bank since September 1992. He previously served as Senior Vice President,
Deputy Counsel and Assistant Secretary of the Bank from April 1992. Prior to
that, he served as Assistant Secretary since 1984.
Significant Consultants. Bancorp plans to retain the services of an outside
consultant, Closter Dock Corp., to perform certain investor relations functions
on behalf of Bancorp. Closter Dock Corp. is presently engaged in the same
capacity on behalf of the Bank.
It is not expected that any additional consideration will be paid to such
persons for their services to Bancorp.
REGULATION OF BANCORP AND ACQUISITIONS OF ITS STOCK
Upon consummation of the Reorganization, Bancorp will become subject to
regulation as a savings and loan holding company under the Home Owners' Loan Act
('HOLA') instead of regulation as a bank holding company under the Bank Holding
Company Act of 1956 (the 'BHC Act') because the Bank has made an election under
Section 10(1) of HOLA to be treated as a 'savings association' for purposes of
the savings and loan holding company provisions of Section 10(e) of HOLA. The
Bank made this election for several reasons. First, although the Bank has a
charter and membership in the FDIC's Bank Insurance Fund ('BIF') that qualify it
as a 'bank' for purposes of the BHC Act, it, like many other state-chartered
capital stock savings banks that are BIF members, considers itself a 'thrift'
with an emphasis on residential and multi-family real estate financing
activities. The Bank believes this view is shared both by its customers and the
financial community. Thrifts (typically known as 'savings associations') and
their holding companies (typically known as 'savings and loan holding
companies') have traditionally been regulated, supervised and examined by the
OTS and its predecessors. Second, the Bank believes that savings and loan
holding companies face a less burdensome regulatory scheme than do bank holding
companies. For example, a savings and loan holding company that controls a
thrift that meets the 'qualified thrift lender' test described below has no
significant restrictions on the types of assets it can acquire or the types of
activities in which it can engage and is not subject to any specific regulatory
capital requirements as is the case with a bank holding company. Under the BHC
Act, a bank holding company's activities are limited to those determined by the
Federal Reserve by order or regulation to 'be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.' If for some
reason, however, Bancorp was unable to obtain the required OTS approvals for the
Reorganization, the Bank and Bancorp would consider effecting the Reorganization
under the BHC Act with Bancorp becoming a bank holding company. Although the
Bank would not seek any additional stockholder approval for such a
Reorganization other than the approval sought
56
<PAGE>
<PAGE>
hereby, this change could result in delays in effecting the Reorganization, and,
as is currently the case, no assurances could be given that the required Federal
Reserve approval would be obtained.
As a result of being a savings and loan holding company, Bancorp will be
required to register with the OTS and will be subject to OTS regulation,
examination and reporting requirements relating to savings and loan holding
companies similar in many respects, including with respect to safety and
soundness matters, to those applicable to depository institutions such as The
Greater. The Greater, as a subsidiary of a savings and loan holding company,
will be subject to certain restrictions in its dealings with Bancorp and with
other companies affiliated with Bancorp. The Greater also will continue to be
subject to the legal and regulatory requirements now applicable to it as a New
York State-chartered savings bank, including those of the NYBL and the FDIC.
Following the Reorganization, The Greater will continue to be subject to
examination by the FDIC and the Superintendent.
Bancorp's ability to continue to be treated as a savings and loan holding
company under current law is dependent upon The Greater continuing to meet the
'qualified thrift lender' test under HOLA (the 'QTL test') which, in general,
requires that 65% of its portfolio assets (all assets except goodwill and other
intangibles, office property and certain liquid assets up to 20 percent of
assets) consist of 'qualified thrift investments' (including, subject to certain
limits, residential mortgage and construction loans, home improvement and repair
loans, mortgage-backed securities, home equity loans, FHL Bank stock,
obligations of the FDIC, the Federal Savings and Loan Corporation, the
Resolution Trust Corporation and the FSLIC Resolution Fund, Federal National
Mortgage Association and Federal Home Loan Mortgage Corporation stock, consumer
loans, certain small business loans and loans to construct, purchase or maintain
churches, schools, nursing homes and hospitals, investments in residential
housing-oriented service corporations, and 50 percent of mortgages originated
and sold within 90 days). At December 31, 1996, the asset composition of The
Greater was substantially in excess of that required to qualify it to meet the
QTL test.
If The Greater failed to meet the QTL test it would be required to register
as a bank holding company under the BHC Act and generally be subject to
significant restrictions on its activities to those that are banking in nature
or closely related to banking as determined by the Federal Reserve Board.
HOLA prohibits a savings and loan holding company, directly or indirectly,
from (i) acquiring control of a savings association, another savings and loan
holding company or a federal savings bank insured by the FDIC (or holding
company thereof), without prior OTS approval; (ii) generally acquiring more than
5% of the voting shares of a savings association or another savings and loan
holding company that is not a controlled subsidiary; or (iii) acquiring control
of an 'uninsured institution,' as defined in HOLA. No director or officer of a
savings and loan holding company or individual owning, controlling or holding
power to vote more than 25% of the holding company's voting shares may (i) hold,
solicit or exercise proxies in respect of any voting rights in a mutual savings
association; or (ii) except with the prior approval of the OTS, acquire control
of any savings association that is not a subsidiary of such holding company.
Under federal law and regulation, transactions between a savings
association and its 'affiliates,' which term includes its holding company and
other companies controlled by its holding company, are subject to quantitative
and qualitative restrictions. Savings associations, which for these purposes
would include The Greater, are restricted in their ability to engage in certain
types of transactions with their affiliates. These 'covered transactions'
include (i) purchasing or investing in securities issued by an affiliate, (ii)
lending or extending credit to, or guaranteeing credit of, an affiliate, (iii)
purchasing assets from an affiliate, and (iv) accepting securities issued by an
affiliate as collateral for a loan or extension of credit. Covered transactions
are permitted between a savings association and a single affiliate up to 10% of
the capital stock and surplus of the association, and between a savings
association and all of its affiliates up to 20% of the capital stock and surplus
of the institution. The purchase of low quality assets by a savings association
from an affiliate is not permitted. Each loan or extension of credit to an
affiliate by a savings association must be secured by collateral with a market
value ranging from 100% to 130% (depending on the type of collateral) of the
amount of credit extended.
Notwithstanding the foregoing, a savings association is not permitted to
make a loan or extension of credit to any affiliate unless the affiliate is
engaged only in activities that the Federal Reserve Board has determined to be
permissible for bank holding companies or were permitted by regulation for
57
<PAGE>
<PAGE>
'multiple' savings and loan holding companies (savings and loan holding
companies with more than one savings association subsidiary) on March 5, 1987.
Savings associations also are prohibited from purchasing or investing in
securities issued by an affiliate, other than of a subsidiary.
Covered transactions between a savings association and an affiliate, and
certain other transactions with or benefiting an affiliate, must be on terms and
conditions at least as favorable to the savings association as those prevailing
at the time for comparable transactions with non-affiliated companies. This
arm's-length requirement applies to all covered transactions, as well as to (i)
the sale of securities or other assets to an affiliate, (ii) the payment of
money or the furnishing of services to an affiliate, (iii) any transaction in
which an affiliate acts as agent or broker or receives a fee for its services to
the savings association or to any other person, or (iv) any transaction or
series of transactions with a third party if any affiliate has a financial
interest in the third party or is a participant in the transaction or series of
transactions.
So long as The Greater remains the sole insured institution subsidiary of
Bancorp, Bancorp will be a 'unitary' savings and loan holding company. The types
of business activities in which Bancorp may engage as a unitary savings and loan
holding company generally will not, under current law, be restricted by HOLA,
provided that The Greater continues to satisfy the QTL test.
If Bancorp were to acquire one or more additional savings associations and
operate them as separate subsidiaries, other than combining them with The
Greater, Bancorp would become a 'multiple' savings and loan holding company. It
then would become subject to limitations on the types of business activities in
which it and its subsidiaries may engage. HOLA limits the activities of a
multiple savings and loan holding company and its noninsured institution
subsidiaries to primarily, among other things, performing management services
for the savings association, conducting an insurance agency or escrow business,
holding or managing assets owned by or acquired from the savings association and
properties used by the savings association, engaging in activities that the
Federal Reserve has determined to be permissible for bank holding companies and
engaging in activities that had previously been determined by regulators to be
permissible activities for a savings and loan holding company (generally
corresponding to activities permissible for service corporations of federal
savings associations). There is no present intention for Bancorp to become a
multiple savings and loan holding company.
Various legislative proposals have been made in the past and there is
currently legislation that has been introduced in Congress that would (i) apply
the restrictions on activities applicable to 'multiple savings and loan building
companies' and bank holding companies to 'unitary savings and loan building
companies' and (ii) eliminate the savings association charter and require
savings associations to become banks and simultaneously abolish the OTS and its
supervisory role over savings and loan holding companies. Bancorp cannot predict
which if any of the foregoing or other similar proposals, if any, will
ultimately be enacted or what the specific effect on Bancorp would be. The
management of The Greater does not anticipate that any legislation limiting its
activities to those permissible for a 'multiple' savings and loan holding
company or a bank holding company would prevent Bancorp from engaging in any
activity that is material to the current plans for Bancorp.
The Federal Deposit Insurance Act (the 'FDIA') requires the FDIC to take
'prompt corrective action' in respect of certain depository institutions such as
the Bank if they do not meet minimum capital requirements. FDIA establishes five
capital tiers: 'well capitalized', 'adequately capitalized', 'undercapitalized',
'significantly undercapitalized' and 'critically undercapitalized'. A depository
institution's capital tier depends upon how its capital levels compare to
various relevant capital measures and certain other factors, as established by
regulation. 'Undercapitalized' depository institutions are subject to growth
limitations and are required to submit a capital restoration plan.
'Significantly undercapitalized' institutions are subject to more severe
restrictions. The FDIC may not accept a capital restoration plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the parent
holding company is limited to the lesser of (i) an amount equal to five percent
of the depository institution's total assets at the time it became
'undercapitalized', and (ii) the amount which
58
<PAGE>
<PAGE>
is necessary (or would have been necessary) to bring the institution into
compliance with all capital standards applicable with respect to such
institution as of the time it fails to comply with the plan. If a depository
institution fails to submit an acceptable plan, it is treated as if it is
'significantly undercapitalized'. In the event of a savings and loan holding
company's bankruptcy, any commitment by the savings and loan holding company to
a federal bank regulatory agency to maintain the capital of a subsidiary
depository institution will be assumed by the bankruptcy trustee and entitled to
a priority of payment.
Under the Change in Bank Control Act and HOLA and 12 C.F.R. Part 574
promulgated thereunder, OTS approval (or, in certain cases, non-disapproval)
must be obtained before any person may acquire control of a savings and loan
holding company such as Bancorp. For such purposes, 'person' includes an
individual or an entity, and security holdings of persons acting in concert are
aggregated for purposes of applying these provisions. Control is conclusively
presumed to exist if, among other things, a person acquires more than 25% of any
class of voting stock of a savings and loan holding company or controls in any
manner the election of a majority of the directors of the savings and loan
holding company. Control is rebuttably presumed to exist if, among other things,
a person acquires more than 10% of any class of voting stock (or 25% of any
class of stock) of a savings and loan holding company and is subject to any of
certain specified 'control factors.' The control factors relate to, among other
matters, the percentage of the debt and equity of the savings and loan holding
company owned by the person, agreements giving the person influence over a
material aspect of the operations of the savings and loan holding company and
the number of seats on the board of directors of the savings and loan holding
company held by the person or designees of the person. Subject to rebuttal, a
person also may be deemed to have control of a savings and loan holding company
if such person holds any combination of voting stock and revocable or
irrevocable proxies representing more than 25% of any class of voting stock of
the savings and loan holding company (excluding proxies held in connection with
a solicitation by, or in opposition to, a solicitation on behalf of management,
but including a solicitation in connection with the election of directors) and
the proxies would enable such person to: (i) elect one-third or more directors
of, (ii) cause the stockholders to approve the acquisition or reorganization of,
or (iii) exert a continuing influence on a material aspect of the business
operations of, an association or its holding company. OTS regulations provide an
application procedure to rebut the control presumptions. If the holders of the
Bancorp Series A Preferred Stock or Bancorp Series B Preferred Stock become
entitled to vote for the election of directors because dividends are in arrears,
such classes of shares may each then be deemed a seperate 'class of voting
stock' for purposes of the foregoing.
Under the NYBL, the prior approval of the New York Banking Board or the
Superintendent of Banks will be required to acquire 'control' of Bancorp.
'Control' for these purposes means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
Bancorp, whether through the ownership of voting stock or otherwise. Control is
presumed to exist if a person, directly or indirectly, owns, controls or holds
with the power to vote ten per centum or more of the voting stock of Bancorp.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE PROPOSED
AGREEMENT AND PLAN OF REORGANIZATION.
PROPOSAL NUMBER 3: RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, the independent auditors of The Greater, were
appointed by the Board of Directors of The Greater to continue as independent
auditors for the Bank for the fiscal year ending December 31, 1997, subject to
the ratification of stockholders at the Annual Meeting. A representative of KPMG
Peat Marwick LLP is expected to be present at the Annual Meeting with the
opportunity to make a statement if he or she so desires and is expected to be
available to respond to appropriate questions. If the Reorganization is
consummated, it is expected that KPMG Peat Marwick LLP will also serve as the
independent auditors of Bancorp.
59
<PAGE>
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE BANK'S INDEPENDENT AUDITORS UNDER
PROPOSAL NUMBER 3.
OTHER MATTERS
As of the date of this Proxy Statement/Prospectus, management does not know
of any other matters to be brought before the stockholders at the Annual
Meeting. No proposal of new business for consideration at the Annual Meeting may
be made by any stockholder, because the deadline required by the Bank's Bylaws
for making any such proposal has passed. If, however, any other matters not now
known are properly brought before the 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 Board of Directors.
STOCKHOLDER PROPOSALS
Any stockholder wishing to have a proposal considered for inclusion in the
Bank's proxy statement and form of proxy relating to the 1998 Annual Meeting of
Stockholders to be held on or about April 24, 1998, or on such other date as
established by the Bank's Board of Directors, must, in addition to other
applicable requirements, set forth such proposal in writing and file it with the
Secretary of the Bank on or before December 14, 1997.
If the proposed Plan of Reorganization is approved and Bancorp is organized
into the holding company for the Bank, any stockholder wishing to have a
proposal considered for inclusion in Bancorp's proxy statement and form of proxy
relating to the 1998 Annual Meeting of Stockholders must, in addition to other
applicable requirements, set forth such proposal in writing and file it with the
Secretary of Bancorp on or before December 14, 1997.
SECURITIES AND EXCHANGE COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Bancorp, in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
EXPERTS
The consolidated statements of financial condition of the Bank and its
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of income, changes in stockholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1996 have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, and upon the authority of
said firm as experts in accounting and auditing.
ANNUAL REPORT
A copy of the Bank's Annual Report to Stockholders for the year ended
December 31, 1996 accompanies this Proxy Statement/Prospectus. The Bank's Annual
Report to Stockholders serves as its annual disclosure statement, which will be
available in the Bank's branches and upon request, starting March 17, 1997.
By Order of the Board of Directors,
/s/ ROBERT P. CARLSON
ROBERT P. CARLSON
Secretary
New York, New York
March 14, 1997
60
<PAGE>
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (THIS 'AGREEMENT'), DATED AS OF MARCH
11, 1997 AMONG THE GREATER NEW YORK SAVINGS BANK ('GNYSB'), A NEW YORK
STATE-CHARTERED STOCK SAVINGS BANK, GREATER NEW YORK BANCORP INC. ('BANCORP'), A
DELAWARE CORPORATION AND A WHOLLY-OWNED SUBSIDIARY OF GNYSB THAT WAS FORMED
UNDER THE LAWS OF THE STATE OF DELAWARE FOR THE PRIMARY PURPOSE OF BECOMING THE
SOLE STOCKHOLDER OF A NEWLY-FORMED INTERIM NEW YORK STATE-CHARTERED STOCK
SAVINGS BANK, AND SUBSEQUENTLY BECOMING THE SOLE HOLDER OF THE COMMON STOCK OF
GNYSB, AND THE GREATER INTERIM SAVINGS BANK ('INTERIM BANK'), AN INTERIM NEW
YORK STATE-CHARTERED STOCK SAVINGS BANK WHICH IS BEING FORMED FOR THE SOLE
PURPOSE OF CONSUMMATING THE REORGANIZATION (THE 'REORGANIZATION') PROVIDED FOR
IN THIS AGREEMENT.
BACKGROUND
The parties are entering into this Agreement in order to set forth the
terms and conditions of the Reorganization by which Bancorp will become the
holding company for GNYSB. The result of the Reorganization will be that, as of
the Effective Date (as defined in Article 5 below), (a) all of the issued and
outstanding shares of capital stock of GNYSB will be held solely by Bancorp, (b)
the holders of the issued and outstanding shares of common stock, par value
$1.00 per share, of GNYSB ('GNYSB Common Stock'), will become the sole holders
of the issued and outstanding shares of common stock, par value $1.00 per share,
of Bancorp ('Bancorp Common Stock'), (c) the holders of the issued and
outstanding shares of Series A ESOP Convertible Preferred Stock, par value $1.00
per share, of GNYSB ('GNYSB Series A Preferred Stock'), will become the holders
of the issued and outstanding shares of Series A ESOP Convertible Preferred
Stock, par value $1.00 per share, of Bancorp ('Bancorp Series A Preferred
Stock'), (d) the holders of the issued and outstanding shares of 12%
Noncumulative Perpetual Preferred Stock, Series B, par value $1.00 per share, of
GNYSB ('GNYSB Series B Preferred Stock'), will become the sole holders of the
issued and outstanding shares of 12% Noncumulative Perpetual Preferred Stock,
Series B, par value $1.00 per share, of Bancorp ('Bancorp Series B Preferred
Stock').
The Reorganization is to be accomplished through the following steps:
(1) the formation of an interim New York State-chartered stock savings
bank, Interim Bank, which will be wholly-owned by Bancorp;
(2) the merger (the 'Merger') of Interim Bank into GNYSB, with GNYSB
as the receiving and surviving corporation; and
(3) pursuant to the Merger:
(a) all of the issued and outstanding shares of Bancorp Common
Stock held by GNYSB will be cancelled;
(b) all of the issued and outstanding shares of GNYSB Common Stock
will be converted automatically, by operation of law and on a
one-for-one basis, into an equal number of issued and outstanding shares
of Bancorp Common Stock;
(c) all of the issued and outstanding shares of GNYSB Series A
Preferred Stock will be converted automatically, by operation of law and
on a one-for-one basis, into an equal number of issued and outstanding
shares of Bancorp Series A Preferred Stock;
(d) all of the issued and outstanding shares of GNYSB Series B
Preferred Stock will be converted automatically, by operation of law and
on a one-for-one basis, into an equal number of issued and outstanding
shares of Bancorp Series B Preferred Stock; and
(e) all of the issued and outstanding shares of common stock of
Interim Bank will be converted automatically, by operation of law and on
a one-for-one basis, into an equal number of issued and outstanding
shares of GNYSB Common Stock, which will be all of the issued and
outstanding GNYSB Common Stock.
A-1
<PAGE>
<PAGE>
The foregoing conversion of GNYSB Common Stock into Bancorp Common Stock,
GNYSB Series A Preferred Stock into Bancorp Series A Preferred Stock, GNYSB
Series B Preferred Stock into Bancorp Series B Preferred Stock and Interim Bank
common stock into GNYSB Common Stock (which shall not be further converted into
shares of Bancorp Common Stock) is intended to constitute a tax-free exchange
under the Internal Revenue Code of 1986, as amended (the 'Code'). The parties,
intending to be legally bound, agree as follows:
ARTICLE 1
MERGER OF INTERIM BANK AND GNYSB AND RELATED MATTERS
1.1 The Merger. On the Effective Date, Interim Bank shall be merged with
and into GNYSB, which shall be the receiving and surviving corporation, pursuant
to the Merger, and the separate existence of Interim Bank shall cease. The
Merger shall be pursuant to the provisions of, and shall have the effect
provided in, the New York Banking Law. On the Effective Date, all assets and
property of GNYSB and Interim Bank (including, but not limited to, real,
personal and mixed property, tangible and intangible, and interests then owned
by GNYSB or Interim Bank, or which would inure to either of them) shall
immediately, by operation of law and without any conveyance, transfer or further
action, become the property of GNYSB. Commencing as of the Effective Date and
continuing thereafter, GNYSB shall be deemed to be a continuation of both GNYSB
and Interim Bank. All rights and obligations of Interim Bank shall remain
unimpaired and GNYSB shall, on the Effective Date, succeed to all those rights
and obligations.
1.2 Continued Existence of GNYSB. Following the Merger, the existence of
GNYSB shall continue unaffected and unimpaired by the Merger, with all the
rights, privileges, immunities, powers and franchises, and subject to all the
duties and liabilities, of a stock savings bank organized under the laws of the
State of New York. The Restated Organization Certificate and By-laws of GNYSB,
as in effect immediately prior to the Merger, shall continue in full force and
effect following the Merger until amended or repealed. GNYSB's name shall not be
changed by reason of the Merger and its deposit accounts shall continue to be
insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation
(the 'FDIC').
1.3 Continued Business of GNYSB. From and after the Effective Date, and
subject to the actions of the Board of Directors and officers of GNYSB, the
business currently conducted by GNYSB shall continue to be conducted by it at
the same principal office, branches, and other places of business, as a
subsidiary of Bancorp, and the directors and officers of GNYSB immediately prior
to the Effective Date shall continue in their respective positions immediately
following the Effective Date, with, in the case of directors, the same terms and
classes. It is the parties' intention that there be continuity of management and
of the operation of GNYSB's business.
1.4 Further Assurances. GNYSB and Interim Bank each agree that at any time,
or from time to time, as and when requested by GNYSB or by its successors or
assigns, Interim Bank shall execute and deliver, or cause to be executed and
delivered, in its name by its last acting officers or by the corresponding
officers of GNYSB (Interim Bank hereby authorizing such officers so to act in
its name), all such conveyances, assignments, transfers, deeds and other
instruments, and shall take or cause to be taken such further or other action as
GNYSB or its successors or assigns may deem necessary or desirable in order to
carry out the vesting, perfecting, confirming, assignment or other transfer of
the interests, assets, property, privileges, powers, immunities, franchises and
other rights referred to in this Article 1, or otherwise to carry out the intent
and purpose of this Agreement.
1.5 Amended and Restated Certificate of Incorporation and By-Laws of
Bancorp. Prior to, on and immediately after the Effective Date, the certificate
of incorporation of Bancorp shall read in its entirety as set forth in Appendix
1 attached to this Agreement, and the by-laws of Bancorp shall read in their
entirety as set forth in Appendix 2 attached to this Agreement.
A-2
<PAGE>
<PAGE>
ARTICLE 2
CONVERSION OF STOCK
2.1 The terms and conditions of the Merger (including, without limitation,
the mode of carrying the Merger into effect and the manner and basis of
converting GNYSB Common Stock into Bancorp Common Stock, GNYSB Series A
Preferred Stock into Bancorp Series A Preferred Stock and GNYSB Series B
Preferred Stock into Bancorp Series B Preferred Stock) shall be as follows:
2.1.1 Bancorp Common Stock Held by GNYSB. On the Effective Date, all
shares of Bancorp Common Stock held by GNYSB immediately prior to the
Effective Date shall be canceled and shall no longer be deemed to be issued
or outstanding for any purpose.
2.1.2 GNYSB Common Stock. On the Effective Date, each share of GNYSB
Common Stock issued and outstanding immediately prior to the Effective Date
shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into one share of fully paid and
non-assessable Bancorp Common Stock. On the Effective Date, each share of
GNYSB Common Stock held in treasury of GNYSB immediately prior to the
Effective Date shall, by virtue of the Merger, be cancelled without payment
of any consideration therefor.
2.1.3 GNYSB Series A Preferred Stock. On the Effective Date, each
share of GNYSB Series A Preferred Stock issued and outstanding immediately
prior to the Effective Date shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into one share of
fully paid and non-assessable Bancorp Series A Preferred Stock. On the
Effective Date, each share of GNYSB Series A Preferred Stock held in
treasury of GNYSB immediately prior to the Effective Date shall, by virtue
of the Merger, be cancelled without payment of any consideration therefor.
2.1.4 GNYSB Series B Preferred Stock. On the Effective Date, each
share of GNYSB Series B Preferred Stock issued and outstanding immediately
prior to the Effective Date shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into one share of
fully paid and non-assessable Bancorp Series B Preferred Stock. On the
Effective Date, each share of GNYSB Series B Preferred Stock held in
treasury of GNYSB immediately prior to the Effective Date shall, by virtue
of the Merger, be cancelled without payment of any consideration therefor.
2.1.5 Dissenters' Rights of Appraisal. Notwithstanding anything in
this Agreement to the contrary, any issued and outstanding shares of
capital stock of GNYSB held by a holder which with respect to such shares
has complied with all of the provisions of the New York Banking Law
concerning the right of shareholders to dissent from the Merger and require
appraisal of their shares shall not be converted as otherwise described in
this Article 2, but shall become the right to receive such consideration as
may be determined to be due to such holder pursuant to such provisions of
the New York Banking Law; provided, however, that any such shares of
capital stock of GNYSB outstanding immediately prior to the Effective Date
and held by such a holder who shall, after the Effective Date, withdraw his
or her demand for appraisal or lose his right of appraisal pursuant to the
New York Banking Law shall be deemed to be converted into the consideration
such shares of capital stock would otherwise have been converted into under
this Article 2.
2.1.6 Interim Bank Common Stock. On the Effective Date, each share of
the common stock of Interim Bank issued and outstanding immediately prior
to the Effective Date shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into, and shall become, one
share of fully paid and non-assessable GNYSB Common Stock (and shall not be
further converted into shares of Bancorp Common Stock) so that, from and
after the Effective Date, all of the issued and outstanding shares of GNYSB
Common Stock shall be held by Bancorp.
2.1.7 Employee Agreements and Benefit Plans. On the Effective Date,
Bancorp shall, to the extent it determines appropriate, assume all the
rights and obligations of GNYSB under GNYSB's Supplemental Executive
Retirement Plan, Employee Stock Ownership Plan, Incentive Savings Plan,
Long-Term Incentive Program, Retirement Plan for Non-Employee Directors,
Plan of Pensions and Retirement Benefits, Non-Employee Directors' Deferred
Compensation Plan, 1996 Equity Incentive Plan, 1997 Annual Incentive Plan
and the 1996 Non-Employee Directors Stock Option Plan (providing for the
granting to each non-employee director of options to purchase 4,000
A-3
<PAGE>
<PAGE>
shares of Bank Common Stock at the 1997 Annual Meeting of Stockholders and
at each subsequent Annual Meeting of Stockholders thereafter). In addition,
Bancorp shall, to the extent it determines appropriate, assume the
obligations of GNYSB under various employment and severance agreements to
which GNYSB is a party with several employees. On the Effective Date,
Bancorp also shall, to the extent it determines appropriate, assume any
obligations of GNYSB to deliver or make available shares of GNYSB Common
Stock and GNYSB Series A Preferred Stock under any agreement, plan or
program not referred to in this Section 2.1.7 to which GNYSB or any of its
subsidiaries is a party. Any reference to GNYSB Common Stock and GNYSB
Series A Preferred Stock under any of the plans listed above or any such
other agreement, plan or program maintained by GNYSB or any of its
subsidiaries shall, to the extent appropriate, be deemed to be a reference
to Bancorp Common Stock and Bancorp Series A Preferred Stock, respectively,
and to the extent appropriate, one share of Bancorp Common Stock and one
share of Bancorp Series A Preferred Stock shall be issuable in lieu of each
share of GNYSB Common Stock and GNYSB Series A Preferred Stock,
respectively, required to be issued under any of such agreements, plans or
programs, subject to subsequent adjustment as provided therein.
2.1.8 Reservation for Issuance of Stock. On the Effective Date, the
Board of Directors of Bancorp shall be deemed to have reserved for
issuance, or authorized the issuance of, as the case may be, (a) a number
of shares of Bancorp Common Stock, and such shares shall automatically (by
operation of law) be so reserved for issuance, or so authorized, as the
case may be, in respect of the GNYSB Series A Preferred Stock and the
agreements, plans and programs referred to in Section 2.1.7 equal to the
number of shares of GNYSB Common Stock that GNYSB had reserved for
issuance, or of which GNYSB had authorized the issuance, as the case may
be, in respect of the GNYSB Series A Preferred Stock and such agreements,
plans and programs immediately prior to the Effective Date and (b) a number
of shares of Bancorp Series A Preferred Stock, and such shares shall
automatically (by operation of law) be so reserved for issuance, or so
authorized, as the case may be, in respect of agreements, plans and
programs referred to in Section 2.1.7 equal to the number of shares of
GNYSB Series A Preferred Stock that GNYSB has reserved for issuance, or of
which GNYSB had authorized the issuance, as the case may be, in respect of
such agreements, plans and programs immediately prior to the Effective
Date.
2.1.9 Stockholder Rights Plan. The Rights (the 'Bank Rights') under
the Rights Agreement, dated as of June 14, 1990, as amended by the First
Amendment, dated as of August 12, 1996, and the Second Amendment dated as
of March 7, 1997 (the 'Rights Agreement'), between GNYSB and The Chase
Manhattan Bank (as successor in interest to the Manufacturers Hanover Trust
Company), as Rights Agent, will be redeemed immediately prior to the
Effective Date and the Rights Agreement will be terminated. Each share of
Bancorp Common Stock issued pursuant to Section 2.1.2 shall be issued with
a right pursuant to a rights agreement between Bancorp and a rights agent
substantially similar to the Rights Agreement.
2.1.10 Evidence of Ownership.
(a) From and after the Effective Date, each holder of an outstanding
certificate or certificates which theretofore represented shares of GNYSB
Common Stock shall, upon surrender of the same to a transfer agent selected
by GNYSB, or to any other person then acting as transfer agent or exchange
agent for Bancorp Common Stock, be entitled to receive, in exchange
therefor, a certificate or certificates representing the number of shares
of Bancorp Common Stock into which the shares theretofore represented by
the certificate or certificates so surrendered shall have been converted in
accordance with this Article 2. Until so surrendered, each such outstanding
certificate or certificates which, prior to the Effective Date, represented
a number of shares of GNYSB Common Stock shall be deemed for all purposes
to evidence the ownership of the same number of shares of Bancorp Common
Stock.
(b) From and after the Effective Date, each holder of an outstanding
certificate or certificates which theretofore represented shares of GNYSB
Series A Preferred Stock shall, upon surrender of the same to a transfer
agent selected by GNYSB, or to any other person then acting as transfer
agent or exchange agent for Bancorp Series A Preferred Stock, be entitled
to receive, in exchange therefor, a certificate or certificates
representing the number of shares of Bancorp Series A
A-4
<PAGE>
<PAGE>
Preferred Stock into which the shares theretofore represented by the
certificate or certificates so surrendered shall have been converted in
accordance with this Article 2. Until so surrendered, each such outstanding
certificate or certificates which, prior to the Effective Date, represented
a number of shares of GNYSB Series A Preferred Stock shall be deemed for
all purposes to evidence the ownership of the same number of shares of
Bancorp Series A Preferred Stock.
(c) From and after the Effective Date, each holder of an outstanding
certificate or certificates which theretofore represented shares of GNYSB
Series B Preferred Stock shall, upon surrender of the same to a transfer
agent selected by GNYSB, or to any other person then acting as transfer
agent or exchange agent for Bancorp Series B Preferred Stock, be entitled
to receive, in exchange therefor, a certificate or certificates
representing the number of shares of Bancorp Series B Preferred Stock into
which the shares theretofore represented by the certificate or certificates
so surrendered shall have been converted in accordance with this Article 2.
Until so surrendered, each such outstanding certificate or certificates
which, prior to the Effective Date, represented a number of shares of GNYSB
Series B Preferred Stock shall be deemed for all purposes to evidence the
ownership of the same number of shares of Bancorp Series B Preferred Stock.
2.1.11 Full Satisfaction. All shares of Bancorp Common Stock, Bancorp
Series A Preferred Stock and Bancorp Series B Preferred Stock into which
shares of GNYSB Common Stock, GNYSB Series A Preferred Stock and GNYSB
Series B Preferred Stock, respectively, shall have been converted pursuant
to this Article 2 shall be deemed to have been issued in full satisfaction
of all rights pertaining to such converted shares.
2.1.12 Sole Rights. On the Effective Date, the holders of certificates
formerly representing GNYSB Common Stock, GNYSB Series A Preferred Stock or
GNYSB Series B Preferred Stock outstanding on the Effective Date shall
cease to have any rights with respect to GNYSB Common Stock, GNYSB Series A
Preferred Stock or GNYSB Series B Preferred Stock, and their sole rights on
and following the Effective Date shall be with respect to the Bancorp
Common Stock, Bancorp Series A Preferred Stock or Bancorp Series B
Preferred Stock into which their shares of GNYSB Common Stock, GNYSB Series
A Preferred Stock or GNYSB Series B Preferred Stock, respectively, shall
have been converted by the Merger.
ARTICLE 3
CONDITIONS
3.1 The obligations of GNYSB, Bancorp and Interim Bank to effect the Merger
and otherwise consummate the transactions contemplated by this Agreement shall
be subject to satisfaction of each of the following conditions at or prior to
the Effective Date:
3.1.1 Board Approval. On or prior to the Effective Date, the
respective Boards of Directors of Bancorp, GNYSB and Interim Bank shall
each have duly authorized this Agreement and Bancorp, GNYSB and Interim
Bank shall have each duly executed and delivered this Agreement to each
other, and such authorizations shall not have been revoked or modified on
the Effective Date.
3.1.2 Stockholder Approval. Any required approval of stockholders
shall have been obtained and shall not have been revoked or modified on the
Effective Date.
3.1.3 Approvals; Consents. All approvals and consents, if any, of the
New York Superintendent of Banks (the 'Superintendent'), the Office of
Thrift Supervision or the Board of Governors of the Federal Reserve System,
the FDIC, and any other governmental agency having jurisdiction, and other
persons that are, in the opinion of counsel for GNYSB, required for the
lawful consummation of the Merger and the issuance and delivery of Bancorp
Common Stock, Bancorp Series A Preferred Stock and Bancorp Series B
Preferred Stock as contemplated by this Agreement, shall have been obtained
and shall not have been revoked on the Effective Date.
3.1.4 Tax Status. GNYSB shall have received either (a) a ruling from
the Internal Revenue Service, acceptable in form and substance to GNYSB and
its counsel, or (b) an opinion of its counsel, which in either case may
be subject to certain representations made by GNYSB and in either case
substantially to the effect that, for federal income tax purposes:
A-5
<PAGE>
<PAGE>
1. The formation of Interim Bank and its merger with and into GNYSB,
with GNYSB as the surviving corporation, will be disregarded for Federal
income tax purposes, and the transaction will be treated as a transfer by
GNYSB stockholders of their GNYSB stock to Bancorp solely in exchange for
stock of Bancorp.
2. The transfer will constitute an exchange within the meaning of
section 351 of the Code.
3. Except to the extent that cash received in redemption of the Bank
Rights is treated as a dividend, no gain or loss will be recognized by the
stockholders of GNYSB upon the exchange of their GNYSB Common Stock solely
for Bancorp Common Stock.
4. No gain or loss will be recognized by the stockholders of GNYSB
upon the exchange of their the Bank Series A Preferred Stock solely for
Bancorp Series A Preferred Stock.
5. No gain or loss will be recognized by the stockholders of GNYSB
upon the exchange of their GNYSB Series B Preferred Stock solely for
Bancorp Series B Preferred Stock.
6. No gain or loss will be recognized by GNYSB, Bancorp or Interim
Bank as a result of the Reorganization.
7. The aggregate basis of the Bancorp Common Stock received by each
stockholder of GNYSB in the Reorganization will be the same as the
aggregate basis of GNYSB Common Stock exchanged therefor.
8. The aggregate basis of the Bancorp Series A Preferred Stock
received by each stockholder of GNYSB in the Reorganization will be the
same as the aggregate basis of GNYSB Series A Preferred Stock exchanged
therefor.
9. The aggregate basis of the Bancorp Series B Preferred Stock
received by each stockholder of GNYSB in the Reorganization will be the
same as the aggregate basis of GNYSB Series B Preferred Stock exchanged
therefor.
10. The holding period of the Bancorp Common Stock received by each
stockholder of GNYSB in the Reorganization will include the holding period
of GNYSB Common Stock exchanged therefor, provided that such stockholder
held such GNYSB Common Stock as a capital asset on the date of the
Reorganization.
11. The holding period of the Bancorp Series A Preferred Stock
received by each stockholder of GNYSB in the Reorganization will include
the holding period of GNYSB Series A Preferred Stock exchanged therefor,
provided that such stockholder held such GNYSB Series A Preferred Stock as
a capital asset on the date of the Reorganization.
12. The holding period of the Bancorp Series B Preferred Stock
received by each stockholder of GNYSB in the Reorganization will include
the holding period of GNYSB Series B Preferred Stock exchanged therefor,
provided that such stockholder held such GNYSB Series B Preferred Stock as
a capital asset on the date of the Reorganization.
ARTICLE 4
TERMINATION; EXPENSES
4.1 Termination. This Agreement may be terminated at any time prior to the
Effective Date (whether before or after any approval by the stockholders of
GNYSB),
(a) at the option of the Board of Directors of any of GNYSB, Bancorp
or Interim Bank if any one or more of the conditions to the obligations of
any of them under this Agreement shall not have been satisfied and shall
not be waived on or prior to the Effective Date, or
(b) at the option of the Board of Directors of GNYSB for any reason.
This Agreement also may be terminated at any time prior to the Effective Date by
the mutual consent of the Boards of Directors of the parties.
4.2 No Further Liability. In the event of the termination of this Agreement
pursuant to this Article 4, this Agreement shall be void and of no further force
or effect, and there shall be no further liability
A-6
<PAGE>
<PAGE>
or obligation of any nature on the part of any of the parties or their
respective directors, officers, employees or stockholders, by reason of this
Agreement or the termination of this Agreement.
4.3 Costs and Expenses. Each party shall pay all costs and expenses
incurred by it in connection with this Agreement and the transactions
contemplated by this Agreement.
ARTICLE 5
EFFECTIVE DATE OF MERGER
The 'Effective Date' for all purposes of this Agreement shall be the later
of (a) the date designated by GNYSB to the Superintendent as the date on which
the Merger shall be effective and (b) the date on which the Superintendent files
this Agreement pursuant to Section 601-b(1) of the New York Banking Law.
ARTICLE 6
MISCELLANEOUS
6.1 Waiver, Amendment. Any of the terms or conditions of this Agreement
that legally may be waived may be waived at any time by any party which is, or
the stockholders of which are, entitled to the benefit of such terms or
conditions. Any of such terms or conditions may be amended in whole or in part
at any time, to the extent not prohibited by applicable law, rules and
regulations, by an agreement in writing, executed in the same manner as this
Agreement, provided that, after approval by the stockholders of GNYSB, this
Agreement shall not be amended in any respect deemed by the Board of Directors
of GNYSB to be materially adverse to the stockholders of GNYSB, without the
approval of such holders.
6.2 Counterparts. This Agreement may be executed by the parties in any
number of separate counterparts, each of which shall be an original, but such
counterparts together shall constitute but one and the same instrument.
6.3 Headings. The article and section headings contained in this Agreement
are for reference purposes only and shall not be deemed to be part of this
Agreement or to affect the meaning or interpretation of this Agreement.
6.4 Execution by Interim Bank. GNYSB and Bancorp acknowledge that, as of
the date of this Agreement, Interim Bank may not have received its charter from
the Superintendent and therefore would not have the legal capacity to execute
and deliver this Agreement. If so, Bancorp agrees to cause Interim Bank to
execute and deliver this Agreement promptly following the issuance of Interim
Bank's charter by the Superintendent. GNYSB and Bancorp agree to be bound by
this Agreement prior to and following such execution and delivery by Interim
Bank.
A-7
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE GREATER NEW YORK SAVINGS BANK
By: /S/ GERARD C. KEEGAN
.................................
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
GREATER NEW YORK BANCORP INC.
By: /S/ GERARD C. KEEGAN
.................................
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
THE GREATER INTERIM SAVINGS BANK
By: /S/ GERARD C. KEEGAN*
.................................
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
- ------------
* To be executed at formation of Interim Bank.
A-8
<PAGE>
<PAGE>
EXHIBIT 1 TO APPENDIX A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GREATER NEW YORK BANCORP INC.
Greater New York Bancorp Inc., a Delaware corporation, hereby certifies as
follows:
ARTICLE I
The name of the Corporation is Greater New York Bancorp Inc. The date of
filing of its original certificate of incorporation with the Secretary of State
was February 10, 1997.
ARTICLE II
This restated certificate of incorporation amends, restates and integrates
the provisions of the certificate of incorporation of Greater New York Bancorp
Inc. and has been duly adopted in accordance with the provisions of Sections 242
and 245 of the General Corporation Law of the State of Delaware by written
consent of the sole stockholder of the outstanding stock entitled to vote
thereon in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
ARTICLE III
The text of the certificate of incorporation is hereby amended and restated
to read herein as set forth in full:
FIRST. The name of the Corporation is Greater New York Bancorp Inc.
SECOND. The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH. The total number of shares of all classes of capital stock which
the Corporation shall have authority to issue is fifty-five million
(55,000,000), of which forty-five million (45,000,000) shares of the par value
of $1.00 per share shall be designated as Common Stock and ten million
(10,000,000) shares of the par value of $1.00 per share shall be designated as
Preferred Stock. Shares of Preferred Stock may be issued in one or more series
from time to time by the board of directors, and the board of directors is
expressly authorized to fix by resolution or resolutions the designations and
the powers, preferences and rights, and the qualifications, limitations and
restrictions thereof, of the shares of each series of Preferred Stock, including
without limitation the following:
(a) the distinctive serial designation of such series which shall
distinguish it from other series;
(b) the number of shares included in such series, which number may be
increased or decreased from time to time unless otherwise provided by the
board of directors in the resolution or resolutions providing for the issue
of such series;
(c) the dividend rate (or method of determining such rate) payable to
the holders of the shares of such series, any conditions upon which such
dividends shall be paid and the date or dates upon which such dividends
shall be payable;
(d) whether dividends on the shares of such series shall be cumulative
and, in the case of shares of any series having cumulative dividend rights,
the date or dates or method of determining the date or dates from which
dividends on the shares of such series shall be cumulative;
(e) the amount or amounts which shall be payable out of the assets of
the Corporation to the holders of the shares of such series upon voluntary
or involuntary liquidation, dissolution or winding up of the Corporation;
(f) the price or prices at which, the period or periods within which
and the terms and conditions upon which the shares of such series may be
redeemed, in whole or in part, at the option of the Corporation or at the
option of the holder or holders thereof or upon the happening of a
specified event or events;
A-9
<PAGE>
<PAGE>
(g) the obligation, if any, of the Corporation to purchase or redeem
shares of such series pursuant to a sinking fund or otherwise and the price
or prices at which, the period or periods within which and the terms and
conditions upon which the shares of such series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(h) whether or not the shares of such series shall be convertible or
exchangeable, at any time or times at the option of the holder or holders
thereof or at the option of the Corporation or upon the happening of a
specified event or events, into shares of any other class or classes or any
other series of the same or any other class or classes of stock of the
Corporation, and the price or prices or rate or rates of exchange or
conversion and any adjustments applicable thereto; and
(i) the voting rights, if any, of the holders of the shares of such
series.
Of the ten million (10,000,000) shares designated as Preferred Stock,
one million eight hundred thousand (1,800,000) shares shall be designated
Series A ESOP Convertible Preferred Stock, two million (2,000,000) shares
shall be designated 12% Noncumulative Perpetual Preferred Stock, Series B
and two hundred thousand (200,000) shares shall be designated Junior
Participating Preferred Stock. The terms of the Series A ESOP Convertible
Preferred Stock are set forth in Exhibit A hereto. The terms of the 12%
Noncumulative Perpetual Preferred Stock, Series B are set forth in Exhibit
B hereto. The terms of the Junior Participating Preferred Stock are set
forth in Exhibit C hereto. Exhibits A, B and C are incorporated herein as
if set forth in full herein.
FIFTH. Until such time as the Corporation acquires all of the outstanding
shares of capital stock of The Greater New York Savings Bank (the 'Holding
Company Formation'), the number of directors shall be one. At and after the time
of the Holding Company Formation, the number of directors of the Corporation
shall not be less than seven (7) nor more than thirty (30). Within such
limitations, the number of directors shall be determined as contemplated by the
by-laws of the Corporation. At and after the time of the Holding Company
Formation, the directors of the Corporation shall be divided into three (3)
classes, as nearly equal in number as reasonably possible, as determined by the
board of directors, with the initial term of office of the first class of such
directors to expire at the first annual meeting of stockholders after the
Holding Company Formation, the initial term of office of the second class of
such directors to expire at the second annual meeting of stockholders after the
Holding Company Formation and the initial term of office of the third class of
such directors to expire at the third annual meeting of stockholders after the
Holding Company Formation, with each class of directors to hold office until
their successors have been duly elected and qualified. Notwithstanding anything
in this Amended and Restated Certificate of Incorporation to the contrary, the
sole director at the time of the Holding Company Formation shall be entitled to
elect the additional directors to the Board of Directors and designate the class
in which each director shall serve. At each annual meeting of stockholders
following such initial classification and election, directors elected to succeed
the directors whose terms expire at such annual meeting shall be elected to hold
office for a term expiring at the annual meeting of stockholders in the third
year following the year of their election and until their successors have been
duly elected and qualified. If the number of directors is changed, any increase
or decrease shall be apportioned among the classes so as to maintain or attain a
number of directors in each class as nearly equal as reasonably possible, but no
decrease in the number of directors may shorten the term of any incumbent
director.
Any or all of the directors may be removed at any time, but only for cause
and by the affirmative vote of at least eighty (80) percent of the total votes
eligible to be cast by the holders of all outstanding shares of any class or
series of stock of the Corporation entitled to vote generally in the election of
directors at a meeting of stockholders expressly called for that purpose. The
chairman of the board of directors may be removed, as chairman of the board of
directors, at any time with or without cause, only by the vote of at least a
majority of the entire board of directors.
The first sentence of the immediately preceding paragraph may not be
amended, modified or repealed except by the affirmative vote of the holders of
not less than eighty (80) percent of the voting power of all outstanding shares
of capital stock of the Corporation entitled to vote generally in the election
of directors, considered for purposes hereof as a single class.
SIXTH. Elections of directors need not be by written ballot except and to
the extent provided in the by-laws of the Corporation.
A-10
<PAGE>
<PAGE>
SEVENTH. Any action required or permitted to be taken by the holders of any
class or series of stock of the Corporation, including but not limited to the
election of directors, may be taken by written consent or consents but only if
such consent or consents are signed by all holders of the class or series of
stock entitled to vote on such action.
EIGHTH. A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except (a) for any breach of the director's duty of loyalty
to the corporation or its stockholders; (b) for acts or ommissions not in good
faith or which involve intentional misconduct or a knowing violation of law; (c)
for unlawful payments of dividends or unlawful stock purchases or redemptions;
or (d) for any transaction from which the director derived an improper personal
benefit. No amendment, modification or repeal of this Article Eighth shall
adversely affect any right or protection of a director that exists at the time
of such amendment, modification or repeal.
NINTH. In taking action, including, without limitation, action which may
involve or relate to a change or potential change in the control of the
Corporation, the board of directors of the Corporation shall be entitled to
consider, without limitation, (a) both the long-term and the short-term
interests of the Corporation and its stockholders and (b) the effects that the
Corporation's actions may have in the short-term or in the long-term upon any of
the following:
(i) the prospects for potential growth, development, productivity and
profitability of the Corporation;
(ii) the Corporation's current employees;
(iii) the Corporation's retired employees and other beneficiaries
receiving or entitled to receive retirement, welfare or similar benefits
from or pursuant to any plan sponsored, or agreement entered into, by the
Corporation;
(iv) the Corporation's customers and creditors; and
(v) the ability of the Corporation to provide, as a going concern,
products, services, employment opportunities and employment benefits and
otherwise to contribute to the communities in which it does business.
Nothing in this Article Ninth shall create any duties owed by any director to
any person or entity to consider or afford any particular weight to any of the
foregoing or abrogate any duty of the directors, either statutory or recognized
by common law or court decisions. For purposes of this Article Ninth 'control'
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a corporation whether
through the ownership of voting stock of such corporation, the ownership of
voting stock of any company which possesses such power or otherwise.
TENTH. The board of directors of the Corporation is expressly authorized to
adopt, amend or repeal by-laws of the Corporation; provided, however, that the
board shall not have the authority to amend or repeal any by-law which shall
have been adopted by the holders of any class or series of stock of the
Corporation entitled to vote thereon, unless otherwise provided in such by-law,
and provided, further, that any by-law adopted by the board may be amended or
repealed by the holders of shares of any class or series of stock of the
Corporation entitled to vote thereon at any annual meeting or at any special
meeting called for that purpose. Notwithstanding the foregoing, any provision of
the by-laws which contains a supermajority voting requirement shall only be
amended or repealed by a vote of the board of directors or holders of any class
or series of stock of the Corporation entitled to vote thereon that is not less
than the supermajority voting requirement specified in such provision.
ELEVENTH. The affirmative vote of at least two-thirds (or such greater
proportion as may otherwise be required pursuant to any specific provision of
this certificate of incorporation) of the total votes eligible to be cast by the
holders of all outstanding shares of any class or series of stock of the
Corporation entitled to vote thereon shall be required to amend, alter, rescind,
repeal, or adopt any provisions inconsistent with, Articles Fifth, Seventh,
Ninth, Tenth, and this Article Eleventh.
IN WITNESS WHEREOF, Greater New York Bancorp Inc. has caused this
certificate to be signed by Gerard C. Keegan, its Chairman, President and Chief
Executive Officer, on the 11th day of March, 1997.
GREATER NEW YORK BANCORP INC.
By /S/ GERARD C. KEEGAN
...................................
Gerard C. Keegan
A-11
<PAGE>
<PAGE>
EXHIBIT A TO THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF GREATER NEW YORK BANCORP INC.
TERMS
OF
SERIES A ESOP CONVERTIBLE PREFERRED STOCK
OF
GREATER NEW YORK BANCORP INC.
SECTION 1. Designation and Amount; Special Purpose Restricted Transfer
Issue.
(A) The shares of this series of Preferred Stock of the Corporation shall
be designated as Series A ESOP Convertible Preferred Stock ('Series A Preferred
Stock') and the number of shares constituting such series shall be one million
eight hundred thousand (1,800,000) shares.
(B) Shares of Series A Preferred Stock shall be issued only to a trustee
acting on behalf of an employee stock ownership plan or other employee benefit
plan of the Corporation and its subsidiaries. In the event of any transfer of
shares of Series A Preferred Stock to any person other than any such plan
trustee without the prior written consent of the Corporation, the shares of
Series A Preferred Stock so transferred, upon such transfer and without any
further action by the Corporation or the holder, shall be automatically
converted into shares of Common Stock on the terms otherwise provided for the
conversion of shares of Series A Preferred Stock into shares of Common Stock
pursuant to Section 5 hereof, and no such transferee shall have any of the
voting powers, preferences and relative, participating, optional or special
rights ascribed to shares of Series A Preferred Stock hereunder but, rather,
only the powers and rights pertaining to the Common Stock into which such shares
of Series A Preferred Stock shall be so converted. Certificates representing
shares of Series A Preferred Stock shall be legended to reflect such
restrictions on transfer. Notwithstanding the foregoing provisions of this
paragraph (B) of Section 1, shares of Series A Preferred Stock (i) may be
converted into shares of Common Stock as provided by Sections 5 and 7 hereof and
the shares of Common Stock issued upon such conversion may be transferred by the
holder thereof as permitted by law and (ii) shall be redeemable by the
Corporation upon the terms and conditions provided by Section 6 hereof.
SECTION 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series A Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends ('Preferred Dividends') in an amount per
share equal to $1.0725 per share per annum, and no more, payable in as nearly as
possible equal proportions on the first day of January and July of each year
(each a 'Dividend Payment Date') commencing on the first such date occurring
after the date on which the Corporation acquires all of the outstanding shares
of capital stock of The Greater New York Savings Bank (the 'Holding Company
Formation'), to holders of record at the start of business on such Dividend
Payment Date. Preferred Dividends shall begin to accrue on outstanding shares of
Series A Preferred Stock from the date of the last dividend payment on the
Series A ESOP Convertible Preferred Stock of The Greater New York Savings Bank.
Preferred Dividends shall accrue on a daily basis whether or not the Corporation
shall have earnings or surplus at the time, but Preferred Dividends for any
period less than a full semi-annual period shall be computed on the basis of a
360-day year of 30-day months. Accumulated but unpaid Preferred Dividends shall
cumulate as of the Dividend Payment Date on which they first become payable, but
no interest shall accrue on accumulated but unpaid Preferred Dividends.
(B) So long as any Series A Preferred Stock shall be outstanding, no
dividend shall be declared or paid or set apart for payment on any other series
of stock ranking on a parity with the Series A Preferred Stock as to dividends,
unless there shall also be or have been declared and paid or set apart
A-12
<PAGE>
<PAGE>
for payment on the Series A Preferred Stock, like dividends for all dividend
payment periods of the Series A Preferred Stock ending on or before the dividend
payment date of such parity stock, ratably in proportion to the respective
amounts of dividends accumulated and unpaid through such dividend payment period
on the Series A Preferred Stock and accumulated and unpaid or payable on such
parity stock through the dividend payment period on such parity stock next
preceding such dividend payment date. In the event that full cumulative
dividends on the Series A Preferred Stock have not been declared and paid or set
apart for payment when due, the Corporation shall not declare or pay or set
apart for payment any dividends or make any other distributions on, or make any
payment on account of the purchase, redemption or other retirement of, any other
class of stock or series thereof of the Corporation ranking, as to dividends or
as to distributions in the event of a liquidation, dissolution or winding-up of
the Corporation, junior to the Series A Preferred Stock until full cumulative
dividends on the Series A Preferred Stock shall have been paid or declared and
provided for.
SECTION 3. Voting Rights.
The holders of shares of Series A Preferred Stock shall have the following
voting rights:
(A) The holders of Series A Preferred Stock shall be entitled to vote
on all matters submitted to a vote of the holders of Common Stock of the
Corporation, voting together with the holders of Common Stock as one class.
Each share of the Series A Preferred Stock shall be entitled to one vote
per share.
(B) Except as otherwise required by law or set forth herein, holders
of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for the taking of
any corporate action; provided, however, that the vote of at least 66 2/3%
of the outstanding shares of Series A Preferred Stock, voting separately as
a series, shall be necessary to adopt any alteration, amendment or repeal
of any provision of this Amended and Restated Certificate of Incorporation
(including any such alteration, amendment or repeal effected by any merger
or consolidation in which the Corporation is the surviving or resulting
corporation) if such amendment, alteration or repeal would alter or change
the powers, preferences or special rights of the shares of Series A
Preferred Stock so as to affect them adversely.
SECTION 4. Liquidation, Dissolution or Winding-Up.
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, the holders of Series A Preferred Stock shall be
entitled to receive out of assets of the Corporation which remain after
satisfaction in full of all valid claims of creditors of the Corporation and
which are available for payment to stockholders and subject to the rights of the
holders of any stock of the Corporation ranking senior to or on a parity with
the Series A Preferred Stock in respect of distributions upon liquidation,
dissolution or winding-up of the Corporation, before any amount shall be paid or
distributed among the holders of Common Stock or any other shares ranking junior
to the Series A Preferred Stock in respect of distributions upon liquidation,
dissolution or winding-up of the Corporation, liquidating distributions in the
amount of $13.00 per share, plus an amount equal to all accumulated and unpaid
dividends thereon to the date fixed for distribution, and no more. If upon any
liquidation, dissolution or winding-up of the Corporation, the amounts payable
with respect to the Series A Preferred Stock and any other stock ranking as to
any such distribution on a parity with the Series A Preferred Stock are not paid
in full, the holders of the Series A Preferred Stock and such other stock shall
share ratably in any distribution of assets in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount to which they are entitled as provided by the foregoing provisions of
this paragraph 4(A), the holders of shares of Series A Preferred Stock shall not
be entitled to any further right or claim to any of the remaining assets of the
Corporation.
(B) Neither the merger or consolidation of the Corporation with or into any
other corporation, nor the merger or consolidation of any other corporation with
or into the Corporation, nor the sale, transfer or lease of all or any portion
of the assets of the Corporation, shall be deemed to be a dissolution,
A-13
<PAGE>
<PAGE>
liquidation or winding-up of the affairs of the Corporation for purposes of this
Section 4, but the holders of Series A Preferred Stock shall nevertheless be
entitled in the event of any such merger or consolidation to the rights provided
by Section 8 hereof.
(C) Written notice of any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Series A
Preferred Stock in such circumstances shall be payable, shall be given by
first-class mail, postage prepaid, mailed not less than twenty (20) days prior
to any payment date stated therein, to the holders of Series A Preferred Stock,
at the address shown on the books of the Corporation or any transfer agent for
the Series A Preferred Stock.
SECTION 5. Conversion into Common Stock.
(A) A holder of shares of Series A Preferred Stock shall be entitled, at
any time prior to the close of business on the date fixed for redemption of such
shares pursuant to Section 6 hereof, to cause any or all of such shares to be
converted into shares of Common Stock, initially at a conversion price equal to
$13.76 per share of Common Stock, with each share of Series A Preferred Stock
being valued at $13.00 for such purpose, and which price shall be adjusted as
hereinafter provided (and, as so adjusted, is hereinafter sometimes referred to
as the 'Conversion Price') (that is, a conversion rate initially equivalent to
approximately .9448 shares of Common Stock for each share of Series A Preferred
Stock so converted but that is subject to adjustment as the Conversion Price is
adjusted as hereinafter provided).
(B) Any holder of shares of Series A Preferred Stock desiring to convert
such shares into shares of Common Stock shall surrender the certificate or
certificates representing the shares of Series A Preferred Stock being
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), at the principal
executive office of the Corporation or the offices of the transfer agent for the
Series A Preferred Stock or such office or offices in the continental United
States of an agent for conversion as may from time to time be designated by
notice to the holders of the Series A Preferred Stock by the Corporation or the
transfer agent for the Series A Preferred Stock, accompanied by written notice
of conversion. Such notice of conversion shall specify (i) the number of shares
of Series A Preferred Stock to be converted and the name or names in which such
holder wishes the certificate or certificates for Common Stock and for any
shares of Series A Preferred Stock not to be so converted to be issued, and (ii)
the address to which such holder wishes delivery to be made of such new
certificates to be issued upon such conversion.
(C) Upon surrender of a certificate representing a share or shares of
Series A Preferred Stock for conversion, the Corporation shall issue and send by
hand delivery (with receipt to be acknowledged) or by first-class mail, postage
prepaid, to the holder thereof or to such holder's designee, at the address
designated by such holder, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled upon conversion.
In the event that there shall have been surrendered a certificate or
certificates representing shares of Series A Preferred Stock, only part of which
are to be converted, the Corporation shall issue and deliver to such holder or
such holder's designee a new certificate or certificates representing the number
of shares of Series A Preferred Stock which shall not have been converted.
(D) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Series A Preferred Stock into shares of Common Stock
made at the option of the holder thereof shall be effective as of the earlier of
(i) the delivery to such holder or such holder's designee of the certificates
representing the shares of Common Stock issued upon conversion thereof or (ii)
the commencement of business on the second business day after the surrender of
the certificate or certificates for the shares of Series A Preferred Stock to be
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto) as provided by this
Exhibit A. On and after the effective day of conversion, the person or persons
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock, but no allowance or adjustment shall be made in respect of
dividends payable to holders of Common Stock in respect of any period prior to
such effective date. The Corporation shall not be obligated to pay any dividends
which shall have been
A-14
<PAGE>
<PAGE>
declared and shall be payable to holders of shares of Series A Preferred Stock
on a Dividend Payment Date if such Dividend Payment Date for such dividend shall
coincide with or be on or subsequent to the effective date of conversion of such
shares.
(E) The Corporation shall not be obligated to deliver to holders of Series
A Preferred Stock any fractional share or shares of Common Stock issuable upon
any conversion of such shares of Series A Preferred Stock, but in lieu thereof
may make a cash payment in respect thereof in any manner permitted by law.
(F) Whenever the Corporation shall issue shares of Common Stock upon
conversion of shares of Series A Preferred Stock as contemplated by this Section
5, the Corporation shall issue together with each such share of Common Stock any
options, warrants or other rights theretofore issued and then outstanding with
respect to any shares of Common Stock.
(G) The Corporation shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of shares of Series A Preferred Stock as herein provided, free from
any preemptive rights, such number of shares of Common Stock as shall from time
to time be issuable upon the conversion of all the shares of Series A Preferred
Stock then outstanding. The Corporation shall prepare and shall use its best
efforts to obtain and keep in force such governmental or regulatory permits or
other authorizations as may be required by law, and shall comply with all
requirements as to registration or qualification of the Common Stock, in order
to enable the Corporation lawfully to issue and deliver to each holder of record
of Series A Preferred Stock such number of shares of its Common Stock as shall
from time to time be sufficient to effect the conversion of all shares of Series
A Preferred Stock then outstanding and convertible into shares of Common Stock.
SECTION 6. Redemption at the Option of the Corporation.
(A) The Series A Preferred Stock shall be redeemable, in whole or in part,
at the option of the Corporation at any time after the date of issuance, at the
following redemption prices per share:
<TABLE>
<CAPTION>
PRICE
DURING THE TWELVE- MONTH PERIOD PER
BEGINNING JULY 2 SHARE
--------------------- ------
<S> <C>
1996........................................................................ 13.30
1997........................................................................ 13.20
1998........................................................................ 13.10
</TABLE>
and thereafter at $13.00 per share, plus, in each case, an amount equal to all
accumulated and unpaid dividends thereon to the date fixed for redemption.
Payment of the redemption price shall be made by the Corporation in cash or
shares of Common Stock, or a combination thereof, as permitted by paragraph (E)
of this Section 6. From and after the date fixed for redemption, dividends on
shares of Series A Preferred Stock called for redemption will cease to accrue,
such shares will no longer be deemed to be outstanding and all rights in respect
of such shares of the Corporation shall cease, except the right to receive the
redemption price. If less than all of the outstanding shares of Series A
Preferred Stock are to be redeemed, the Corporation shall either redeem a
portion of the shares of each holder determined pro rata based on the number of
shares held by each holder or shall select the shares to be redeemed by lot, as
may be determined by the Board of Directors of the Corporation.
(B) Unless otherwise required by law, notice of redemption for any
redemption made pursuant to this Section 6 will be sent to the holders of Series
A Preferred Stock at the address shown on the books of the Corporation or any
transfer agent for the Series A Preferred Stock by first-class mail, postage
prepaid, mailed not less than twenty (20) days nor more than sixty (60) days
prior to the redemption date. Each such notice shall state: (i) the redemption
date; (ii) the total number of shares of the Series A Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; (v) that dividends on
the shares to be redeemed will cease to accrue on such redemption date; and (vi)
the conversion rights of the shares to be redeemed, the period within which
A-15
<PAGE>
<PAGE>
conversion rights may be exercised, and the Conversion Price and number of
shares of Common Stock issuable upon conversion of a share of Series A Preferred
Stock at the time. Upon surrender of the certificates for any shares so called
for redemption and not previously converted (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at the
date fixed for redemption and at the redemption price set forth in this Section
6.
(C) In the event of a modification to the Internal Revenue Code of 1986, as
amended, which has the effect of precluding the Corporation from claiming the
tax deduction for dividends paid on the Series A Preferred Stock when such
dividends are used as provided under Section 404(k)(2) of the Internal Revenue
Code of 1986, as amended and in effect on the date shares of Series A Preferred
Stock are initially issued, the Corporation may, in its sole discretion and
notwithstanding anything to the contrary in paragraph (A) of this Section 6,
elect to redeem such shares for the amount payable in respect of the shares upon
liquidation of the Corporation pursuant to Section 4 hereof.
(D) [Intentionally Omitted]
(E) The Corporation shall make payment of the redemption price required
upon redemption of shares of Series A Preferred Stock for cash, or if the
Corporation so elects, in shares of Common Stock, or in a combination of such
shares and cash, any such shares to be valued for such purpose at their Fair
Market Value (as defined in paragraph (G) of Section 9 hereof, provided,
however, that in calculating their Fair Market Value the Adjustment Period shall
be deemed to be the five (5) consecutive trading days preceding, and including,
the date of redemption).
SECTION 7. Special Conversion Rights.
A holder of shares of Series A Preferred Stock shall be entitled to cause
any or all of such shares to be converted into shares of Common Stock at a
conversion rate equal to the quotient of (A) $13.00 per share of Series A
Preferred Stock plus accumulated and unpaid dividends thereon to the date fixed
for conversion, divided by (B) the Common Stock Market Value (as defined below),
at any time and from time to time upon notice to the Company given not less than
five (5) business days prior to the date fixed by the holder in such notice for
such conversion, but only when and to the extent unavoidably necessary (i) for
such holder to provide for distributions required to be made under, or to
satisfy an investment election provided to participants in accordance with, The
Greater New York Savings Bank Employee Stock Ownership Plan, as the same may be
amended, or any successor plan (the 'Plan') to participants in the Plan; (ii)
for such holder to make payment of principal, interest or premium due and
payable (whether as scheduled or upon acceleration) on any indebtedness incurred
for the benefit of the Plan by the holder, the Plan or a trust under the Plan;
or (iii) in the event the Plan is determined by the Internal Revenue Service not
to be qualified within the meaning of Sections 401(a), the applicable provisions
of Sections 409, and 4975(e)(7) of the Internal Revenue Code of 1986, as
amended; provided, however, that if the 'fair market value' of a share of Series
A Preferred Stock as of the most recent 'Valuation Date' (as such terms are
defined in Article I, Sections 1.18(b) and 1.39 of The Greater New York Savings
Bank Employee Stock Ownership Plan, hereinafter referred to as the 'Preferred
Stock Fair Market Value') exceeds $13.00 at the time of any such conversion,
then such shares of Series A Preferred Stock will be converted into shares of
Common Stock at a conversion rate equal to the quotient of (A) the Preferred
Stock Fair Market Value plus accumulated and unpaid dividends thereon to the
date fixed for conversion, divided by (B) the Common Stock Market Value;
provided, further however, that the Company may at its election substitute for
any such conversion a cash payment per share of Series A Preferred Stock sought
to be converted equal to the greater of (x) $13.00 and (y) the Preferred Stock
Fair Market Value, plus, in either case, accumulated and unpaid dividends
thereon.
For the purposes of this Section 7, 'Common Stock Market Value' shall mean
the average of the last reported sales prices quoted on the Nasdaq National
Market (or, in case no sale occurs on a given day, the average of the reported
closing bid and asked prices shall be substituted for the last reported sales
price), regular way, of publicly traded shares of Common Stock over the five (5)
consecutive trading days immediately preceding the date of conversion.
A-16
<PAGE>
<PAGE>
SECTION 8. Consolidation, Merger, etc.
(A) In the event that the Corporation shall consummate any consolidation or
merger or similar transaction, however named, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged solely for or changed,
reclassified or converted solely into stock of any successor or resulting
company (including the Corporation) that constitutes 'qualifying employer
securities' with respect to a holder of Series A Preferred Stock within the
meaning of Section 409(l) of the Internal Revenue Code of 1986, as amended, and
Section 407(d)(5) of the Employee Retirement Income Security Act of 1974, as
amended, or any successor provisions of law, and, if applicable, for a cash
payment in lieu of fractional shares, if any, the shares of Series A Preferred
Stock of such holder shall be assumed by and shall become preferred stock of
such successor or resulting company, having in respect of such company insofar
as possible the same powers, preferences and relative, participating, optional
or other special rights (including the redemption rights provided by Section 6
hereof), and the qualifications, limitations or restrictions thereon, that the
Series A Preferred Stock had immediately prior to such transaction, except that
after such transaction each share of the Series A Preferred Stock shall be
convertible, otherwise on the terms and conditions provided by Sections 5 and 7
hereof, into the qualifying employer securities so receivable by a holder of the
number of shares of Common Stock into which such shares of Series A Preferred
Stock could have been converted immediately prior to such transaction if such
holder of Common Stock failed to exercise any rights of election to receive any
kind or amount of stock, securities, cash or other property (other than such
qualifying employer securities and a cash payment, if applicable, in lieu of
fractional shares) receivable upon such transaction (provided that, if the kind
or amount of qualifying employer securities receivable upon such transaction is
not the same for each non-electing share, then the kind and amount of qualifying
employer securities receivable upon such transaction for each non-electing share
shall be the kind and amount so receivable per share by a plurality of the
nonelecting shares). The rights of the Series A Preferred Stock as preferred
stock of such successor or resulting company shall successively be subject to
adjustments pursuant to Section 9 hereof after any such transaction as nearly
equivalent to the adjustments provided for by such section prior to such
transaction. The Corporation shall not consummate any such merger, consolidation
or similar transaction unless all then outstanding shares of the Series A
Preferred Stock shall be assumed and authorized by the successor or resulting
company as aforesaid.
(B) In the event that the Corporation shall consummate any consolidation or
merger or similar transaction, however named, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged for or changed,
reclassified or converted into other stock or securities or cash or any other
property, or any combination thereof, other than any such consideration which is
constituted solely of qualifying employer securities (as referred to in
paragraph (A) of this Section 8) and cash payments, if applicable, in lieu of
fractional shares, outstanding shares of Series A Preferred Stock shall, without
any action on the part of the Corporation or any holder thereof, be deemed
converted by virtue of such merger, consolidation or similar transaction
immediately prior to such consummation into the number of shares of Common Stock
into which such shares of Series A Preferred Stock could have been converted at
such time if the Conversion Price were the same as the redemption price then in
effect pursuant to the table set forth in paragraph 6(A) hereof plus an amount
equal to all accumulated and unpaid dividends thereon to the date fixed for such
deemed conversion (the 'Merger Conversion Price') and each share of Series A
Preferred Stock shall, by virtue of such transaction and on the same terms as
apply to the holders of Common Stock, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property (payable in like
kind) receivable by a holder of the number of shares of Common Stock into which
such shares of Series A Preferred Stock could have been converted immediately
prior to such transaction at the Merger Conversion Price if such holder of
Common Stock failed to exercise any rights of election as to the kind or amount
of stock, securities, cash or other property receivable upon such transaction
(provided that, if the kind or amount of stock, securities, cash or other
property receivable upon such transaction is not the same for each non-electing
share, then the kind and amount of stock, securities, cash or other property
receivable upon such transaction for each non-electing share shall be the kind
and amount so receivable per share by a plurality of the non-electing shares).
A-17
<PAGE>
<PAGE>
SECTION 9. Anti-dilution Adjustments.
(A) In the event that the Corporation shall, at any time or from time to
time while any of the shares of the Series A Preferred Stock are outstanding,
(i) pay a dividend or make a distribution in respect of the Common Stock in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller number of
shares, in each case whether by reclassification of shares, recapitalization of
the Corporation (including a recapitalization effected by a merger or
consolidation to which Section 8 hereof does not apply) or otherwise, the
Conversion Price in effect immediately prior to such action shall be adjusted by
multiplying such Conversion Price by the fraction the numerator of which is the
number of shares of Common Stock outstanding immediately before such event and
the denominator of which is the number of shares of Common Stock outstanding
immediately after such event. An adjustment made pursuant to this paragraph 9(A)
shall be given effect, upon payment of such a dividend or distribution, as of
the record date for the determination of shareholders entitled to receive such
dividend or distribution (on a retroactive basis) and in the case of a
subdivision or combination shall become effective immediately as of the
effective date thereof.
(B) In the event that the Corporation shall, at any time or from time to
time while any of the shares of Series A Preferred Stock are outstanding, issue
to holders of shares of Common Stock as a dividend or distribution, including by
way of a reclassification of shares or a recapitalization of the Corporation,
any right or warrant to purchase shares of Common Stock (but not including as
such a right or warrant any security convertible into or exchangeable for shares
of Common Stock) at a purchase price per share less than the Fair Market Value
(as hereinafter defined) of a share of Common Stock on the date of issuance of
such right or warrant, then, subject to the provisions of paragraphs (E) and (F)
of this Section 9, the Conversion Price shall be adjusted by multiplying such
Conversion Price by the fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the number of shares of Common Stock which could be purchased at
the Fair Market Value of a share of Common Stock at the time of such issuance
for the maximum aggregate consideration payable upon exercise in full of all
such rights or warrants and the denominator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock that could be
acquired upon exercise in full of all such rights and warrants.
(C) In the event that the Corporation shall, at any time or from time to
time while any of the shares of Series A Preferred Stock are outstanding, issue,
sell or exchange shares of Common Stock (other than pursuant to any right or
warrant to purchase or acquire shares of Common Stock (including as such a right
or warrant any security convertible into or exchangeable for shares of Common
Stock) and other than pursuant to any employee or director incentive or benefit
plan or arrangement, including any employment, severance or consulting
agreement, of the Corporation or any subsidiary of the Corporation heretofore or
hereafter adopted) for a consideration having a Fair Market Value on the date of
such issuance, sale or exchange less than the Fair Market Value of such shares
on the date of such issuance, sale or exchange, then, subject to the provisions
of paragraphs (E) and (F) of this Section 9, the Conversion Price shall be
adjusted by multiplying such Conversion Price by the fraction the numerator of
which shall be the sum of (i) the Fair Market Value of all the shares of Common
Stock outstanding on the day immediately preceding the first public announcement
of such issuance, sale or exchange plus (ii) the Fair Market Value of the
consideration received by the Corporation in respect of such issuance, sale or
exchange of shares of Common Stock, and the denominator of which shall be the
product of (i) the Fair Market Value of a share of Common Stock on the day
immediately preceding the first public announcement of such issuance, sale or
exchange multiplied by (ii) the sum of the number of shares of Common Stock
outstanding on such day plus the number of shares of Common Stock so issued,
sold or exchanged by the Corporation. In the event that the Corporation shall,
at any time or from time to time while any shares of Series A Preferred Stock
are outstanding, issue, sell or exchange any right or warrant to purchase or
acquire shares of Common Stock (including as such a right or warrant any
security convertible into or exchangeable for shares of Common Stock), other
than any such issuance to holders of shares of Common Stock as a dividend or
distribution (including by way of a reclassification of shares or a
recapitalization of the Corporation) and other than pursuant to any employee or
director incentive or benefit plan or arrangement (including any employment,
severance or
A-18
<PAGE>
<PAGE>
consulting agreement) of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted, for a consideration having a Fair Market Value
on the date of such issuance, sale or exchange less than the Non-Dilutive Amount
(as hereinafter defined), then, subject to the provisions of paragraphs (E) and
(F) of this Section 9, the Conversion Price shall be adjusted by multiplying
such Conversion Price by the fraction the numerator of which shall be the sum of
(i) the Fair Market Value of all the shares of Common Stock outstanding on the
day immediately preceding the first public announcement of such issuance, sale
or exchange plus (ii) the Fair Market Value of the consideration received by the
Corporation in respect of such issuance, sale or exchange of such right or
warrant plus (iii) the Fair Market Value at the time of such issuance of the
consideration which the Corporation would receive upon exercise in full of all
such rights or warrants, and the denominator of which shall be the product of
(i) the Fair Market Value of a share of Common Stock on the day immediately
preceding the first public announcement of such issuance, sale or exchange
multiplied by (ii) the sum of the number of shares of Common Stock outstanding
on such day plus the maximum number of shares of Common Stock which could be
acquired pursuant to such right or warrant at the time of the issuance, sale or
exchange of such right or warrant (assuming shares of Common Stock could be
acquired pursuant to such right or warrant at such time).
(D) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series A Preferred Stock are outstanding, make an
Extraordinary Distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including a recapitalization or
reclassification effected by a merger or consolidation to which Section 8 hereof
does not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of
Common Stock, the Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall, subject to paragraphs
(E) and (F) of this Section 9, be adjusted by multiplying such Conversion Price
by the fraction the numerator of which is (i) the product of (x) the number of
shares of Common Stock outstanding immediately before such Extraordinary
Distribution or Pro Rata Repurchase multiplied by (y) the Fair Market Value (as
herein defined) of a share of Common Stock on the record date with respect to an
Extraordinary Distribution, or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata Repurchase, or on
the date of purchase with respect to any Pro Rata Repurchase which is not a
tender offer, as the case may be, minus (ii) the Fair Market Value of the
Extraordinary Distribution or the aggregate purchase price of the Pro Rata
Repurchase, as the case may be, and the denominator of which shall be the
product of (A) the number of shares of Common Stock outstanding immediately
before such Extraordinary Dividend or Pro Rata Repurchase minus, in the case of
a Pro Rata Repurchase, the number of shares of Common Stock repurchased by the
Corporation multiplied by (B) the Fair Market Value of a share of Common Stock
on the record date with respect to an Extraordinary Distribution or on the
applicable expiration date (including all extensions thereof) of any tender
offer which is a Pro Rata Repurchase or on the date of purchase with respect to
any Pro Rata Repurchase which is not a tender offer, as the case may be. The
Corporation shall send each holder of Series A Preferred Stock (i) notice of its
intent to make any dividend or distribution and (ii) notice of any offer by the
Corporation to make a Pro Rata Repurchase, in each case at the same time as, or
as soon as practicable after, such offer is first communicated (including by
announcement of a record date in accordance with the rules of any stock exchange
on which the Common Stock is listed or admitted to trading) to holders of Common
Stock. Such notice shall indicate the intended record date and the amount and
nature of such dividend or distribution, or the number of shares subject to such
offer for a Pro Rata Repurchase and the purchase price payable by the
Corporation pursuant to such offer, as well as the Conversion Price and the
number of shares of Common Stock into which a share of Series A Preferred Stock
may be converted at such time.
(E) Notwithstanding any other provisions of this Section 9, the Corporation
shall not be required to make any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least one percent in the
Conversion Price. Any lesser adjustment shall be carried forward and shall be
made no later than the time of, and together with, the next subsequent
adjustment which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least one percent in the
Conversion Price.
A-19
<PAGE>
<PAGE>
(F) If the Corporation shall make any dividend or distribution on the
Common Stock or issue any Common Stock, other capital stock or other security of
the Corporation or any rights or warrants to purchase or acquire any such
security, which transaction does not result in an adjustment to the Conversion
Price pursuant to the foregoing provisions of this Section 9, the Board of
Directors of the Corporation shall consider whether such action is of such a
nature that an adjustment to the Conversion Price should equitably be made in
respect of such transaction. If in such case the Board of Directors of the
Corporation determines that an adjustment to the Conversion Price should be
made, an adjustment shall be made effective as of such date, as determined by
the Board of Directors of the Corporation. The determination of the Board of
Directors of the Corporation as to whether an adjustment to the Conversion Price
should be made pursuant to the foregoing provisions of this paragraph 9(F), and,
if so, as to what adjustment should be made and when, shall be final and binding
on the Corporation and all stockholders of the Corporation. The Corporation
shall be entitled to make such additional adjustments in the Conversion Price,
in addition to those required by the foregoing provisions of this Section 9, as
shall be necessary in order that any dividend or distribution in shares of
capital stock of the Corporation, subdivision, reclassification or combination
of shares of stock of the Corporation or any recapitalization of the Corporation
shall not be taxable to holders of the Common Stock.
(G) The following definitions shall apply to the terms of the Series A
Preferred Stock:
'Extraordinary Distribution' shall mean any dividend or other
distribution (effected while any of the shares of Series A Preferred Stock
are outstanding) (i) of cash, where the aggregate amount of such cash
dividend or distribution together with the amount of all cash dividends and
distributions made during the preceding period of 12 months, when combined
with the aggregate amount of all Pro Rata Repurchases (for this purpose,
including only that portion of the aggregate purchase price of such Pro
Rata Repurchase which is in excess of the Fair Market Value of the Common
Stock repurchased as determined on the applicable expiration date
(including all extensions thereof) of any tender offer or exchange offer
which is a Pro Rata Repurchase, or the date of purchase with respect to any
other Pro Rata Repurchase which is not a tender offer or exchange offer
made during such period), exceeds twelve and one-half per cent (12 1/2%) of
the aggregate Fair Market Value of all shares of Common Stock outstanding
on the record date for determining the shareholders entitled to receive
such Extraordinary Distribution and (ii) of any shares of capital stock of
the Corporation (other than shares of Common Stock), other securities of
the Corporation (other than securities of the type referred to in paragraph
(B) of this Section 9), evidences of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary of
the Corporation), or any combination thereof. The Fair Market Value of an
Extraordinary Distribution for purposes of paragraph (D) of this Section 9
shall be the sum of the Fair Market Value of such Extraordinary
Distribution plus the amount of any cash dividends which are not
Extraordinary Distributions made during such twelve-month period and not
previously included in the calculation of an adjustment pursuant to
paragraph (D) of this Section 9.
'Fair Market Value' shall mean, as to shares of Common Stock or any
other class of capital stock or securities of the Corporation or any other
issuer which are publicly traded, the average of the Current Market Prices
(as hereinafter defined) of such shares or securities for each day of the
Adjustment Period (as hereinafter defined). 'Current Market Price' of
publicly traded shares of Common Stock or any other class of capital stock
or other security of the Corporation or any other issuer for a day shall
mean the last reported sales price, regular way, or, in case no sale takes
place on such day, the average of the reported closing bid and asked
prices, regular way, in either case as reported on the New York Stock
Exchange Composite Tape or, if such security is not listed or admitted to
trading on the New York Stock Exchange, on the principal national
securities exchange on which such security is listed or admitted to trading
or, if not listed or admitted to trading on any national securities
exchange, on the NASDAQ National Market or, if such security is not quoted
on such National Market, the average of the closing bid and asked prices on
each such day in the over-the-counter market as reported by NASDAQ or, if
bid and asked prices for such security on each such day shall not have been
reported through NASDAQ, the average of the bid and asked prices for such
day as furnished by any New York Stock Exchange member firm regularly
making a market in such security selected for such purpose by the Board of
Directors of the Corporation or a committee thereof on each trading day
during the Adjustment Period. 'Adjustment Period' shall
A-20
<PAGE>
<PAGE>
mean the period of five (5) consecutive trading days, selected by the Board
of Directors of the Corporation or a committee thereof, during the twenty
(20) trading days preceding, and including, the date as of which the Fair
Market Value of a security is to be determined. The 'Fair Market Value' of
any security which is not publicly traded or of any other property shall
mean the fair value thereof as determined by an independent investment
banking or appraisal firm experienced in the valuation of such securities
or property selected in good faith by the Board of Directors of the
Corporation or a committee thereof, or, if no such investment banking or
appraisal firm is in the good faith judgment of the Board of Directors or
such committee available to make such determination, as determined in good
faith by the Board of Directors of the Corporation or such committee.
'Non-Dilutive Amount' in respect of an issuance, sale or exchange by
the Corporation of any right or warrant to purchase or acquire shares of
Common Stock (including any security convertible into or exchangeable for
shares of Common Stock) shall mean the remainder of (i) the product of the
Fair Market Value of a share of Common Stock on the day preceding the first
announcement of such issuance, sale or exchange multiplied by the maximum
number of shares of Common Stock which could be acquired on such date upon
the exercise in full of such rights and warrants (including upon the
conversion or exchange of all such convertible or exchangeable securities),
whether or not exercisable (or convertible or exchangeable) at such date,
minus (ii) the aggregate amount payable pursuant to such right or warrant
to purchase or acquire such maximum number of shares of Common Stock;
provided, however, that in no event shall the Non-Dilutive Amount be less
than zero. For purposes of the foregoing sentence, in the case of a
security convertible into or exchangeable for shares of Common Stock, the
amount payable pursuant to a right or warrant to purchase or acquire shares
of Common Stock shall be the Fair Market Value of such security on the date
of the issuance, sale or exchange of such security by the Corporation.
'Pro Rata Repurchase' shall mean any purchase of shares of Common
Stock by the Corporation or any subsidiary thereof, whether for cash,
shares of capital stock of the Corporation, other securities of the
Corporation, evidences of indebtedness of the Corporation or any other
person or any other property (including shares of a subsidiary of the
Corporation), or any combination thereof, effected while any of the shares
of Series A Preferred Stock are outstanding, pursuant to any tender offer
or exchange offer subject to Section 13(e) of the Securities Exchange Act
of 1934, as amended (the 'Exchange Act'), or any successor provision of
law, or any similar provisions of any law or regulation applicable to
companies having the same regulatory status as does the Bank, or pursuant
to any other offer available to substantially all holders of Common Stock;
provided, however, that no purchase of shares by the Corporation or any
subsidiary thereof made in open market transactions shall be deemed a Pro
Rata Repurchase. For purposes of this paragraph 9(G), shares shall be
deemed to have been purchased by the Corporation or any subsidiary thereof
'in open market transactions' if they have been purchased substantially in
accordance with the requirements of Rule 10b-18 as in effect under the
Exchange Act, on the date shares of Series A Preferred Stock are initially
issued by the Corporation or on such other terms and conditions as the
Board of Directors of the Corporation or a committee thereof shall have
determined are reasonably designed to prevent such purchases from having a
material effect on the trading market for the Common Stock.
(H) Whenever an adjustment to the Conversion Price of the Series A
Preferred Stock is required pursuant to the terms of the Series A Preferred
Stock, the Corporation shall forthwith place on file with the transfer agent for
the Common Stock and the Series A Preferred Stock, if there be one, and with the
Secretary of the Corporation, a statement signed by two (2) officers of the
Corporation stating the adjusted Conversion Price determined as provided herein
and the resulting conversion ratio of the Series A Preferred Stock. Such
statement shall set forth in reasonable detail such facts as shall be necessary
to show the reason and the manner of computing such adjustment, including any
determination of Fair Market Value involved in such computation. Promptly after
each adjustment to the Conversion Price of the Series A Preferred Stock, the
Corporation shall mail a notice thereof and of the then prevailing conversion
ratio to each holder of shares of the Series A Preferred Stock.
A-21
<PAGE>
<PAGE>
SECTION 10. Ranking; Attributable Capital and Adequacy of Surplus;
Retirement of Shares.
(A) The Series A Preferred Stock shall rank senior to the Common Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding-up. The Series A Preferred Stock shall not rank junior to
any other series of the Corporation's Preferred Stock as to the payment of
dividends or the distribution of assets on liquidation, dissolution or
winding-up.
(B) The capital of the Corporation allocable to the Series A Preferred
Stock for purposes of the Delaware General Corporation Law shall be $1.00 per
share. In addition to any vote of stockholders required by law, the vote of the
holders of a majority of the outstanding shares of Series A Preferred Stock
shall be required to increase the par value of the Common Stock or otherwise
increase the capital of the Corporation allocable to the Common Stock for the
purpose of the Delaware General Corporation Law if, as a result thereof, the
surplus of the Corporation for purposes thereof would be less than the amount of
the Preferred Dividends that would accrue on the then outstanding shares of
Series A Preferred Stock during the following three (3) years.
(C) Any shares of Series A Preferred Stock acquired by the Corporation by
reason of the conversion or redemption of such shares as provided by the terms
of the Series A Preferred Stock, or otherwise so acquired, shall be cancelled.
SECTION 11. Miscellaneous.
(A) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) business days after the mailing thereof if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice under
the terms of the Series A Preferred Stock) with postage prepaid, addressed: (i)
if to the Corporation, to its office at One Penn Plaza, New York, New York 10119
(Attention: Secretary) or to the transfer agent for the Series A Preferred
Stock, or other agent of the Corporation designated as permitted by the terms of
the Series A Preferred Stock or (ii) if to any holder of the Series A Preferred
Stock or Common Stock, as the case may be, to such holder at the address of such
holder as listed in the stock record books of the Corporation (which may include
the records of any transfer agent for the Series A Preferred Stock or Common
Stock, as the case may be) or (iii) to such other address as the Corporation or
any such holder, as the case may be, shall have designated by notice similarly
given.
(B) The term 'Common Stock' as used in this Exhibit A to the Amended and
Restated Certificate of Incorporation means the Corporation's Common Stock of
$1.00 par value, as the same exists at the date of filing of this Certificate of
Incorporation, or any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value. In the event that, at any time as a result of an adjustment made pursuant
to Section 9 hereof, the holder of any share of the Series A Preferred Stock
upon thereafter surrendering such shares for conversion shall become entitled to
receive any shares or other securities of the Corporation other than shares of
Common Stock, the Conversion Price in respect of such other shares or securities
so receivable upon conversion of shares of Series A Preferred Stock shall
thereafter be adjusted, and shall be subject to further adjustment from time to
time, in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in Section 9 hereof, and the
provisions of Sections 1 through 8, and 10 and 11 hereof with respect to the
Common Stock shall apply on like or similar terms to any such other shares or
securities.
(C) The Corporation shall pay any and all stock transfer and documentary
stamp taxes that may be payable in respect of any issuance or delivery of shares
of Series A Preferred Stock or shares of Common Stock or other securities issued
on account of Series A Preferred Stock pursuant hereto or certificates
representing such shares or securities. The Corporation shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issuance or delivery of shares of Series A Preferred Stock or
Common Stock or other securities in a name other than that in which the shares
of Series A Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than a payment
to the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the person otherwise entitled to
such
A-22
<PAGE>
<PAGE>
issuance, delivery or payment has paid to the Corporation the amount of any such
tax or has established, to the satisfaction of the Corporation, that such tax
has been paid or is not payable.
(D) In the event that a holder of shares of Series A Preferred Stock shall
not by written notice designate the name in which shares of Common Stock to be
issued upon conversion of such shares should be registered or to whom payment
upon redemption of shares of Series A Preferred Stock should be made or the
address to which the certificate or certificates representing such shares, or
such payment, should be sent, the Corporation shall be entitled to register such
shares, and make such payment, in the name of the holder of such Series A
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Corporation.
(E) Unless otherwise provided in this Amended and Restated Certificate of
Incorporation, all payments in the form of dividends, distributions on voluntary
or involuntary dissolution, liquidation or winding-up or otherwise made upon the
shares of Series A Preferred Stock and any other stock ranking on a parity with
the Series A Preferred Stock with respect to such dividend or distribution shall
be made pro rata, so that amounts paid per share on the Series A Preferred Stock
and such other stock shall in all cases bear to each other the same ratio that
the required dividends, distributions or payments, as the case may be, then
payable per share on the shares of the Series A Preferred Stock and such other
stock bear to each other.
(F) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Series A Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of Series
A Preferred Stock.
A-23
<PAGE>
<PAGE>
EXHIBIT B TO AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF GREATER NEW YORK BANCORP INC.
TERMS
OF
12% NONCUMULATIVE PERPETUAL PREFERRED STOCK, SERIES B
OF
GREATER NEW YORK BANCORP INC.
SECTION 1. Designation and Amount.
(A) The shares of this series of preferred stock shall be designated as 12%
Noncumulative Perpetual Preferred Stock, Series B ('Series B Preferred Stock'),
and the number of shares constituting such series shall be two million
(2,000,000) shares. Shares of Series B Preferred Stock shall have a par value of
$1.00 per share.
(B) The number of authorized shares of Series B Preferred Stock may be
reduced from time to time, but not below the number of shares of Series B
Preferred Stock then outstanding, by resolution duly adopted by the Board of
Directors. The number of authorized shares of Series B Preferred Stock shall not
be increased. Fractional shares of Series B Preferred Stock, rounded to the
nearest one-hundredth of a whole number, may be issued.
SECTION 2. Ranking; Attributable Capital and Adequacy of Surplus.
(A) With respect to dividend rights, the Series B Preferred Stock shall
rank prior to common stock of all classes of the Corporation (collectively, the
'Common Stock') and to all other classes and series of equity securities of the
Corporation now or hereafter authorized, issued or outstanding other than Parity
Dividend Stock and Senior Dividend Stock. Parity Dividend Stock shall mean any
class or series of equity securities of the Corporation expressly designated as
ranking, with respect to dividend rights, on a parity with the Series B
Preferred Stock, and Senior Dividend Stock shall mean any class or series of
equity securities of the Corporation expressly designated as ranking, with
respect to dividend rights, as senior to the Series B Preferred Stock. Shares of
the Corporation's Series A ESOP Convertible Preferred Stock (the 'Series A
Preferred Stock') are hereby designated as Senior Dividend Stock.
(B) With respect to rights upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Series B Preferred Stock shall
rank prior to the Common Stock and to all other classes and series of equity
securities of the Corporation now or hereafter authorized, issued or outstanding
other than Parity Liquidation Stock and Senior Liquidation Stock. Parity
Liquidation Stock shall mean any class or series of equity securities of the
Corporation expressly designated as ranking, with respect to rights upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, on a parity with the Series B Preferred Stock, and Senior
Liquidation Stock shall mean any class or series of equity securities of the
Corporation expressly designated as ranking, with respect to rights upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, as senior to the Series B Preferred Stock. Shares of the Series A
Preferred Stock are hereby designated as Parity Liquidation Stock.
(C) To the extent not expressly prohibited by the Amended and Restated
Certificate of Incorporation, the Series B Preferred Stock shall be subject to
the creation of Parity Dividend Stock and Parity Liquidation Stock
(collectively, 'Parity Stock') and of Common Stock and all other classes and
series of equity securities of the Corporation ranking junior to the Series B
Preferred Stock with respect to dividend rights ('Junior Dividend Stock') or
rights upon the voluntary or involuntary liquidation, dissolution or winding up
of the Corporation ('Junior Liquidation Stock' and, collectively with Junior
Dividend Stock, 'Junior Stock'). Shares of the Corporation's Junior
Participating Preferred Stock are hereby designated as Junior Dividend Stock and
as Junior Liquidation Stock. No shares of Senior Dividend Stock or Senior
Liquidation Stock shall be created without the consent of the holders of Series
B Preferred Stock as provided in Section 6(C) hereof.
(D) The capital of the Corporation allocable to the Series B Preferred
Stock for purposes of the Delaware General Corporation Law shall be $1.00 per
share. In addition to any vote of stockholders required by law, the vote of the
holders of a majority of the outstanding shares of Series B Preferred
A-24
<PAGE>
<PAGE>
Stock shall be required to increase the par value of the Common Stock or
otherwise increase the capital of the Corporation allocable to the Common Stock
for the purpose of the Delaware General Corporation Law if, as a result thereof,
the surplus of the Corporation for purposes of the Delaware General Corporation
Law would be less than the amount of dividends that would accrue on the then-
outstanding shares of Series B Preferred Stock during the following three years.
SECTION 3. Noncumulative Dividends; Priority.
(A) (i) Subject to the restrictions and limitations on declaration and
payment of dividends specified in Section 11, the holders of record of shares of
Series B Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors, out of funds legally available therefor,
noncumulative cash dividends at an annual rate of 12% of the $25.00 liquidation
preference per share ($3.00 per share per annum), and no more. Dividends on the
Series B Preferred Stock shall be declared and paid in cash only. Such
noncumulative cash dividends shall be declared and payable quarterly in arrears
in the amount set forth in Section 3(A)(iii) on January 15, April 15, July 15
and October 15 of each year or, if such day is not a Business Day (as defined in
Section 9), on the next Business Day (each such date, a 'Dividend Payment
Date'). The first Dividend Payment Date shall be the first such date to occur
after the Holding Company Formation. Each declared dividend shall be payable to
holders of record of the Series B Preferred Stock as they appear on the stock
books of the Corporation (or of any transfer agent for the Series B Preferred
Stock) at the close of business on such record dates, not more than fifty (50)
calendar days nor less than ten (10) calendar days preceding the Dividend
Payment Date therefor, as determined by the Board of Directors (each such date,
a 'Record Date'). The initial period for which dividends shall be paid (the
'Initial Dividend Period') shall commence on the last "Dividend Period
Commencement Date" that occurred under the 12% Noncumulative Perpetual Preferred
Stock, Series B of The Greater New York Savings Bank and shall end on and
include the date next preceding the first Dividend Period Commencement Date (as
defined below) to occur after the Holding Company Formation. Thereafter,
quarterly dividend periods (each, a 'Dividend Period') shall commence on
and include March 1, June 1, September 1 and December 1 of each year (each
such date, a 'Dividend Period Commencement Date') and shall end on and include
the date next preceding the Dividend Period Commencement Date of the following
Dividend Period.
(ii) Dividends on the Series B Preferred Stock shall be noncumulative.
If a dividend on the Series B Preferred Stock with respect to any Dividend
Period (including the Initial Dividend Period) is not declared by the Board of
Directors, the Corporation shall have no obligation at any time to pay a
dividend on the Series B Preferred Stock with respect to such Dividend Period,
whether or not dividends are declared payable with respect to any future
Dividend Period. The holders of the Series B Preferred Stock shall not be
entitled to any dividends in excess of the noncumulative dividends declared by
the Board of Directors, as set forth in this paragraph (A).
(iii) The amount of dividends payable on each share of Series B
Preferred Stock for each full Dividend Period during which such share is
outstanding shall be $0.75. The amount of dividends payable for any Dividend
Period which is less than a full three (3) months shall be computed on the
basis of a 360-day year composed of twelve 30-day months and the actual number
of days elapsed in such Initial Dividend Period or Dividend Period.
(iv) The Series B Preferred Stock shall not participate in dividends
with the Common Stock.
(v) The holders of the Series B Preferred Stock shall not be entitled to
any interest, or any sum of money in lieu of interest, in respect of any
dividend payment or payments on the Series B Preferred Stock declared by the
Board of Directors which may be unpaid.
(B) (i) No full dividends shall be declared or paid or set apart for
payment on any Parity Dividend Stock for any Dividend Period unless full
dividends have been or contemporaneously are declared and paid (or declared and
a sum sufficient for the payment thereof set apart for such payment) on the
Series B Preferred Stock for such Dividend Period. When dividends are not paid
in full (or declared and a sum sufficient for such full payment is not so set
apart) for any Dividend Period on the Series B Preferred Stock and any other
Parity Dividend Stock, dividends declared on the Series B Preferred Stock and
other Parity Dividend Stock shall only be declared pro rata, such that the
amount of dividends declared per share on the Series B Preferred Stock and other
Parity Dividend Stock shall bear to each other the
A-25
<PAGE>
<PAGE>
same ratio that, at the time of such declaration, all accrued and payable but
unpaid dividends for such Dividend Period per share on shares of the Series B
Preferred Stock (which shall not include any accumulation in respect of unpaid
dividends for prior Dividend Periods) and other Parity Dividend Stock bear to
each other.
(ii) The Corporation shall not (a) declare or (b) pay or set apart funds
for any dividends or other distributions (other than in Common Stock or other
Junior Stock) with respect to any Common Stock or other Junior Dividend Stock of
the Corporation, or (c) (except by conversion into or exchange for Junior Stock)
repurchase, redeem or otherwise acquire, or set apart funds for the repurchase,
redemption or other acquisition of, any Common Stock or other Junior Stock
through a sinking fund or otherwise, unless the Corporation shall have, in the
case of clause (a) declared, or in the case of clauses (b) or (c) paid or set
apart funds for the payment of, full dividends on the Series B Preferred Stock
with respect to the same calendar quarter for which (x) the dividend or other
distribution is being declared or paid, as the case may be, on the Common Stock
or other Junior Stock or (y) the Common Stock or other Junior Stock is being
repurchased, redeemed or otherwise acquired.
(C) Any reference to 'dividends' or 'distributions' in this Section 3 shall
not be deemed to include any distribution made in connection with any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation.
SECTION 4. Redemption at the Option of the Corporation.
(A) (i) The shares of Series B Preferred Stock shall not be subject to
mandatory redemption, and shall not be redeemable by the Corporation prior to
October 1, 2003. On or after October 1, 2003, shares of Series B Preferred Stock
may be redeemed by the Corporation, at its option, in whole or in part, at any
time or from time to time, upon notice as provided in paragraph (B) of this
Section 4, by resolution of the Board of Directors, at the redemption prices set
forth below in cash, plus, in each case, an amount in cash equal to all accrued
and unpaid dividends thereon (whether or not declared) from the Dividend Period
Commencement Date next preceding the date fixed for redemption (the 'Redemption
Date') to, but excluding, the Redemption Date (without accumulation of unpaid
dividends for prior Dividend Periods):
<TABLE>
<CAPTION>
DURING THE REDEMPTION
TWELVE-MONTH PERIOD PRICE
BEGINNING OCTOBER 1, PER SHARE
----------------------- ----------
<S> <C>
2003............................................................................. $ 27.250
2004............................................................................. 27.025
2005............................................................................. 26.800
2006............................................................................. 26.575
2007............................................................................. 26.350
2008............................................................................. 26.125
2009............................................................................. 25.900
2010............................................................................. 25.675
2011............................................................................. 25.450
2012............................................................................. 25.225
2013 and thereafter.............................................................. 25.000
</TABLE>
(ii) The aggregate redemption price payable to each holder of record of
Series B Preferred Stock to be redeemed shall be rounded to the nearest cent
($0.01).
(B) (i) Notice of any redemption shall be given by first-class mail,
postage prepaid, mailed at least twenty (20) days but not more than sixty (60)
days prior to the Redemption Date to each holder of record of Series B Preferred
Stock to be redeemed at such holder's address as the same shall appear on the
stock books of the Corporation (or of any transfer agent for the Series B
Preferred Stock). Each such notice shall set forth: (a) the Redemption Date; (b)
the redemption price; (c) the number of shares of Series B Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (d) the
place or places where certificates for such shares are to be surrendered for
payment of the redemption price; and (e) a statement that dividends on the
shares of Series B Preferred Stock to be redeemed shall cease to accrue
A-26
<PAGE>
<PAGE>
on the Redemption Date. Neither failure to mail such notice, nor any defect
therein or in the mailing thereof, to any particular holder shall affect the
sufficiency of the notice or the validity of the proceedings for redemption with
respect to the other holders. Any notice which was mailed in the manner herein
provided shall be conclusively presumed to have been duly given whether or not
the holder receives such notice.
(ii) On or after the Redemption Date, each holder of shares of Series B
Preferred Stock to be redeemed shall present and surrender the certificate or
certificates for such shares to the Corporation at the place designated in the
notice given to such holder, and thereupon the redemption price of such shares
shall be paid to or on the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be cancelled. If fewer than all the shares represented by any
such certificate are redeemed, a new certificate representing the unredeemed
shares shall be issued to the holder of such shares.
(iii) If such notice of redemption shall have been so mailed, and if, on
or before the Redemption Date specified in such notice, all funds necessary for
such redemption shall have been set aside by the Corporation, separate and apart
from its other funds, in trust for the account of the holders of shares of
Series B Preferred Stock to be redeemed (so as to be and continue to be
available therefor), then, on and after the Redemption Date, notwithstanding
that any certificates for shares of Series B Preferred Stock so called for
redemption shall not have been surrendered for cancellation, the shares of
Series B Preferred Stock so called for redemption shall be deemed to be no
longer outstanding and the holders of such shares shall cease to be shareholders
of the Corporation and shall have no voting or other rights with respect to such
shares, except for the right to receive out of the funds so set aside in trust
the amount payable on redemption thereof, without interest, upon surrender (and
endorsement or assignment for transfer, if required by the Corporation) of their
certificates.
(iv) In the event that holders of shares of Series B Preferred Stock
that have been redeemed shall not, within two (2) years (or any longer period
required by law) after the Redemption Date, claim any amount deposited in trust
with a bank or trust company for the redemption of such shares, such bank or
trust company shall, upon demand by the Corporation and if permitted by
applicable law, pay over to the Corporation any such unclaimed amount so
deposited with it, and shall thereupon be relieved of all responsibility in
respect thereof, and thereafter the holders of such shares shall, subject to
applicable escheat laws, look only to the Corporation for payment of the
redemption price thereof, but without interest from the Redemption Date. Any
interest accrued on funds deposited in trust as aforesaid shall be paid to the
Corporation from time to time.
(C) If fewer than all the outstanding shares of Series B Preferred Stock
are to be redeemed, the shares to be redeemed shall be selected pro rata or by
lot or by such other method as the Board of Directors, in its sole discretion,
determines to be equitable.
(D) Shares of Series B Preferred Stock redeemed, purchased or otherwise
acquired for value by the Corporation shall, after such redemption, purchase or
acquisition, be retired and cancelled. All such shares shall upon their
cancellation become authorized but unissued shares of preferred stock and may be
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the Board of Directors as permitted by law (other than as
shares of Series B Preferred Stock).
(E) The Series B Preferred Stock shall not be subject to the operation of
any mandatory purchase, retirement or sinking fund.
SECTION 5. Liquidation Preference.
(A) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the holders of shares of Series B Preferred
Stock shall be entitled to receive for each share thereof, out of the assets of
the Corporation which are legally available for distribution to shareholders
under applicable law, or the proceeds thereof, before any payment or
distribution of such assets or proceeds shall be made to holders of shares of
Common Stock or any other Junior Liquidation Stock, liquidating distributions in
the amount of $25.00 per share, plus an amount per share equal to all accrued,
undeclared and unpaid dividends thereon from the Dividend Period Commencement
Date next preceding the date fixed for such liquidation, dissolution or winding
up (the 'Liquidation Date') to, but excluding, the Liquidation Date (without
accumulation of unpaid dividends for prior Dividend
A-27
<PAGE>
<PAGE>
Periods), and no more; provided, however, that the holders of shares of Series B
Preferred Stock and any Parity Liquidation Stock shall be entitled to such
liquidating distributions only after payment in full of liquidating
distributions to holders of shares of any Senior Liquidation Stock. If the
amounts available for distribution in respect of shares of Series B Preferred
Stock and any Parity Liquidation Stock are not sufficient to satisfy the full
liquidation rights of all the outstanding shares thereof, the holders of such
outstanding shares of Series B Preferred Stock and such Parity Liquidation Stock
shall share ratably in any such distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After payment of the
full amount of the liquidating distribution to which they are entitled, the
holders of shares of Series B Preferred Stock as such shall not be entitled to
any further participation in any distribution of assets by the Corporation. All
distributions made in respect of the Series B Preferred Stock in connection with
such a liquidation, dissolution or winding up of the Corporation shall be made
pro rata to the holders of the Series B Preferred Stock entitled thereto.
(B) Neither the merger or consolidation of the Corporation with or into any
other entity, nor the merger or consolidation of any other entity with or into
the Corporation, nor the sale, transfer or lease of all or any portion of the
assets of the Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Corporation for purposes of this Section 5.
(C) Written notice of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Series B
Preferred Stock in such circumstances shall be payable, shall be given by
first-class mail, postage prepaid, mailed not less than twenty (20) days prior
to any payment date stated therein, to each holder of record of Series B
Preferred Stock, at such holder's address as the same shall appear on the stock
books of the Corporation (or of any transfer agent for the Series B Preferred
Stock).
SECTION 6. Voting Rights.
(A) Except as expressly provided in this Section 6, or as otherwise
required by applicable law or regulation, the holders of shares of Series B
Preferred Stock shall have no voting rights.
(B) (i) The holders of shares of Series B Preferred Stock shall be entitled
to exercise the voting rights provided for in this paragraph (B) of Section 6
(the 'Election Right') upon the occurrence of a 'Voting Event'. It shall be a
Voting Event if the Corporation shall have failed to make the payment of full
dividends on the Series B Preferred Stock (or the declaration of such full
dividends and the setting apart of a sum sufficient for payment thereof) with
respect to each of any six (6) Dividend Periods (including the Initial Dividend
Period), whether consecutive or not. A Voting Event shall be deemed to have
occurred as of the Dividend Payment Date of the Dividend Period that is the
sixth (6th) Dividend Period for which the payment of full dividends on the
Series B Preferred Stock has not been made (or declared and set apart for
payment).
(ii) Upon the occurrence of a Voting Event, the maximum authorized
number of directors of the Corporation, without further action, shall be
increased by two (2). The holders of shares of Series B Preferred Stock and the
holders of any other class or series of Parity Stock as to which the payment of
dividends is in arrears and unpaid in an aggregate amount equal to or exceeding
the amount of dividends payable for six (6) quarterly dividend periods (or if
dividends are payable other than on a quarterly basis the number of dividend
periods, whether or not consecutive, containing in the aggregate not less than
five hundred forty (540) calendar days) and upon which by its terms the same
right to elect two (2) directors has been conferred and is exercisable ('Voting
Parity Stock'), shall have the exclusive right, voting together as a single
class, to elect the two (2) additional directors at the Corporation's next
annual meeting of shareholders or at a special meeting of shareholders as
provided below and to reelect two (2) directors at each subsequent annual
meeting of shareholders until the Election Right terminates as provided in
subsection (iv) of this paragraph (B). At any time when the Election Right shall
have so vested, the Corporation may, and upon the written request of the holders
of record of not less than 20% of the total number of shares of the Series B
Preferred Stock and such Voting Parity Stock then outstanding shall, call a
special meeting of the holders of such shares to fill such newly-created
directorships for the election of directors. In the case of such a written
request, such special meeting shall be held within ninety (90) days after the
delivery of such request and, in either case, at the place and upon the notice
provided by law and in the by-laws of the Corporation, provided that the
A-28
<PAGE>
<PAGE>
Corporation shall not be required to call such a special meeting if such request
is received less than one hundred twenty days (120) before the date fixed for
the next succeeding annual meeting of share-holders of the Corporation, at which
meeting such newly-created directorships shall be filled by the holders of such
shares. If, prior to the end of the term of any director elected as aforesaid, a
vacancy in the office of such director shall occur by reason of death,
resignation, disability or disqualification, the remaining director elected as
aforesaid shall appoint a successor to hold office for the unexpired term of
such former director, and if both directors elected as aforesaid shall cease to
serve as directors before their terms shall expire, the holders of Series B
Preferred Stock and any Voting Parity Stock then outstanding may, at a meeting
of such holders duly held, elect successors to hold office for the unexpired
terms of such directors whose places shall be vacant. The election or
appointment of any person as a director pursuant to this Section 6 shall be
subject to compliance with any requirement for regulatory approval of (or
non-objection to) such person's serving as a director.
(iii) The majority of the holders of the Series B Preferred Stock and
any Voting Parity Stock then outstanding, voting together as a single class,
shall have the right at any time to remove without cause and replace any
directors which such holders have elected or who have been appointed pursuant to
this Section 6.
(iv) The Election Right of the holders of the Series B Preferred Stock
and the term of the directors elected to the Board of Directors pursuant to a
particular exercise of such Election Right shall continue until full dividends
have been declared and paid for four (4) consecutive Dividend Periods following
the vesting of such Election Right, at which time such Election Right and the
term of such directors shall, without further action, terminate, subject to
revesting of the Election Right upon the occurrence of a subsequent Voting
Event; provided, however, that if, at the time of termination of the Election
Right of the holders of the Series B Preferred Stock, there shall be outstanding
any Voting Parity Stock having similar voting rights which remain in effect, the
term of any directors elected by the holders of the Series B Preferred Stock and
such Voting Parity Stock shall continue until such time as the voting right of
the holders of such Voting Parity Stock shall terminate by its terms. Upon such
termination the number of directors constituting the Board of Directors of the
Corporation shall, without further action, be reduced by two (2), subject always
to increase of the number of directors pursuant to the foregoing provisions in
case of the revesting of the Election Right upon the occurrence of a subsequent
Voting Event.
(v) The directors elected pursuant to this Section 6 shall not become
members of any of the three (3) classes of directors otherwise required by
Article 6 of the Amended and Restated Certificate of Incorporation. If the
Amended and Restated Certificate of Incorporation, the Corporation's by-laws and
applicable law were construed to require classification of such directors and as
a result, or if for any other reason, the holders of the shares of Series B
Preferred Stock and any Voting Parity Stock then outstanding are not able to
elect the specified number of directors at the next annual meeting of
shareholders in the manner described above, the Corporation shall use its best
efforts to take all actions necessary to permit the full exercise of such voting
rights (including, if necessary, taking action to increase the authorized number
of directors standing for election at such next annual meeting of shareholders
or seeking to amend, alter or change the Amended and Restated Certificate of
Incorporation or the by-laws of the Corporation).
(C) (i) So long as any shares of Series B Preferred Stock are outstanding,
the Corporation shall not, without the consent of the holders of at least
66 2/3% of the outstanding shares of Series B Preferred Stock, voting together
as a single class, (a) amend, alter or repeal or otherwise change any provision
of the Amended and Restated Certificate of Incorporation (including any such
amendment, alteration, repeal or change effected by any merger or consolidation
in which the Corporation is the surviving or resulting corporation) if such
amendment, alteration, repeal or change would materially and adversely affect
the rights, preferences, powers or privileges of the Series B Preferred Stock,
or (b) authorize, create or issue or increase the authorized or issued amount of
any class or series of Senior Dividend Stock or Senior Liquidation Stock or any
warrants, options or other rights convertible into or exchangeable for any class
or series of Series Dividend Stock or Senior Liquidation Stock.
(ii) The creation or issuance of Parity Stock or Junior Stock, or the
distribution of assets upon a voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, or a merger,
A-29
<PAGE>
<PAGE>
consolidation, reorganization or other business combination in which the
Corporation is not the surviving or resulting corporation, or an amendment which
substitutes the surviving or resulting corporation in a merger or consolidation
for the Corporation or which increases the number of shares of preferred stock
which the Corporation is authorized to issue, shall not be deemed to be a
material and adverse change to the rights, preferences, powers or privileges of
the Series B Preferred Stock requiring a vote of the holders of shares of Series
B Preferred Stock pursuant to this paragraph (C).
(iii) No vote of the Series B Preferred Stock shall be required if the
Series B Preferred Stock is to be redeemed in whole on a Redemption Date
occurring on or prior to the date of occurrence of any event otherwise requiring
a class vote by the Series B Preferred Stock.
(D) Except as provided by law or regulation or the provisions of the
Amended and Restated Certificate of Incorporation, the presence at a meeting, in
person or by proxy, of shareholders entitled to cast a majority of the shares of
Series B Preferred Stock outstanding and entitled to vote on any matter shall
constitute a quorum of such shareholders; provided, however, if any matter shall
require a vote of holders of shares of Series B Preferred Stock and any Voting
Parity Stock, voting together as a single class, the presence at a meeting, in
person or proxy, of shareholders entitled to cast a majority of the shares of
Series B Preferred Stock and such Voting Parity Stock which is outstanding and
entitled to vote on any matter shall constitute a quorum of such shareholders.
In connection with any matter on which holders of the Series B Preferred Stock
are entitled to vote as one class or otherwise pursuant to law or regulation or
the provisions of the Amended and Restated Certificate of Incorporation, each
holder of Series B Preferred Stock shall be entitled to one vote for each share
of Series B Preferred Stock held by such holder.
SECTION 7. No Conversion, Preemptive or Subscription Rights.
The holders of shares of Series B Preferred Stock shall not have any rights
to convert such shares into shares of any other class or series of capital stock
or into any other securities of, or any interest in, the Corporation. The Series
B Preferred Stock is not entitled to any preemptive or subscription rights with
respect to any securities of the Corporation.
SECTION 8. No Other Rights.
The shares of Series B Preferred Stock shall not have any powers,
designations, preferences and relative, participating, optional and other
special rights except as set forth herein or in any other provision of the
Amended and Restated Certificate of Incorporation or as otherwise required by
applicable law or regulation.
SECTION 9. Business Day.
For purposes hereof, the term 'Business Day' shall mean any day other than
a Saturday, a Sunday or a day on which banking institutions in New York, New
York are obligated or authorized by law or executive order to be closed.
SECTION 10. Action by Committee of Board of Directors.
To the extent permitted by applicable law, any action specified herein as
being authorized or required to be taken by the Board of Directors may be taken
by a duly authorized committee thereof.
SECTION 11. Compliance with Applicable Law and Other Restrictions.
Declaration by the Board of Directors and payment by the Corporation of
dividends to the holders of the Series B Preferred Stock and the repurchase,
redemption or other acquisition by the Corporation of shares of Series B
Preferred Stock shall be subject in all respects to any restrictions and
limitations placed on dividends, repurchases, redemptions or other distributions
by the Corporation under (a) laws, rules, regulations and regulatory conditions
or limitations applicable to or regarding the Corporation from time to time and
(b) orders, judgments, injunctions or decrees issued by, or agreements with,
federal or state banking authorities with respect to the Corporation from time
to time in effect.
SECTION 12. Miscellaneous.
(A) All notices referred to herein shall be in writing, and except as
otherwise provided all notices hereunder shall be deemed to have been given upon
the earlier of receipt thereof or three (3) Business Days after the mailing
thereof if sent by registered mail (unless first-class mail shall be
specifically
A-30
<PAGE>
<PAGE>
permitted for such notice under the terms of this Exhibit B to the Amended and
Restated Certificate of Incorporation) with postage prepaid, addressed: (i) if
to the Corporation, to its office at One Penn Plaza, New York, New York 10119
(Attention: Secretary) or to the transfer agent for the Series B Preferred
Stock, if any, or other agent of the Corporation designated as permitted
hereunder; or (ii) if to any holder of the Series B Preferred Stock, to such
holder at the address of such holder as listed in the stock books of the
Corporation (which may include the records of any transfer agent for the Series
B Preferred Stock); or (iii) to such other address as the Corporation or any
such holder, as the case may be, shall have designated by notice similarly
given.
(B) In the event that a holder of shares of Series B Preferred Stock shall
not by written notice designate to whom payment upon redemption of shares of
Series B Preferred Stock should be made or the address to which such payment
should be sent, the Corporation shall be entitled to make such payment in the
name of the holder of such Series B Preferred Stock as shown on the records of
the Corporation and to send such payment to the address of such holder shown on
the records of the Corporation.
(C) Unless otherwise provided in the Amended and Restated Certificate of
Incorporation, all payments in the form of dividends, distributions on the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, or otherwise made upon the shares of Series B Preferred Stock and
any Parity Stock shall be made pro rata, so that amounts paid per share on the
Series B Preferred Stock and such Parity Stock shall in all cases bear to each
other the same ratio that the required dividends, distributions or payments, as
the case may be, then payable per share on the shares of the Series B Preferred
Stock and such Parity Stock bear to each other.
(D) The Corporation may appoint, and from time to time discharge and
change, a transfer agent and registrar for the Series B Preferred Stock. Upon
any such appointment, discharge or change of a transfer agent and registrar, the
Corporation shall send notice thereof by first-class mail, postage prepaid, to
each holder of record of Series B Preferred Stock.
A-31
<PAGE>
<PAGE>
EXHIBIT C TO AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF GREATER NEW YORK BANCORP INC.
TERMS
OF
JUNIOR PARTICIPATING PREFERRED STOCK
OF
GREATER NEW YORK BANCORP INC.
SECTION 1. Designation and Amount. The shares of such series shall be
designated as 'Junior Participating Preferred Stock' and the number of shares
constituting such series shall be two hundred thousand (200,000).
SECTION 2. Dividends and Distributions.
The holders of shares of Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year (each such
date being referred to herein as a 'Quarterly Dividend Payment Date'),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $1.00 per share, of the
Corporation (the 'Common Stock') since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Junior
Participating Preferred Stock. In the event that the Corporation shall, at any
time after the Corporation acquires all of the outstanding shares of capital
stock of The Greater New York Savings Bank (such event being the 'Holding
Company Formation' and the date of such event being the 'Rights Declaration
Date'), (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Junior Participating Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 3. Voting Rights. The holders of shares of Junior Participating
Preferred Stock shall not by virtue of their ownership thereof be entitled to
vote upon any matter except as provided in Section 10 herein or by applicable
law.
SECTION 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Participating Preferred Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Participating
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Participating
Preferred Stock, except dividends paid ratably on the Junior Participating
Preferred Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;
A-32
<PAGE>
<PAGE>
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Participating
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Junior Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
SECTION 5. Reacquired Shares. Any shares of Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
SECTION 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Junior Participating Preferred Stock unless, prior thereto,
the holders of shares of Junior Participating Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the 'Liquidation Preference'). Following the payment of the full amount of the
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
'Common Adjustment') equal to the quotient obtained by dividing (i) the
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the 'Adjustment Number'). Following the payment of the full amount of the
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Junior Participating Preferred Stock and Common Stock, respectively,
holders of Junior Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a
parity with the Junior Participating Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by
A-33
<PAGE>
<PAGE>
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Junior Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. No Redemption. The shares of Junior Participating Preferred
Stock shall not be redeemable.
SECTION 9. Ranking. The Junior Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such other series shall provide otherwise.
SECTION 10. Amendment. The Amended and Restated Certificate of
Incorporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Junior Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Junior
Participating Preferred Stock, voting separately as a class.
SECTION 11. Fractional Shares. Junior Participating Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Junior Participating Preferred Stock.
A-34
<PAGE>
<PAGE>
EXHIBIT 2 TO APPENDIX A
THE BY-LAWS
OF
GREATER NEW YORK BANCORP INC.
A-35
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------------ ----
<S> <C> <C>
ARTICLE I
OFFICES.................................................................................. A-38
ARTICLE II
STOCKHOLDERS............................................................................. A-38
SECTION 1. Annual Meetings.......................................................................... A-38
SECTION 2. Special Meetings......................................................................... A-38
SECTION 3. Notice of Meetings....................................................................... A-38
SECTION 4. Waiver of Notice......................................................................... A-38
SECTION 5. Fixing of Record Date.................................................................... A-38
SECTION 6. Quorum................................................................................... A-39
SECTION 7. Conduct of Meetings...................................................................... A-39
SECTION 8. Voting................................................................................... A-39
SECTION 9. Proxies.................................................................................. A-39
SECTION 10. Inspectors of Election................................................................... A-39
SECTION 11. Nominating Committee; Nominating Procedure............................................... A-39
SECTION 12. New Business............................................................................. A-40
ARTICLE III
CAPITAL STOCK............................................................................ A-41
SECTION 1. Certificates of Stock.................................................................... A-41
SECTION 2. Transfer Agent........................................................................... A-41
SECTION 3. Registration and Transfer of Shares...................................................... A-41
SECTION 4. Lost, Destroyed and Mutilated Certificates............................................... A-41
SECTION 5. Holder of Record......................................................................... A-41
ARTICLE IV
BOARD OF DIRECTORS....................................................................... A-42
SECTION 1. Responsibilities; Number of Directors.................................................... A-42
SECTION 2. Classification of Board.................................................................. A-42
SECTION 3. Qualifications........................................................................... A-42
SECTION 4. Mandatory Retirement..................................................................... A-42
SECTION 5. Action by Directors Without a Meeting.................................................... A-42
SECTION 6. Regular and Annual Meetings.............................................................. A-42
SECTION 7. Special Meetings......................................................................... A-42
SECTION 8. Notice of Special Meetings; Waiver of Notice............................................. A-42
SECTION 9. Presence at Meetings by Conference Telephone............................................. A-43
SECTION 10. Quorum and Voting Requirements........................................................... A-43
SECTION 11. Compensation............................................................................. A-43
SECTION 12. Removal.................................................................................. A-43
SECTION 13. Vacancies................................................................................ A-43
SECTION 14. Amendments Concerning Classification of the Board........................................ A-43
ARTICLE V
COMMITTEES............................................................................... A-43
SECTION 1. Compensation Committee................................................................... A-43
SECTION 2. Audit Committee.......................................................................... A-44
SECTION 3. Standing Committees...................................................................... A-44
SECTION 4. Benefits Committee....................................................................... A-44
SECTION 5. Search Committee......................................................................... A-44
SECTION 6. Employment of Assistants for Certain Committees.......................................... A-44
</TABLE>
A-36
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
- ------------ ----
<S> <C> <C>
SECTION 7. Ad Hoc Committees........................................................................ A-44
SECTION 8. Meetings of Committees; Quorum........................................................... A-44
SECTION 9. Removal.................................................................................. A-44
ARTICLE VI
OFFICERS................................................................................. A-44
SECTION 1. Number................................................................................... A-44
SECTION 2. Term; Removal............................................................................ A-45
SECTION 3. Chairman and Chief Executive Officer..................................................... A-45
SECTION 4. President................................................................................ A-45
SECTION 5. Group Presidents, Vice President and Other Officers...................................... A-45
SECTION 6. Secretary................................................................................ A-45
SECTION 7. Counsel.................................................................................. A-46
SECTION 8. Auditor.................................................................................. A-46
ARTICLE VII
DIVIDENDS................................................................................ A-46
ARTICLE VIII
INDEMNIFICATION.......................................................................... A-46
ARTICLE IX
MISCELLANEOUS............................................................................ A-47
SECTION 1. Corporate Seal........................................................................... A-47
SECTION 2. Securities............................................................................... A-47
SECTION 3. Corporation Accounts and Checks.......................................................... A-47
SECTION 4. Bonds of Officers, Clerks and Employees.................................................. A-47
SECTION 5. Officers' Authority...................................................................... A-47
ARTICLE X
EMERGENCY MANAGEMENT..................................................................... A-47
ARTICLE XI
AMENDMENTS............................................................................... A-47
</TABLE>
A-37
<PAGE>
<PAGE>
BY-LAWS
OF GREATER NEW YORK BANCORP INC.
ARTICLE I
OFFICES
The principal office of Greater New York Bancorp Inc. (the 'Corporation')
shall be located in the State of New York, in the Borough of Manhattan, County
of New York. The Corporation may also have other offices at such other places as
the Board of Directors (the 'Board') from time to time designates or the
business of the Corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the Corporation for the
election of directors and the transaction of any other business as may properly
come before such meeting shall be held at such time and at such place as may be
designated by the Board.
SECTION 2. Special Meetings. Special meetings of the stockholders, for any
purpose, may be called at any time by the Chairman, the President, or by
resolution of at least three-fourths of the entire Board and shall be called by
the Secretary upon the written request of the holders of record of three-fourths
of all the outstanding voting stock of the Corporation. Special meetings shall
be held at such time and at such place as may be designated by the Board. At a
special meeting, no business shall be transacted and no corporate action shall
be taken other than that stated in the notice of meeting.
SECTION 3. Notice of Meetings. Written notice stating the place, day and
hour of any meeting of stockholders and the purpose or purposes for which the
meeting is called shall be delivered to each stockholder of record entitled to
vote at such meeting, either personally or by mail not less than ten (10) nor
more than fifty (50) days before the date of such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the U.S. mail, with
postage thereon prepaid, addressed to the stockholder at his or her address as
it appears on the stock transfer books or records of the Corporation as of the
record date prescribed in Section 5 of this Article II, or at such other address
as the stockholder shall have furnished in writing to the Secretary. Notice of
any special meeting shall indicate that the notice is being issued by or at the
direction of the person or persons calling such meeting. When any meeting of
stockholders, either annual or special, is adjourned to another time or place,
no notice of the adjourned meeting must be given, other than an announcement at
the meeting at which such adjournment is taken giving the time and place to
which the meeting is adjourned. However, if the adjournment is for more than
thirty (30) days, or if after adjournment the Board fixes a new record date for
the adjourned meeting, notice of the adjourned meeting shall be given to each
stockholder of record on the new record date.
SECTION 4. Waiver of Notice. Notice of meeting need not be given to any
stockholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting. The attendance of any stockholder at a
meeting, in person or by proxy, without objecting at the beginning of the
meeting to the lack of notice of such meeting, shall constitute a waiver of
notice by such stockholder.
SECTION 5. Fixing of Record Date. For the purpose of determining
stockholders entitled to notice of and to vote at any meeting of stockholders or
any adjournment thereof, or stockholders entitled to receive payment of any
dividend or the allotment of any rights, or in order to make a determination of
stockholders for any other proper purpose, the Board shall fix in advance a date
as the record date for any such determination of stockholders. Such date in any
case shall be not more than fifty (50) days and, in the case of a meeting of
stockholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of stockholders is to be taken.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this Section 5, such determination
shall, unless otherwise provided by the Board, also apply to any adjournment
thereof.
A-38
<PAGE>
<PAGE>
SECTION 6. Quorum. The holders of a majority of the outstanding shares of
the capital stock of the Corporation issued and outstanding and entitled to vote
thereat, represented in person or by proxy, shall constitute a quorum at a
meeting of stockholders. If less than a majority of such shares are represented
at a meeting, a majority of the shares so represented may adjourn the meeting
from time to time without further notice. At such adjourned meeting at which a
quorum shall be represented, any business may be transacted which might have
been transacted at the meeting as originally noticed. When a quorum is once
present to organize a meeting, such quorum is not broken by the subsequent
withdrawal of any stockholders.
SECTION 7. Conduct of Meetings. The Chairman or, in his or her absence, the
President or, if both the Chairman and the President are absent or otherwise
unable to conduct any such meetings, such other person as shall be appointed by
a majority of the Board shall serve as chairman at all meetings of the
stockholders. The Secretary or, in his or her absence, such other person as the
chairman of the meeting shall appoint, shall serve as secretary of the meeting.
The chairman of the meeting shall conduct all meetings of the stockholders in
accordance with the best interests of the Corporation and shall have the
authority and discretion to establish reasonable procedural rules for the
conduct of such meetings. The chairman of the meeting shall also have the
authority to adjourn the meeting from time to time and from place to place as he
or she may deem necessary and in the best interests of the Corporation.
SECTION 8. Voting. Each stockholder entitled to vote at any meeting may
vote either in person or by proxy. Except to the extent expressly provided for
in the Amended and Restated Certificate of Incorporation, each stockholder
entitled to vote shall be entitled to one vote for each share of voting stock
registered in his or her name on the transfer books or records of the
Corporation as of the record date prescribed in Section 5 of this Article II.
Except for the election of directors or as otherwise provided by law, these
By-Laws, or the Amended and Restated Certificate of Incorporation, at all
meetings of stockholders all matters shall be determined by a majority vote of
the stockholders present in person or by proxy and entitled to vote thereat.
Directors shall, except as otherwise required by law or the Amended and Restated
Certificate of Incorporation, be elected by a plurality of the votes cast by
each class of shares entitled to vote at a meeting of stockholders present in
person or by proxy and entitled to vote in the election. At any meeting of the
stockholders of the Corporation, when ownership of a share of voting stock
stands in the name of two or more persons or fiduciaries, in the absence of
written directions to the Corporation to the contrary, any one or more of such
stockholders may cast, in person or by proxy, all votes to which such ownership
is entitled. In the event an attempt is made to cast conflicting votes, in
person or by proxy, by the several persons or fiduciaries in whose names shares
of stock stand, the vote or votes to which those persons or fiduciaries are
entitled shall be cast as directed by a majority of those holding such stock and
present in person or by proxy at such meeting, but no votes shall be cast for
such stock if a majority cannot agree.
SECTION 9. Proxies. All proxies shall be in writing, signed by the
stockholder or by his or her duly authorized attorney-in-fact, and shall be
filed with the Secretary before being voted. No proxy shall be valid after
eleven (11) months from the date of its execution unless otherwise provided in
the proxy. The attendance at any meeting by a stockholder who shall have
previously given a proxy applicable thereto shall not, as such, have the effect
of revoking the proxy. The Corporation may treat any duly executed proxy as not
revoked and in full force and effect until it receives a duly executed
instrument revoking it, or a duly executed proxy bearing a later date.
SECTION 10. Inspectors of Election. In advance of any meeting of
stockholders, the Board shall appoint one or more persons, other than officers,
directors or nominees for office, as inspectors of election to act at such
meeting or any adjournment thereof. Such appointment shall not be altered at the
meeting. If inspectors of election are not so appointed, the chairman of the
meeting shall make such appointment at the meeting. In case any person appointed
as inspector fails to appear or fails or refuses to act, the vacancy may be
filled by appointment by the Board in advance of the meeting or at the meeting
by the chairman of the meeting.
SECTION 11. Nominating Committee; Nominating Procedure. The Board shall act
as a nominating committee for selecting the nominees for election as directors.
Except in the case of a nominee substituted as a result of the death or other
incapacity of a nominee, the nominating committee shall
A-39
<PAGE>
<PAGE>
deliver written nominations to the Secretary at least sixty (60) days prior to
the date of the annual meeting. Provided such committee makes such nominations,
no nominations for directors except those made by the nominating committee shall
be voted upon at the annual meeting of stockholders unless other nominations by
stockholders are made in accordance with the provisions of this Section 11.
Nominations of individuals for election to the Board at an annual meeting of
stockholders may be made by any stockholder of the Corporation entitled to vote
for the election of directors at such meeting who provides timely notice in
writing to the Secretary as set forth in this Section 11. To be timely, a
stockholder's notice shall be delivered to or received by the Secretary not
later than December 14, 1997, in the case of individuals to be nominated at the
first annual meeting of the Corporation, and not less than ninety (90) calendar
days nor more than one hundred and twenty (120) calendar days prior to the
anniversary date of the date on which the Corporation's proxy statement was
released to stockholders in connection with the previous year's annual meeting
of stockholders for all subsequent annual meetings. Such stockholder's notice
shall set forth (a) as to each person whom the stockholder proposes to nominate
for election or re-election as a director (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) such person's written consent to serve as a
director, if elected, and (iv) such other information regarding the nominee as
would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission; and (b) as to the
stockholder giving the notice (i) the name and address of such stockholder, (ii)
the class and number of shares of the Corporation which are owned of record by
such stockholder, and (iii) a description of all arrangements or understanding
between the stockholder and nominee and any other person or persons (naming such
person or persons) pursuant to which the nominations are to be made by the
stockholder. At the request of the Board, any person nominated by the Board for
election as a director shall furnish to the Secretary that information required
to be set forth in a stockholder's notice of nomination which pertains to the
nominee together with the required written consent. No person shall be elected
as a director of the Corporation by stockholders unless nominated in accordance
with the procedures set forth in this Section 11. Ballots bearing the names of
all the persons nominated by the nominating committee and by stockholders shall
be provided for use at the annual meeting.
SECTION 12. New Business. Any new business to be taken up at the annual
meeting at the request of the Chairman or the President shall be stated in
writing and filed with the Secretary at least fifteen (15) days before the date
of the annual meeting, and all business so stated, proposed and filed shall be
considered at the annual meeting, but, except as provided in this Section 12, no
other proposals shall be acted upon at the annual meeting. Any non-management
proposal offered by a stockholder may be made at the annual meeting and the same
may be discussed and considered, but unless properly brought before the meeting
such proposal shall not be acted upon at the meeting. For a proposal to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary. To be timely, a
stockholder's notice must be delivered to or received by the Secretary not later
than December 14, 1997, in the case of any proposal to be brought before the
first annual meeting of the Corporation's stockholders, and not less than ninety
(90) nor more than one hundred and twenty (120) days prior to the anniversary
date of the date on which the Corporation's proxy statement was released to
stockholders in connection with the previous year's annual meeting of
stockholders for all subsequent annual meetings. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (a) a brief description of the proposal desired to be
brought before the annual meeting; (b) the name and address of the stockholder
proposing such business; (c) the class and number of shares of the Corporation
which are owned of record by the stockholder; and (d) such other information
regarding such proposal as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission.
This proposal shall not prevent the consideration and approval or disapproval at
the annual meetings of reports of officers, directors and committees of the
Board or the management of the Corporation, but in connection with such reports,
no new business shall be acted upon at such annual meeting unless stated and
filed as herein provided.
A-40
<PAGE>
<PAGE>
ARTICLE III
CAPITAL STOCK
SECTION 1. Certificates of Stock. Certificates of stock shall be in such
form as shall be approved by the Board, provided that each certificate shall
when issued state upon the fact thereof (a) that the Corporation is a
corporation organized under the laws of the State of Delaware; (b) the name of
the person to whom the certificate is issued; (c) the number, class and series,
if any, which the certificate represents; and (d) the par value of each share
represented by the certificate. Each certificate shall further state that the
Corporation will furnish to any stockholder upon request and without charge a
statement of the rights and preferences of shares of each class or series of
stock, or shall set forth such statement on the certificate itself. The
certificates shall be numbered in the order of their issue, and shall be signed
by the Chairman, the President or any Vice President and the Secretary or any
Assistant Secretary, and the seal of the Corporation or a facsimile thereof
shall be impressed, affixed or reproduced thereon. If the certificates are
signed by a Transfer Agent acting on behalf of the Corporation, or are
registered by a Registrar, the signatures of the officers of the Corporation may
be facsimiles. In case any officer or officers who shall have signed any such
certificate or certificates shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates have not
ceased to be such officers or officer of the Corporation.
SECTION 2. Transfer Agent. The Board shall have power to appoint one or
more Transfer Agents and Registrars for the transfer and registration of
certificates of stock of any class, and may require that stock certificates
shall be countersigned and registered by one or more of such Transfer Agents and
Registrars.
SECTION 3. Registration and Transfer of Shares. The name of each person
owning a share of the capital stock of the Corporation shall be entered on the
books of the Corporation together with the number of shares held by him or her,
the numbers of the certificates covering such shares and the dates of issue of
such certificates. The shares of stock of the Corporation shall be transferable
on the books of the Corporation by the holders thereof in person, or by their
duly authorized attorneys or legal representatives, on surrender and
cancellation of certificates for a like number of shares, accompanied by an
assignment or power of transfer endorsed thereon or attached thereto, duly
executed, with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require and with proper evidence of
payment of all applicable transfer taxes. A record shall be made of each
transfer.
SECTION 4. Lost, Destroyed and Mutilated Certificates. The holder of any
shares of capital stock of the Corporation shall immediately notify the
Corporation of any loss, theft, destruction or mutilation of the certificates
therefor. The Corporation may issue, or cause to be issued, a new certificate of
stock in the place of any certificate theretofore issued by it alleged to have
been lost, stolen or destroyed upon evidence satisfactory to the Corporation of
the loss, theft or destruction of the certificate, and in the case of
mutilation, the surrender of the mutilated certificate. The Corporation may, in
its discretion, require the owner of a lost, stolen or destroyed certificate, or
his or her legal representatives, to give the Corporation a bond, in such sum
not exceeding double the value of the stock and with such surety or sureties as
they may require, to indemnify it against any claim that may be made against it
by reason of the issue of such new certificate and against all other liability
in the premises, or may refer such owner to such remedy or remedies as he or she
may have under the laws of the State of Delaware.
SECTION 5. Holder of Record. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock of the Corporation as the
holder thereof in fact and shall not be bound to recognize any equitable or
other claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by law.
A-41
<PAGE>
<PAGE>
ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. Responsibilities; Number of Directors. The business and affairs
of the Corporation shall be managed by and under the direction of the Board of
Directors except as may be otherwise provided by law or in the Amended and
Restated Certificate of Incorporation. Until such time as the Corporation
acquires all of the outstanding shares of capital stock of The Greater New York
Savings Bank (the 'Holding Corporation Formation'), the number of directors
shall be one. At and after the time of the Holding Corporation Formation, the
Board shall consist of not less than seven (7) nor more than thirty (30)
directors. Within the foregoing limits, the number of directors shall be
determined by resolution of the Board.
SECTION 2. Classification of Board. At and after the time of the Holding
Corporation Formation, the directors shall be divided into three classes in
respect of term of office, each class to contain, as nearly as may be
practicable, one-third of the whole number of the Board. The initial terms of
the directors will be staggered so that directors of one class will be elected
at each annual meeting of stockholders. The members of the first class shall
serve until the first annual meeting of stockholders, the members of the second
class shall serve until the annual meeting of stockholders held one year
thereafter, and the members of the third class shall serve until the annual
meeting of stockholders held two years thereafter; provided, however, that in
each case directors shall continue to serve until their successors shall be
elected and shall qualify. At each annual meeting of stockholders, one class of
directors shall be elected to serve until the annual meeting of stockholders
held three years next following and until their successors shall be elected and
shall qualify.
SECTION 3. Qualifications. Each director shall be at least twenty-five (25)
years of age and at least one-half of the directors shall be citizens of the
United States. Not more than one-third of the total number of directors, but in
no event more than five (5), may be officers or employees of the Corporation.
SECTION 4. Mandatory Retirement. No person who is seventy-five (75) years
of age or more shall be eligible for election as a director. No person shall
continue to serve as a director beyond the next annual meeting of stockholders
of the Corporation following such person's attainment of seventy-five (75) years
of age.
SECTION 5. Action by Directors Without a Meeting. Unless otherwise
restricted by the Amended and Restated Certificate of Incorporation or these
by-laws, any action required or permitted to be taken at any meeting of the
Board of Directors, or of any committee thereof, may be taken without a meeting
if all members of the Board or of such committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
SECTION 6. Regular and Annual Meetings. An annual meeting for the election
of officers shall be held, without notice other than these By-Laws, immediately
after, and at the same place as the annual meeting of stockholders, or at such
other time or place within fifteen (15) days after the annual meeting of the
stockholders as the Board shall determine. Regular meetings of the Board shall
be held, without notice other than these By-Laws, at least once each month on
the second (2nd) Thursday of such month (or on the next following full business
day if the date so selected shall fall on a legal holiday), at the principal
administrative office of the Corporation, at 10:30 a.m. or at such other dates,
time or place as the Board shall determine.
SECTION 7. Special Meetings. Special meetings of the Board, for any
purpose, may be called at any time by or at the request of the Chairman or the
President. Special meetings of the Board may also be convened upon the written
request of at least a majority of the entire Board. The persons authorized to
call special meetings of the Board may fix any place, within or without the
Corporation's regular business area, as the place for holding any special
meeting of the Board called by such persons.
SECTION 8. Notice of Special Meetings; Waiver of Notice. At least 24 hours
notice of special meetings shall be given to each director if given in person or
by telephone or telegraph. Three (3) days notice of special meetings is required
if notice is given by mail. The object of the special meeting and the persons by
whom the meeting has been called, if other than the Chairman or the President,
shall be stated in the notice. Such notice shall be deemed to be given when
deposited in the U.S. mail so addressed, with postage thereon prepaid if mailed,
or when delivered to the telegraph company if sent
A-42
<PAGE>
<PAGE>
by telegram. Notice of a special meeting need not be given to any director who
submits a signed waiver of notice to the Secretary, whether before or after the
meeting. The attendance or participation of a director at a special meeting
shall constitute a waiver of notice of such meeting, except where a director
attends or participates in a special meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened.
SECTION 9. Presence at Meetings by Conference Telephone. Any member of the
Board or of any committee thereof may participate in a meeting of the Board or
of such committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear each other
at the same time. Participation in a meeting by such means shall constitute
presence at the meeting.
SECTION 10. Quorum and Voting Requirements. A quorum at any meeting of the
Board shall consist of a majority of the directors then in office or such
greater number as shall be required by law. If less than a required quorum is
present, the majority of those directors present may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be represented, any business may be transacted at the meeting as
originally notified. When a quorum is once present to organize a meeting, such
quorum is not broken by the subsequent withdrawal of directors originally in
attendance. Except as otherwise required by law or as otherwise provided herein
or in the Amended and Restated Certificate of Incorporation, all matters shall
be determined by a majority vote of those present at each meeting at which a
quorum is present.
SECTION 11. Compensation. From time to time, as the Board deems necessary,
the Board shall fix the compensation of:
(a) Directors for their service as such, for attendance at meetings of
the Board and of committees thereof, and
(b) Executive Officers of the Corporation.
SECTION 12. Removal. Notwithstanding any other provision of the Amended and
Restated Certificate of Incorporation or these By-Laws, a director may be
removed at any time but only for cause and by the affirmative vote of the
holders of record of not less than eighty percent (80%) of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors at a meeting of the stockholders called for that purpose.
SECTION 13. Vacancies. All vacancies in the office of director not
exceeding one-third of the entire Board, including vacancies created by newly
created directorships resulting from an increase in the number of directors, may
be filled by a vote of a majority of the directors then holding office at any
regular or special meeting of the Board called for that purpose. Any director so
elected by the Board shall serve until the next election of the class for which
such director shall have been chosen and until his or her successor shall be
elected and qualified. In the event that there are less than three (3)
vacancies, the Board, in its discretion, may leave such directorships unfilled
until the next annual election. Notwithstanding anything in these bylaws to the
contrary, the sole director at the time of the Holding Company Formation shall
be entitled to elect the additional directors to the Board of Directors and
designate the class in which each director shall serve.
SECTION 14. Amendments Concerning Classification of the Board. The number
and classification of directors of the Corporation may be altered only by a vote
of two-thirds of the entire Board or by the affirmative vote of the holders of
record of not less than eighty percent (80%) of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors at a meeting of the stockholders called for that purpose.
ARTICLE V
COMMITTEES
SECTION 1. Compensation Committee. The Compensation Committee reviews and
recommends the cash compensation of each officer and employee of the Corporation
whose annual salary exceeds an amount specified by the Board. The Committee also
approves annual incentive plans and reviews performance under such plans. In
addition, the Committee administers the Corporation's Long-Term Incentive
Program and the Corporation's 1996 Equity Incentive Plan and is responsible for
granting stock options, stock appreciation rights and other awards under said
plans. The committee shall consist
A-43
<PAGE>
<PAGE>
of at least three directors, none of whom may be an officer or a salaried
employee of the Corporation. The Committee shall elect its own Chairman.
SECTION 2. Audit Committee. The Committee examines the records and affairs
of the Corporation once each year for the purpose of determining the financial
condition of the Corporation and delivers a report of each such examination to
the Board of Directors. In addition, the Audit Committee receives and reviews
quarterly reports from the Corporation's Auditor and supervises the Auditor's
activities. The Audit Committee shall consist of at least five directors, none
of whom may be an officer or a salaried employee of the Corporation. The
Committee may employ independent counsel. The Committee shall elect its own
Chairman, and meets at least quarterly at his call.
SECTION 3. Standing Committees. At the annual meeting or as soon thereafter
as may be practicable, the Board, upon the recommendation of the Chairman, shall
elect from their own number the members of the Audit Committee, the Search
Committee, the Benefits Committee and the Compensation Committee. From time to
time, the Chairman, with the approval of the Board, may appoint such other or
special committees as may be deemed necessary or desirable. Except as otherwise
provided in these By-Laws, any director may serve on two or more committees. The
members of each committee shall serve until the next succeeding annual meeting,
or until their successor shall have been appointed as provided herein. In
appointing committees, the Board shall seek to rotate members to encourage
participation by all directors, but such rotation shall not be required. The
Chairman, with the approval of the Board, may at any time appoint a director to
fill any vacancy on any committee of the Board. The Chairman shall be chairman
and a member of all committees, except the Audit Committee and the Compensation
Committee.
SECTION 4. Benefits Committee. The Benefits Committee administers the
Corporation's Pension Plan, Incentive Savings Plan, Directors Pension Plan and
the Supplemental Executive Retirement Plan and carries out the provisions
thereof. The Committee shall consist of the Corporation's Chairman and at least
three other non-salaried directors.
SECTION 5. Search Committee. The Search Committee recruits, interviews and
recommends to the Board candidates for directors, Chairman, President and other
senior officers of the Corporation. The Committee shall consist of the Chairman
and at least four other directors.
SECTION 6. Employment of Assistants for Certain Committees. The Audit,
Search and Compensation Committees may employ such experts and assistants and
incur such reasonable expense as they deem necessary in making such reports,
examinations or audits.
SECTION 7. Ad Hoc Committees. Ad hoc committees may be established and
directors may be appointed thereto by the Chairman at any time. Such committees,
the members thereof and the activities thereof, shall be reported at the next
meeting of the Board for approval and ratification.
SECTION 8. Meetings of Committees; Quorum. The committees of the Board
shall meet at the call of the Chairman whenever there shall be any business
requiring the attention of any such committee, except that the Audit Committee
and the Compensation Committee shall meet at the call of their respective
chairman. Ad hoc committees shall meet at such time or times as may be required
by the Chairman. Notice of an additional meeting need not be given to any
director who submits a signed waiver of notice to the Secretary, whether before
or after the meeting. The attendance or participation of a director at an
additional meeting shall constitute a waiver of notice of such meeting, except
where a director attends or participates at the additional meeting for the
purposes of objecting to the transaction of any business because the meeting is
not lawfully called or convened. A majority of the members of each committee
shall constitute a quorum for the transaction of business. Each committee shall
keep minutes of each meeting which shall be presented at the next regular
meeting of the Board.
SECTION 9. Removal. Unless otherwise specified herein, any member of any
committee may be removed at any regular meeting of the Board by an affirmative
vote of two-thirds of the entire Board.
SECTION 1. Number. The Board shall, immediately after and at the same place
as the annual meeting of stockholders, or at such other time or place within
fifteen (15) days after the annual meeting of stockholders as the Board shall
determine, elect a Chairman and Chief Executive Officer and such
A-44
<PAGE>
<PAGE>
ARTICLE VI
OFFICERS
other officers as the Board deems necessary. Any two or more offices may be held
by the same person, except the offices of Chairman and Secretary or President
and Secretary.
The election of all officers shall be by a majority of the entire Board. If
such election is not held at the meeting held annually for the election of
officers, such officers may be so elected at any subsequent meeting or at a
special meeting called for that purpose, in the same manner as above provided.
Each person elected shall have the authority, bear such title and perform such
duties as provided in these By-Laws and as the Board may prescribe from time to
time. All officers elected or appointed by the Board shall hold office at the
pleasure of the Board. Whenever a vacancy occurs among the officers, it may be
filled at any regular or special meeting called for that purpose, in the same
manner as above provided.
SECTION 2. Term; Removal. Each officer shall serve until his or her
successor is elected, the office is abolished, or he or she is removed. Any
officer may be removed at any regular meeting of the Board with or without cause
by an affirmative vote of a majority of the entire Board of Directors.
SECTION 3. Chairman and Chief Executive Officer. The executive power of the
Corporation shall be vested in the Chairman and he or she shall be the Chief
Executive Officer and head of the Corporation, in general charge and supervision
of its affairs and of the management and control thereof and of the conduct of
its business. The Chairman shall have all powers and perform all duties
incidental to his or her office. The decision of the Chairman in all matters
shall be conclusive unless overruled or modified by the Board. The Chairman
shall be the presiding officer at all meetings of the Board and of the
committees thereof, except the Audit Committee and the Compensation Committee.
He or she shall preside at all annual and special meetings of the stockholders
and any adjournments thereof. He or she may call special meetings of the Board
or of the committees thereof as and when he or she may deem necessary or
advisable and shall be a member of all committees, except the Audit Committee
and the Compensation Committee, and as otherwise may be provided by law. The
Chairman shall sign and execute, by and in the name of the Corporation, and
affix the corporate seal to all documents and instruments of every name or
nature which are necessary or may be required in the course of the conduct of
the business and affairs of the Corporation, except as hereinafter provided. The
Chairman shall exercise supervisory control and direction over all officers. He
or she shall exercise control and disciplinary power, including discharge, over
all officers and employees, including their absences from duty and their
vacations; provided, however, that such power of discharge with respect to
officers elected or appointed by the Board shall be subject to approval by the
Board.
SECTION 4. President. The President shall be the Chief Administrative
Officer of the Corporation and shall assist the Chairman in the management,
direction and supervision of the business, operations and affairs of the
Corporation and generally perform such other duties as may be designated by the
Chairman or the Board. In the absence or incapacity of the Chairman, or if there
be no Chairman, the President shall perform all of the duties and exercise all
of the powers of the Chairman in addition to those of the President.
SECTION 5. Group Presidents, Vice President and Other Officers. There shall
be such number of Group Presidents, Vice Presidents and other officers as may be
determined by the Board. The Group Presidents, Vice Presidents and such other
officers shall perform such duties and exercise such powers as may be designated
by the Chairman or the Board. Such officers may be assigned priority in status
and accorded such supplementary designations as may be determined by the Board.
SECTION 6. Secretary. The Secretary shall attend all meetings of the Board
and of the stockholders, shall record, or cause to be recorded, all votes and
minutes of all proceedings in a book to be kept for that purpose, and shall
perform like duties for the committees when required. The Secretary shall give,
or cause to be given, notice of all meetings of stockholders and special
meetings of the Board, as required by statute or by these By-Laws. The Secretary
shall keep or cause to be kept accurate and complete records of the ownership of
shares of the Corporation. The Secretary shall be the custodian of the seal of
the Corporation and shall affix it to any document requiring it when authorized
by the Chairman or the Board to do so and, when so affixed, it may be attested
by his or her signature. The Secretary shall also perform such other duties as
are required by these By-Laws, as may be directed by the Chairman or the
President or as the Board may from time to time prescribe.
A-45
<PAGE>
<PAGE>
SECTION 7. Counsel. The Counsel shall be the attorney and counsel of the
Corporation and the legal advisor thereof, and of the directors, officers and
committees. The Chairman, with the approval of the Board, may retain additional
legal assistance when such retention appears prudent or desirable.
SECTION 8. Auditor. The Auditor shall be primarily accountable at all times
to the Audit Committee of the Board. The Auditor shall make regular examinations
and audits of the accounts, records and transactions of the Corporation, in
conformity with the internal auditing program of the Corporation and under the
direction and supervision of the Audit Committee, and he or she shall maintain
records of such examinations and audits. The Auditor shall make such other
examinations as may be required by the Chairman, the Audit Committee or the
Board. All written reports of the Auditor shall be addressed to the officer
responsible for the area audited, with copies to all members of the Audit
Committee and with a copy, in the Auditor's discretion, or by direction of the
Chairman of the Audit Committee, to the Chairman of the Corporation.
The Auditor shall meet at least quarterly with the Audit Committee and at
other times upon the Auditor's request or the request of the Chairman of the
Audit Committee, to report upon his or her audit and/or examinations and
findings of the accounts, records and transactions of the Corporation.
The compensation of the Auditor shall be established and reviewed annually
by the Audit Committee and approved by a majority of the entire Board.
ARTICLE VII
DIVIDENDS
The Board shall have the power, subject to the requirements of the Amended
and Restated Certificate of Incorporation and the Delaware General Corporation
Law, to declare and pay dividends out of the surplus or net profits of the
Corporation except where there is any impairment of capital stock, and to pay
such dividends to the stockholders, and to fix the date or dates for eligibility
to receive such dividend and for the payment thereof.
ARTICLE VIII
INDEMNIFICATION
The Corporation shall indemnify to the full extent permitted by law any
person made or threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person or such person's testator or intestate is or was a director,
officer or employee of the Corporation or serves or served at the request of the
Corporation any other enterprise as a director, officer or employee. Expenses,
including attorneys' fees, incurred by any such person in defending any such
action, suit or proceeding shall be paid or reimbursed by the Corporation
promptly upon receipt by it of an undertaking of such person to repay such
expenses if it shall ultimately be determined that such person is not entitled
to be indemnified by the Corporation. The rights provided to any person by this
by-law shall be enforceable against the Corporation by such person who shall be
presumed to have relied upon it in serving or continuing to serve as a director,
officer or employee as provided above. No amendment of this by-law shall impair
the rights of any person arising at any time with respect to events occurring
prior to such amendment.
The Corporation may, but shall not be obliged to, purchase and maintain
insurance, to the full extent permitted by law, on behalf of any person who is
or was a trustee, director, officer, employee or agent of the Corporation or is
or was serving at the request of the Corporation as a trustee, director, officer
or employee of another corporation, partnership joint venture, trust,
association, conference, group or other enterprise of any type or kind, domestic
or foreign, against any liability asserted against him or her and incurred by
him or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify him or her
against such liability under the provisions of Section 145 of Delaware General
Corporation Law.
For purposes of this by-law, the term 'Corporation' shall include any
predecessor of the Corporation and any constituent corporation (including any
constituent of a constituent) absorbed by the Corporation in a consolidation or
merger; the term 'other enterprise' shall include any corporation,
partnership, joint venture, trust or employee benefit plan; service 'at the
request of the Corporation' shall include service as a director, officer or
employee of the Corporation which imposes duties on, or involves services by,
such director, officer or employee with respect to an employee benefit plan, its
A-46
<PAGE>
<PAGE>
participants or beneficiaries; any excise taxes assessed on a person with
respect to an employee benefit plan shall be deemed to be indemnifiable
expenses; and action by a person with respect to an employee benefit plan which
such person reasonably believes to be in the interest of the participants and
beneficiaries of such plan shall be deemed to be action not opposed to the best
interests of the Corporation.
ARTICLE IX
MISCELLANEOUS
SECTION 1. Corporate Seal. The Corporation may have a corporate seal which
shall have the name of the Corporation inscribed thereon and shall be in such
form as may be approved from time to time by the Board of Directors. The
corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.
SECTION 2. Securities. Access to the stocks, bonds and other securities of
the Corporation shall be had by such officers and other persons as shall be
designated by resolution of the Board and under such restrictions or limitations
as the Board shall from time to time impose.
SECTION 3. Corporation Accounts and Checks. All checks on the bank accounts
maintained by the Corporation must be signed by such officers and other persons
as shall be designated by resolution of the Board, under such restrictions as
the Board may from time to time impose.
SECTION 4. Bonds of Officers, Clerks and Employees. Every director,
officer, clerk and employee of the Corporation shall be bonded for the honest
and faithful discharge of his or her respective duties in such an amount as may
be prescribed by the Board.
SECTION 5. Officers' Authority. Such officers of the Corporation as may be
designated by the Board shall have power to execute for and in the name of the
Corporation, with or without its corporate seal, all such documents as may be
necessary or proper to be executed in and about the business of the Corporation.
ARTICLE X
EMERGENCY MANAGEMENT
When there shall occur or exist an emergency referred to in Section 110 of
the Delaware General Corporation Law, the Board of Directors may adopt emergency
By-Laws in conformance with said Section 110, any provisions of these By-Laws or
resolution of the Board to the contrary notwithstanding.
ARTICLE XI
AMENDMENTS
These By-Laws may be amended at any meeting of the Board by the vote of a
majority of the entire Board; provided that any By-Law made by the Board may be
altered, amended, rescinded, or repealed by the holders of shares of capital
stock entitled to vote thereon at any annual meeting or at any special meeting
called for that purpose. Notwithstanding the foregoing, any provision of these
By-Laws which contains a supermajority voting requirement shall only be altered,
amended, rescinded, or repealed by a vote of the Board or holders of capital
stock entitled to vote thereon that is not less than the supermajority specified
in such provision.
A-47
<PAGE>
<PAGE>
APPENDIX B
SS 6022. PROCEDURE TO ENFORCE STOCKHOLDER'S RIGHT TO RECEIVE PAYMENT FOR SHARES
1. A stockholder intending to enforce his right under a section of this
chapter to receive payment for his shares if the proposed corporate action
referred to therein is taken shall file with the corporation, before the meeting
of stockholders at which the action is submitted to a vote, or at such meeting
but before the vote, written objection to the action. The objection shall
include a statement that he intends to demand payment for his shares if the
action is taken. Such objection is not required from any stockholder to whom the
corporation did not give notice of such meeting in accordance with this chapter
or where the proposed action is authorized by written consent of stockholders
without a meeting.
2. Within ten days after the stockholders' authorization date, which term
as used in this section means the date on which the stockholders' vote
authorizing such action was taken, or the date on which such consent without a
meeting was obtained from the requisite stockholders, the corporation shall give
written notice of such authorization or consent by registered mail to each
stockholder who filed written objection or from whom written objection was not
required, excepting any who voted for or consented in writing to the proposed
action.
3. Within twenty days after the giving of notice to him, any stockholder to
whom the corporation was required to give such notice and who elects to dissent
shall file with the corporation a written notice of such election, stating his
name and residence address, the number and classes of shares as to which he
dissents and a demand for payment of the fair value of his shares.
4. A stockholder may not dissent as to less than all of the shares, held by
him of record, that he owns beneficially. A nominee or fiduciary may not dissent
on behalf of any beneficial owner as to less than all of the shares of such
owner held of record by such nominees or fiduciary.
5. Upon filing a notice of election to dissent, the stockholder shall cease
to have any of the rights of a stockholder except the right to be paid the fair
value of his shares and any other rights under this section. Withdrawal of a
notice of election shall require the written consent of the corporation. If a
notice of election is withdrawn, or the proposed corporate action is abandoned
or rescinded, or a court shall determine that the stockholder is not entitled to
receive payment for his shares, or the stockholder shall otherwise lose his
dissenter's rights, he shall not have the right to receive payment for his
shares and he shall be reinstated to all his rights as a stockholder as of the
filing of his notice of election, including any intervening preemptive rights
and the right to payment of any intervening dividend or other distribution or,
if any such rights have expired or any such dividend or distribution other than
in cash has been completed, in lieu thereof, at the election of the corporation,
the fair value thereof in cash as determined by the board as of the time of such
expiration or completion, but without prejudice otherwise to any corporate
proceedings that may have been taken in the interim.
6. At the time of filing the notice of election to dissent or within one
month thereafter the stockholder shall submit the certificates representing his
shares to the corporation, or to its transfer agent, which shall forthwith note
conspicuously thereon that a notice of election has been filed and shall return
the certificates to the stockholder or other person who submitted them on his
behalf. Any stockholder who fails to submit his certificates for such notation
as herein specified shall, at the option of the corporation exercised by written
notice to him within forty-five days from the date of filing of such notice of
election to dissent, lose his dissenter's rights unless a court, for good cause
shown, shall otherwise direct. Upon transfer of a certificate bearing such
notation, each new certificate issued therefor shall bear a similar notation
together with the name of the original dissenting holder of the shares and a
transferee shall acquire no rights in the corporation except those which the
original dissenting stockholder had after filing his notice of election.
7. Within seven days after the expiration of the period within which
stockholders may file their notices of election to dissent, or within seven days
after the proposed corporate action is consummated, whichever is later, the
corporation or, in the case of a merger, the receiving corporation, shall make a
written offer by registered mail to each stockholder who has filed such notice
of election to pay for his shares at a specified price which the corporation
considers to be their fair value. Such offer shall be
B-1
<PAGE>
<PAGE>
made at the same price per share to all dissenting stockholders of the same
class, or if divided into series, of the same series and shall be accompanied by
a balance sheet of the corporation whose shares the dissenting stockholder holds
as of the latest available date, which shall not be earlier than twelve months
before the making of such offer, and a profit and loss statement or statements
for not less than a twelve month period ended on the date of such balance sheet
or, if the corporation was not in existence throughout such twelve month period,
for the portion thereof during which it was in existence. If within thirty days
after the making of such offer, the corporation making the offer and any
stockholder agree upon the price to be paid for his shares, payment therefor
shall be made within sixty days after the making of such offer upon the
surrender of the certificates representing such shares.
8. The following procedure shall apply if the corporation fails to make
such offer within such period of seven days, or if it makes the offer and any
dissenting stockholder or stockholders fail to agree with it within the period
of thirty days thereafter upon the price to be paid for their shares:
(a) The corporation or, in the case of a merger, the receiving
corporation shall, within twenty days after the expiration of whichever is
applicable of the two periods last mentioned, institute a special
proceeding in the supreme court in the judicial district in which the
office of the corporation is located to determine the rights of dissenting
stockholders and to fix the fair value of their shares.
(b) If the corporation fails to institute such proceeding within such
period of twenty days, any dissenting stockholder may institute such
proceeding for the same purpose not later than thirty days after the
expiration of such twenty day period. If such proceeding is not instituted
within such thirty day period, all dissenter's right shall be lost unless
the supreme court, for good cause shown, shall otherwise direct.
(c) All dissenting stockholders, excepting those who, as provided in
subdivision seven, have agreed with the corporation upon the price to be
paid for their shares, shall be made parties to such proceeding, which
shall have the effect of an action quasi in rem against the shares. The
corporation shall serve a copy of the petition in such proceeding upon each
dissenting stockholder who is a resident of this state in the manner
provided by law for the service of a summons, and upon each nonresident
dissenting stockholder either by registered mail and publication, or in
such other manner as is permitted by law. The jurisdiction of the court
shall be plenary and exclusive.
(d) The court shall determine whether each dissenting stockholder, as
to whom the corporation requests the court to make such determination, is
entitled to receive payment for his shares. If the corporation does not
request any such determination or if the court finds that any dissenting
stockholder is so entitled, it shall proceed to fix the value of the
shares, which, for the purposes of this section, shall be the fair value as
of the close of business on the day prior to the stockholders'
authorization date, excluding any appreciation or depreciation directly or
indirectly induced by such corporate action or its proposal. The court may,
if it so elects, appoint an appraiser to receive evidence and recommend a
decision on the question of fair value. Such appraiser shall have the
power, authority and duties specified in the order appointing him, or any
amendment thereof.
(e) The final order in the proceeding shall be entered against the
corporation in favor of each dissenting stockholder who is a party to the
proceeding and is entitled thereto for the value of his shares so
determined.
(f) The final order shall include an allowance for interest at such
rate as the court finds to be equitable, from the stockholders'
authorization date to the date of payment. If the court finds that the
refusal of any stockholder to accept the corporate offer of payment for his
shares was arbitrary, vexatious or otherwise not in good faith, no interest
shall be allowed to him.
(g) The costs and expenses of such proceeding shall be determined by
the court and shall be assessed against the corporation, or, in the case of
a merger, the receiving corporation, except that all or any part of such
costs and expenses may be apportioned and assessed, as the court may
determine, against any or all of the dissenting stockholders who are
parties to the proceeding if the court finds that their refusal to accept
the corporate offer was arbitrary, vexatious or otherwise not in good
faith. Such expenses shall include reasonable compensation for and the
reasonable expenses of the appraiser, but shall exclude the fees and
expenses of counsel for and experts employed by any party unless the court,
in its discretion, awards such fees and expenses. In
B-2
<PAGE>
<PAGE>
exercising such discretion, the court shall consider any of the following:
(A) that the fair value of the shares as determined materially exceeds the
amount which such corporation offered to pay; (B) that no offer was made by
such corporation; and (C) that such corporation failed to institute the
special proceeding within the period specified therefor.
(h) Within sixty days after final determination of the proceeding, the
corporation or, in the case of a merger, the receiving corporation shall
pay to each dissenting stockholder the amount found to be due him, upon
surrender of the certificates representing his shares.
9. Shares acquired by the corporation upon the payment of the agreed value
therefor or of the amount due under the final order, as provided in this
section, shall be dealt with as provided in section five thousand fourteen,
except that, in the case of a merger, they shall be disposed of as provided in
the plan of merger or consolidation.
10. The enforcement by a stockholder of his right to receive payment for
his shares in the manner provided herein shall exclude the enforcement by such
stockholder of any other right to which he might otherwise be entitled by virtue
of share ownership, except as provided in subdivision five, and except that this
section shall not exclude the right of such stockholder to bring or maintain an
appropriate action to obtain relief on the ground that such corporate action
will be or is illegal or fraudulent as to him.
11. Except as otherwise expressly provided in this section, any notice to
be given by a corporation to a stockholder under this section shall be given in
the manner provided in section six thousand five.
Added L.1964, c. 849, SS 1, eff. Sept. 1, 1964.
B-3
<PAGE>
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation, among others, has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections (a) and (b)
therein, or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that expenses (including attorneys'
fees) incurred by a director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition thereof upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it is ultimately determined that such director or officer is not entitled to
indemnification under Section 145; and that indemnification and advancement of
expenses provided by, or granted pursuant to Section 145 are not exclusive of
any other rights to indemnification or advancement under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office; and empowers the corporation to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the corporation,
among others, or is or was serving at the request of the corporation as a
director or officer, among others, of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
Bancorp's Amended and Restated Certificate of Incorporation and By-laws
provide, in effect, that to the fullest extent permitted by law and under the
circumstances permitted by subsections (a) and (b) of Section 145 of the
Delaware General Corporation Law, Bancorp (i) shall indemnify any person who was
or is a party or is threatened to be made a party to any action, suit or
proceeding described in subsections (a) and (b) (and such person's estate) by
reason of the fact that such person is or was a trustee, director, officer or
employee of Bancorp or one of Bancorp's subsidiary corporations, or serves or
served any corporation, association, conference or group in any capacity at the
request of Bancorp against reasonable expenses including attorney's fees,
judgments, fines and amounts paid in settlement, and (ii) may purchase and
maintain insurance, to the fullest extent permitted by law, on behalf of any
person who is or was a trustee, director, officer or employee of Bancorp or is
or was serving at the request of Bancorp as a trustee, director, officer or
employee of another corporation of any type or
II-1
<PAGE>
<PAGE>
kind, domestic or foreign, against any liability asserted against him or her and
incurred by him or her in any such capacity, or arising out of his or her status
as such. The By-laws also provide, in effect, that expenses incurred by a
director or officer in defending a civil or criminal action, suit or proceeding
shall be paid by the Company in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of the director or officer to repay
such amount if it shall ultimately be determined that such director or officer
is not entitled to be indemnified by the Company. In addition, as permitted by
Section 145 of the General Corporation Law of the State of Delaware, the Company
plans to purchase and maintain liability insurance covering directors and
officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------------------------------------------------------------------------------------------
<C> <S>
2 -- Agreement and Plan of Reorganization (attached to Proxy Statement/Prospectus as
Appendix A).
3.1 -- Amended and Restated Certificate of Incorporation of Greater New York Bancorp Inc. (attached to Proxy
Statement/Prospectus as Exhibit 1 to Appendix A).
3.2 -- By-Laws of Greater New York Bancorp Inc. (attached to Proxy Statement/Prospectus as Exhibit 2 to
Appendix A).
4.1 -- Instruments defining the rights of security holders. (Amended and Restated Certificate of Incorporation
and By-Laws, incorporated by reference to Exhibits 1 and 2, respectively, to Appendix A to the Proxy
Statement/Prospectus included in the Registration Statement.)
4.2 -- Bancorp Rights Agreement
5 -- Opinion of Sullivan & Cromwell as to validity of securities.
8 -- Opinion of Sullivan & Cromwell as to tax matters.
12 -- Computation of Consolidated Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividend
Requirements.
21 -- Subsidiaries of Greater New York Bancorp Inc.
23.1 -- Consent of Sullivan & Cromwell (included in Exhibits 5 and 8 hereto)
23.2 -- Consent of KPMG Peat Marwick LLP.
99.1 -- Form of Proxy Card.
99.2 -- Annual Report on Form F-2 of The Greater New York Savings Bank for the fiscal year ended December 31,
1996 with all exhibits thereto.
</TABLE>
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective Registration Statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;'
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the
II-2
<PAGE>
<PAGE>
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the Bancorp common or preferred stock being registered which are not
issued in the share exchange.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(6) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
(7) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
(8) That every prospectus: (i) that is filed pursuant to paragraph (7)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the Registration Statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20, or otherwise (other
than by insurance), the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than under insurance
policies and other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by the registrant is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of New York, State of New
York on this 11th day of March, 1997.
GREATER NEW YORK BANCORP INC.
By: /s/ GERARD C. KEEGAN
.................................
NAME: GERARD C. KEEGAN
TITLE: DIRECTOR, CHIEF EXECUTIVE
OFFICER AND PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated, on March 11th, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
Principal Executive Officer and Sole Director:
/S/ GERARD C. KEEGAN Director, Chief Executive Officer and President
.........................................
(GERARD C. KEEGAN)
Controller:
/S/ PHILIP T. SPIES Senior Vice President and Controller
.........................................
(PHILIP T. SPIES)
</TABLE>
II-4
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ------ ------------------------------------------------------
<S> <C> <C> <C>
2 -- Agreement and Plan of Reorganization. ................ Incorporated by reference to Appendix A to
the Proxy Statement/Prospectus included in
the Registration Statement.
3.1 -- Amended and Restated Certificate of Incorporation of
Greater New York Bancorp Inc. ........................ Incorporated by reference to Exhibit 1 to
Appendix A to the Proxy
Statement/Prospectus included in the
Registration Statement.
3.2 -- By-Laws of Greater New York Bancorp Inc. ............. Incorporated by reference to Exhibit 2 to
Appendix A to the Proxy
Statement/Prospectus included in the
Registration Statement.
4.1 -- Instruments defining the rights of security
holders .............................................. Amended and Restated Certificate of
Incorporation and By-Laws, incorporated by
reference to Exhibits 1 and 2,
respectively, to Appendix A to the Proxy
Statement/Prospectus included in the
Registration Statement.
4.2 -- Bancorp Rights Agreement.............................. Filed herewith.
5 -- Opinion of Sullivan & Cromwell as to validity of
securities. .......................................... Filed herewith.
8 -- Opinion of Sullivan & Cromwell as to tax matters. .... Filed herewith.
12 -- Computation of Consolidated Ratios of Earnings to
Combined Fixed Charges and Preferred Stock Dividend
Requirements.......................................... Filed herewith.
21 -- Subsidiaries of Greater New York Bancorp Inc. ........ Filed herewith.
23.1 -- Consent of Sullivan & Cromwell (included in Exhibits 5
and 8). .............................................. Filed herewith.
23.2 -- Consent of KPMG Peat Marwick LLP. .................... Filed herewith.
23.3 -- Consent of Persons About to become Directors.......... Filed herewith.
99.1 -- Form of Proxy Card ................................... Filed herewith.
99.2 -- Annual Report on Form F-2 of The Greater New York
Savings Bank for the fiscal year ended December 31,
1996 (including as exhibits thereto the Bank's
Restated Organization Certificate, Bank Bylaws, Rights
Agreement, material employment agreements, material
severance agreements, director, officer and employee
benefit plans, statement re: computation of earnings
per share for the years ended December 31, 1996, 1995
and 1994, financial data schedule and 1996 Annual
Report to Stockholders (pages 23-76 and 79)).......... Filed herewith.
</TABLE>
STATEMENT OF DIFFERENCES
The copyright symbol shall be expressed as.................. 'c'
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
GREATER NEW YORK BANCORP INC.
and
THE CHASE MANHATTAN BANK
Rights Agent
--------------
Rights Agreement
Dated as of , 1997
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Certain Definitions............................................................... 1
Section 2. Appointment of Rights Agent....................................................... 4
Section 3. Issue of Rights Certificates...................................................... 4
Section 4. Form of Rights Certificates....................................................... 6
Section 5. Countersignature and Registration.................................................. 7
Section 6. Transfer, Split Up, Combination
and Exchange of Rights Certificates,
Mutilated, Destroyed, Lost or Stolen
Rights Certificates............................................................................ 8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights...................................................................... 9
Section 8. Cancellation and Destruction of
Rights Certificates........................................................................... 12
Section 9. Reservation and Availability of
Capital Stock................................................................................. 12
Section 10. Preferred Stock Record Date...................................................... 14
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or
Number of Rights.............................................................................. 15
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares........................................................................... 26
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power........................................................... 26
Section 14. Fractional Rights and Fractional Shares.......................................... 29
Section 15. Rights of Action................................................................. 30
Section 16. Agreement of Rights Holders...................................................... 31
Section 17. Rights Certificate Holder Not Deemed
a Stockholder................................................................................. 32
Section 18. Concerning the Rights Agent...................................................... 32
</TABLE>
-i-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.......................................................................... 33
Section 20. Duties of Rights Agent........................................................... 33
Section 21. Change of Rights Agent........................................................... 36
Section 22. Issuance of New Rights Certificates.............................................. 37
Section 23. Redemption and Termination....................................................... 37
Section 24. Exchange......................................................................... 38
Section 25. Notice of Certain Events......................................................... 39
Section 26. Notices.......................................................................... 41
Section 27. Supplements and Amendments....................................................... 41
Section 28. Successors....................................................................... 42
Section 29. Determinations and Actions by the
Board of Directors, etc....................................................................... 42
Section 30. Benefits of this Agreement....................................................... 43
Section 31. Severability..................................................................... 43
Section 32. Governing Law.................................................................... 43
Section 33. Counterparts..................................................................... 43
Section 34. Descriptive Headings............................................................. 44
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
</TABLE>
-ii-
<PAGE>
<PAGE>
RIGHTS AGREEMENT, dated as of _____ __, 1997 (the "Agreement"), between Greater
New York Bancorp Inc., a Delaware corporation (the "Company"), and The Chase
Manhattan Bank (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized the issuance of
one Right for each share of common stock, par value $1.00 per share, of the
Company (the "Common Stock") to be issued in connection with the reorganization
of the Company into a holding company for The Greater New York Savings Bank (the
"Reorganization") and has authorized the issuance of one Right (as such number
may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof)
for each share of Common Stock of the Company issued between the date of the
Reorganization (whether originally issued or delivered from the Company's
treasury) and the Distribution Date, each Right initially representing the right
to purchase one one-hundredth of a share of Junior Participating Preferred Stock
of the Company having the rights, powers and preferences set forth in the
Certificate of Incorporation, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than any employee benefit
plan of the Company or any subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan) who is a Beneficial Owner of 20% or more of the outstanding
shares of Common Stock; provided, however, that the term "Acquiring Person"
shall not include any Person who becomes the Beneficial Owner of 20% or more of
the outstanding shares of Common Stock but who acquired Beneficial Ownership
of shares of Common Stock without any plan or intention to seek or affect
control of the Company, if such Person promptly enters into an irrevocable
commitment to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting, with respect to such shares), sufficient
shares of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) so that such Person ceases to be the Beneficial
Owner of 20% or more of the outstanding shares of Common Stock. For purposes of
the foregoing, a Person engaged in business as an underwriter of securities
shall not be deemed to be the "Beneficial Owner" of, or to "beneficially own,"
any securities acquired through such Person's participation in good faith in
a firm commitment underwriting until the expiration of forty days after the
date of such acquisition.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 under the Securities and Exchange Act of 1934, as such
Rule is in effect on the date of this Agreement.
<PAGE>
<PAGE>
(c) A Person shall be deemed the "Beneficial Owner", and to have "Beneficial
Ownership" of, and to "Beneficially Own", any securities as to which such Person
or any of such Person's Affiliates or Associates is or may be deemed to be the
beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the Exchange Act, as
such Rules are in effect on the date of this Agreement, as well as any
securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange or (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made to more than ten holders of shares of
a class of stock of the Company registered under Section 12 of the Exchange Act
and pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D under the Exchange Act
(or any similar provision of a comparable or successor report). For purposes of
this Agreement, in determining the percentage of the outstanding shares of
Common Stock with respect to which a Person is the Beneficial Owner, all shares
as to which such Person is deemed the Beneficial Owner shall be deemed
outstanding.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M., New York time,
on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., New York time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock, par value $1.00 per share, of
the Company, except that "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.
(g) "Common stock equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
(h) "Current market price" shall have the meaning set forth in Section 11(D)(i)
hereof.
(i) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(j) "Distribution Date" shall have the meaning set forth in Section 3(a) hereof.
(k) "Exchange Ratio" shall have the meaning set forth in Section 24(a) hereof.
(l) "Expiration Date" shall have the meaning set forth in Section 7(a) hereof.
-2-
<PAGE>
<PAGE>
(m) "Final Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(n) "Person" shall mean any individual, firm, corporation, partnership or any
other entity.
(o) "Preferred Stock" shall mean shares of Junior Participating Preferred Stock,
$1.00 par value, of the Company, and, to the extent that there is not a
sufficient number of shares of Junior Participating Preferred Stock authorized
to permit the full exercise of the Rights, any other series of Preferred Stock,
$1.00 par value, of the Company designated for such purpose containing terms
substantially similar to the terms of the Junior Participating Preferred Stock.
(p) "Principal Party" shall have the meaning set forth in Section 13(b) hereof.
(q) "Purchase Price" shall have the meaning set forth in Section 4(a) hereof.
(r) "Redemption Price" shall have the meaning set forth in Section 23(a) hereof.
(s) "Rights" shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.
(t) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(u) "Section 11(a)(ii) Event" shall mean the event described in Section
11(a)(ii) hereof.
(v) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
(w) "Section 13 Event" shall mean any event described in clauses (x), (y) or (z)
of Section 13(a) hereof.
(x) "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
(y) "Stock Acquisition Date" shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) by the Company or an Acquiring Person
that an Acquiring Person has become such.
-3-
<PAGE>
<PAGE>
(z) "Subsidiary" shall mean, with reference to any Person, any corporation of
which an amount of voting securities sufficient to elect at least a majority of
the directors of such corporation is beneficially owned, directly or indirectly,
by such Person, or otherwise controlled by such Person.
(aa) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(bb) "Trading Day" shall have the meaning set forth in Section 11(d)(i) hereof.
(cc) "Triggering Event" shall mean any Section 11(a)(ii) Event or Section 13
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the tenth day after the
Stock Acquisition Date (or, if the tenth day after the Stock Acquisition Date
occurs before the Record Date, the close of business on the Record Date), or
(ii) the close of business on the tenth business day after the date of
commencement of a tender offer or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan), if upon consummation thereof, such Person would be the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding (the earlier of
(i) and (ii) being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company). As soon
as practicable after the Distribution Date, the Rights Agent will, at the
Company's expense, send by first-class, insured, postage prepaid mail, to each
record holder of the
-4-
<PAGE>
<PAGE>
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(p) hereof, at the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) Until the Distribution Date, the Rights will be evidenced by certificates
for the Common Stock and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in Section 7
hereof), the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock which are
issued (whether originally issued or from the Company's treasury) on and after
the date of the Reorganization but prior to the earlier of the Distribution Date
or the Expiration Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between the Greater
New York Bancorp Inc. (the "Company") and The Chase Manhattan Bank (the
"Rights Agent") dated as of _____ __, 1997 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a
-5-
<PAGE>
<PAGE>
copy of which is on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in
the form set forth in Exhibit A hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such number
of one one-hundredths of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise price per one
one-hundredth of a share, the "Purchase Price"), but the amount and type of
securities, purchasable upon the exercise of each Right and
-6-
<PAGE>
<PAGE>
the Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
such Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned manually or by facsimile signature by the
Rights Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
-7-
<PAGE>
<PAGE>
the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the Person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any Person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its shareholder services office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates,
Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e), Section 14 and
Section 24 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence
-8-
<PAGE>
<PAGE>
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the Person entitled thereto
a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part, at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earliest of (i) the
close of business on June 25, 2000 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) and (ii) being herein referred to as the "Expiration Date") or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.
-9-
<PAGE>
<PAGE>
(b) The Purchase Price for each one one-hundredth of a share of Preferred Stock
pursuant to the exercise of a Right shall initially be $24 and shall be subject
to adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights, with
the form of election to purchase and the certificate on the reverse side thereof
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-hundredth of a share of Preferred Stock (or
other shares, securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of Preferred Stock (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-hundredths of a share of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall have elected
to deposit the total number of shares of Preferred Stock issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of a
share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made by certified check, bank
draft or money order payable to the order of the Company or the Rights Agent. In
the event that the Company is obligated to issue other securities (including
Common Stock) of the Company, pay cash and/or distribute other property pursuant
to Section 11(a) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The Company reserves
the right to require
-10-
<PAGE>
<PAGE>
prior to the occurrence of a Triggering Event that, upon any exercise of Rights,
a number of Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In case the registered holder of any Rights Certificate shall exercise less
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a direct or indirect transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a direct or indirect transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless (i) such registered holder shall have (A)
completed and signed the certificate contained in the form of election to
purchase
-11-
<PAGE>
<PAGE>
set forth on the reverse side of the Rights Certificate surrendered for such
exercise, and (B) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request and (ii) all necessary
regulatory or governmental approvals or consents required by the Company or any
such registered holder, as the case may be, for the valid and legal exercise of
such Rights and the issuance of any securities or distribution of other property
upon such exercise shall have been obtained.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, as provided in this Agreement, including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) issuable and deliverable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable,
-12-
<PAGE>
<PAGE>
all shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as practicable
following the first occurrence of a Section 11(a)(ii) Event, or, if applicable,
as soon as practicable following the earliest date after the first occurrence of
a Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Securities Act of
1933 (the "Act"), with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the date
of the expiration of the Rights. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed ninety
(90) days after the date referred to in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such Jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all one one-hundredths of a share of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
-13-
<PAGE>
<PAGE>
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for a number of one one-hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than
that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number of
one one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender or until it has been established to the Company's satisfaction that no
such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights
-14-
<PAGE>
<PAGE>
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
-15-
<PAGE>
<PAGE>
(ii) Subject to Section 24 of this Agreement, in the event any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan), alone or together with its
Affiliates and Associates, shall, at any time after the Rights Dividend
Declaration Date, becomes an Acquiring Person, unless the event causing
such person to become an Acquiring Person is a transaction set forth in
Section 13(a) hereof, then, promptly following the first occurrence of
a Section 11(a)(ii) Event, proper provision shall be made so that each
holder of a Right (except as provided below and in Section 7(e) hereof)
shall thereafter have the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a share of
Preferred Stock, such number of shares of Common Stock of the Company
as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing
that product (which, following such first occurrence, shall thereafter
be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the lowest closing price (as
determined pursuant to the second sentence of Section 11(d)(i) hereof)
per share of Common Stock on any Trading Day (as defined in Section
11(d)(i) hereof) occurring within the twelve-month period immediately
preceding the date of such first occurrence (such number of shares, the
"Adjustment Shares"). (iii) In the event that the number of shares of
Common Stock which is authorized by the Company's Organization
Certificate but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall, to the
extent permitted by applicable law and regulation, and provided that
none of the following actions shall cause the Company to fail to meet
applicable capital adequacy standards of any federal or state
-16-
<PAGE>
<PAGE>
regulatory authority having jurisdiction over the capital adequacy of
the Company: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess, the "Spread"), and
(B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the
Board of Directors of the Company has deemed to have the same value as
shares of Common Stock (such shares of preferred stock, "common stock
equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the
advice of a recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated, subject to the
proviso appearing immediately before clause (A) above, to deliver, upon
the surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the
"Substitution
-17-
<PAGE>
<PAGE>
Period"). To the extent that the Company determines that some action
need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Stock on such
date.
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock) less
than the current market price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price, and the denominator of which
-18-
<PAGE>
<PAGE>
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred Stock and/or equivalent
preferred stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock and the denominator of which shall be such current
market price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
-19-
<PAGE>
<PAGE>
(d)(i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common
Stock for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
current market price per share of the Common Stock is determined during
a period following the announcement by the issuer of such Common Stock
of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of
such Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification shall not have
occurred prior to the commencement of the requisite thirty (30) Trading
Day or ten (10) Trading Day period, as set forth above, then, and in
each such case, the "current market price" shall be properly adjusted
to take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked
-20-
<PAGE>
<PAGE>
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected
by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange,
a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the fair
value per share as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(ii)For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the current
market price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section
11(d), the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement) multiplied by the current market price per
share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current
market price" per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board
-21-
<PAGE>
<PAGE>
of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market
price" of one one-hundredth of a share of Preferred Stock shall be
equal to the "current market price" of one share of Preferred Stock
divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one one-hundredths of a share of
Preferred Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in Section
11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in
-22-
<PAGE>
<PAGE>
Sections 11(b) and (c), each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a share of
Preferred Stock (calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the Purchase
Price to adjust the number of Rights, in lieu of any adjustment in the number of
one one-hundredths of a share of Preferred Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may
-23-
<PAGE>
<PAGE>
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the number
of one one-hundredths of a share of Preferred Stock issuable upon the exercise
of the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-hundredth of a share and the
number of one one-hundredths of a share which were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of one
one-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-hundredths of a share
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of one
one-hundredths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that in their good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price,
-24-
<PAGE>
<PAGE>
(iii) issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, options, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Section 27 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the event
that the Company shall at any time after the Rights Dividend Declaration Date
and prior to the Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of
-25-
<PAGE>
<PAGE>
Rights associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Section 11 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Common Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
accordance with Section 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or
-26-
<PAGE>
<PAGE>
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section 11(o) hereof),
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one one-hundredths
of a share of Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event, multiplying
the number of such one one-hundredths of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock
of such Principal Party on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13 Event.
-27-
<PAGE>
<PAGE>
(b) "Principal Party" shall mean (i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation and if no securities are so issued,
the Person that is the other party to such merger or consolidation and (ii) in
the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal Party" shall
refer to such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any such consolidation, merger, sale or
transfer unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal
-28-
<PAGE>
<PAGE>
Party and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights, except prior
to the Distribution Date as provided in Section 11(p) hereof, or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
-29-
<PAGE>
<PAGE>
(b) The Company shall not be required to issue fractions of shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock). In lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-hundredth of a share of Preferred Stock, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not be
required to issue fractions of shares of Common Stock upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common-Stock. For purposes of this Section
14(c), the current market value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Rights expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise of
a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this Agreement
are vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution Date, of
the Common Stock), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any
-30-
<PAGE>
<PAGE>
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the principal office
or offices of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or
-31-
<PAGE>
<PAGE>
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the number of one one-hundredths of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable upon the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of
-32-
<PAGE>
<PAGE>
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent, and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of
-33-
<PAGE>
<PAGE>
which the Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter (including,
without limitation, the identity of any Acquiring Person and the determination
of "current market price") be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it be responsible for
any adjustment required under the provisions of Section 11 or Section 13 hereof
or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require
-34-
<PAGE>
<PAGE>
any such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from the Chairman of the
Board, the President, or any Senior Vice President of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if there shall
be
-35-
<PAGE>
<PAGE>
reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights Agent
for exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty (30) days' notice in writing mailed to the Company, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon ten (10) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail at the Company's expense. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of ten (10) days after giving notice of such
removal, or within a period of thirty (30) days after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), as the
case may be, then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of any state of the United States so long as such corporation is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
-36-
<PAGE>
<PAGE>
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or awarded on or
prior to the Distribution Date, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the Company, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any time prior
to the earlier of (i) the close of business on the tenth day following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred
-37-
<PAGE>
<PAGE>
prior to the Record Date, the close of business on the tenth day following the
Record Date), or (ii) the Final Expiration Date, redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). The redemption of the
Rights by the Board of Directors of the Company may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a section 11(a)(ii) Event until such time as the Company's right
of redemption hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the "current market
price", as defined in Section 11(d)(i) hereof, of the Common Stock at the time
of redemption) or any other form of consideration deemed appropriate by the
Board of Directors.
(b) Effective at the time of any such redemption as provided for in Section
23(a) hereof and without any further action or notice, the right to exercise the
Rights shall terminate and each Right will thereafter represent only the right
to receive the Redemption Price in cash without interest.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any time and
from time to time on or after a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock or "common stock equivalents" (or any combination thereof) at an
exchange ratio of one share of Common Stock, or such number of "common stock
equivalents" or units representing fractions thereof as would be deemed to have
the same value as one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a
-38-
<PAGE>
<PAGE>
holder of such Rights shall be to receive that number of shares of Common Stock
and/or "common stock equivalents" equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock and/or "common stock equivalents" for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock which are authorized
by the Company's Organization Certificate but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
shares of "common stock equivalents" for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the Company shall pay
to the registered holders of Rights with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the value of a whole share of Common Stock. For purposes of this
subsection (d), the value of a whole share of Common Stock shall be the closing
price (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to this
Section 24, and the value of any "common stock equivalent" shall be deemed to
have the same value as the Common Stock on such date.
Section 25. Notice of Certain Events.
-39-
<PAGE>
<PAGE>
(a) In case the Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or merger into
or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, (i) the Company shall
as soon as practicable thereafter give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in
-40-
<PAGE>
<PAGE>
the preceding paragraph to Preferred Stock shall be deemed thereafter to refer
to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights Certificate to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
Greater New York Bancorp Inc.
One Penn Plaza
New York, New York 10119
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The Chase Manhattan Bank
Attention: [ ]
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights
-41-
<PAGE>
<PAGE>
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person,
or an Affiliate or Associate of an Acquiring Person); provided, however, this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date, the Purchase Price, or the number of one one-hundredths
of a share of Preferred Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the
-42-
<PAGE>
<PAGE>
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors. Without limiting the foregoing,
if any provision requiring that a determination be made by less than the entire
board is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be made by the
entire board.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all
-43-
<PAGE>
<PAGE>
such counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
-44-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: GREATER NEW YORK BANCORP INC.
By __________________________ By ___________________________
Name: Name: Gerald C. Keegan
Title: Assistant Secretary Title: Chairman and Chief
Executive Officer
Attest: THE CHASE MANHATTAN BANK
By __________________________ By ___________________________
Name: Name:
Title: Title:
-45-
<PAGE>
<PAGE>
Exhibit A
[Form of Rights Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER JUNE 25, 2000 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
GREATER NEW YORK BANCORP INC.
This certifies that , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and condition of the Rights Agreement, dated as
of April __, 1997 (the "Rights Agreement"), between Greater New York Bancorp
Inc. (the "Company") and The Chase Manhattan Bank (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M. (New York City time) on
June 25, 2000 at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of a fully paid,
nonassessable share of Junior Participating Preferred Stock (the "Preferred
Stock") of the Company, at a purchase price of $24 per one one-hundredth of
- ---------------------
1 The portion of the legend in brackets shall be
inserted only if applicable and shall replace the
preceding sentence.
A-1
<PAGE>
<PAGE>
a share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of April __, 1997, based on the Preferred Stock as constituted at such
date. The Company reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights Agreement) that a number
of Rights be exercised so that only whole shares of Preferred Stock will be
issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and kind
of shares of Preferred Stock or other securities, which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company or the
Rights Agent.
A-2
<PAGE>
<PAGE>
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the shareholder services office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to the earlier of the close of
business on (a) the tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and (b) the Final
Expiration Date or (ii) may be exchanged in whole or in part for shares of the
Company's Common Stock, par value $1.00 per share, and/or other equity
securities of the Company deemed to have the same value as shares of Common
Stock, at any time after a Section 11(a)(ii) Event.
No fractional shares of Preferred Stock will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise.
A-3
<PAGE>
<PAGE>
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
A-4
<PAGE>
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal.
Dated as of ____________ __, 1997
ATTEST:GREATER NEW YORK BANCORP INC.
__________________By______________________
Secretary Title:
Countersigned:
THE CHASE MANHATTAN BANK
_________________________
By_______________________
Authorized Signature
A-5
<PAGE>
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto __________________
___________________________________________________________
(Please print name and address of transferee and insert
social security or other identifying number)
___________________________________________________________
this Rights Certificate, together with all right title and interest therein, and
does hereby irrevocably constitute and appoint __________ Attorney, to transfer
the within Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ____________________, 19__
_________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did
[ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _______________, 19______________________________
Signature
A-6
<PAGE>
<PAGE>
Signature Guaranteed:
NOTICE
The Signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
A-7
<PAGE>
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: GREATER NEW YORK BANCORP INC.
The undersigned hereby irrevocably elects to exercise _____ Rights represented
by this Rights Certificate to purchase the shares of Preferred Stock issuable
upon the exercise of the Rights (or such other securities of the Company or of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of and
delivered to:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
A-8
<PAGE>
<PAGE>
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
____________________________________________________________
Dated: ______________, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did
[ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: _______________, 19__ ________________________
Signature
Signature Guaranteed:
A-9
<PAGE>
<PAGE>
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-10
<PAGE>
<PAGE>
March 11, 1997
Greater New York Bancorp Inc.,
One Penn Plaza,
New York, New York 10119.
Dear Sirs:
In connection with the registration under the Securities Act of 1933
(the "Act") of 13,850,000 shares (the "Common Shares") of Common Stock, par
value $1.00 per share (the "Common Stock"), of Greater New York Bancorp Inc., a
Delaware corporation (the "Company"), 1,536,391 shares (the "Preferred Shares")
of Series A ESOP Convertible Preferred Stock, par value $1.00 per share, of the
Company, the shares of Common Stock initially issuable upon conversion of the
Preferred Shares (the "Conversion Common Shares"), and the stock purchase rights
related to the Common Shares and the Conversion Common Shares (the "Rights") to
be issued pursuant to a Rights Agreement (the "Rights Agreement"), to be entered
into between the Company and The Chase Manhattan Bank, as Rights Agent (the
"Rights Agent"), we, as your counsel, have examined such corporate records,
certificates
<PAGE>
<PAGE>
Greater New York Bancorp Inc. -2-
and other documents, and such questions of law, as we have considered necessary
or appropriate for the purposes of this opinion. Upon the basis of such
examination, we advise you that, in our opinion:
(1) When the registration statement relating to the Common
Shares, the Preferred Shares, the Conversion Common Shares and the
Rights (the "Registration Statement") has become effective under the
Act, and the Common Shares and the Preferred Shares have been duly
issued and exchanged as contemplated by the Registration Statement,
the Common Shares and the Preferred Shares will be validly issued,
fully paid and nonassessable, and the Conversion Common Shares, when
duly issued upon conversion of the Preferred Shares, will be validly
issued, fully paid and nonassessable.
(2) Assuming that the Rights Agreement has been duly
executed and authorized by the Company and duly authorized, executed
and delivered by the Rights Agent, then when the Registration
Statement has become effective under the Act, the Common Shares have
been validly issued and exchanged as contemplated by the Registration
Statement and the Conversion Common Shares have been validly issued
upon conversion of the
<PAGE>
<PAGE>
Greater New York Bancorp Inc. -3-
Preferred Shares, the Rights attributable thereto will be validly
issued.
In connection with our opinion set forth in paragraph (2) above, we
note that the question whether the Board of Directors of the Company might be
required to redeem the Rights at some future time will depend upon the facts and
circumstances existing at that time and, accordingly, is beyond the scope of
such opinion.
The foregoing opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State of Delaware, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.
We have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by us to be
responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
<PAGE>
Exhibit 8
March 11, 1997
Greater New York Bancorp Inc.,
One New York Plaza,
New York, New York 10119.
Ladies and Gentlemen:
As tax counsel to Greater New York Bancorp Inc. (the
"Corporation") in connection with the transactions contemplated by the
Registration Statement on Form S-4, dated February 20, 1997, as amended by
Amendment No. 1 to Form S-4, included therein (as so amended, the "Registration
Statement"), we have examined the Proxy Statement/Prospectus dated March 11,
1997 (the "Proxy Statement/Prospectus") and such questions of law as we have
considered necessary or appropriate for the purpose of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion, the statements of Federal income tax law under the heading "Tax
Consequences of the Reorganization" in the Proxy Statement/Prospectus, subject
to the limitations therein described, are correct in all material respects as of
the date hereof.
<PAGE>
<PAGE>
Greater New York Bancorp Inc. -2-
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the references to us under the heading "Tax
Consequences of the Reorganization" in the Proxy Statement/Prospectus. In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
<PAGE>
EXHIBIT 12
THE GREATER NEW YORK SAVINGS BANK
COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
EARNINGS:
1. Income (loss) before income taxes and cumulative
effect of accounting change................... $ 29,546 $(20,261) $ 9,951 $(25,408) $ 14,496
2. ADD: Fixed charges (Line 12).................... 105,594 110,990 93,780 97,340 130,925
3. LESS: Equity in undistributed income (loss) of
unconsolidated subsidiaries and affiliates.... 32 84 (99) 157 --
-------- -------- -------- -------- ---------
4. Earnings including interest on deposits......... 135,108 90,645 103,830 71,775 145,421
5. LESS: Interest on deposits...................... 66,806 69,069 61,266 71,854 107,815
-------- -------- -------- -------- ---------
6. Earnings excluding interest deposits............ $ 68,302 $ 21,576 $ 42,564 $ (79) $ 37,606
-------- -------- -------- -------- ---------
-------- -------- -------- -------- ---------
PREFERRED STOCK DIVIDEND REQUIREMENTS:
7. Preferred stock dividend requirements........... $ 7,211 $ 7,710 $ 7,317 $ 1,816 $ 1,848
8. Pro forma tax gross up(a)....................... 6,118 6,541 6,208 1,541 1,568
-------- -------- -------- -------- ---------
9. Preferred stock dividend requirements on a
pretax basis.................................. $ 13,329 $ 14,251 $ 13,525 $ 3,357 $ 3,416
-------- -------- -------- -------- ---------
-------- -------- -------- -------- ---------
FIXED CHARGES:
10. Interest expense................................ $104,577 $109,994 $ 92,766 $ 96,223 $ 129,826
11. Estimated interest component of net rental
expense....................................... 1,017 996 1,014 1,117 1,099
-------- -------- -------- -------- ---------
12. Total fixed charges............................. 105,594 110,990 93,780 97,340 130,925
13. ADD: Preferred stock dividend requirements (Line
9)............................................ 13,329 14,251 13,525 3,357 3,416
-------- -------- -------- -------- ---------
14. Total combined fixed charges and preferred stock
dividend requirements on a pretax basis....... 118,923 125,241 107,305 100,697 134,341
15. LESS: Interest on deposits (Line 5)............. (66,806) (69,069) (61,266) (71,854) (107,815)
-------- -------- -------- -------- ---------
16. Combined fixed charges and preferred stock
dividend requirements on a pretax basis
excluding interest on deposits................ $ 52,117 $ 56,172 $ 46,039 $ 28,843 $ 26,526
-------- -------- -------- -------- ---------
-------- -------- -------- -------- ---------
CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(B):
Including interest on deposits
(Line 4/Line 14)............................. 1.14 0.72 0.97 0.71 1.08
-------- -------- -------- -------- ---------
-------- -------- -------- -------- ---------
Excluding interest on deposits
(Line 6/Line 16)............................. 1.31 0.38 0.92 * 1.42
-------- -------- -------- -------- ---------
-------- -------- -------- -------- ---------
</TABLE>
- ------------
* Not meaningful
(a) Represents a tax equivalent adjustment to reflect the preferred stock
dividend requirements on a pretax basis.
(b) Upon the formation of the holding company (Greater New York Bancorp Inc.),
the consolidated ratios shown will represent the consolidated ratios of
Greater New York Bancorp Inc.
<PAGE>
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF GREATER NEW YORK BANCORP INC.
1. The Greater Interim Savings Bank, a New York State-chartered capital stock
savings bank (in formation)
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
The Greater New York Savings Bank:
We consent to incorporation by reference in this Registration Statement dated
March 11, 1997 of Pre-Effective Amendment No. 1 to Form S-4 of Greater New York
Bancorp Inc. of our report dated January 23, 1997, related to the consolidated
statements of financial condition of The Greater New York Savings Bank and
Subsidiaries as of December 31, 1996 and 1995 and the related consolidated
statements of income, changes in stockholders' equity and cash flows for each
of the years in the three-year period ended December 31, 1996 which report is
included in the Annual Report to Stockholders of The Greater New York Savings
Bank for the year 1996 which report has been incorporated by reference in the
December 31, 1996 annual report on Form F-2 of The Greater New York Savings
Bank. We also consent to the reference to our firm under the heading "Experts"
in this Registration Statement.
KPMG Peat Marwick LLP
New York, New York
March 10, 1997
<PAGE>
<PAGE>
Consent of Persons
About to Become Directors
Pursuant to Rule 438 of the Securities Act of 1933, as amended,
the undersigned hereby consent to being named in the Registration Statement
on Form S-4 of Greater New York Bancorp Inc. (the "Registrant"), filed
February 20, 1997, as persons who are about to become directors of the
Registrant.
IN WITNESS WHEREOF, the undersigned have signed this consent this
th day of March, 1997.
/s/ Gwendolyn Calvert Baker /s/ C. Stephen Connolly
- ---------------------------- ---------------------------
Gwendolyn Calvert Baker C. Stephen Connolly
/s/ Peter C. Haeffner, Jr. /s/ Nicholas A. Marshall
- ---------------------------- ---------------------------
Peter C. Haeffner, Jr. Nicholas A. Marshall
/s/ William F. de Neergaard /s/ James G. Peel
- ---------------------------- ---------------------------
William F. de Neergaard James G. Peel
/s/ Philip F. Ruppel /s/ George H. Sorter
- ---------------------------- ---------------------------
Philip F. Ruppel George H. Sorter
/s/ William F. Ward
- ----------------------------
William F. Ward
<PAGE>
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN ITEM 1 AND FOR THE PROPOSALS
IN ITEMS 2 AND 3.
Please mark your votes as indicated in this example [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN ITEM 1
AND "FOR" ITEMS 2 AND 3.
1-Election of Directors. Nominees for a three year term:
Gerard C. Keegan, Nicholas A. Marshall, Peter C. Haeffner, Jr.
For all Nominees (except Withhold for all
as otherwise indicated) Nominees
[ ] [ ]
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
______________________________________________________________
2-Approval of the Proposed FOR AGAINST ABSTAIN
Agreement and Plan of
Reorganization. [ ] [ ] [ ]
3-Ratification of Appointment of
KPMG Peat Marwick LLP as inde-
pendent Auditors for the Bank. [ ] [ ] [ ]
In their discretion, the proxies are authorized to vote upon such other business
as may come before the Annual Meeting and any adjournments thereof.
I PLAN TO ATTEND THE ANNUAL MEETING [ ]
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND A PROXY
STATEMENT/PROSPECTUS FOR THE ANNUAL MEETING.
____________________
SIGNATURE____________________SIGNATURE________________________DATE______________
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. ANY OWNER OF
SHARES HELD JOINTLY MAY SIGN THIS PROXY. IF SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE INCLUDE YOUR FULL TITLE. CORPORATE
PROXIES SHOULD BE SIGNED BY AN AUTHORIZED OFFICER.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
IMPORTANT
THE GREATER NEW YORK SAVINGS BANK
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 1997
Dear Stockholder:
YOUR SHARES CANNOT BE VOTED ON CERTAIN PROPOSALS
UNLESS YOU GIVE YOUR SPECIFIC INSTRUCTIONS
Please give your voting instructions by signing and returning this form of
proxy. Your vote is important, regardless of the number of shares that you own.
A REPLY IS NECESSARY TO VOTE YOUR SHARES
PLEASE ACT PROMPTLY
<PAGE>
<PAGE>
REVOCABLE PROXY
This Proxy is solicited on behalf of the Board of Directors of The Greater New
York Savings Bank for the Annual Meeting of Stockholders to be held on Friday,
April 25, 1997.
The undersigned stockholder of The Greater New York Savings Bank (the "Bank")
hereby appoints Carol Ann Solferino and Michele M. Kelly, or either of them,
with full powers of substitution, to attend and act as proxy for the undersigned
and to vote at the Annual Meeting of Stockholders (the "Annual Meeting") to be
held at The Grand Prospect Hall, 263 Prospect Avenue, Brooklyn, New York 11215,
on April 25, 1997, at 10:00 a.m., and at any adjournments thereof.
Please sign and date this Proxy on the reverse side and return it in the
enclosed envelope.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<PAGE>
FEDERAL DEPOSIT INSURANCE CORPORATION
Washington, D.C. 20429
FORM F-2
ANNUAL REPORT UNDER SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1996
FDIC Insurance Certificate No. 16015-6
THE GREATER NEW YORK SAVINGS BANK
----------------------------------
(Exact name of bank as specified in its charter)
One Penn Plaza, New York, NY 10119 New York
- ------------------------------------- -------------------------------
(Address of Administrative Office) (State or other jurisdiction of
incorporation or organization)
11-0754650 (212) 613-4000
- ------------------------------------- -------------------------------
(I.R.S. Employer Identification No.) (Bank's telephone number,
including area code)
Securities registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934:
(Title of Each Class)
Common Stock, $1.00 par value per share
---------------------------------------
12% Noncumulative Perpetual Preferred Stock, Series B
(Liquidation Preference $25 per share; $1.00 par value per share)
------------------------------------------------------
Junior Participating Preferred Stock Purchase Rights
----------------------------------------------------
Indicate by check mark if the bank, as a "small business issuer" as defined
under 17 CFR 240.12b-2, is providing alternative disclosures as permitted for
small business issuers in this Form F-2. [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 10 is
not contained herein, and will not be contained, to the best of the Bank's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form F-2 or any amendment of this Form F-2. [ ]
Indicate by check mark whether the Bank (1) has filed all reports required to be
filed by Section 13 of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Bank was required to file such
reports): Yes XX No ; and (2) has been subject to such filing requirements for
the past 90 days: Yes XX No. __.
As of February 28, 1997, the aggregate market value of the 13,248,893 shares of
Common Stock of the Bank issued and outstanding on such date, which excludes
369,077 shares held by all directors and executive officers as a group, was
$208,670,065. This value is based on the closing price of $15.75 per share of
the Bank's Common Stock on February 28, 1997.
The number of shares outstanding of the Bank's Common Stock as of February 28,
1997 is 13,617,970.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
PARTS I and II
- --------------
Portions of the 1996 Annual Report to Stockholders.
PARTS I AND II
- --------------
Portions of the Proxy Statement/Prospectus for the 1997 Annual Meeting of
Stockholders, dated March 14, 1997.
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
1996 ANNUAL REPORT ON FORM F-2
TABLE OF CONTENTS
Page
----
PART I
Item 1 Business ........................................................ 1
General ...................................................... 1
The Bank's Competitive Strategy .............................. 3
Market Area .................................................. 5
Lending Activities ........................................... 5
Nonperforming Assets and Allowances for Loan and Real
Estate Losses ............................................. 8
Troubled Debt Restructurings and Impaired Loans .............. 9
Securities ................................................... 9
Interest Rate Sensitivity .................................... 10
Liquidity and Capital Resources .............................. 10
Savings Banks Life Insurance ................................. 11
Subsidiaries ................................................. 11
Taxation ..................................................... 13
Personnel .................................................... 14
Regulation and Supervision ................................... 14
Item 2 Properties ..................................................... 16
Item 3 Legal Proceedings .............................................. 18
Item 4 Security Ownership of Certain Beneficial Owners and Management . 18
PART II
Item 5 Market for the Bank's Common Stock and Related Security
Holder Matters ............................................ 18
Item 6 Selected Financial Data ........................................ 18
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................... 18
Item 8 Financial Statements and Supplementary Data .................... 19
PART III
Item 9 Directors and Principal Officers of the Bank ................... 24
Item 10 Management Compensation and Transactions ....................... 26
PART IV
Item 11. Exhibits, Financial Statement Schedules and Reports on Form F-3 26
Signatures ............................................................. 29
<PAGE>
<PAGE>
PART I
ITEM 1. BUSINESS
- -----------------
General
The Greater New York Savings Bank and Subsidiaries (the Bank) is a New
York State-chartered, stock savings bank which was originally organized as a New
York State-chartered, mutual savings bank in 1897 in the Park Slope section of
Brooklyn, New York. At December 31, 1996, the Bank had total assets of $2.54
billion, deposits of $1.67 billion, borrowed funds of $640.4 million and
stockholders' equity of $209.6 million.
In January 1997, the Bank announced its intention to form a holding
company, which is subject to the required regulatory and shareholder approvals.
Under this proposal, Greater New York Bancorp Inc. will become the holding
company for the Bank. All the outstanding common and preferred stock of the Bank
will be converted, on a one-for-one basis, into all of the outstanding common
and preferred stock of Greater New York Bancorp Inc. After reorganization, the
Bank will continue its existing business as a subsidiary of Greater New York
Bancorp Inc. The consolidated capitalization, assets, liabilities, net income,
stockholders' equity and financial statements of Greater New York Bancorp Inc.
immediately following the reorganization will be the same as those of the Bank
prior to the reorganization. The holding company is expected to provide the Bank
with increased flexibility in the pursuit of its strategic objectives.
As of December 31, 1996, the Bank conducted its retail banking
activities through 14 full-service branch offices, nine of which were located in
Brooklyn, New York, three in Nassau County, New York, and one each in Queens and
Suffolk counties, New York. The Bank expects to open additional full-service
branches in Brooklyn during 1997. The Bank has its administrative headquarters
in Manhattan and its lending office in Mineola, New York. At December 31, 1996,
the Bank had average deposits per branch of $119 million and 80% of its total
deposits were derived from its Brooklyn branches. In Brooklyn, the Bank's
established branches averaged approximately $160 million in deposits. The Bank's
deposits are insured by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation (FDIC). In addition, the Bank is a member of the Federal Home Loan
Bank (FHLB) system.
The Bank's principal business consists of attracting retail deposits
from the general public and investing those deposits, together with funds from
borrowings, in mortgage loans and securities. The Bank also earns noninterest
income, such as customer service charges, fees from originating and servicing
loans and fees from the sale of third-party investment products.
The Bank's primary lending efforts during the last several years have
been focused on residential lending. This effort has included: the introduction
of new loan products;
1
<PAGE>
<PAGE>
new mortgage centers; additional loan representatives, processors and
underwriters; the use of mortgage brokers; and increased advertising. In order
to facilitate the management of interest rate risk, adjustable-rate and
medium-term residential mortgage and cooperative loans are originated for the
Bank's portfolio, while longer-term, fixed-rate loans are predominantly
originated for sale into the secondary market. In 1996, 1995 and 1994, the
Bank's 1-4 family and cooperative loan originations totaled $128 million, $66
million and $59 million, respectively. In determining whether to originate
loans, management considers, among other things, yields earned on alternative
investments, such as mortgage-backed securities. The Bank generally originates
new loans that are profitable on a risk-adjusted basis in comparison to an
alternative security investment.
For 1996, the Bank had net income of $18.5 million, or $.77 per fully
diluted common share, compared to $19.2 million, or $.80 per share, in 1995.
Results for 1996 included $11.0 million of net tax expense, whereas net income
for 1995 included $39.5 million of net tax benefits. The Bank became taxable in
1996 for financial statement purposes due to the recognition of a substantial
amount of its deferred tax asset in 1995.
Earnings before taxes rose to $29.5 million in 1996, from a pre-tax loss
of $20.3 million in 1995. Much of the improvement was due to substantial
reductions in the combined provision for loan and real estate losses and
expenses for nonperforming loan and real estate activities. The Bank also
experienced increased fee income in 1996 from investment product sales and
banking services. In recognition of the substantial improvements in the Bank's
financial results and condition over the last several years, in December 1996,
the Bank paid its first common dividend since 1990 of $.05 per share.
The combined provision for loan and real estate losses declined to $2.0
million in 1996, from $47.1 million in 1995. The provision for 1995 included
approximately $36 million related to the rapid disposition strategy initiated in
the fourth quarter, which was successful in reducing the Bank's nonperforming
assets by nearly $78 million since its inception. Expenses for nonperforming
loan and real estate activities also fell sharply from $8.4 million in 1995, to
$3.5 million in 1996, or a 59% decline. Other noninterest expenses aggregated
$48.2 million in 1996, compared to $47.5 million in 1995, or an increase of 1%.
The Bank's net interest margin improved slightly to 3.02% in 1996, from
2.98% in 1995, while net interest and dividend income amounted to $72.4 million
in 1996, unchanged from 1995. The Bank's one-year interest rate sensitivity gap
improved from a negative 5.7% at December 31, 1995, to a negative 0.2% at
December 31, 1996. Noninterest income amounted to $10.8 million in 1996,
compared to $10.4 million in 1995. Noninterest income for 1996 included gains
aggregating $2.3 million from the sale of mortgage servicing rights and student
loans, whereas the income for 1995 included $2.7 million realized from the
prepayment of a large commercial real estate loan. Fees from investment product
sales and other banking services together increased by $1.1 million over 1995.
2
<PAGE>
<PAGE>
Asset quality continued to improve as nonperforming assets fell to $45.6
million, or 1.79% of total assets, at year-end 1996, from $55.8 million, or
2.16%, at December 31, 1995. Loans categorized as troubled debt restructurings
also declined from $195.1 million at December 31, 1995, to $155.5 million at
December 31, 1996. Net loan and real estate chargeoffs for 1996 declined to $8.8
million, from $48.8 million in 1995. A substantial portion of the chargeoffs was
attributable to the rapid disposition strategy.
At December 31, 1996, the combined allowance for loan and real estate
losses amounted to $20.5 million, compared to $27.3 million at December 31,
1995. The combined allowance (excluding reserves attributable to real estate
held for development) represented 42% of nonperforming assets at December 31,
1996, compared to 46% at year-end 1995.
Stockholders' equity to total assets improved to 8.25% at December 31,
1996, from 7.59% at year-end 1995. At the same time, book value per common share
rose to $11.31 at December 31, 1996, from $10.55 a year ago. The Bank's
regulatory Tier 1 leverage and total risk-based capital ratios increased to
7.06% and 14.62%, respectively, at December 31, 1996, from 6.02% and 11.98% at
December 31, 1995.
The Bank's Competitive Strategy
The Bank considers its greatest strength to be its branch network.
Almost all of the Bank's branches, particularly in Brooklyn, New York, have
long-established relationships within their communities. For a century, the Bank
has positioned itself as a community-based bank relying on quality service as
well as community outreach and involvement to maintain its standing in the
industry. The Bank seeks to differentiate itself from its competitors through
the extra measures taken to solidify its community relationships. Many branches
are located in large ethnic communities. The Bank services the Portuguese,
Orthodox Jewish, Russian, African-American, Haitian and Hispanic communities,
among others, by advertising in ethnic publications. Additionally, individuals
who are typically residents of the communities served by the Bank and have
foreign language skills are actively recruited by the Bank to meet the specific
needs of depositors. The Bank also produces its product brochures in five
foreign languages and branch personnel can currently speak over 30 foreign
languages. The Bank also routinely makes available, at no cost, meeting rooms to
community groups for meetings or seminars.
As part of its community involvement, The Greater Housing Grant Program
awards grants to local community development organizations that are working to
promote home ownership opportunities for low-to-moderate income families. These
organizations help stabilize neighborhoods by developing new housing,
rehabilitating existing housing, providing consumer education and credit
counseling, and making credit available to prospective home buyers. The Greater
Housing Grant Program has awarded a total of $150,000 in grants to various
community development groups in Brooklyn, Queens and
3
<PAGE>
<PAGE>
on Long Island since its inception in 1994.
The Greater also has a Kids' Bank Program, an in-school educational
program designed to teach children about money and the benefits of saving. The
Kids' Bank has reached 108 classes in 59 neighborhood schools since its
inception in 1994. The program is centered around providing fourth grade
students with textbooks and lesson plans that are integrated into the schools'
math and social studies curriculum. As part of the program, the Bank also opens
a Kids' Bank account with a small deposit for each child. The program has
attracted over 14,000 accounts and a total of nearly $5 million in deposits.
The Bank strives to provide its customers with courteous and
professional service. The Bank offers an array of flexible deposit products and
services as well as a wide range of residential lending programs. Retail deposit
products include checking, savings and certificate of deposit accounts, along
with money-market and business checking accounts. In addition, beginning in
September 1996, credit cards are offered through a third-party bank. The
Bank's lending programs are designed to meet its customers' individual needs,
whether they are buying their first home or refinancing their existing mortgage.
Home mortgage loans include a number of programs with low down-payment plans,
including FNMA, FHA, VA and SONYMA loans. Five of the Bank's six mortgage loan
centers are located in the branch offices where knowledgeable loan
representatives accept and process mortgage applications. The Bank also
maintains a strong relationship with a number of mortgage brokers in the greater
New York area.
In addition to the aforementioned products, the Bank offers a variety of
banking and financial brokerage services to assist its customers to meet their
financial needs through the Bank. Third-party mutual funds and annuities are
offered through a subsidiary of the Bank.
Each of the Bank's branch offices have modernized customer service areas
and one or more state-of-the-art Automated Teller Machines (ATMs) at which
depositors can process routine transactions. These machines accommodate five
foreign languages and have full-color graphics and other features. All but one
branch offers full-service safe deposit vault services. The Bank is also a
member of the NYCE and CIRRUS ATM networks which provide depositors with access
to ATM banking on a regional, national and international level. At December 31,
1996, the Bank had 27 ATMs in its branch network and two off-site ATMs at the
Broadway Mall in Hicksville, Long Island.
Branch service hours typically reflect the needs of the community.
Saturday hours are offered at eleven branches, Sunday hours are offered at two
branches and extended limited service, early-morning or evening hours are
offered at all branches. Automated telephone banking also permits depositors to
verify balances, transfer funds between accounts and determine the status of
personal checks on a 24-hour basis.
During 1997, the Bank plans to open additional full-service branches in
Brooklyn, New York. The branches will offer a full array of deposit products,
residential, student
4
<PAGE>
<PAGE>
and home equity loans, safe deposit boxes and 24-hour ATMs. The Bank believes
that its strategy of differentiating itself through community visibility and
superior service is responsible for generating its large base of core, low-cost
deposits.
Market Area
The Bank's depositor base is drawn from its branch network located in
Brooklyn, Queens, and Nassau and Suffolk counties on Long Island, New York. The
deposit base of the Bank has a direct relationship to the proximity of its
branch office facilities. The Bank considers its primary mortgage lending area
as encompassing the New York metropolitan area, particularly the communities
where the Bank's branches are located and also in Manhattan.
Lending Activities
In originating loans, the Bank competes with savings banks, savings and
loan associations, credit unions, mortgage companies, commercial banks and other
financial services firms. In attracting borrowers, the Bank relies on:
marketing; competitive pricing and variety of the loan products it offers; and
quality customer service (such as providing knowledgeable loan representatives
and timely processing of loan applications). In addition, the Bank also
originates loans through a network of mortgage brokers, which contributed
significantly to the Bank's volume of originations in 1996. The volume and types
of loans originated by the Bank are affected primarily by: management's
perception of the demand, credit risk and profitability of various types of real
estate financing; the availability of funds; the Bank's portfolio needs and its
ability to sell loans in the secondary mortgage market; as well as other
factors, such as competition and general economic conditions.
Over the last several years, the Bank's investment in securities has
increased from 45% of total assets at December 31, 1994, to 55% at December 31,
1996, while its loan portfolio to total assets has decreased from 46% to 37%
during the same timeframe. This shift is due to various factors. First, the low
interest rate environment caused a larger than normal amount of prepayments of
higher-yielding commercial real estate and multi-family loans in 1995 and 1996.
Second, in order to reduce its exposure to commercial real estate loans, the
Bank has not made such loans since 1990 (other than loans to finance sales of
foreclosed real estate or to convert maturing construction advances to permanent
financing). In addition, only a modest amount of new multi-family loans have
been originated in the last several years, due to the reduced profitability of
such lending resulting from competitive pricing practices. In determining
whether to originate loans, the Bank considers, among other things, whether the
new loan can earn a risk-adjusted return that is greater than an alternative
security investment. Third, despite a significantly higher level of 1-4 family
and cooperative loan originations over the last two years, the low rate
environment caused a relatively large number of these originations to be of the
long-term, fixed-rate variety, which the Bank normally sells into the secondary
market.
5
<PAGE>
<PAGE>
Finally, a substantial portion of the student loan portfolio was sold in 1996
due to reduced profitability resulting from legislative changes that have
increased the servicing costs associated with such loans.
The lower level of loans receivable (particularly higher-yielding
commercial real estate and multi-family loans) has adversely impacted the Bank's
net interest margin. However, such impact has been largely offset by increases
in the ratio of the Bank's interest-earning assets to interest-bearing
liabilities resulting from the investment of funds generated from operations and
sales of nonperforming assets. The level and type of earning assets directly
impacts the related amounts of interest and fee income to be recognized in
future periods. The Bank expects its residential loan originations, including
its multi-family lending, to increase in 1997 from 1996 levels.
Residential Lending. The Bank's residential lending consists of a full
range of fixed- and adjustable-rate loan products that are originated through
six retail mortgage loan centers and a network of mortgage brokers. The loan
centers are located in the Bank's branches at Sheepshead Bay (Brooklyn), Park
Slope (Brooklyn), Church Avenue (Brooklyn), 13th Avenue (Brooklyn), Mineola
(Nassau county) and Medford (Suffolk county).
The Bank's fixed-rate residential loan originations (FRMs) are normally
sold into the secondary market. Conforming FRMs are sold to either FNMA or
FHLMC, while jumbo loans are sold to other investors. From time-to-time, the
Bank will retain 10- and 15-year FRMs for portfolio. The Bank's adjustable-rate
loan originations (ARMs) are retained for its portfolio. Periodically,
conforming ARMs may be securitized with FNMA or FHLMC. The repricing of ARMs is
based predominantly on a fixed margin mainly over the weekly average yield on
U.S. Treasury securities, adjusted to a constant maturity of one- three- or
five-year terms (depending upon the type of ARM). These loans generally carry
periodic and lifetime interest rate caps (limitations of increases and decreases
in the interest rate) of 2% and 6%, respectively. The Bank has never offered any
loans with a negative amortization feature.
The Bank's underwriting procedures require an appraisal of the property
securing the loan for the purpose of ascertaining the loan-to-value ratio (i.e.,
the ratio that the original principal amount of the loan bears to the lower of
the purchase price or appraised value of the property securing the loan at the
time of origination) and the property's adequacy as security. Such appraisals
conform to the appraisal standards of FNMA and FHLMC. Appraisals are generally
performed by independent appraisers who meet the Bank's requirements and are
reviewed and approved by the Bank's Appraisal Department.
Under its residential lending program, the Bank also offers home equity
loans in the form of a line of credit for which the security is generally a
second mortgage. These loans have adjustable interest rates that, after an
introductory period, are based on a fixed margin over the prime lending rate.
6
<PAGE>
<PAGE>
Multi-Family and Commercial Real Estate Lending. Commencing in 1990, the
Bank curtailed new commercial real estate and multi-family lending and
redirected its resources towards the reduction of nonperforming assets and the
extension and modification of maturing and existing loans. In 1996, the Bank
expected to begin a multi-family lending effort concentrated in communities that
are well known by the Bank (such as Manhattan, Brooklyn and Queens). However,
due to competitive pricing practices, the profitability from such lending
declined. As a result, the Bank's volume of originations were insignificant
during 1996. The Bank is currently not offering commercial real estate loans.
The Bank has a Commercial Mortgage Department which includes a team of
loan officers whose responsibility is to originate new multi-family loans that
are profitable on a risk-adjusted basis as well as to monitor the Bank's
performing commercial real estate and multi-family loan portfolio with an
objective of timely identification of problem loans. In addition, new loans are
also subject to an independent analysis by the Bank's Credit Quality Department.
The Bank's underwriting process with respect to multi-family loans is
designed to require that actual or anticipated cash flow from the underlying
property will be more than sufficient to cover operating expenses and debt
service payments. Loan-to-value ratios on new loans made by the Bank do not
exceed 75% and the property's debt service coverage is at least 125%. New
mortgage loans on multi-family properties are normally originated for terms of
no more than 10 years with interest rates that reset predominantly at the end of
five years or less, based on a fixed margin mainly over the weekly average yield
on U.S. Treasury securities, adjusted to a constant maturity of five years.
At December 31, 1996, the Bank's mortgage loan portfolio was
concentrated in commercial real estate and multi-family loans. Commercial real
estate loans included loans made for the acquisition and refinancing of office
buildings, shopping centers and industrial and warehouse properties. The Bank
also participated, to a lesser extent, in commercial real estate loans
originated by other banks. With respect to certain large loans originated by the
Bank, the Bank offered participation to other lenders while retaining the
servicing of such loans. Multi-family property loans consist primarily of loans
for the acquisition or refinancing of rental and cooperative apartment
buildings.
Consumer Lending. The focus of the Bank's consumer lending business is
student lending. The Bank has been a participant in the New York State
Guaranteed Student Loan Program since 1968. The Bank markets its student loan
programs primarily through high school guidance counselors, college financial
aid offices, high school newspapers and branch advertising. The Bank also seeks
to develop relationships with major colleges and universities in its market
area. In October 1996, the Bank sold $34.4 million of student loans
(representing substantially all of this portfolio) for a gain of $0.7 million.
Due to legislative changes, the costs associated with servicing these loans has
increased. As a result, management concluded that the benefits of a sale
exceeded the future profitability
7
<PAGE>
<PAGE>
from continuing to hold these loans for portfolio. The Bank continues to
originate student loans with the intention of selling them into the secondary
market.
Loan Fees. The Bank derives various fees from its lending activities,
including loan commitment, origination and processing fees. The Bank also
derives fees and charges related to existing loans, which include prepayment
fees, late charges and satisfaction fees. Many of these fees vary with the
volume and type of loans originated and with competitive conditions in the
mortgage markets. The Bank also generates gains and losses on sales of loans
originated for sale into the secondary market.
Loan Servicing. As a loan servicer, the Bank receives fees from the
loans it services for investors. Additionally, the Bank earns interest on
insurance premiums and tax payments paid into escrow accounts by the borrower
and on loan payments held by the Bank before being remitted to the investor.
In September 1996, the Bank was able to benefit from favorable market
conditions by selling servicing rights on $185 million of residential loans
serviced for investors (which represented a substantial portion of this
portfolio) for a gain of $1.5 million. The sale included a majority of servicing
rights capitalized under SFAS No. 122, "Accounting for Mortgage Servicing
Rights," which had a net carrying value of $0.6 million. At December 31, 1996,
loans serviced for investors aggregated $84.8 million, compared to $292.5
million at December 31, 1995. Currently, the Bank intends to either sell its new
loans originated for sale into the secondary market on a servicing-released
basis (rather than a servicing-retained basis as was the case previously), or
periodically sell any retained servicing rights based on market conditions. As a
result, fee income from servicing loans (which approximated $1.0 million in
1996, $1.1 million in 1995 and $1.2 million in 1994) is expected to decrease in
the foreseeable future from prior levels. However, lower expenses associated
with the mortgage servicing operation coupled with the investment of the
proceeds from the sale of the rights, as well as the benefits of the additional
capital, will substantially mitigate the loss of servicing fees.
For additional information concerning loans, including: the credit
risk, composition and geographic distribution of the loan portfolio; loans
originated; and loans serviced for others; see the Bank's 1996 Annual Report to
Stockholders, pages 26 through 32, 36, 37, 38, 40, 41, 44, 50 through 52,
57 through 59, 60, 64 and 71 through 73, which are incorporated herein by
reference, and pages 21 through 23 of this report.
Nonperforming Assets and Allowances for Loan and Real Estate Losses
During 1989 to 1993, the Bank experienced a significant increase in
nonperforming and delinquent commercial real estate and multi-family loans which
resulted in large provisions for loan and real estate losses. In response
thereto, the Bank strengthened its controls over credit risk and related
management processes and implemented various strategies designed to reduce the
level of such assets as well as their related costs. The
8
<PAGE>
<PAGE>
strategies have included individual sales and dispositions, a bulk sale, loan
restructurings and chargeoffs, all of which have significantly improved the
Bank's asset quality and substantially impacted the allowances for loan and real
estate losses.
The Bank's Special Assets Department is directly responsible for the
resolution or disposition of nonperforming and underperforming assets. This
department is comprised of professionals who review, monitor and respond to
problem loans to determine if a restructuring is viable or whether to commence
foreclosure proceedings. Once an asset is acquired through foreclosure,
responsibility for its management and disposition is assigned to professionals
within the Bank who are experienced in real estate management and sales.
For information concerning nonperforming assets, the rapid disposition
strategy initiated in the fourth quarter of 1995 to reduce such assets, and the
allowances for loan and real estate losses, see the Bank's 1996 Annual Report to
Stockholders, pages 30 through 34, 50, 51, 58, 59, 60, 72 and 73, which are
incorporated herein by reference, and page 23 of this report.
Troubled Debt Restructurings and Impaired Loans
In conjunction with the Bank's efforts to reduce nonperforming assets,
the Bank has restructured the terms of certain commercial real estate and
multi-family loans as a result of the borrowers' weakened financial condition
and inability to meet the loans' original terms. At December 31, 1996, troubled
debt restructurings amounted to $155.5 million, representing 26% of the Bank's
performing commercial real estate and multi-family loans. For information
concerning troubled debt restructurings and impaired loans (as defined by SFAS
No. 114), see the Bank's 1996 Annual Report to Stockholders, pages 29, 30, 50,
51 and 58, which are incorporated herein by reference.
Securities
The Bank has the authority to invest in a wide range of securities,
subject to certain restrictions in the New York State Banking Law and applicable
regulations. The FDIC Improvement Act of 1991 imposes additional restrictions on
equity investments and other activities (see the section "Regulation and
Supervision" in this report). The Bank's investment policy and strategy is
reviewed and approved by the Board of Directors and its Investment Committee.
At December 31, 1996, the Bank's total investment in securities
aggregated $1.41 billion and consisted predominantly of mortgage-backed
securities. For additional information concerning securities, see the Bank's
1996 Annual Report to Stockholders, pages 25, 26, 36, 37, 40 through 44, 50, 54
through 56, 63, 64, 71 and 72, which are incorporated herein by reference, and
pages 19 and 20 of this report.
9
<PAGE>
<PAGE>
Interest Rate Sensitivity
The Bank's interest rate sensitivity, as illustrated by its gap position
(the difference between the amounts of assets and liabilities repricing or
maturing within a one-year period as a percentage of total assets) has improved
from a negative 5.7% at December 31, 1995, to a negative 0.2% at December 31,
1996. For additional information concerning interest rate sensitivity, see the
Bank's 1996 Annual Report to Stockholders, pages 42 through 44, which are
incorporated herein by reference.
Liquidity and Capital Resources
The Bank manages its liquidity position on a daily basis to assure that
funds are available to meet operations, deposit withdrawals, the repayment of
borrowings, and loan and investment funding commitments. The Bank's primary
sources of funds consist of: retail deposits obtained through its branch
offices; borrowings; amortization, satisfactions and repayments of loans;
maturities and repayments of securities; sales of assets available for sale and
cash provided by operating activities.
Deposits. The Bank's primary competition for deposits historically has
come from other savings banks, savings and loan associations and commercial
banks located in the Bank's principal market area. Additional competition for
deposits has been encountered from various nondeposit investment vehicles
available to consumers, such as short-term money market securities, money market
funds, equity securities, mutual funds, annuities and other corporate and
government securities.
The Bank offers a variety of deposit accounts designed to attract both
short- and long-term deposits from the general public. Included among these
accounts are: variable-rate savings accounts; fixed- and variable-rate
certificates of deposit, individual retirement accounts (IRAs) and Keogh
accounts; and variable-rate money market savings and checking accounts. The Bank
relies primarily on high quality customer service, its involvement in community
activities, competitive pricing policies and advertising to attract and retain
deposits. The Bank does not rely upon any individual or entity for a significant
portion of its deposits.
The Bank reviews interest rates offered on deposit accounts on a weekly
basis and, pursuant to such reviews, the rates may be revised upward or
downward. The Bank monitors its rates and adjusts them in accordance with the
Bank's overall funds management and liquidity objectives, while still remaining
competitive with other financial institutions in its market area. The Bank does
not necessarily seek to match the highest rates paid by competing institutions.
Borrowings. The Bank makes use of short- and long-term advances from the
Federal Home Loan Bank of New York (FHLBNY). As a member of the FHLBNY, the Bank
has the ability to borrow from the FHLBNY to meet its general business needs,
10
<PAGE>
<PAGE>
subject to the availability of certain types of low-risk collateral sufficient
to fully secure such advances. In addition, the Bank is required to own capital
stock in the FHLBNY, the amount of which fluctuates with the level of
outstanding borrowings (including reverse repurchase agreements).
The Bank also obtains funds from sales of securities (primarily
mortgage-backed) to broker-dealers or the FHLBNY under short-term agreements to
repurchase the same securities, when such funds are available at more attractive
rates. These agreements are accounted for as collateralized financing
transactions.
For additional information concerning liquidity and capital resources,
deposits, borrowed funds and stockholders' equity, see the Bank's 1996 Annual
Report to Stockholders, pages 34 through 37, 40 through 45, 52, 60 through 64,
71 and 72, which are incorporated herein by reference.
Savings Banks Life Insurance
The Bank offers savings banks life insurance (SBLI) to its customers, up
to a maximum of $50,000 for ordinary insurance and $500,000 for group term
insurance. The Bank's employees administer the SBLI program, which is governed
by New York State law. The assets, liabilities and operating results of the
Bank's SBLI program are separate and distinct from the Bank and accordingly are
not included in the Bank's consolidated financial statements. The Bank is not
liable under any insurance policy. At December 31, 1996, the Bank's SBLI program
had approximately $551 million of insurance in force. The Bank believes that
offering low-cost SBLI is beneficial to its relationships with its depositors
and the public.
Subsidiaries
Unconsolidated Affiliates. The Bank has an investment in an
unconsolidated affiliate, Institutional Group Information Corp. (IGIC). IGIC
provides banking related data processing services to the Bank and other
financial institutions. IGIC, located in Great Neck, New York, is jointly owned
with one other savings bank. IGIC provides financial account file and customer
information file services to the Bank for its deposits and loans. IGIC also
provides safe deposit records and various integrated financial systems including
an on-line general ledger system. The data processing facilities of IGIC have
been updated and expanded on a continuous basis. At December 31, 1996, the
Bank's total investment in IGIC was $1.8 million, including a 64% equity
ownership.
Management believes the data processing facilities of IGIC have served
the Bank well. The Bank is currently evaluating an extension of the term of its
contract with IGIC, which expires in 1998.
11
<PAGE>
<PAGE>
Wholly-Owned Subsidiaries. Greater Investment Services Inc. (GIS) was
originally chartered in 1989 as a New York corporation. The stock of the GIS is
held by The Greater New York Financial Corporation (GNYFC), a wholly-owned
nonoperating subsidiary of the Bank incorporated in Delaware. GIS currently
serves as a conduit for the sale of tax-deferred annuities and a variety of
mutual funds and it also executes unsolicited trades of individual securities.
The products are sold through the Bank's branch system using licensed,
registered investment consultants who are employed by GIS. All securities are
sold through an unaffiliated registered broker-dealer. GIS earned gross revenues
of approximately $1.7 million in 1996 and $1.0 million in 1995.
Infoserve, which is a wholly-owned subsidiary of the Bank, is located in
Great Neck, New York, and provides check clearing and processing, as well as
check and money order issuance services to the Bank and other financial
institutions.
Joint Ventures. Real estate held for development at December 31, 1996,
which is carried at the lower of cost or net realizable value, consisted of
equity investments through wholly-owned subsidiaries in five joint venture
projects that were originated before 1990. These projects, which predominantly
involve the development of moderately priced residential housing located on Long
Island, New York, are in various stages of completion, ranging from the latter
portion of the approval process to the final phase of the disposition process.
These projects have progressed much slower than originally anticipated due to
delays in the subdivision approval process and the recession that occurred in
the local economy prior to 1994. The Bank has restructured a number of its joint
venture agreements with the objective of facilitating the disposition of these
investments.
The first of these projects, Laurel Hill Associates, involves the
development of a 154 acre parcel of land in Mt. Sinai, New York with a 166 unit
planned retirement community, a 200 bed nursing home, a 225 unit continuous care
retirement facility and approximately 260 single family homes. The project has
received all necessary zoning approvals and is presently in the subdivision
approval stage. The disposition strategy calls for the sale of the approved
continuous care retirement facility and nursing home sites to a qualified
third-party developer. It is currently anticipated that the remainder of the
project will be built and sold by the joint venture partnership, with
construction commencing as early as 1997. At December 31, 1996, the Bank's
carrying value of this investment was $8.9 million, a slight increase from
year-end 1995. The Bank had an unfunded commitment to this project of
approximately $364,000 at December 31, 1996.
The second project is Manorville Hills Associates, a 307 lot residential
subdivision on 248 acres located in Manorville, New York. The project has
received all zoning approvals and the site maps for the first two sections (69
units) have recently been filed, thereby enabling construction to commence. The
joint venture partnership intends to sell these lots, either on a
section-by-section basis, or in bulk to third-party developers who will then
construct homes. The carrying value of this investment at year-end 1996 was
12
<PAGE>
<PAGE>
$6.2 million, with no unfunded commitments outstanding.
Country Village Estates, the third project, is a 196 unit planned
retirement community located on 35 acres in Selden, New York. This project,
which has no unfunded commitment, had a carrying value at December 31, 1996 of
$4.4 million, unchanged from December 31, 1995. The project has been under
ongoing construction for six years with approximately 105 units built to date,
89 of which have been sold. At this juncture, the joint venture partnership
plans to continue to develop the project and dispose of units through
conventional sales activity.
The fourth joint venture investment, known as Tiffany Park Estates,
consists of a 20 acre parcel of land located in Nesconset, New York. Although
the joint venture partnership has been successful in obtaining a rezoning
allowing the construction of 88 condominium units, it decided not to commence
construction. Instead, the partnership plans to dispose of this investment by
marketing and selling the land to a third-party developer, who will then
construct and sell units. This joint venture investment has no unfunded
commitment and had a carrying value at December 31, 1996 of $1.7 million, which
is unchanged from year-end 1995.
The fifth and final project is a 77 lot subdivision on a 41 acre parcel
of land located in Coram, New York, known as Tanglewood at Coram Associates II.
This investment is similar to Tiffany Park Estates in that the joint venture
partnership has obtained all necessary zoning approvals, but elected not to
construct the project. Likewise, this development parcel is being marketed for
sale to third-party developers. The year-end 1996 carrying value of this
investment was $1.9 million, which represents a slight increase from December
31, 1995. An unfunded commitment of $29,000 at year-end 1996 is expected to be
utilized to carry the project.
With regard to certain restrictions imposed by the FDIC on the Bank in
continuing its real estate joint venture activities, see the section "Regulation
and Supervision" on page 14 of this report.
Other Subsidiaries. In addition to the foregoing, other subsidiaries of
the Bank either hold title to various parcels of real estate acquired by the
Bank through foreclosure or are currently nonoperating entities. Once foreclosed
real estate is disposed of, those subsidiaries are normally dissolved.
Taxation
For information concerning taxation, including the Bank's deferred tax
asset, see the Bank's 1996 Annual Report to Stockholders, pages 33, 34, 35, 39,
42, 53, 68 and 69, which are incorporated herein by reference.
13
<PAGE>
<PAGE>
Personnel
As of December 31, 1996, the Bank had 92 officers, 399 full-time
employees and 69 full-time equivalent employees. GIS had six officers (five of
whom are also Bank officers) and nine full-time employees. The Bank maintains a
comprehensive employee benefits program, which provides hospitalization and
major medical insurance, life insurance, disability insurance, and reduced
mortgage loan rates for qualifying employees (excluding executive officers). The
Bank's employees also have a Pension Plan and an Employee Stock Ownership Plan.
The Bank's employees are not represented by any collective bargaining unit and
the Bank maintains a favorable relationship with its employees.
Regulation and Supervision
The Bank is subject to regulation, examination and supervision by the
New York State Banking Department and the FDIC (the Regulators). The Bank is
also governed by numerous federal and state laws and regulations including the
FDIC Improvement Act of 1991 (FDICIA). This legislation contains provisions
relating to the capitalization and safety and soundness of financial
institutions.
Summary of FDICIA. FDICIA requires the FDIC to take prompt corrective
action if a bank's capital fails to satisfy certain minimum capital
requirements. The legislation also: enhances the regulatory examination process;
increases reporting requirements; imposes significant limitations on the powers
of insured banks chartered under state law to make equity investments and engage
as a principal in other activities; imposes a risk-based system for determining
annual deposit insurance assessments and requires risk-based capital standards
to take adequate account of interest rate risk, concentration of credit risk and
the risks of nontraditional activities.
Prompt Corrective Action. FDICIA requires the FDIC to take prompt
corrective action if a bank fails to satisfy certain minimum capital
requirements. The capital requirements include Tier 1 leverage and risk-based
capital requirements that are used to define five categories of banks ("well
capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically undercapitalized"). Any institution that
fails to meet the minimum level of any relevant capital measure (any of the
three "undercapitalized" categories) can be subject to a wide range of
limitations on its activities and operations and requirements as to remedial
actions.
In September 1996, a Memorandum of Understanding between the Bank and
the Regulators was terminated. The memorandum was an agreement under which,
among other items, required the Bank to: maintain a minimum Tier 1 leverage
capital ratio of 5.50%; reduce classified assets in relation to total Tier 1
capital and reserves; and provide a variety of information to the Regulators.
14
<PAGE>
<PAGE>
In order to be considered adequately capitalized at December 31, 1996
under FDIC regulations, the Bank is required to maintain minimum Tier 1
Leverage, Tier 1 risk-based and total risk-based capital ratios of 4%, 4% and
8%, respectively. At December 31, 1996, the Bank's Tier 1 leverage, Tier 1
risk-based and total risk-based capital ratios were 7.06%, 12.99% and 14.62%,
respectively, which allows the Bank to be considered well capitalized under FDIC
regulations. In order to be considered as such, FDIC regulations require Tier 1
leverage, Tier 1 risk-based and total risk-based capital ratios of at least 5%,
6% and 10%, respectively. See the section "Equity Investment Activities" below
and page 71 of the Bank's 1996 Annual Report to Stockholders, which is
incorporated herein by reference, for a further discussion of capital
requirements.
Equity Investment Activities. FDICIA prohibits insured state banks from
engaging as principal in any type of activity, or from acquiring or retaining
any equity investment, not permissible for a national bank. FDICIA makes certain
exceptions to these general rules, and the act authorizes the FDIC to permit
other exceptions for institutions that are and continue to be in compliance with
applicable regulatory capital standards. Under these provisions of FDICIA,
state-chartered institutions need the permission of the FDIC to continue certain
equity investment activities. FDICIA does not affect the Bank's ability to
continue its SBLI activities as such activities are currently conducted.
With regard to the above restrictions, the FDIC has approved a phase-out
plan which permits the Bank to continue its real estate joint venture activities
through December 31, 2000, subject to certain conditions. The conditions include
a requirement that the Bank perform supplemental quarterly capital adequacy
calculations which deduct all such real estate joint venture investments. The
Bank has performed these supplemental calculations and continues to be well
capitalized under applicable FDIC regulations. Solely for purposes of these
calculations, the Bank's Tier 1 leverage, Tier 1 risk-based and total risk-based
capital ratios (as calculated by deducting the net carrying value of joint
venture investments, inclusive of commitments to invest) would have been 6.23%,
11.56% and 13.19%, respectively, at December 31, 1996. If the Bank's capital
(calculated as described above) falls below the level required for
well-capitalized institutions pursuant to FDIC regulations, it must submit a
plan to restore its capital to such a level. There can be no assurance, absent
an extension by the FDIC, that any of the Bank's joint ventures can be completed
or disposed of by December 31, 2000, without significant loss to the Bank.
For purposes of the FDIC's assignment of the Bank to the capital
categories described previously to determine prompt corrective action and the
Bank's deposit insurance assessment rates (discussed below), the Bank's capital
ratios are computed after deducting the real estate joint venture investments,
as calculated above.
Deposit Insurance Assessment Rates. Under FDICIA, the FDIC's deposit
insurance assessment rates for an institution are currently determined based on
the FDIC's
15
<PAGE>
<PAGE>
assignment of the institution to one of three capital categories (well
capitalized, adequately capitalized or under capitalized) and one of three
supervisory categories. Beginning in 1993, the rates had ranged from 0.23% of
deposits for an institution in the highest category (i.e., well capitalized and
financially sound, with no more than a few minor weaknesses) to 0.31% of
deposits for an institution in the lowest category (i.e., under capitalized and
substantial supervisory concern). For the Bank, the assessment rate was 0.29% of
deposits through May 31, 1995. Effective June 1, 1995, the FDIC reduced the
assessment rates to a range of 0.04% to 0.31% of deposits for all institutions.
The Bank's assessment rates were reduced to 0.21% for June and 0.07% of deposits
from July 1, through December 31, 1995. On January 1, 1996, FDIC deposit
insurance assessment rates declined further ranging from a minimum of $2,000 per
year for well-capitalized institutions with no supervisory concerns, and 0.03%
to 0.27% of deposits for all other institutions. For the Bank, the assessment
rate was reduced to 0.03% of deposits. On January 1, 1997, pursuant to the
Deposit Insurance Funds Act of 1996, FDIC deposit insurance assessment rates
have increased by an additional 1.3 basis points for all banks insured by the
Bank Insurance Fund.
Community Reinvestment Act. Under the Community Reinvestment Act
("CRA"), as implemented by the FDIC's regulations (which were amended in April
1995), the Bank has a continuing and affirmative obligation consistent with its
safe and sound operation to help meet the credit needs of its entire community,
including low and moderate income neighborhoods. The CRA does not establish
specific lending requirements or programs for financial institutions nor does it
limit an institution's discretion to develop the types of products and services
that it believes are best suited to its particular community, consistent with
the CRA. The CRA requires the FDIC, in connection with its examination of the
Bank, to assess the Bank's record of meeting the credit needs of its community
and to take such record into account in its evaluation of certain applications
by such institution. The CRA also requires all institutions to make public
disclosure of their CRA ratings. The New York State Banking Department also
performs a CRA examination of the Bank. The Bank received a "Satisfactory" CRA
rating in its most recent examinations by the FDIC and New York State Banking
Department.
ITEM 2. PROPERTIES
- ------------------
The Bank conducts its business from its administrative headquarters in
Manhattan, a total of 14 full-service branch offices located in Brooklyn, Queens
and Nassau and Suffolk Counties, and a lending office in Mineola, New York. The
table on page 17 sets forth information relating to each of the Bank's offices
as of December 31, 1996.
16
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Year
Owned Initially
or Lease Leased/
Location of Property Leased Expiration Acquired
- -------------------- ------ ---------- ---------
<S> <C> <C> <C>
Principal Branch Office:
451 and 457 Fifth Avenue 451 - Owned 1919
At 9th & 10th Streets 457 - Leased 2043 1994
Brooklyn, New York 11215
Administrative Headquarters:
One Penn Plaza Leased(1) 1998 1982, 1984
New York, New York 10119
Lending Office:
211 Station Road Leased 2017 1987
Mineola, New York 11501
Branch Offices:
Brooklyn, New York:
101 Church Ave at McDonald Ave. Owned 1930
4302 18th Ave. at East 2nd St. Owned 1956
110 7th Ave. at President St. Owned 1955
5220 13th Ave. at 53rd St. Leased(2) 1998 1978
1045 Flatbush Ave. at Duryea Pl. Owned 1925
1550 Flatbush Ave. at Nostrand Ave. Owned 1943
489 Neptune Ave. at West 5th St. Leased 2003 1965
1672 Sheepshead Bay Rd.
at Voorhies Ave. Owned 1993
Queens, New York:
179-25 Hillside Ave. at 179th St. Own Bldg. 1963
Lease Land 2005 1963
Nassau County, New York:
222 Station Plaza North Leased(3) 1997 1972
Mineola, New York
Sands Shopping Center Leased 2010 1988
3535 Long Beach Road
Oceanside, New York
102 Broadway Mall Leased 2009 1988
Route 106/107
Hicksville, New York
Suffolk County, New York:
King Kullen Shopping Center
2775 Route 112 Leased 2010 1988
Medford, New York
</TABLE>
(1) The Bank is currently evaluating whether to renew this lease or secure
comparable space elsewhere.
(2) Leased with option to purchase.
(3) Extension of lease is currently being negotiated.
17
<PAGE>
<PAGE>
The Bank also owns one property in Brooklyn, New York which was acquired
through foreclosure in 1993. The property, which will be used primarily as a
disaster recovery center, is currently under construction.
Rental expense (net of sublease rental income of $1.1 million) for the
Bank for the year ended December 31, 1996 approximated $3.1 million as a result
of leases with average original terms of approximately twenty-four years. For
information concerning the Bank's premises and equipment, lease obligations and
lease commitments, see page 59 of the Bank's 1996 Annual Report to Stockholders,
which is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
- --------------------------
For information concerning legal proceedings, see page 71 of the Bank's
1996 Annual Report to Stockholders, which is incorporated herein by reference.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -----------------------------------------------------------------------
The information contained under the caption "Beneficial Ownership of the
Bank's Voting Stock" on pages 17 through 19 of the Proxy Statement/Prospectus
for the 1997 Annual Meeting of Stockholders (the 1997 Proxy Statement), is
incorporated herein by reference.
PART II
ITEM 5. MARKET FOR THE BANK'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
- -------------------------------------------------------------------------------
The information contained under the caption "Other Investor Information"
on page 79 of the Bank's 1996 Annual Report to Stockholders is incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
The information contained under the caption "Selected Financial Data" on
page 23 of the Bank's 1996 Annual Report to Stockholders is incorporated herein
by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The information contained in the section captioned "Management's
Discussion and Analysis" on pages 24 through 45 of the Bank's 1996 Annual Report
to Stockholders is incorporated herein by reference.
18
<PAGE>
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
FINANCIAL STATEMENTS
The Bank's Consolidated Statements of Financial Condition as of December
31, 1996 and 1995, and the related Consolidated Statements of Income, Changes in
Stockholders' Equity, and Cash Flows for each of the years in the three-year
period ended December 31, 1996, together with the related notes, the Report of
Management on Responsibility for Financial Reporting and the Independent
Auditors' Report on pages 46 through 76 of the Bank's 1996 Annual Report to
Stockholders, are incorporated herein by reference.
SUPPLEMENTARY DATA
Securities
The following schedule sets forth information about the Bank's security
investments as of December 31:
<TABLE>
<CAPTION>
1996 1995 1994
------------------------ ---------------------- -----------------------
Carrying Estimated Carrying Estimated Carrying Estimated
($ in thousands) Value Fair Value Value Fair Value Value Fair Value
----------- ---------- -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury securities ................... $ 49 $ 50 $ 48 $ 50 $ 45 $ 45
U.S. government agency securities .......... 15,884 15,998 18,742 18,866 -- --
Securities issued by states and
political subdivisions in the U.S (1) ..... 57,278 57,139 61,119 61,477 62,147 61,585
Mortgage-backed securities:
Pass-through securities:
Guaranteed by GNMA ..................... 115,886 113,760 127,914 127,007 139,769 125,906
Issued by FNMA & FHLMC ................. 288,123 290,405 270,098 272,478 332,502 322,439
Privately issued ....................... 1,072 1,079 1,603 1,582 2,030 1,970
CMOs and REMICs:
Issued or guaranteed by FNMA & FHLMC ... 369,595 363,935 230,656 225,085 197,813 177,975
All other privately issued ............. 439,700 430,276 481,205 479,264 366,705 344,582
All other debt securities .................. 102,695 102,358 102,776 101,414 68,957 67,896
Federal Home Loan Bank Stock ............... 23,600 23,600 27,850 27,850 23,450 23,450
---------- ---------- ---------- ---------- ---------- ----------
Total securities (2) ....................... $1,413,882 $1,398,600 $1,322,011 $1,315,073 $1,193,418 $1,125,848
========== ========== ========== ========== ========== ==========
Pledged securities ......................... $ 568,926 $ 563,802 $ 523,081 $ 519,035 $ 653,686 $ 603,900
========== ========== ========== ========== ========== ==========
</TABLE>
(1) These securities were sold to investment trust funds. The trust funds
have put options that require the Bank to repurchase the securities at
par value under certain circumstances. The sale is being accounted for
as a collateralized financing arrangement for financial statement
purposes.
(2) At December 31, 1996, 1995 and 1994, securities with a carrying value of
$215,961, $202,444 and $44,331, respectively, were categorized as
available for sale. Securities available for sale are carried at
estimated fair value.
19
<PAGE>
<PAGE>
The following schedule sets forth the carrying value and estimated
weighted-average lives of mortgage-backed securities at December 31, 1996.
<TABLE>
<CAPTION>
Carrying Estimated Estimated
($ in millions) Value Life (Yrs.)(1) Life (Yrs.)(2)
- --------------- -------- -------------- --------------
<S> <C> <C> <C>
Held to maturity fixed rate:
Pass-through (GNMA) ................................... $ 66.3 9.2 9.2
Pass-through (FNMA & FHLMC) ........................... 64.2 3.2 3.9
Pass-through (nonagency) .............................. 1.1 3.2 4.5
REMIC - Pass-through (nonagency) ...................... 63.8 5.5 6.6
REMIC - CMOs (FNMA & FHLMC) ........................... 45.9 2.5 6.0
REMIC - CMOs (nonagency) .............................. 51.4 6.6 8.4
---------- --- -----
Total fixed rate ......................................... 292.7 5.6 6.8
Held to maturity adjustable rate:
Pass-through (FNMA & FHLMC) ........................... 116.6 3.7 5.1
REMIC - Pass-through (nonagency) ...................... 289.1 3.2 5.1
REMIC - CMOs (FNMA & FHLMC) ........................... 309.1 15.0 17.4
REMIC - CMOs (nonagency) .............................. 35.4 7.7 9.2
---------- --- -----
Total adjustable rate .................................... 750.2 8.4 10.4
---------- --- -----
Total held to maturity ................................... $ 1,042.9 7.6 9.4
========== === =====
Available for sale fixed rate:
Pass-through (GNMA) ................................... $ 17.0 9.0 9.0
Pass-through (FNMA & FHLMC) ........................... 63.1 3.9 4.7
---------- --- -----
Total fixed rate ......................................... 80.1 5.1 5.6
Available for sale adjustable rate:
Pass-through (GNMA) ................................... 32.6 6.2 9.7
Pass-through (FNMA & FHLMC) ........................... 44.2 5.2 6.4
REMIC - CMOs (FNMA & FHLMC) ........................... 14.6 9.4 9.6
---------- --- -----
Total adjustable rate .................................... 91.4 6.2 8.1
---------- --- -----
Total available for sale ................................. $ 171.5 5.7 6.9
========== === =====
Total fixed-rate portfolio ............................... $ 372.8 5.5 6.6
Total adjustable-rate portfolio .......................... 841.6 8.1 10.1
---------- --- -----
Total portfolio .......................................... $ 1,214.4 7.3 9.0
========== === =====
</TABLE>
(1) Based upon estimated cash flows using the interest rate environment at
December 31, 1996.
(2) Based upon estimated cash flows assuming an immediate increase of 300 basis
points in interest rates at December 31, 1996.
20
<PAGE>
<PAGE>
Loans Receivable
The following schedule sets forth the activity in loans receivable for
the years ended December 31:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
- --------------- ----------- ----------- -----------
<S> <C> <C> <C>
Loans receivable, net, at beginning of year ............... $ 1,071,175 $ 1,191,323 $ 1,285,061
Loans originated for portfolio:
1-4 family .......................................... 39,514 13,184 23,823
Multi-family ........................................ 4,565 8,048 7,630
Commercial real estate .............................. 3,070 11,760 14,832
Cooperative ......................................... 48,433 14,728 9,097
Student ............................................. 7,820 8,722 11,676
Other consumer ...................................... 10,882 9,848 8,652
-----------------------------------------
114,284 66,290 75,710
Loans originated for sale:
1-4 family .......................................... 30,926 31,992 25,176
Cooperative ......................................... 9,408 6,040 1,025
Student ............................................. 2,642 -- --
-----------------------------------------
42,976 38,032 26,201
Loans purchased:
1-4 family .......................................... 517 482 61
Multi-family ........................................ -- 12,700 --
Commercial real estate .............................. -- -- 5,936
-----------------------------------------
517 13,182 5,997
-----------------------------------------
Total loans originated and purchased ...................... 157,777 117,504 107,908
Principal repayments ...................................... (173,418) (149,105) (133,195)
Sales of loans:
1-4 family .......................................... (33,566) (32,582) (29,846)
Cooperative ......................................... (9,293) (6,073) (661)
Multi-family ........................................ -- (2,145) --
Commercial real estate .............................. (18,035) (1,296) --
Student ............................................. (34,411) -- --
-----------------------------------------
Total loans sold .......................................... (95,305) (42,096) (30,507)
Transfers of mortgage loans to real estate acquired through
foreclosure, net ...................................... (8,494) (19,881) (24,903)
Chargeoffs ................................................ (9,289) (28,940) (15,353)
Decrease (increase) in unearned discount and fees ......... 2,129 3,017 (4,664)
-----------------------------------------
Net loan activity ......................................... (126,600) (119,501) (100,714)
Decrease (increase) in allowance for loan losses .......... 6,765 (647) 6,976
-----------------------------------------
Loans receivable, net, at end of year ..................... $ 951,340 $ 1,071,175 $ 1,191,323
=========================================
</TABLE>
21
<PAGE>
<PAGE>
The following schedule sets forth information with respect to the
composition of loans receivable at December 31:
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
-------- ---------- ---------- ---------- ----------
Carrying Carrying Carrying Carrying Carrying
($ in thousands) Value Value Value Value Value
-------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Loans secured by real estate:
1-4 family residential properties ............ $202,690 $ 193,407 $ 215,735 $ 242,696 $ 274,544
Multi-family residential properties .......... 227,169 273,601 303,479 348,752 401,262
Commercial real estate properties ............ 408,156 505,847 582,566 616,290 659,266
Construction and land development ............ -- -- -- -- 24,404
Cooperative residential properties ........... 118,047 79,301 72,944 73,352 73,908
Commercial and industrial loans ................ 47 -- -- -- 79
Student loans .................................. 6,673 37,819 36,030 30,725 29,220
Other loans .................................... 5,786 5,193 3,915 3,568 5,823
-------- ---------- ---------- ---------- ----------
Total loans, net of unearned discount and fees . $968,568 $1,095,168 $1,214,669 $1,315,383 $1,468,506
======== ========== ========== ========== ==========
Loans included above that were:
90 days or more past due and accruing
interest .................................... $ 2,125 $ 4,652 $ 2,198 $ 4,376 $ 2,271
30 days or more but less than 90 days past
due and accruing interest ................... 30,601 49,263 40,826 63,377 58,901
On a nonperforming status .................... 31,821 39,369 70,770 112,275 172,883
Classified as troubled debt restructurings ... 155,538 195,139 199,290 174,769 159,485
</TABLE>
The following schedule sets forth the carrying value of multi-family and
commercial real estate loans at December 31, 1996, by remaining term to
contractual maturity.
<TABLE>
<CAPTION>
Within 1 Over 1 to 5 Over 5
Year Years Years Total
-------- ----------- ------- -----
<S> <C> <C> <C> <C>
($ in thousands)
Multi-family:
Fixed rate .......................... $ 12,705 $ 2,447 $13,001 $ 28,153
Adjustable rate ..................... 68,365 120,226 11,887 200,478
Unearned discount and fees ............ -- -- -- (1,462)
-------- -------- ------- ---------
Total multi-family .................... 81,070 122,673 24,888 227,169
Commercial real estate:
Fixed rate .......................... 18,253 21,657 1,703 41,613
Adjustable rate ..................... 106,150 235,337 26,118 367,605
Unearned discount and fees ............ -- -- -- (1,062)
-------- -------- ------- ---------
Total commercial real estate .......... 124,403 256,994 27,821 408,156
-------- -------- ------- ---------
Grand total ........................... $205,473 $379,667 $52,709 $ 635,325
======== ======== ======= =========
</TABLE>
22
<PAGE>
<PAGE>
Information related to the Bank's ten largest commercial real estate and
multi-family loans as of December 31, 1996, is summarized in the following
table.
<TABLE>
<CAPTION>
Percentage of Total
Commercial Real
($ in thousands) Estate and Multi-family
Type of Collateral Location of Collateral Amount Loans Status
- ------------------ ---------------------- ------ ----- --------------
<S> <C> <C> <C> <C>
Multi-family .. Connecticut $16,103 2.5% Troubled debt restructuring
Hotel ......... Long Island, NY 14,600 2.3 Performing loan
Multi-family .. Long Island, NY 11,647 1.8 Performing loan
Office building New York City 10,745 1.7 Troubled debt restructuring (1)
Office building Long Island, NY 10,130 1.5 Performing loan
Office building Brooklyn, NY 9,904 1.6 Performing loan
Multi-family .. New Jersey 9,725 1.5 Performing loan
Office building New York City 9,567 1.5 Troubled debt restructuring
Hotel ......... Long Island, NY 9,461 1.5 Troubled debt restructuring
Office building Long Island, NY 9,249 1.4 Troubled debt restructuring (1)
-------- ----
$111,131 17.5%
======== =====
</TABLE>
(1) Loan is also considered impaired under the criteria of SFAS No. 114.
Allowance for Loan Losses
The following schedule sets forth information with respect to the
allowance for loan losses for the years ended December 31:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
($ in thousands)
Balance at beginning of year .................. $ 23,993 $ 23,346 $ 30,322 $ 41,078 $ 54,005
Provision charged to operations ............... 1,500 29,400 7,990 26,444 26,289
Chargeoffs:
Loans secured by 1-4 family residential
properties (including cooperative loans) .. (229) (3,233) (868) (1,829) (730)
Loans secured by multi-family residential
properties ................................ (635) (9,269) (4,622) (15,854) (4,624)
Loans secured by commercial real estate
properties ................................ (8,425) (16,437) (9,583) (18,834) (13,658)
Construction and land development ........... -- -- (214) (831) (15,050)
All other loans ............................. -- (1) (66) -- (180)
----------- ----------- ----------- ----------- -----------
Total chargeoffs .............................. (9,289) (28,940) (15,353) (37,348) (34,242)
Recoveries .................................... 1,024 187 387 148 26
Reserve transferred to the allowance for real
estate losses ............................... -- -- -- -- (5,000)
----------- ----------- ----------- ----------- -----------
Balance at end of year (1) .................... $ 17,228 $ 23,993 $ 23,346 $ 30,322 $ 41,078
=========== =========== =========== =========== ===========
Net chargeoffs to average loans outstanding
during the period ........................... .79% 2.47% 1.18% 2.68% 2.06%
Allowance for loan losses to total loans ...... 1.78% 2.19% 1.92% 2.31% 2.80%
Allowance for loan losses to
nonperforming loans ......................... 54.14% 60.94% 32.99% 27.01% 23.76%
Nonperforming loans to total loans ............ 3.29% 3.59% 5.83% 8.54% 11.77%
Total nonperforming loans ..................... $ 31,821 $ 39,369 $ 70,770 $ 112,275 $ 172,883
Total loans, net of unearned discount and fees $ 968,568 $ 1,095,168 $ 1,214,669 $ 1,315,383 $ 1,468,506
Average loans (2) ............................. $ 1,041,372 $ 1,165,203 $ 1,264,992 $ 1,388,711 $ 1,664,738
</TABLE>
(1) The allowance for loan losses predominantly related to multi-family and
commercial real estate loans.
(2) Nonperforming loans have been included in the average loan amounts.
23
<PAGE>
<PAGE>
Investments in Subsidiaries and Affiliates
The following schedule sets forth information with respect to
investments in, income from dividends, and equity in earnings or losses of
subsidiaries and affiliates:
<TABLE>
<CAPTION>
At December 31, 1996 Bank's Proportionate Share of
--------------------------------- Earnings or (Loss) for the Years
($ in thousands) % of Equity in Ended December 31,
Voting Total Underlying ------------------------------
Subsidiary Stock Investment Net Assets 1996 1995 1994
------------------------ ----- ---------- ---------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Consolidated:
Greater Investment Services
Inc. (GIS) ............................... 100% $ (**) $ (**) $ 839 $ 440 $ 523
Infoserve Corporation ....................... 100 1,179 1,179 56 38 (97)
Unconsolidated:
Institutional Group Info
Corporation (IGIC) ....................... 64 1,794 1,794 (24) 46 (2)
</TABLE>
(**) The Bank's investment in GIS amounted to one hundred dollars at December
31, 1996.
PART III
ITEM 9. DIRECTORS AND PRINCIPAL OFFICERS OF THE BANK
- ------------------------------------------------------
Directors of the Bank. The information contained under the caption
"Proposal Number 1: Election of Directors" on pages 13 through 15 and under the
caption "Certain Transactions" on page 32 of the 1997 Proxy Statement is
incorporated herein by reference.
Principal Officers of the Bank. The following table sets forth
information at December 31, 1996 with respect to the persons who serve as
principal officers of the Bank:
<TABLE>
<CAPTION>
NAME AGE POSITION(S) CURRENTLY HELD WITH THE BANK
- ----- ---- ------------------------------------------
<S> <C> <C>
Gerard C. Keegan 50 Director, Chairman, President and Chief Executive Officer
Michael J. Henchy 47 Executive Vice President and Chief Administrative Officer
Daniel J. Harris 39 Executive Vice President and Chief Lending Officer
Philip A. Cimino 46 Senior Vice President and Chief Investment Officer
Philip T. Spies 50 Senior Vice President and Controller
Gary DiLorenzo 40 Senior Vice President and Chief Credit Officer
Robert P. Carlson 45 Senior Vice President, Counsel and Secretary
John A. Dresch 55 Senior Vice President and Director of Human Resources
Theodore A. Zarembo 50 Senior Vice President and Chief Appraiser
Franklyn A. Berkowitz 48 Senior Vice President - Banking Operations
Michael D. Gornicki 42 Senior Vice President and Auditor
Jeanne Lutfy 39 Senior Vice President - Marketing
Michael R. Barrett 43 Senior Vice President - Commercial Lending
</TABLE>
24
<PAGE>
<PAGE>
Gerard C. Keegan has been Director, Chairman, President and Chief
Executive Officer since November 1991. He previously served as Director,
President and Chief Operating Officer since July 1988.
Michael J. Henchy has been Executive Vice President and Chief
Administrative Officer since January 1992. Prior to that, he was an Executive
Vice President - Banking Operations, since July 1988.
Daniel J. Harris has been Executive Vice President and Chief Lending
Officer since February 1996. Prior to that, he was an Executive Vice President
and Chief Credit Officer since January 1995, and Senior Vice President - Special
Assets, since February 1992.
Philip A. Cimino has been Senior Vice President and Chief Investment
Officer since January 1989.
Philip T. Spies has been Senior Vice President and Controller since
September 1985. Mr. Spies is a Certified Public Accountant.
Gary DiLorenzo has been Senior Vice President and Chief Credit Officer
since February 1996. Prior to that, he was Senior Vice President and Auditor
since January 1992. Mr. DiLorenzo is a Certified Public Accountant.
Robert P. Carlson has been Senior Vice President, Counsel and Secretary
since September 1992. He previously served as Senior Vice President, Deputy
Counsel and Assistant Secretary from April 1992. Prior to that, he served as
Assistant Secretary since 1984.
John A. Dresch has been Senior Vice President and Director of Human
Resources since January 1991.
Theodore A. Zarembo has been Senior Vice President and Chief Appraiser
since December 1992. He previously served as First Vice President and Chief
Appraiser from September 1992. Prior to that, he was employed by CB Commercial
Real Estate Group, Inc. as Senior Vice President and National Marketing Director
since September 1983. Mr. Zarembo is a member of The Appraisal Institute.
Franklyn A. Berkowitz has been Senior Vice President in charge of
Banking Operations since May 1994. Prior to that, he was a First Vice President
of Bank Leumi Trust Co. from March 1993. Prior to that, Mr. Berkowitz was a
First Vice President of The Dime Savings Bank of New York from July 1987.
Michael D. Gornicki has been Senior Vice President and Auditor since
February 1996. Prior to that, he was Senior Vice President in charge of
Strategic Planning and Risk Management from January 1995. Prior to that, he
served as a First Vice President from June 1992 in the Office of the Chairman
and as a Second Vice President from February 1989 in the Controllers Department.
Mr. Gornicki is a Certified Public Accountant.
25
<PAGE>
<PAGE>
Jeanne Lutfy has been Senior Vice President in charge of Marketing since
January 1995. She previously served as a First Vice President - Marketing from
June 1994. Prior to that, Ms. Lutfy was employed by The New York City Economic
Development Corporation as a Vice President of Marketing and Corporate
Communications from July 1984.
Michael R. Barrett has been Senior Vice President in charge of
Commercial Lending since February 1996. He previously served as First Vice
President in charge of Owned Real Estate from February 1993. Prior to that, Mr.
Barrett was Vice President/Director of Industrial Real Estate at Cushman and
Wakefield of Long Island from 1988.
Significant Consultants. The Bank retains the services of an outside
consultant, Closter Dock Corp., to perform certain investor relations and
communication functions for the Bank. Fraser P. Seitel has acted as Senior
Counselor of Investor Relations for the Bank since January 1994. He also is a
Senior Counselor to Burson-Marstellar, a public affairs firm and the principal
of Emerald Partners, a management and communications consultancy, since 1992.
Prior to that, Mr. Seitel was a communications executive at The Chase Manhattan
Bank.
ITEM 10. MANAGEMENT COMPENSATION AND TRANSACTIONS
- ---------------------------------------------------
The information contained under the caption "Report on Executive
Compensation of the Compensation Committee" on pages 22 through 24 and
"Executive Compensation" on pages 26 through 32 of the 1997 Proxy Statement is
incorporated herein by reference.
PART IV
ITEM 11. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM F-3
- ------------------------------------------------------------------------
(a)(1) Financial Statements. The following are contained in Exhibit 6.1 and
are incorporated herein by reference:
Consolidated Statements of Financial Condition as of December 31, 1996
and 1995 (page 46).
Consolidated Statements of Income, Changes in Stockholders' Equity and
Cash Flows for the Years Ended December 31, 1996, 1995 and 1994 (pages
47, 48 and 49, respectively).
Notes to Consolidated Financial Statements (pages 50 to 74).
Report of Management on Responsibility for Financial Reporting (page
75).
26
<PAGE>
<PAGE>
Independent Auditors' Report (page 76).
(a)(2) Financial Statement Schedules. The following schedules, required to be
filed by this report, are included herein, with the exception of
Schedule II and IV.
Schedule I - Securities (page 19).
Schedule II - Loans to Officers, Directors, Principal Security Holders,
and any Associates of the Foregoing Persons is omitted because there
was no such activity.
Schedule III - Loans Receivable (page 22).
Schedule IV - Bank Premises and Equipment, see page 59 of the Bank's
1996 Annual Report to Stockholders, which is incorporated herein by
reference.
Schedule V - Investments in, Income from Dividends, and Equity in
Earnings or Losses of Subsidiaries and Associated Companies (page 24).
Schedule VI - Allowance for Loan Losses (page 23).
(b) There were no reports filed on Form F-3 by the Bank during the last
quarter of the period covered by this report.
(c) Exhibits. The following exhibits are filed as part of this report:
Exhibit No. Notes Name of Exhibit
---------- ----- ---------------
1.1 Restated Organization Certificate, as amended
1.2 Bylaws, as amended
2.1 Rights Agreement related to the Junior
Participating Preferred Stock Purchase Rights
2.2 First Amendment to Rights Agreement
2.3 Second Amendment to Rights Agreement
3.1 Material Contracts - Employment Agreements of:
A. Mr. Keegan
(a) B. Messrs. Henchy, Spies, Cimino, DiLorenzo,
Dresch, Harris, Carlson, Zarembo, Berkowitz
Gornicki, Barrett and Ms. Lutfy
3.2 Material Contracts - "Change in Control"
Severance Agreements with:
A. Mr. Keegan
(b) B. Messrs. Henchy, Spies, Cimino, DiLorenzo,
Dresch, Harris, Carlson, Zarembo, Berkowitz
Gornicki, Barrett and Ms. Lutfy
C. Approximately 79 other officers (a sample of
which is filed as the exhibit)
3.3 Material Contracts - The Retirement Plan of
The Greater New York Savings Bank for Nonemployee
Directors
3.4 Material Contracts - The Greater New York Savings
Bank Supplemental Executive Retirement Plan
3.5 Material Contracts - The Greater New York Savings
Bank Long-Term Incentive Program
27
<PAGE>
<PAGE>
Exhibit No. Notes Name of Exhibit
----------------- ---------------
3.6 Material Contracts - The Greater New York Savings
Bank 1996 Annual Incentive Plan
3.7 Material Contracts - The Greater New York Savings
Bank 1997 Annual Incentive Plan
3.8 Material Contracts - The Greater New York Savings
Bank 1996 Equity Incentive Plan
3.9 Material Contracts - The Greater New York Savings
Bank 1996 Nonemployee Directors Stock Option Plan
3.10 Material Contracts - The Greater New York Savings
Bank Incentive Savings Plan
3.11 Material Contracts - The Greater New York Savings
Bank Nonemployee Directors Deferred Compensation
Plan
3.12 Material Contracts - Plan of Pensions and
Retirement Benefits of The Greater New York
Savings Bank
3.13 Material Contracts - The Greater New York Savings
Bank Employee Stock Ownership Plan
4.1 Statement Re: Computation of Earnings Per Share
for the Years Ended December 31, 1996, 1995 and
1994
6.1 1996 Annual Report to Stockholders, pages 23 to
76 and page 79
8.1 Financial Data Schedule
9.1 Omitted: A list of the subsidiaries of the Bank,
other than those appearing on page 24, has been
omitted as these subsidiaries, individually and
in the aggregate as a single subsidiary, do not
constitute a significant subsidiary as of
December 31, 1996.
Notes:
(a) The Employment Agreements of everyone except Mr. Henchy have not been
filed as exhibits, since they are similar to the agreement of Mr.
Henchy.
(b) The "Change in Control" Severance Agreements of everyone except Mr.
Henchy have not been filed as exhibits, since they are similar to the
agreement of Mr. Henchy.
28
<PAGE>
<PAGE>
Signatures
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Bank has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE GREATER NEW YORK SAVINGS BANK
By: /s/ Gerard C. Keegan Date: March 7, 1997
---------------------------- ----------------------------
Gerard C. Keegan,
Chairman of the Board, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the date indicated.
Principal Executive Officer and Director:
By: /s/ Gerard C. Keegan Date: March 7, 1997
---------------------------- ----------------------------
Gerard C. Keegan,
Chairman of the Board, President and Chief Executive Officer
Controller:
By: /s/ Philip T. Spies Date: March 7, 1997
---------------------------- ----------------------------
Philip T. Spies,
Senior Vice President and Controller
Directors:
By: /s/ William F. de Neergaard Date: March 7, 1997
---------------------------- ----------------------------
William F. de Neergaard
By: /s/ James G. Peel Date: March 7, 1997
---------------------------- ----------------------------
James G. Peel
By: /s/ C. Stephen Connolly, M.D. Date: March 7, 1997
---------------------------- ----------------------------
C. Stephen Connolly, M.D.
By: /s/ Philip F. Ruppel Date: March 7, 1997
---------------------------- ----------------------------
Philip F. Ruppel
By: /s/ George H. Sorter Date: March 7, 1997
---------------------------- ----------------------------
George H. Sorter
By: /s/ Nicholas A. Marshall Date: March 7, 1997
---------------------------- ----------------------------
Nicholas A. Marshall
By: /s/ Peter C. Haeffner, Jr. Date: March 7, 1997
---------------------------- ----------------------------
Peter C. Haeffner, Jr.
By: /s/ William F. Ward Date: March 7, 1997
---------------------------- ----------------------------
William F. Ward
By: /s/ Gwendolyn C. Baker Date: March 7, 1997
---------------------------- ----------------------------
Gwendolyn C. Baker
29
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESTATED ORGANIZATION CERTIFICATE
OF
THE GREATER NEW YORK SAVINGS BANK
UNDER SECTION 8007 OF
THE BANKING LAW
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
NAME
............................................................ 1
ARTICLE II
PRINCIPAL OFFICE
............................................................ 1
ARTICLE III
CAPITAL STOCK
Section 1. Authorized Shares .......................................... 2
Section 2. Designations, Powers, Preferences, Rights,
Qualifications, Limitations and Restrictions
Relating to the Capital Stock ............................ 2
Section 3. Limitations on Beneficial Ownership
of Common Stock .......................................... 4
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Number of Directors ........................................ 4
Section 2. Classification of Board .................................... 5
Section 3. Removal of Directors ....................................... 5
Section 4. Removal of Chairman ........................................ 5
Section 5. Evaluation of Acquisition Proposals ........................ 5
(i)
<PAGE>
<PAGE>
Section Page
- ------- ----
ARTICLE V
ACTION BY STOCKHOLDERS BY WRITTEN CONSENT
............................................................ 6
ARTICLE VI
CERTAIN BUSINESS COMBINATIONS
Section 1. Higher Vote Required for Certain Business
Combinations ............................................. 6
Section 2. When Higher Vote is Not Required ........................... 7
Section 3. Definitions ................................................ 9
Section 4. Powers of the Disinterested Directors ...................... 13
Section 5. Effect of Fiduciary Obligations of Interested
Stockholders ............................................. 13
Section 6. Amendment, Repeal, Etc. .................................... 13
Section 7. Expiration ................................................. 13
ARTICLE VII
AMENDMENTS
Section 1. Amendments of Restated Organization
Certificate .............................................. 14
Section 2. Amendments of By-Laws ...................................... 14
(ii)
<PAGE>
<PAGE>
RESTATED ORGANIZATION CERTIFICATE
OF
THE GREATER NEW YORK SAVINGS BANK
UNDER SECTION 8007 OF THE BANKING LAW
We, Frank Wille and Charles H. Ahearn, being the Chairman and Chief
Executive Officer and the Secretary, respectively, of The Greater New York
Savings Bank (the "Corporation"), in accordance with Section 8007 of the Banking
Law of the State of New York, do hereby certify as follows:
FIRST, The name of the Corporation is THE GREATER NEW YORK SAVINGS BANK.
SECOND, The Corporation was created by a Certificate of Incorporation filed
by the Superintendent of Banks of the State of New York on February 14, 1916.
THIRD, The text of the Organization Certificate of The Greater New York
Savings Bank is hereby amended and changed in its entirety to read as follows:
ARTICLE I
NAME
The name by which the Corporation is to be known is THE GREATER NEW YORK
SAVINGS BANK.
ARTICLE II
PRINCIPAL OFFICE
The principal office of the Corporation is to be located at 451 Fifth
Avenue, in the Borough of Brooklyn, County of Kings, State of New York.
<PAGE>
<PAGE>
-2-
ARTICLE III
CAPITAL STOCK
Section 1. Authorized Shares.
The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is fifty-five million (55,000,000)
shares, of which ten million (10,000,000) shares shall be preferred stock, par
value $1.00 per share (the "Preferred Stock"), and forty-five million
(45,000,000) shares shall be common stock, par value $1.00 per share (the
"Common Stock"). The Preferred Stock and Common Stock are sometimes hereinafter
collectively referred to as "Capital Stock."
Section 2. Designations, Powers, Preferences, Rights,
Qualifications, Limitations and Restrictions
Relating to the Capital Stock.
The following is a statement of the designations, powers, preferences and
rights in respect of the classes of the Capital Stock, and the qualifications,
limitations or restrictions thereof, and of the authority with respect thereto
expressly vested in the Board of Directors of the Corporation:
(a) Preferred Stock. The Preferred Stock may be issued from time to time in
one or more series, the number of shares and any designation of each series and
the powers, preferences and rights of the shares of each series, and the
qualifications, limitations or restrictions thereof, to be as stated and
expressed in a resolution or resolutions providing for the issue of such series
adopted by the Board of Directors, subject to the limitations prescribed by law.
The Board of Directors in any such resolution or resolutions is expressly
authorized to state for each such series:
(i) the voting powers, if any, of the holders of shares of such series
in addition to any voting rights affirmatively required by law;
(ii) the rate or rates per annum and the time or times at and
conditions upon which the holders of shares of such series shall be
entitled to receive dividends and other distributions, and whether any such
dividends shall be cumulative or non-cumulative and, if cumulative, the
terms upon which such dividends shall be cumulative;
(iii) the terms and conditions upon which the shares of such series
shall be redeemable;
(iv) the amount payable and the rights to which the holders of the
shares of such series shall be entitled upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;
<PAGE>
<PAGE>
-3-
(v) the terms, if any, upon which shares of such series shall be
convertible into, or exchangeable for, shares of any other class or classes
or of any other series of the same or any other class or classes, including
the price or prices or the rate or rates of conversion or exchange and the
terms of adjustment, if any; and
(vi) any other designations, preferences, and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, so far as they are not inconsistent with the
provisions of this Restated Organization Certificate or the laws of the
State of New York.
All shares of the Preferred Stock of any one series shall be identical to
each other in all respects, except that shares of any one series issued at
different times may differ as to the dates from which dividends thereon, if
cumulative, shall be cumulative.
Subject to any limitations or restrictions stated in the resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting a series, the Board of Directors may by resolution or resolutions
likewise adopted increase or decrease (but not below the number of shares of the
series then outstanding) the number of shares of the series subsequent to the
issue of shares of that series; and in case the number of shares of any series
shall be so decreased, the shares constituting the decrease shall resume that
status which they had prior to the adoption of the resolution originally fixing
the number of shares constituting such series.
(b) Common Stock. All shares of Common Stock shall be identical with each
other in every respect. The shares of Common Stock shall entitle the holders
thereof to one vote for each share upon all matters upon which shareholders have
the right to vote. The holders of Common Stock shall not be permitted to
cumulate their votes for the election of directors.
Subject to the preferences, privileges and powers with respect to each
class of Capital Stock of the Corporation having any priority over the Common
Stock, and the restrictions and qualifications thereof, the holders of the
Common Stock shall have and possess all rights pertaining to Capital Stock of
the Corporation.
No holder of shares of Common Stock shall be entitled as such, as a matter
of preemptive right, to subscribe for, purchase or otherwise acquire any part of
any new or additional issue of shares of any class whatsoever of the
Corporation, or of securities convertible into shares of any class whatsoever of
the Corporation, or of any warrants or other instruments evidencing rights or
options to subscribe for, purchase or otherwise acquire such shares or
securities, whether now or hereafter authorized or whether issued for cash or
other consideration or by way of dividend.
<PAGE>
<PAGE>
-4-
Section 3. Limitation on Beneficial Ownership of Common
Stock.
No person, for a period of not less than three years (or such other longer
period, not to exceed five years, as may be subsequently authorized by the New
York Banking Law or the regulations of the New York Banking Department in
connection with the conversion of a savings bank from the mutual form to the
stock form of organization) following the date of filing by the Superintendent
of Banks of this Restated Organization Certificate, shall directly or indirectly
acquire the beneficial ownership of ten percent (1O%) or more of the Common
Stock of the Corporation. Any person who directly or indirectly acquires the
beneficial ownership of more than ten percent (1O%) of the Common Stock of the
Corporation in violation of this Section 3 shall not be entitled to vote any
shares in excess of such ten percent (10%) limitation in connection with any
matters submitted to the stockholders for a vote. As used in this Section 3, the
term "person" shall mean any corporation, partnership, trust, unincorporated
organization or association, syndicate, any other entity or a natural person,
together with any affiliate or associate of such person or any other person
acting in concert with such person, but shall not include a trust which forms a
part of a plan that is described in section 401(a) of the Internal Revenue Code
of 1986, as amended (or the corresponding provisions of any succeeding law) and
that is maintained by the Corporation for the benefit of its employees. For
purposes of this Section 3, the terms "affiliate" and "associate" shall have the
same meanings set forth in Section 3 of Article VI, below.
The limitations contained in this Section 3 shall not apply to (a) a
transaction in which the Corporation shall form a holding company without a
change in the beneficial ownership interests of its stockholders other than
pursuant to the exercise of any dissenter or appraisal rights, or (b) any offer
or sale with a view towards public resale made exclusively by the Corporation to
any underwriter or underwriters acting on behalf of the Corporation, or to the
selling group acting on such underwriter's or underwriters' behalf, in
connection with a public offering of the Corporation's Capital Stock.
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Number of Directors.
The number of directors of the Corporation shall not be less than seven (7)
nor more than thirty (30). Within such limitations, the number of directors
shall be determined by the By-Laws of the Corporation or by resolution of the
Board of Directors.
<PAGE>
<PAGE>
-5-
Section 2. Classification of Board.
The directors of the Corporation shall be divided into three classes in
respect of term of office, each class to contain as near as may be possible one-
third of the entire number of the Board, with the terms of office of one class
expiring each year. At each annual meeting of stockholders, the successors to
the class of directors whose term expires at that time shall be elected by the
stockholders to serve until the annual meeting of stockholders held three years
next following and until their successors shall be elected and shall qualify.
In the event of any intervening changes in the authorized number of
directors, the Board of Directors may designate one or more directorships as
directorships of another class in order more nearly to achieve equality of
number of directors among the classes; provided, however, that such
redesignation shall not take effect until the expiration of the term of the
director then holding such directorship. Notwithstanding the requirement that
the three classes of directors shall be as nearly equal in number as possible,
in the event of any change in the authorized number of directors, each director
then continuing to serve as such shall nevertheless continue as a director of
the class of which he is a member until the expiration of his current term, or
his prior resignation, disqualification, disability or removal.
Section 3. Removal of Directors.
Any or all of the directors may be removed at any time, but only for cause
and only by the affirmative vote of at least eighty percent (80%) of the total
votes eligible to be cast by the holders of all outstanding shares of Capital
Stock entitled to vote generally in the election of directors at a meeting of
stockholders expressly called for that purpose.
Section 4. Removal of Chairman.
The Chairman may be removed at any time with or without cause only by the
vote of at least a majority of the entire Board of Directors.
Section 5. Evaluation of Acquisition Proposals.
The Board of Directors of the Corporation, when evaluating any offer of
another party to (a) purchase or exchange any securities or property for any
outstanding equity securities of the Corporation, (b) merge or consolidate the
Corporation with another corporation, or (c) purchase or otherwise acquire all
or substantially all of the properties and assets of the Corporation, shall, in
connection with the exercise of its judgment in determining what is in the best
interest of the Corporation and its stockholders, give due consideration not
only to the price or other consideration being offered, but also to all other
relevant factors including, without limitation, the financial and managerial
resources and future prospects of
<PAGE>
<PAGE>
-6-
the other party, the possible effects on the business of the Corporation and its
subsidiaries and on the depositors, employees, customers, suppliers and
creditors of the Corporation and its subsidiaries, and the effects on the
communities in which the Corporation's facilities are located. In so evaluating
any such offer, the Board of Directors shall be deemed to be performing their
duly authorized duties and acting in good faith and in the best interests of the
Corporation within the meaning of sections 257 and 7015 of the New York Banking
Law, as they may be amended from time to time.
ARTICLE V
ACTION BY STOCKHOLDERS BY WRITTEN CONSENT
Whenever stockholders of the Corporation are required or permitted to take
any action by vote at any annual or special meeting, such action may be taken
without a meeting upon written consent, setting forth the action so taken,
signed by the holders of all outstanding shares of Capital Stock entitled to
vote thereon.
ARTICLE VI
CERTAIN BUSINESS COMBINATIONS
Section 1. Higher Vote Required for Certain Business
Combinations.
In addition to any affirmative vote required by law or this Restated
Organization Certificate, and except as otherwise expressly provided for in
Section 2 of this Article VI, any Business Combination shall require the
affirmative vote of at least eighty percent (80%) of the total number of votes
eligible to be cast by the holders of all outstanding shares of Voting Stock,
voting together as a single class (it being understood that for purposes of this
Article VI each share of the Voting Stock shall have the number of votes granted
to it pursuant to Article III of this Restated Organization Certificate),
together with the affirmative vote of at least fifty percent (50%) of the total
number of votes eligible to be cast by the holders of all outstanding shares of
the Voting Stock not beneficially owned by the Interested Stockholder involved
or any Affiliate or Associate thereof, voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
<PAGE>
<PAGE>
-7-
Section 2. When Higher Vote is Not Required.
The provisions of Section 1 of this Article VI shall not be applicable to
any particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by law or any other provision of this
Restated Organization Certificate, if the Business Combination shall have been
approved by a majority of the Disinterested Directors then in office or all of
the conditions specified in the following subsections (a) through (g) are met:
(a) The aggregate amount of the cash and the Fair Market Value as of the
Consummation Date of consideration other than cash to be received per share by
holders of Common Stock in such Business Combination shall be at least equal to
the higher of the following:
(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of Common Stock acquired by it
(A) within the two year period immediately prior to the Announcement Date,
or (B) in the transaction in which it became an Interested Stockholder,
whichever is higher, plus interest compounded annually from the
Determination Date through the Consummation Date at the prime rate of
interest of Citibank, N.A. (or other major bank headquartered in New York
City selected by a majority of the Disinterested Directors then in office)
from time to time in effect in New York City, less the aggregate amount of
any cash dividends paid, and the Fair Market Value of any dividends paid,
other than in cash, per share of Common Stock from the Determination Date
through the Consummation Date in an amount up to but not exceeding the
amount of such interest payable per share of Common Stock; and
(ii) the Fair Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is higher.
(b) The aggregate amount of the cash and the Fair Market Value as of the
Consummation Date of consideration other than cash to be received per share by
holders of shares of any class of outstanding Voting Stock, other than Common
Stock, in such Business Combination shall be at least equal to the highest of
the following (such requirement being applicable to each such class of
outstanding Voting Stock, whether or not the Interested Stockholder has
previously acquired any shares of such class of Voting Stock):
(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of such class of Voting Stock
acquired by it (A) within the two year period immediately prior to the
Announcement Date, or (B) in the transaction in which it became an
Interested Stockholder, whichever is higher, plus interest compounded
annually from the Determination Date through the Consummation Date at the
prime rate of interest of Citibank, N.A. (or
<PAGE>
<PAGE>
-8-
other major bank headquartered in New York City selected by a majority of
the Disinterested Directors then in office) from time to time in effect in
New York City, less the aggregate amount of any cash dividends paid, and
the Fair Market Value of any dividends paid other than in cash, per share
of such class of Voting Stock from the Determination Date through the
Consummation Date in an amount up to but not exceeding the amount of such
interest payable per share of such class of Voting Stock;
(ii) (if applicable) the highest preferential amount per share to
which the holders of shares of such class of Voting Stock are entitled in
the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; and
(iii) the Fair Market Value per share of such class of Voting Stock on
the Announcement Date or on the Determination Date, whichever is higher.
(c) The consideration to be received by holders of a particular class of
outstanding Voting Stock (including Common Stock) in such Business Combination
shall be in cash or in the same form as the Interested Stockholder has
previously paid for shares of such class of Voting Stock. If the Interested
Stockholder has paid for shares of any class of Voting Stock with varying forms
of consideration, the form of consideration for such class of Voting Stock shall
be either cash or the form used to acquire the largest number of shares of such
class of Voting Stock previously acquired by it.
(d) The holders of all outstanding shares of Voting Stock not beneficially
owned by the Interested Stockholder immediately prior to the consummation of
such Business Combination shall be entitled to receive in such Business
Combination cash or other consideration for their shares in compliance with
subsections (a), (b) and (c) of this Section 2.
(e) After the Determination Date and prior to the Consummation Date:
(i) except as approved by a majority of the Disinterested Directors
then in office, there shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends (whether or not
cumulative) on any outstanding Preferred Stock;
(ii) there shall have been (A) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Disinterested Directors then in office, and (B) an increase in such annual
rate of dividends as necessary to reflect any reclassification (including
any reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure to so increase such annual
rate is approved by a majority of the Disinterested Directors then in
office; and
<PAGE>
<PAGE>
-9-
(iii) such Interested Stockholder shall not have become the beneficial
owner of any additional shares of Voting Stock except as part of the
transaction which results in such Interested Stockholder becoming an
Interested Stockholder.
(f) After the Determination Date, the Interested Stockholder shall not have
received the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by or through the
Corporation, whether in anticipation of or in connection with such Business
Combination or otherwise.
(g) A proxy or information statement describing the proposed Business
Combination in accordance with the requirements of the Securities Exchange Act
of 1934, as amended, whether or not the Corporation is then subject to such
requirements, and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to public
stockholders of the Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions). The first
page of such proxy or information statement shall prominently display the
recommendation, if any, which a majority of the Disinterested Directors then in
office may choose to make to the holders of Voting Stock regarding the proposed
Business Combination. Such proxy or information statement shall also contain, if
a majority of the Disinterested Directors then in office so requests, an opinion
of a reputable investment banking firm (which firm shall be selected by a
majority of the Disinterested Directors then in office, furnished with all
information it reasonably requests, and paid a reasonable fee for its services
by the Corporation upon the Corporation's receipt of such opinion) as to the
fairness (or lack of fairness) of the terms of the proposed Business Combination
from the point of view of the holders of Voting Stock other than the Interested
Stockholder.
Section 3. Definitions.
For purposes of this Article VI:
(a) "Affiliate" or "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities and Exchange Act of 1934, as amended, as in effect on the date of
filing by the Superintendent of Banks of this Restated Organization Certificate
whether or not the Corporation was then subject to such rule.
(b) "Announcement Date" shall mean the date of the first public
announcement of the proposal of the Business Combination.
(c) A Person shall be deemed the "beneficial owner of any Voting Stock:
<PAGE>
<PAGE>
-10-
(i) which such Person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) which such Person or any or its Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (B) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which is beneficially owned, directly or indirectly, by any
other Person with which such first mentioned Person or any of its
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any shares of
Voting Stock; provided, however, that (A) no director or officer of the
Corporation (nor any Affiliate or Associate of any such director or
officer) shall, solely by reason of any or all of such directors or
officers acting in their capacities as such, be deemed, for any purposes
hereof, to beneficially own any Common Stock of the Corporation
beneficially owned by any other such director or officer (or any Affiliate
or Associate thereof), and (B) no trust which forms a part of a pension,
savings, employee stock ownership, or similar employee benefit plan of the
Corporation or any subsidiary nor any trustee with respect thereto (nor any
affiliate of such trustee) shall, solely by reason of such capacity, be
deemed, for any purposes hereof, to beneficially own any Voting Stock of
the Corporation held under any such plan.
(d) The term "Business Combination" shall mean any transaction which is
referred to in any one or more of the following paragraphs (i) through (v):
(i) any merger or consolidation of the Corporation or any Subsidiary
with (A) any Interested Stockholder, or (B) any other corporation (whether
or not itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate or Associate of any Interested
Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value equal to twenty percent (20%) or more of the
aggregate Fair Market Value of all of the outstanding Capital Stock of the
Corporation; or
(iii) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder having an aggregate
Fair Market Value equal to twenty percent (20%) or more of
<PAGE>
<PAGE>
-11-
the aggregate Fair Market Value of all of the outstanding Capital Stock of
the Corporation; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(v) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an
Interested Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder, except as a result of
immaterial changes due to fractional share adjustments.
(e) "Consummation Date" shall mean the date of the consummation of the
Business Combination.
(f) "Determination Date" shall mean the date on which the Interested
Stockholder became an Interested Stockholder.
(g) "Disinterested Director" shall mean any member of the Board of
Directors of the Corporation who is not affiliated with the Interested
Stockholder and who either was a member of the Board of Directors prior to the
Determination Date, or was recommended for election by a majority of the
Disinterested Directors in office at the time such director was nominated for
election.
(h) "Fair Market Value" shall mean (i) in the case of stock, the highest
closing price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange listed stocks, or, if such stock is not quoted on the Composite Tape,
the New York Stock Exchange, or, if such stock is not listed on such Exchange,
on the principal United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, on which such stock is listed, or,
if such stock is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities Dealers
Automated Quotation System or any system then in use, or if no such quotation is
available, the fair market value on the date in question of a share of such
stock as determined in good faith by a majority of the Disinterested Directors
then in office, in each case with respect to any class of stock, appropriately
adjusted for any dividend or distribution in shares of such stock or any stock
split or reclassification of outstanding shares of such stock into a greater
number of shares of such stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of such stock;
<PAGE>
<PAGE>
-12-
and (ii) in the case of property other than cash or stock, the fair market value
of such property on the date in question as determined in good faith by a
majority of the Disinterested Directors then in office.
(i) References to "highest per share price" shall in each case with respect
to any class of stock reflect an appropriate adjustment for any dividend or
distribution in shares of such stock or any stock split or reclassification of
outstanding shares of such stock into a greater number of shares of such stock
or any combination or reclassification of outstanding shares of such stock into
a smaller number of shares of such stock.
(j) "Interested Stockholder" shall mean any Person (other than the
Corporation, any Subsidiary, or any pension, savings, stock ownership or other
employee benefit plan maintained for the benefit of employees of the Corporation
and/or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly, of more than ten
percent (10%) of the voting power of the outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any time within the two
year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of ten percent (10%) or more of the voting
power of the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two year period immediately
prior to the date in question beneficially owned by any other Interested
Stockholder, if such assignment or succession shall have occurred in the
course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended.
In determining whether a Person is an Interested Stockholder pursuant to
this subsection (j), the number of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned through application of subsection
(c) of this Section 3 but shall not include any other shares of Voting Stock
which may be issuable pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, warrants or options, or otherwise.
(k) "Person" shall mean any corporation, partnership, trust,
unincorporated organization or association, syndicate, any other entity or a
natural person.
(l) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in subsection (j) of this Section 3, the term "Subsidiary"
shall mean only a corporation of which a majority of each class of voting
securities is owned, directly or indirectly, by the Corporation.
<PAGE>
<PAGE>
-13-
(m) "Voting Stock" shall mean all of the outstanding shares of Capital
Stock entitled to vote generally in the election of directors.
Section 4. Powers of the Disinterested Directors.
When it appears that a particular person may be an Interested Stockholder
and that the provisions of this Article VI need to be applied or interpreted,
then a majority of the Directors of the Corporation who would qualify as
Disinterested Directors shall have the power and duty to interpret all of the
terms and provisions of this Article VI, and to determine on the basis of
information known to them after reasonable inquiry all facts necessary to
ascertain compliance with this Article VI, including, without limitation, (a)
whether a person is an Interested Stockholder, (b) the number of shares of
Voting Stock beneficially owned by any person, (c) whether a person is an
Affiliate or Associate of another, (d) whether the assets which are the subject
of any Business Combination, or the securities to be issued or transferred by
the Corporation or any Subsidiary in any Business Combination, have an aggregate
Fair Market Value equal to twenty percent (20%) or more of the aggregate Fair
Market Value of all of the outstanding capital stock of the Corporation, and (e)
whether all of the applicable conditions set forth in Section 2 of this Article
VI have been met with respect to any Business Combination.
Section 5. Effect of Fiduciary Obligations of Interested Stockholders.
Nothing contained in this Article VI shall be construed to relieve any
Interested Stockholder from any fiduciary obligations imposed by law.
Section 6. Amendment, Repeal, Etc.
Except as provided in Section 7 of this Article VI and notwithstanding any
other provisions of this Restated Organization Certificate or the By-Laws (and
notwithstanding the fact that a lesser percentage may be specified by law, this
Restated Organization Certificate or the By-Laws of the Corporation), the
affirmative vote of at least eighty percent (80%) of the total number of votes
eligible to be cast by the holders of all outstanding shares of the Voting
Stock, voting together as a single class, together with the affirmative vote of
at least fifty percent (50%) of the total number of votes eligible to be cast by
the holders of all outstanding shares of the Voting Stock not beneficially owned
by any Interested Stockholder or Affiliate or Associate thereof, voting together
as a single class, shall be required to amend, alter, rescind, repeal, or adopt
any provisions inconsistent with, this Article VI.
Section 7. Expiration.
The provisions set forth in this Article VI shall expire three years (or
such other longer period, not to exceed five years, as may be subsequently
authorized by the New York Banking Law or the regulations of the New York
Banking Department in connection with the conversion of
<PAGE>
<PAGE>
-14-
a savings bank from the mutual form to the stock form of organization) from the
effective date of the conversion of the Corporation from the mutual to the stock
form of organization.
ARTICLE VII
AMENDMENTS
Section 1. Amendments of Restated Organization Certificate.
The Corporation reserves the right to amend this Restated Organization
Certificate from time to time, in any and as many respects as may be desired and
as may be lawfully contained in an original organization certificate filed at
the time of making such amendment. Notwithstanding the foregoing, the
affirmative vote of at least two-thirds (or such greater proportion as may
otherwise be required pursuant to any specific provision of this Restated
Organization Certificate) of the total votes eligible to be cast by the holders
of all outstanding shares of Capital Stock entitled to vote thereon shall be
required to amend, alter, rescind, repeal, or adopt any provisions inconsistent
with, Section 3 of Article III, or Articles IV, V, VI or VII of this Restated
Organization Certificate; provided, however, that the affirmative vote of a
majority of the total votes eligible to be cast by the holders of all
outstanding shares of Capital Stock entitled to vote thereon shall be sufficient
to amend the expiration provision set forth in Section 7 of Article VI.
Section 2. Amendments of By-Laws.
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors of the Corporation is expressly authorized to make,
alter, amend, rescind or repeal from time to time any of the By-Laws of the
Corporation in accordance with the terms thereof; provided, however, that the
Board shall not have the authority to alter, amend, rescind or repeal any By-
Law which shall have been made from time to time by the holders of shares of
capital stock entitled to vote thereon, unless otherwise provided by the holders
of shares entitled to vote thereon, and provided further, that any By-Law made
by the Board may be altered, amended, rescinded, or repealed by the holders of
shares of Capital Stock entitled to vote thereon at any annual meeting or at any
special meeting called for that purpose. Notwithstanding the foregoing, any
provision of the By-Laws which contains a supermajority voting requirement shall
only be altered, amended, rescinded, or repealed by a vote of the Board or
holders of Capital Stock entitled to vote thereon that is not less than the
supermajority specified in such provision.
FOURTH, This amendment and restatement of the Organization Certificate was
authorized by a majority vote of the members of the Board of Trustees.
<PAGE>
<PAGE>
-15-
IN WITNESS WHEREOF, we have made, signed and acknowledged this certificate
in duplicate, this 17th day of June, 1987.
/s/Frank Wille
-------------------------------
Frank Wille
Chairman and Chief
Executive Officer
/s/Charles H. Ahearn
-------------------------------
Charles H. Ahearn
Secretary
<PAGE>
<PAGE>
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 17th day of June, 1987, before me personally came FRANK WILLE, to me
known and known to me to be the individual described in and who executed the
foregoing instrument, and he duly acknowledged to me that he executed the same.
/s/Carmila M. Cavallo
- -------------------------------
Notary Public
(Seal) CARMILA M. CAVALLO
Notary Public, State of New York
No. 01CA5654500
Qualified in Kings County
Commission Expires September 30, 1988
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 17th day of June, 1987, before me personally came CHARLES H. AHEARN,
to me known and known to me to be the individual described in and who executed
the foregoing instrument, and he duly acknowledged to me that he executed the
same.
/s/Anthony Figeroux
- -------------------------------
Notary Public
(Seal) ANTHONY FIGEROUX
Notary Public, State of New York
No. 41-4625679
Qualified in Queens County
Commission Expires July 31, 1988
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
RESTATED ORGANIZATION CERTIFICATE
OF
THE GREATER NEW YORK SAVINGS BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, Gerard C. Keegan, and Robert P. Carlson, being the President and Chief
Operating Officer and the Assistant Secretary, respectively, of The Greater New
York Savings Bank (the "Corporation"), in accordance with Section 8005 of the
Banking Law of the State of New York, do hereby certify as follows:
FIRST, The name of the Corporation is THE GREATER NEW YORK SAVINGS BANK.
SECOND, The Corporation was created by a Certificate of Incorporation filed
by the Superintendent of Banks of the State of New York on February 14, 1916. On
June 24, 1987, the Restated Organization Certificate of the Corporation
providing for the conversion of the Corporation from mutual to stock form was
filed with the Superintendent of Banks of the State of New York.
THIRD, The Restated Organization Certificate of the Corporation is hereby
amended in accordance with Section 5002 of the Banking Law of the State of New
York by the addition of the Certificate of Designations of Series A ESOP
Convertible Preferred Stock attached hereto as Exhibit A, which states the
number, designation, relative rights, preferences, and limitations of the
Corporation's Series A ESOP Convertible Preferred Stock.
FOURTH, This amendment was authorized by the majority vote of the entire
Board of Directors of the Corporation as required by Section 5002 of the Banking
<PAGE>
<PAGE>
Law of the State of New York and Article III, Section 2 of the Corporation's
Restated Organization Certificate.
IN WITNESS WHEREOF, the undersigned officers of the Corporation have made,
signed and acknowledged this certificate, this 13th day of February, 1989.
/s/Gerard C. Keegan
-------------------------------
Gerard C. Keegan
President and Chief
Operating Officer
/s/Robert P. Carlson
-------------------------------
Robert P. Carlson
Assistant Secretary
2
<PAGE>
<PAGE>
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 13th day of February, 1989, before me personally appeared GERARD C.
KEEGAN, to me known, who being by me duly sworn, did depose and say that he is
the President and Chief Operating Officer of The Greater New York Savings Bank
described in the Certificate of Amendment of the Restated Organization
Certificate, that he executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
/s/Cheryl Swack
- -------------------------------
Notary Public
(Seal) CHERYL SWACK
Notary Public, State of New York
No. 31-4928254
Qualified in New York County
Commission Expires April 25, 1990
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 13th day of February, 1989, before me personally appeared ROBERT P.
CARLSON, to me known, who being by me duly sworn, did depose and say that he is
the Secretary of The Greater New York Savings Bank described in the Certificate
of Amendment of the Restated Organization Certificate, that he executed the
foregoing instrument, and he duly acknowledged to me that he executed the same.
/s/Barbara J. McClorey
- -------------------------------
Notary Public
(Seal) BARBARA J. McCLOREY
Notary Public, State of New York
No. 30-4894231
Qualified in Nassau County
Certificate Filed in New York County
Commission Expires May 11, 1989
<PAGE>
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATIONS
OF
SERIES A ESOP CONVERTIBLE PREFERRED STOCK
of
THE GREATER SAVINGS BANK OF NEW YORK
Pursuant to Section 5002 of the
Banking Law of the State of New York
I, Gerard C. Keegan, President and Chief Operating Officer of The Greater
New York Savings Bank (the "Company"), a corporation organized and existing
under the Banking Law of the State of New York, in accordance with the
provisions of Section 5002 thereof, DO HEREBY CERTIFY that, pursuant to the
authority conferred upon the Board of Directors by the Organization Certificate
of the Company, the Board of Directors authorized the series of Preferred Stock
hereinafter provided for and established the voting powers thereof and has
adopted the following resolution creating a series of one million eight hundred
thousand (1,800,000) shares of Preferred Stock, par value $1.00 per share,
designated as Series A ESOP Convertible Preferred Stock:
RESOLVED that, pursuant to the authority vested in the Board of Directors
of the Company in accordance
<PAGE>
<PAGE>
with the provisions of its Organization Certificate, a series of Preferred Stock
of the Company be, and it hereby is, created, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount; Special Purpose Restricted Transfer
Issue.
(A) The shares of this series of Preferred Stock shall be designated as
Series A ESOP Convertible Preferred Stock ("Series A Preferred Stock") and the
number of shares constituting such series shall be one million eight hundred
thousand (1,800,000) shares.
(B) Shares of Series A Preferred Stock shall be issued only to a trustee
acting on behalf of an employee stock ownership plan or other employee benefit
plan of the Company. In the event of any transfer of shares of Series A
Preferred Stock to any person other than any such plan trustee without the prior
written consent of the Company, the shares of Series A Preferred Stock so
transferred, upon such transfer and without any further action by the Company or
the holder, shall be automatically converted into shares of Common Stock on the
terms otherwise provided for the conversion of shares
2
<PAGE>
<PAGE>
of Series A Preferred Stock into shares of Common Stock pursuant to Section 5
hereof, and no such transferee shall have any of the voting powers, preferences
and relative, participating, optional or special rights ascribed to shares of
Series A Preferred Stock hereunder but, rather, only the powers and rights
pertaining to the Common Stock into which such shares of Series A Preferred
Stock shall be so converted. Certificates representing shares of Series A
Preferred Stock shall be legended to reflect such restrictions on transfer.
Notwithstanding the foregoing provisions of this paragraph (B) of Section 1,
shares of Series A Preferred Stock (i) may be converted into shares of Common
Stock as provided by Sections 5 and 7 hereof and the shares of Common Stock
issued upon such conversion may be transferred by the holder thereof as
permitted by law and (ii) shall be redeemable by the Company upon the terms and
conditions provided by Section 6 hereof.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series A Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends ("Preferred
3
<PAGE>
<PAGE>
Dividends") in an amount per share equal to $l.0725 per share per annum, and no
more, payable in as nearly as possible equal proportions on the first day of
January and July of each year (each a "Dividend Payment Date") commencing on
July 1, 1989, to holders of record at the start of business on such Dividend
Payment Date. Preferred Dividends shall begin to accrue on outstanding shares of
Series A Preferred Stock from the date of issuance of such shares of Series A
Preferred Stock. Preferred Dividends shall accrue on a daily basis whether or
not the Company shall have earnings or surplus at the time, but Preferred
Dividends accrued after July 1, 1989 on the shares of Series A Preferred Stock
for any period less than a full semi-annual period between Dividend Payment
Dates shall be computed on the basis of a 360-day year of 30-day months. A full
semi-annual dividend payment of $0.53625 per share shall accrue for the period
from the date of issuance until July 1, 1989. Accumulated but unpaid Preferred
Dividends shall cumulate as of the Dividend Payment Date on which they first
become payable, but no interest shall accrue on accumulated but unpaid Preferred
Dividends.
(B) So long as any Series A Preferred Stock shall be outstanding, no
dividend shall be declared or
4
<PAGE>
<PAGE>
paid or set apart for payment on any other series of stock ranking on a parity
with the Series A Preferred Stock as to dividends, unless there shall also be or
have been declared and paid or set apart for payment on the Series A Preferred
Stock, like dividends for all dividend payment periods of the Series A Preferred
Stock ending on or before the dividend payment date of such parity stock,
ratably in proportion to the respective amounts of dividends accumulated and
unpaid through such dividend payment period on the Series A Preferred Stock and
accumulated and unpaid or payable on such parity stock through the dividend
payment period on such parity stock next preceding such dividend payment date.
In the event that full cumulative dividends on the Series A Preferred Stock have
not been declared and paid or set apart for payment when due, the Company shall
not declare or pay or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the purchase, redemption or
other retirement of, any other class of stock or series thereof of the Company
ranking, as to dividends or as to distributions in the event of a liquidation,
dissolution or winding-up of the Company, junior to the Series A Preferred Stock
until full cumulative
5
<PAGE>
<PAGE>
dividends on the Series A Preferred Stock shall have been paid or declared and
provided for.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) The holders of Series A Preferred Stock shall be entitled to vote on
all matters submitted to a vote of the holders of Common Stock of the Company,
voting together with the holders of Common Stock as one class. Each share of the
Series A Preferred Stock shall be entitled to one vote per share.
(B) Except as otherwise required by law or set forth herein, holders of
Series A Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any corporate
action; provided, however, that the vote of at least 66-2/3% of the outstanding
shares of Series A Preferred Stock, voting separately as a series, shall be
necessary to adopt any alteration, amendment or repeal of any provision of the
Organization Certificate of the Company, as amended, or this Resolution
(including any such alteration, amendment or repeal effected by any merger or
consolidation in which the
6
<PAGE>
<PAGE>
Company is the surviving or resulting corporation) if such amendment, alteration
or repeal would alter or change the powers, preferences or special rights of the
shares of Series A Preferred Stock so as to affect them adversely.
Section 4. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of Series A Preferred Stock shall be entitled to
receive out of assets of the Company which remain after satisfaction in full of
all valid claims of creditors of the Company and which are available for payment
to stockholders and subject to the rights of the holders of any stock of the
Company ranking senior to or on a parity with the Series A Preferred Stock in
respect of distributions upon liquidation, dissolution or winding up of the
Company, before any amount shall be paid or distributed among the holders of
Common Stock or any other shares ranking junior to the Series A Preferred Stock
in respect of distributions upon liquidation, dissolution or winding up of the
Company, liquidating distributions in the amount of $13.00 per share, plus an
amount equal to all accumulated and unpaid dividends thereon to the date fixed
for distribution, and no more. If upon any liqui-
7
<PAGE>
<PAGE>
dation, dissolution or winding up of the Company, the amounts payable with
respect to the Series A Preferred Stock and any other stock ranking as to any
such distribution on a parity with the Series A Preferred Stock are not paid in
full, the holders of the Series A Preferred Stock and such other stock shall
share ratably in any distribution of assets in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount to which they are entitled as provided by the foregoing provisions of
this paragraph 4(A), the holders of shares of Series A Preferred Stock shall not
be entitled to any further right or claim to any of the remaining assets of the
Company.
(B) Neither the merger or consolidation of the Company with or into any
other corporation, nor the merger or consolidation of any other corporation with
or into the Company, nor the sale, transfer or lease of all or any portion of
the assets of the Company, shall be deemed to be a dissolution, liquidation or
winding up of the affairs of the Company for purposes of this Section 4, but the
holders of Series A Preferred Stock shall nevertheless be entitled in the event
of any such merger or consolidation to the rights provided by Section 8 hereof.
(C) Written notice of any voluntary or invol-
8
<PAGE>
<PAGE>
untary liquidation, dissolution or winding up of the Company, stating the
payment date or dates when, and the place or places where, the amounts
distributable to holders of Series A Preferred Stock in such circumstances shall
be payable, shall be given by first-class mail, postage prepaid, mailed not less
than twenty (20) days prior to any payment date stated therein, to the holders
of Series A Preferred Stock, at the address shown on the books of the Company or
any transfer agent for the Series A Preferred Stock.
Section 5. Conversion into Common Stock.
(A) A holder of shares of Series A Preferred Stock shall be entitled, at
any time prior to the close of business on the date fixed for redemption of such
shares pursuant to Section 6 hereof, to cause any or all of such shares to be
converted into shares of Common Stock, initially at a conversion price equal to
$16.64 per share of Common Stock, with each share of Series A Preferred Stock
being valued at $13.00 for such purpose, and which price shall be adjusted as
hereinafter provided (and, as so adjusted, is hereinafter sometimes referred to
as the "Conversion Price") (that is, a conversion rate initially equivalent to
.78125 shares of Common Stock for each share of Series A Preferred Stock so
converted but
9
<PAGE>
<PAGE>
that is subject to adjustment as the Conversion Price is adjusted as hereinafter
provided).
(B) Any holder of shares of Series A Preferred Stock desiring to convert
such shares into shares of Common Stock shall surrender the certificate or
certificates representing the shares of Series A Preferred Stock being
converted, duly assigned or endorsed for transfer to the Company (or accompanied
by duly executed stock powers relating thereto), at the principal executive
office of the Company or the offices of the transfer agent for the Series A
Preferred Stock or such office or offices in the continental United States of an
agent for conversion as may from time to time be designated by notice to the
holders of the Series A Preferred Stock by the Company or the transfer agent for
the Series A Preferred Stock, accompanied by written notice of conversion. Such
notice of conversion shall specify (i) the number of shares of Series A
Preferred Stock to be converted and the name or names in which such holder
wishes the certificate or certificates for Common Stock and for any shares of
Series A Preferred Stock not to be so converted to be issued, and (ii) the
address to which such holder wishes delivery to be made of such new certificates
to be issued upon such conversion.
10
<PAGE>
<PAGE>
(C) Upon surrender of a certificate representing a share or shares of
Series A Preferred Stock for conversion, the Company shall issue and send by
hand delivery (with receipt to be acknowledged) or by first class mail, postage
prepaid, to the holder thereof or to such holder's designee, at the address
designated by such holder, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled upon conversion.
In the event that there shall have been surrendered a certificate or
certificates representing shares of Series A Preferred Stock, only part of which
are to be converted, the Company shall issue and deliver to such holder or such
holder's designee a new certificate or certificates representing the number of
shares of Series A Preferred Stock which shall not have been converted.
(D) The issuance by the Company of shares of Common Stock upon a
conversion of shares of Series A Preferred Stock into shares of Common Stock
made at the option of the holder thereof shall be effective as of the earlier of
(i) the delivery to such holder or such holder's designee of the certificates
representing the shares of Common Stock issued upon conversion thereof or (ii)
the commencement of business on the second business day
11
<PAGE>
<PAGE>
after the surrender of the certificate or certificates for the shares of Series
A Preferred Stock to be converted, duly assigned or endorsed for transfer to the
Company (or accompanied by duly executed stock powers relating thereto) as
provided by this Resolution. On and after the effective day of conversion, the
person or persons entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock, but no allowance or adjustment shall be made in
respect of dividends payable to holders of Common Stock in respect of any period
prior to such effective date. The Company shall not be obligated to pay any
dividends which shall have been declared and shall be payable to holders of
shares of Series A Preferred Stock on a Dividend Payment Date if such Dividend
Payment Date for such dividend shall coincide with or be on or subsequent to the
effective date of conversion of such shares.
(E) The Company shall not be obligated to deliver to holders of Series A
Preferred Stock any fractional share or shares of Common Stock issuable upon any
conversion of such shares of Series A Preferred Stock, but in lieu thereof may
make a cash payment in respect thereof in any manner permitted by law.
12
<PAGE>
<PAGE>
(F) Whenever the Company shall issue shares of Common Stock upon
conversion of shares of Series A Preferred Stock as contemplated by this Section
5, the Company shall issue together with each such share of Common Stock any
options, warrants or other rights theretofore issued and then outstanding with
respect to any shares of Common Stock.
(G) The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
shares of Series A Preferred Stock as herein provided, free from any preemptive
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the shares of Series A Preferred Stock then
outstanding. The Company shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all requirements
as to registration or qualification of the Common Stock, in order to enable the
Company lawfully to issue and deliver to each holder of record of Series A
Preferred Stock such number of shares of its Common Stock as shall from time to
time be sufficient to effect the
13
<PAGE>
<PAGE>
conversion of all shares of Series A Preferred Stock then outstanding and
convertible into shares of Common Stock.
Section 6. Redemption At the Option of the Company.
(A) The Series A Preferred Stock shall be redeemable, in whole or in part,
at the option of the Company at any time after July 1, 1992, or on or before
July 1, 1992 if permitted by paragraph (D) of this Section 6, at the following
redemption prices per share:
During the Twelve-
Month Period Price Per
Beginning July 2 Share
- ----------------- ---------
1989 ......................................... $ 14.00
1990 ......................................... 13.90
1991 ......................................... 13.80
1992 ......................................... 13.70
1993 ......................................... 13.60
1994 ......................................... 13.50
1995 ......................................... 13.40
1996 ......................................... 13.30
1997 ......................................... 13.20
1998 ......................................... 13.10
and thereafter at $13.00 per share, plus, in each case, an amount equal to all
accumulated and unpaid dividends thereon to the date fixed for redemption.
Payment of the redemption price shall be made by the Company in cash or shares
of Common Stock, or a combination thereof, as permitted by paragraph (E) of this
Section 6. From and after the date fixed for redemption, dividends on shares of
Series A Preferred Stock called for redemption will
14
<PAGE>
<PAGE>
cease to accrue, such shares will not longer be deemed to be outstanding and all
rights in respect of such shares of the Company shall cease, except the right to
receive the redemption price. If less than all of the outstanding shares of
Series A Preferred Stock are to be redeemed, the Company shall either redeem a
portion of the shares of each holder determined pro rata based on the number of
shares held by each holder or shall select the shares to be redeemed by lot, as
may be determined by the Board of Directors of the Company.
(B) Unless otherwise required by law, notice of redemption for any
redemption made pursuant to this Section 6 will be sent to the holders of Series
A Preferred Stock at the address shown on the books of the Company or any
transfer agent for the Series A Preferred Stock by first class mail, postage
prepaid, mailed not less than twenty (20) days nor more than sixty (60) days
prior to the redemption date. Each such notice shall state: (i) the redemption
date; (ii) the total number of shares of the Series A Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to
15
<PAGE>
<PAGE>
be surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
conversion rights of the shares to be redeemed, the period within which
conversion rights may be exercised, and the Conversion Price and number of
shares of Common Stock issuable upon conversion of a share of Series A Preferred
Stock at the time. Upon surrender of the certificates for any shares so called
for redemption and not previously converted (properly endorsed or assigned for
transfer, if the Board of Directors of the Company shall so require and the
notice shall so state), such shares shall be redeemed by the Company at the date
fixed for redemption and at the redemption price set forth in this Section 6.
(C) In the event of a modification to the Internal Revenue Code of 1986,
as amended, which has the effect of precluding the Company from claiming the tax
deduction for dividends paid on the Series A Preferred Stock when such dividends
are used as provided under Section 404(k)(2) of the Internal Revenue Code of
1986, as amended and in effect on the date shares of Series A Preferred Stock
are initially issued, the Company may, in its sole discretion and
notwithstanding anything to the contrary in paragraph (A) of this Section 6,
elect to
16
<PAGE>
<PAGE>
redeem such shares for the amount payable in respect of the shares upon
liquidation of the Company pursuant to Section 4 hereof.
(D) Notwithstanding anything to the contrary in paragraph (A) of this
Section 6, the Company may elect to redeem any or all of the shares of Series A
Preferred Stock at any time on or prior to July 1, 1992 on the terms and
conditions set forth in paragraphs (A) and (B) of this Section 6, if the last
reported sales price, regular way, of a share of Common Stock, as reported on
the New York Stock Exchange Composite Tape or, if the Common Stock is not listed
or admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such stock is listed or admitted to trading or, if
the Common Stock is not listed or admitted to trading on any national securities
exchange, on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if the Common
Stock is not quoted on such National Market System, the average of the closing
bid and asked prices in over-the-counter market as reported by NASDAQ, for at
least forty (40) trading days within a period of sixty (60) consecutive trading
days ending within five (5) days of the notice of redemption equals
17
<PAGE>
<PAGE>
or exceeds one hundred fifty percent (150%) of the Conversion Price (giving
effect equitably in making such calculation to any adjustments required by
Section 9 hereof).
(E) The Company shall make payment of the redemption price required upon
redemption of shares of Series A Preferred Stock for cash, or if the Company so
elects, in shares of Common Stock, or in a combination of such shares and cash,
any such shares to be valued for such purpose at their Fair Market Value (as
defined in paragraph (G) of Section 9 hereof, provided, however, that in
calculating their Fair Market Value the Adjustment Period shall be deemed to be
the five (5) consecutive trading days preceding, and including, the date of
redemption).
Section 7. Special Conversion Rights.
A holder of shares of Series A Preferred Stock shall be entitled to cause
any or all of such shares to be converted into shares of Common Stock at a
conversion rate equal to the ratio of $13.00 per share of Series A Preferred
Stock plus accumulated and unpaid dividends thereon to the date fixed for
redemption to the Fair Market Value (as defined in paragraph 9(G) hereof,
provided, however, that in calculating such Fair Market
18
<PAGE>
<PAGE>
Value the Adjustment Period shall be deemed to be the five consecutive trading
days preceding, and including, the date of conversion) at any time and from time
to time upon notice to the Company given not less than five (5) business days
prior to the date fixed by the holder in such notice for such conversion, but
only when and to the extent unavoidably necessary (i) for such holder to provide
for distributions required to be made under, or to satisfy an investment
election provided to participants in accordance with, The Greater New York
Savings Bank Employee Stock Ownership Plan, effective as of January 1, 1989, as
the same may be amended, or any successor plan (the "Plan") to participants in
the Plan; (ii) for such holder to make payment of principal, interest or premium
due and payable (whether as scheduled or upon acceleration) on any indebtedness
incurred for the benefit of the Plan by the holder, the Plan or a trust under
the Plan; or (iii) in the event the Plan is determined by the Internal Revenue
Service not to be qualified within the meaning of Sections 401(a) the applicable
provisions of 409, and 4975(e)(7) of the Internal Revenue Code of 1986, as
amended; provided, however, that the Company may at its election substitute for
such conversion a cash payment per share of Series A Preferred Stock sought to
be
19
<PAGE>
<PAGE>
converted of $13.00 plus accumulated and unpaid dividends thereon if it has
received an opinion of counsel or advice of the staff of the Federal Deposit
Insurance Corporation ("FDIC") to the effect that the exercise of such election
will not impair the treatment of the Series A Preferred Stock as permanent
stockholders' equity for purposes of the FDIC's capital regulations.
Section 8. Consolidation, Merger, etc.
(A) In the event that the Company shall consummate any consolidation or
merger or similar transaction, however named, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged solely for or changed,
reclassified or converted solely into stock of any successor or resulting
company (including the Company) that constitutes "qualifying employer
securities" with respect to a holder of Series A Preferred Stock within the
meaning of Section 409(1) of the Internal Revenue Code of 1986, as amended, and
Section 407(d)(5) of the Employee Retirement Income Security Act of 1974, as
amended, or any successor provisions of law, and, if applicable, for a cash
payment in lieu of fractional shares, if any, the shares of Series A Preferred
Stock of such holder shall be assumed by and shall become preferred stock of
such successor or resulting company,
20
<PAGE>
<PAGE>
having in respect of such company insofar as possible the same powers,
preferences and relative, participating, optional or other special rights
(including the redemption rights provided by Section 6 hereof), and the
qualifications, limitations or restrictions thereon, that the Series A Preferred
Stock had immediately prior to such transaction, except that after such
transaction each share of the Series A Preferred Stock shall be convertible,
otherwise on the terms and conditions provided by Sections 5 and 7 hereof, into
the qualifying employer securities so receivable by a holder of the number of
shares of Common Stock into which such shares of Series A Preferred Stock could
have been converted immediately prior to such transaction if such holder of
Common Stock failed to exercise any rights of election to receive any kind or
amount of stock, securities, cash or other property (other than such qualifying
employer securities and a cash payment, if applicable, in lieu of fractional
shares) receivable upon such transaction (provided that, if the kind or amount
of qualifying employer securities receivable upon such transaction is not the
same for each non-electing share, then the kind and amount of qualifying
employer securities receivable upon such transaction for each non-electing share
shall be the kind and amount
21
<PAGE>
<PAGE>
so receivable per share by a plurality of the non-electing shares). The rights
of the Series A Preferred Stock as preferred stock of such successor or
resulting company shall successively be subject to adjustments pursuant to
Section 9 hereof after any such transaction as nearly equivalent to the
adjustments provided for by such section prior to such transaction. The Company
shall not consummate any such merger, consolidation or similar transaction
unless all then outstanding shares of the Series A Preferred Stock shall be
assumed and authorized by the successor or resulting company as aforesaid.
(B) In the event that the Company shall consummate any consolidation or
merger or similar transaction, however named, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged for or changed,
reclassified or converted into other stock or securities or cash or any other
property, or any combination thereof, other than any such consideration which is
constituted solely of qualifying employer securities (as referred to in
paragraph (A) of this Section 8) and cash payments, if applicable, in lieu of
fractional shares, outstanding shares of Series A Preferred Stock shall, without
any action on the part of the Company or any holder thereof, be deemed converted
by virtue of such
22
<PAGE>
<PAGE>
merger, consolidation or similar transaction immediately prior to such
consummation into the number of shares of Common Stock into which such shares of
Series A Preferred Stock could have been converted at such time if the
Conversion Price were the same as the redemption price then in effect pursuant
to the table set forth in paragraph 6(A) hereof plus an amount equal to all
accumulated and unpaid dividends thereon to the date fixed for such deemed
conversion (the "Merger Conversion Price") and each share of Series A Preferred
Stock shall, by virtue of such transaction and on the same terms as apply to the
holders of Common Stock, be converted into or exchanged for the aggregate amount
of stock, securities, cash or other property (payable in like kind) receivable
by a holder of the number of shares of Common Stock into which such shares of
Series A Preferred Stock could have been converted immediately prior to such
transaction at the Merger Conversion Price if such holder of Common Stock failed
to exercise any rights of election as to the kind or amount of stock,
securities, cash or other property receivable upon such transaction (provided
that, if the kind or amount of stock, securities, cash or other property
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount of
23
<PAGE>
<PAGE>
stock, securities, cash or other property receivable upon such transaction for
each non-electing share shall be the kind and amount so receivable per share by
a plurality of the non-electing shares).
Section 9. Anti-dilution Adjustments.
(A) In the event the Company shall, at any time or from time to time while
any of the shares of the Series A Preferred Stock are outstanding, (i) pay a
dividend or make a distribution in respect of the Common Stock in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
in each case whether by reclassification of shares, recapitalization of the
Company (including a recapitalization effected by a merger or consolidation to
which Section 8 hereof does not apply) or otherwise, the Conversion Price in
effect immediately prior to such action shall be adjusted by multiplying such
Conversion Price by the fraction the numerator of which is the number of shares
of Common Stock outstanding immediately before such event and the denominator of
which is the number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this paragraph 9(A) shall be given effect,
upon payment of
24
<PAGE>
<PAGE>
such a dividend or distribution, as of the record date for the determination of
shareholders entitled to receive such dividend or distribution (on a retroactive
basis) and in the case of a subdivision or combination shall become effective
immediately as of the effective date thereof.
(B) In the event that the Company shall, at any time or from time to time
while any of the shares of Series A Preferred Stock are outstanding, issue to
holders of shares of Common Stock as a dividend or distribution, including by
way of a reclassification of shares or a recapitalization of the Company, any
right or warrant to purchase shares of Common Stock (but not including as such a
right or warrant any security convertible into or exchangeable for shares of
Common Stock) at a purchase price per share less than the Fair Market Value (as
hereinafter defined) of a share of Common Stock on the date of issuance of such
right or warrant, then, subject to the provisions of paragraphs (E) and (F) of
this Section 9, the Conversion Price shall be adjusted by multiplying such
Conversion Price by the fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the number of shares of Common Stock which
25
<PAGE>
<PAGE>
could be purchased at the Fair Market Value of a share of Common Stock at the
time of such issuance for the maximum aggregate consideration payable upon
exercise in full of all such rights or warrants and the denominator of which
shall be the number of shares of Common Stock outstanding immediately before
such issuance of rights or warrants plus the maximum number of shares of Common
Stock that could be acquired upon exercise in full of all such rights and
warrants.
(C) In the event the Company shall, at any time or from time to time while
any of the shares of Series A Preferred Stock are outstanding, issue, sell or
exchange shares of Common Stock (other than pursuant to any right or warrant to
purchase or acquire shares of Common Stock (including as such a right or warrant
any security convertible into or exchangeable for shares of Common Stock) and
other than pursuant to any employee or director incentive or benefit plan or
arrangement, including any employment, severance or consulting agreement, of the
Company or any subsidiary of the Company heretofore or hereafter adopted) for a
consideration having a Fair Market Value on the date of such issuance, sale or
exchange less than the Fair Market Value of such shares on the date of such
issuance, sale or exchange,
26
<PAGE>
<PAGE>
then, subject to the provisions of paragraphs (E) and (F) of this Section 9, the
Conversion Price shall be adjusted by multiplying such Conversion Price by the
fraction the numerator of which shall be the sum of (i) the Fair Market Value of
all the shares of Common Stock outstanding on the day immediately preceding the
first public announcement of such issuance, sale or exchange plus (ii) the Fair
Market Value of the consideration received by the Company in respect of such
issuance, sale or exchange of shares of Common Stock, and the denominator of
which shall be the product of (i) the Fair Market Value of a share of Common
Stock on the day immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (ii) the sum of the number of shares of
Common Stock outstanding on such day plus the number of shares of Common Stock
so issued, sold or exchanged by the Company. In the event the Company shall, at
any time or from time to time while any shares of Series A Preferred Stock are
outstanding, issue, sell or exchange any right or warrant to purchase or acquire
shares of Common Stock (including as such a right or warrant any security
convertible into or exchangeable for shares of Common Stock), other than any
such issuance to holders of shares of Common Stock as a dividend or dis-
27
<PAGE>
<PAGE>
tribution (including by way of a reclassification of shares or a
recapitalization of the Company) and other than pursuant to any employee or
director incentive or benefit plan or arrangement (including any
employment, severance or consulting agreement) of the Company or any
subsidiary of the Company heretofore or hereafter adopted, for a
consideration having a Fair Market Value on the date of such issuance, sale
or exchange less than the Non-Dilutive Amount (as hereinafter defined),
then, subject to the provisions of paragraphs (E) and (F) of this Section
9, the Conversion Price shall be adjusted by multiplying such Conversion
price by the fraction the numerator of which shall be the sum of (i) the
Fair Market Value of all the shares of Common Stock outstanding on the day
immediately preceding the first public announcement of such issuance, sale
or exchange plus (ii) the Fair Market Value of the consideration received
by the Company in respect of such issuance, sale or exchange of such right
or warrant plus (iii) the Fair Market Value at the time of such issuance of
the consideration which the Company would receive upon exercise in full of
all such rights or warrants, and the denominator of which shall be the
product of (i) the Fair Market Value of a share of Common Stock on the day
immediately preceding
28
<PAGE>
<PAGE>
the first public announcement of such issuance, sale or exchange multiplied by
(ii) the sum of the number of shares of Common Stock outstanding on such day
plus the maximum number of shares of Common Stock which could be acquired
pursuant to such right or warrant at the time of the issuance, sale or exchange
of such right or warrant (assuming shares of Common Stock could be acquired
pursuant to such right or warrant at such time).
(D) In the event the Company shall, at any time or from time to time while
any of the shares of Series A Preferred Stock are outstanding, make an
Extraordinary Distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Company (including a recapitalization or
reclassification effected by a merger or consolidation to which Section 8 hereof
does not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of
Common Stock, the Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall, subject to paragraphs
(E) and (F) of this Section 9, be adjusted by multiplying such Conversion Price
by the fraction the numerator of which is (i) the product of (x) the number of
shares of Common Stock outstanding immedi-
29
<PAGE>
<PAGE>
ately before such Extraordinary Distribution or Pro Rata Repurchase multiplied
by (y) the Fair Market Value (as herein defined) of a share of Common Stock on
the record date with respect to an Extraordinary Distribution, or on the
applicable expiration date (including all extensions thereof) of any tender
offer which is a Pro Rata Repurchase, or on the date of purchase with respect to
any Pro Rata Repurchase which is not a tender offer, as the case may be, minus
(ii) the Fair Market Value of the Extraordinary Distribution or the aggregate
purchase price of the Pro Rata Repurchase, as the case may be, and the
denominator of which shall be the product of (A) the number of shares of Common
Stock outstanding immediately before such Extraordinary Dividend or Pro Rata
Repurchase minus, in the case of a Pro Rata Repurchase, the number of shares of
Common Stock repurchased by the Company multiplied by (B) the Fair Market Value
of a share of Common Stock on the record date with respect to an Extraordinary
Distribution or on the applicable expiration date (including all extensions
thereof) of any tender offer which is a Pro Rata Repurchase or on the date of
purchase with respect to any Pro Rata Repurchase which is not a tender offer, as
the case may be. The Company shall send each holder of Series A Preferred Stock
(i)
30
<PAGE>
<PAGE>
notice of its intent to make any dividend or distribution and (ii) notice of any
offer by the Company to make a Pro Rata Repurchase, in each case at the same
time as, or as soon as practicable after, such offer is first communicated
(including by announcement of a record date in accordance with the rules of any
stock exchange on which the Common Stock is listed or admitted to trading) to
holders of Common Stock. Such notice shall indicate the intended record date and
the amount and nature of such dividend or distribution, or the number of shares
subject to such offer for a Pro Rata Repurchase and the purchase price payable
by the Company pursuant to such offer, as well as the Conversion Price and the
number of shares of Common Stock into which a share of Series A Preferred Stock
may be converted at such time.
(E) Notwithstanding any other provisions of this Section 9, the Company
shall not be required to make any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease or at least one percent (1%) in
the Conversion Price. Any lesser adjustment shall be carried forward and shall
be made no later than the time of, and together with, the next subsequent
adjustment which, together with any adjustment or adjustments so carried
forward, shall amount
31
<PAGE>
<PAGE>
to an increase or decrease of at least one percent (1%) in the Conversion Price.
(F) If the Company shall make any dividend or distribution on the Common
Stock or issue any Common Stock, other capital stock or other security of the
Company or any rights or warrants to purchase or acquire any such security,
which transaction does not result in an adjustment to the Conversion Price
pursuant to the foregoing provisions of this Section 9, the Board of Directors
of the Company shall consider whether such action is of such a nature that an
adjustment to the Conversion Price should equitably be made in respect of such
transaction. If in such case the Board of Directors of the Company determines
that an adjustment to the Conversion Price should be made, an adjustment shall
be made effective as of such date, as determined by the Board of Directors of
the Company. The determination of the Board of Directors of the Company as to
whether an adjustment to the Conversion Price should be made pursuant to the
foregoing provisions of this paragraph 9(F), and, if so, as to what adjustment
should be made and when, shall be final and binding on the Company and all
stockholders of the Company. The Company shall be entitled to make such
additional adjustments in the Conversion Price, in addi-
32
<PAGE>
<PAGE>
tion to those required by the foregoing provisions of this Section 9, as shall
be necessary in order that any dividend or distribution in shares of capital
stock of the Company, subdivision, reclassification or combination of shares of
stock of the Company or any recapitalization of the Company shall not be taxable
to holders of the Common Stock.
(G) For purposes of this Resolution, the following definitions shall
apply:
"Extraordinary Distribution" shall mean any dividend or other distribution
(effected while any of the shares of Series A Preferred Stock are outstanding)
(i) of cash, where the aggregate amount of such cash dividend or distribution
together with the amount of all cash dividends and distributions made during the
preceding period of 12 months, when combined with the aggregate amount of all
Pro Rata Repurchases (for this purpose, including only that portion of the
aggregate purchase price of such Pro Rata Repurchase which is in excess of the
Fair Market Value of the Common Stock repurchased as determined on the
applicable expiration date (including all extensions thereof) of any tender
offer or exchange offer which is a Pro Rata Repurchase, or the date of purchase
with respect to any other Pro Rata Repurchase
33
<PAGE>
<PAGE>
which is not a tender offer or exchange offer made during such period), exceeds
twelve and one-half per cent (12-1/2%) of the aggregate Fair Market Value of all
shares of Common Stock outstanding on the record date for determining the
shareholders entitled to receive such Extraordinary Distribution and (ii) any
shares of capital stock of the Company (other than shares of Common Stock),
other securities of the Company (other than securities of the type referred to
in paragraph (B) of this Section 9), evidences of indebtedness of the Company or
any other person or any other property (including shares of any subsidiary of
the Company), or any combination thereof. The Fair Market Value of an
Extraordinary Distribution for purposes of paragraph (D) of this Section 9 shall
be the sum of the Fair Market Value of such Extraordinary Distribution plus the
amount of any cash dividends which are not Extraordinary Distributions made
during such twelve month period and not previously included in the calculation
of an adjustment pursuant to paragraph (D) of this Section 9.
"Fair Market Value shall mean, as to shares of Common Stock or any other
class of capital stock or securities of the Company or any other issuer which
are publicly traded, the average of the Current Market Prices
34
<PAGE>
<PAGE>
(as hereinafter defined) of such shares or securities for each day of the
Adjustment Period (as hereinafter defined). "Current Market Price" of publicly
traded shares of Common Stock or any other class of capital stock or other
security of the Company or any other issuer for a day shall mean the last
reported sales price, regular way, or, in case no sale takes place on such day,
the average of the reported closing bid and asked prices, regular way, in either
case as reported on the New York Stock Exchange Composite Tape or, if such
security is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the NASDAQ National Market System or, if such security
is not quoted on such National Market System, the average of the closing bid and
asked prices on each such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for such security on each such day shall not
have been reported through NASDAQ, the average of the bid and asked prices for
such day as furnished by any New York Stock Exchange member firm regularly
making a market in such security selected for such purpose by the Board of
Directors of
35
<PAGE>
<PAGE>
the Company or a committee thereof on each trading day during the Adjustment
Period. "Adjustment Period" shall mean the period of five (5) consecutive
trading days, selected by the Board of Directors of the Company or a committee
thereof, during the 20 trading days preceding, and including, the date as of
which the Fair Market Value of a security is to be determined; provided,
however, that for purposes of paragraph 9(H) hereof "Adjustment Period" shall
mean the period of July 8, 1989 through January 7, 1990 inclusive. The "Fair
Market Value" of any security which is not publicly traded or of any other
property shall mean the fair value thereof as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors of the
Company or a committee thereof, or, if no such investment banking or appraisal
firm is in the good faith judgment of the Board of Directors or such committee
available to make such determination, as determined in good faith by the Board
of Directors of the Company or such committee.
"Non-Dilutive Amount" in respect of an issuance, sale or exchange by the
Company of any right or warrant to purchase or acquire shares of Common Stock
36
<PAGE>
<PAGE>
(including any security convertible into or exchangeable for shares of Common
Stock) shall mean the remainder of (i) the product of the Fair Market value of a
share of Common Stock on the day preceding the first announcement of such
issuance, sale or exchange multiplied by the maximum number of shares of Common
Stock which could be acquired on such date upon the exercise in full of such
rights and warrants (including upon the conversion or exchange of all such
convertible or exchangeable securities), whether or not exercisable (or
convertible or exchangeable) at such date, minus (ii) the aggregate amount
payable pursuant to such right or warrant to purchase or acquire such maximum
number of shares of Common Stock; provided, however, that in no event shall the
Non-Dilutive Amount be less than zero. For purposes of the foregoing sentence,
in the case of a security convertible into or exchangeable for shares of Common
Stock, the amount payable pursuant to a right or warrant to purchase or acquire
shares of Common Stock shall be the Fair Market Value of such security on the
date of the issuance, sale or exchange of such security by the Company.
"Pro Rata Repurchase" shall mean any purchase of shares of Common Stock by
the Company or any subsidiary thereof, whether for cash, shares of capital stock
37
<PAGE>
<PAGE>
of the Company, other securities of the Company, evidences of indebtedness of
the Company or any other person or any other property (including shares of a
subsidiary of the Company), or any combination thereof, effected while any of
the shares of Series A Preferred Stock are outstanding, pursuant to any tender
offer or exchange offer subject to Section 13(e) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or any successor provision of law, or
any similar provisions of any law or regulation applicable to companies having
the same regulatory status as does the Bank, or pursuant to any other offer
available to substantially all holders of Common Stock; provided, however, that
no purchase of shares by the Company or any subsidiary thereof made in open
market transactions shall be deemed a Pro Rata Repurchase. For purposes of this
paragraph 9(G), shares shall be deemed to have been purchased by the Company or
any subsidiary thereof "in open market transactions" if they have been purchased
substantially in accordance with the requirements of Rule 10b-18 as in effect
under the Exchange Act, on the date shares of Series A Preferred Stock are
initially issued by the Company or on such other terms and conditions as the
Board of Directors of the Company or a committee thereof shall have determined
38
<PAGE>
<PAGE>
are reasonably designed to prevent such purchases from having a material effect
on the trading market for the Common Stock.
(H) If the Fair Market Value of a share of Common Stock for the period
from July 8, 1989 through January 7, 1990 inclusive is less than $13.00 then the
Conversion Price in effect on January 7, 1990 shall be further adjusted by
multiplying the Conversion Price in effect on January 7, 1990 times the fraction
the numerator of which is the Fair Market Value of a share of Common Stock for
the period from July 8, 1989 through January 7, 1990 inclusive and the
denominator of which is $13.00; provided, however, that in no event shall the
numerator be less than $10.75. If the Conversion Price is otherwise adjusted at
any time prior to the adjustment provided for in this paragraph 9(H), the
amounts of $13.00 and $10.75 specified above shall also be adjusted immediately
prior to calculating any adjustment pursuant to this paragraph 9(H) by
multiplying each such amount times a fraction the numerator of which is the
Conversion Price in effect as of the close of business on January 7, 1990 and
the denominator of which is the initial Conversion Price set forth in paragraph
5(A) hereof. Any such
39
<PAGE>
<PAGE>
adjustment pursuant to this paragraph 9(H) shall take effect as of January 8,
1990.
(I) Whenever an adjustment to the Conversion Price of the Series A
Preferred Stock is required pursuant to this Resolution, the Company shall
forthwith place on file with the transfer agent for the Common Stock and the
Series A Preferred Stock if there be one, and with the Secretary of the Company,
a statement signed by two officers of the Company stating the adjusted
Conversion Price determined as provided herein and the resulting conversion
ratio of the Series A Preferred Stock. Such statement shall set forth in
reasonable detail such facts as shall be necessary to show the reason and the
manner of computing such adjustment, including any determination of Fair Market
Value involved in such computation. Promptly after each adjustment to the
Conversion Price of the Series A Preferred Stock, the Company shall mail a
notice thereof and of the then prevailing conversion ratio to each holder of
shares of the Series A Preferred Stock.
Section 10. Ranking; Attributable Capital and Adequacy of Surplus;
Retirement of Shares.
(A) The Series A Preferred Stock shall rank senior to the Common Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolu-
40
<PAGE>
<PAGE>
tion or winding up. The Series A Preferred Stock shall not rank junior to any
other series of the Company's Preferred Stock as to the payment of dividends or
the distribution of assets on liquidation, dissolution or winding up.
(B) The capital of the Company allocable to the Series A Preferred Stock
for purposes of the New York Banking Law (the "Banking Law") shall be $1.00 per
share. In addition to any vote of stockholders required by law, the vote of the
holders of a majority of the outstanding shares of Series A Preferred Stock
shall be required to increase the par value of the Common Stock or otherwise
increase the capital of the Company allocable to the Common Stock for the
purpose of the Banking Law if, as a result thereof, the surplus of the Company
for purposes of the Banking Law would be less than the amount of Preferred
Dividends that would accrue on the then outstanding shares of Series A Preferred
Stock during the following three years.
(C) Any shares of Series A Preferred Stock acquired by the Company by
reason of the conversion or redemption of such shares as provided by this
Resolution, or otherwise so acquired, shall be cancelled, and the Company shall
thereafter take such actions as may then be required by Section 5014 of the
Banking Law of the State of New York to reflect the cancellation of such shares.
41
<PAGE>
<PAGE>
Section 11. Miscellaneous.
(A) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) business days after the mailing thereof if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice under
the terms of this Resolution) with postage prepaid, addressed: (i) if to the
Company, to its office at One Penn Plaza, New York, New York 10119 (Attention:
Secretary) or to the transfer agent for the Series A Preferred Stock, or other
agent of the Company designated as permitted by this Resolution or (ii) if to
any holder of the Series A Preferred Stock or Common Stock, as the case may be,
to such holder at the address of such holder as listed in the stock record books
of the Company (which may include the records of any transfer agent for the
Series A Preferred Stock or Common Stock, as the case may be) or (iii) to such
other address as the Company or any such holder, as the case may be, shall have
designated by notice similarly given.
(B) The term "Common Stock" as used in this Resolution means the Company's
Common Stock of $1.00 par value, as the same exists at the date of filing of a
Certificate of Designations relating to Series A Preferred Stock, or any other
class of stock resulting from successive changes or reclassifications of such
Common
42
<PAGE>
<PAGE>
Stock consisting solely of changes in par value. In the event that, at any time
as a result of an adjustment made pursuant to Section 9 of this Resolution, the
holder of any share of the Series A Preferred Stock upon thereafter surrendering
such shares for conversion shall become entitled to receive any shares or other
securities of the Company other than shares of Common Stock, the Conversion
Price in respect of such other shares or securities so receivable upon
conversion of shares of Series A Preferred Stock shall thereafter be adjusted,
and shall be subject to further adjustment from time to time, in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in Section 9 hereof, and the provisions of Sections 1
through 8 and 10 and 11 of this Resolution with respect to the Common Stock
shall apply on like or similar terms to any such other shares or securities.
(C) The Company shall pay any and all stock transfer and documentary stamp
taxes that may be payable in respect of any issuance or delivery of shares of
Series A Preferred Stock or shares of Common Stock or other securities issued on
account of Series A Preferred Stock pursuant hereto or certificates representing
such shares or securities. The Company shall not, however, be required to pay
any such tax which may be payable in respect of any transfer involved in the
issuance or delivery of shares of Series A Preferred Stock or Common Stock
43
<PAGE>
<PAGE>
or other securities in a name other than that in which the shares of Series A
Preferred Stock with respect to which such shares or other securities are issued
or delivered were registered, or in respect of any payment to any person with
respect to any such shares or securities other than a payment to the registered
holder thereof, and shall not be required to make any such issuance, delivery or
payment unless and until the person otherwise entitled to such issuance,
delivery or payment has paid to the Company the amount of any such tax or has
established, to the satisfaction of the Company, that such tax has been paid or
is not payable.
(D) In the event that a holder of shares of Series A Preferred Stock shall
not by written notice designate the name in which shares of Common Stock to be
issued upon conversion of such shares should be registered or to whom payment
upon redemption of shares of Series A Preferred Stock should be made or the
address to which the certificate or certificates representing such shares, or
such payment, should be sent, the Company shall be entitled to register such
shares, and make such payment, in the name of the holder of such Series A
Preferred Stock as shown on the records of the Company and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Company.
44
<PAGE>
<PAGE>
(E) Unless otherwise provided in the Organization Certificate, as amended,
of the Company, all payments in the form of dividends, distributions on
voluntary or involuntary dissolution, liquidation or winding-up or otherwise
made upon the shares of Series A Preferred Stock and any other stock ranking on
a parity with the Series A Preferred Stock with respect to such dividend or
distribution shall be made pro rata, so that amounts paid per share on the
Series A Preferred Stock and such other stock shall in all cases bear to each
other the same ratio that the required dividends, distributions or payments, as
the case may be, then payable per share on the shares of the Series A Preferred
Stock and such other stock bear to each other.
(F) The Company may appoint, and from time to time discharge and change, a
transfer agent for the Series A Preferred Stock. Upon any such appointment or
discharge of a transfer agent, the Company shall send
45
<PAGE>
<PAGE>
notice thereof by first-class mail, postage prepaid, to each holder of record of
Series A Preferred Stock.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designations and do affirm the foregoing as true under the penalties of perjury
this 13th day of February, 1989.
/s/ Gerard C. Keegan
--------------------------------
Gerard C. Keegan
President and
Chief Operating Officer
ATTEST:
/s/ Robert P. Carlson
- --------------------------------
Name: Robert P. Carlson
Title: Assistant Secretary
46
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE RESTATED ORGANIZATION CERTIFICATE
OF
THE GREATER NEW YORK SAVINGS BANK
Under Section 8005 of the Banking Law
---------------------------------
We, Gerard C. Keegan, and Patrick J. Damanti, being the President and
Chief Operating Officer and the Assistant Secretary, respectively, of The
Greater New York Savings Bank, in accordance with Section 8005 of the Banking
Law of the State of New York, DO HEREBY CERTIFY:
FIRST, the name of the Corporation is THE GREATER NEW YORK SAVINGS BANK.
SECOND, The Corporation was created by a Certificate of Incorporation
filed by the Superintendent of Banks of the State of New York on February 14,
1916. On June 24, 1987, the Restated Organization Certificate of the Corporation
providing for the conversion of the Corporation from mutual to stock form was
filed with the Superintendent of Banks of the State of New York.
THIRD, The Restated Organization Certificate of the Corporation was
amended in accordance with Section 5002 of the Banking Law of the State of New
York by the addition of the Certificate of Designations of Series A ESOP
Convertible Preferred Stock, which states the number, designation, relative
rights, preferences, and limitations of the Corporation's Series A ESOP
Convertible Preferred Stock.
FOURTH, the Restated Organization Certificate is hereby amended by the
addition of the following provisions stating the number, designations, relative
rights, preferences and limitations of a series of preferred stock of the
Corporation, designated as Junior Partici-
<PAGE>
<PAGE>
pating Preferred Stock, as fixed by resolution of the Board of Directors of the
Corporation pursuant to the authority vested in it by the Restated Organization
Certificate of the Corporation. Article III, SECTION 2, PART A of the Restated
Organization Certificate of the Corporation is hereby amended by the addition of
the following at the end thereof:
(vii) Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Junior Participating Preferred Stock" and the number of shares
constituting such series shall be one hundred fifty thousand (150,000).
Section 2. Dividends and Distributions.
(A) The holders of shares of Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $1.00 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Junior
Participating Preferred Stock. In the event the Corporation shall at any time
after June 14, 1990 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such
2
<PAGE>
<PAGE>
case the amount to which holders of shares of Junior Participating Preferred
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Junior
Participating Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Junior
Participating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Junior
Participating Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Junior Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution
3
<PAGE>
<PAGE>
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Junior Participating
Preferred Stock shall not by virtue of their ownership thereof be entitled to
vote upon any matter except as otherwise provided herein or by applicable law.
(A) (i) If at any time dividends on any Junior Participating Preferred
Stock shall be in arrears in an amount equal to six (6) quarterly dividends
thereon, the occurrence of such contingency shall mark the beginning of a period
(herein called a "default period") which shall extend until such time when all
accrued and unpaid dividends for all previous quarterly dividend periods and for
the current quarterly dividend period on all shares of Junior Participating
Preferred Stock then outstanding shall have been declared and paid or set apart
for payment. During each default period, all holders of Preferred Stock
(including holders of the Junior Participating Preferred Stock) with dividends
in arrears in an amount equal to six (6) quarterly dividends thereon, voting as
a class, irrespective of series, shall have the right to elect two (2)
Directors.
(ii) During any default period, such voting right of the holders of Junior
Participating Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(A) or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless the holders of ten
percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of Common
Stock shall not affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special
4
<PAGE>
<PAGE>
meeting does not amount to the required number, the holders of the Preferred
Stock shall have the right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the required number. After
the holders of the Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Junior Participating
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
a special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this paragraph (A)(iii)
shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions of this paragraph
(A)(iii), no such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock, and other classes
of stock of the Corporation if applicable, shall continue to be entitled to
elect the whole number of Directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) Directors voting as a class, after
the exercise
5
<PAGE>
<PAGE>
of which right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy in
the Board of Directors may (except as provided in paragraph (A)(ii) of this
Section 3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock which elected the
Director whose office shall have become vacant. References in this paragraph (A)
to Directors elected by the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right of
the holders of Preferred Stock as a class to elect Directors shall cease, (y)
the term of any Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such number as may be
provided for in the certificate of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of paragraph (A)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner provided
by law or in the certificate of incorporation or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.
(B) Except as set forth herein, holders of Junior Participating Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Participating Preferred Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Participating
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not
6
<PAGE>
<PAGE>
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Participating
Preferred Stock, except dividends paid ratably on the Junior Participating
Preferred Stock and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Participating
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Junior Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
7
<PAGE>
<PAGE>
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Junior Participating Preferred Stock unless, prior thereto,
the holders of shares of Junior Participating Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the "Liquidation Preference"). Following the payment of the full amount of the
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Junior Participating Preferred Stock and Common Stock, respectively,
holders of Junior Participating Preferred Stock and holders of shares of
8
<PAGE>
<PAGE>
Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a
parity with the Junior Participating Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Junior Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock pay-
9
<PAGE>
<PAGE>
able in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Junior Participating Preferred Stock shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Junior Participating Preferred
Stock shall not be redeemable.
Section 9. Ranking. The Junior Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Restated Organization Certificate of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Junior Participating Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions
10
<PAGE>
<PAGE>
and to have the benefit of all other rights of holders of Junior Participating
Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this 14th day of
June, 1990.
Attest: THE GREATER NEW YORK SAVINGS BANK
By /s/ Charles H. Ahearn By /s/ Gerard C. Keegan
- --------------------------------- ----------------------------------------
Charles H. Ahearn Name: Gerard C. Keegan
Secretary Title: President and Chief
Operating Officer
By /s/ Patrick J. Damanti
----------------------------------------
Name: Patrick J. Damanti
Title: Assistant Secretary
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
RESTATED ORGANIZATION CERTIFICATE
OF
THE GREATER NEW YORK SAVINGS BANK
Under Section 8005 of the Banking Law
We, Gerard C. Keegan and Robert P. Carlson, being the Chairman, President
and Chief Executive Officer and the Senior Vice President, Counsel and
Secretary, respectively, of The Greater New York Savings Bank (the
"Corporation"), in accordance with Section 8005 of the Banking Law of the State
of New York, do hereby certify as follows:
FIRST, The name of the Corporation is THE GREATER NEW YORK SAVINGS BANK.
SECOND, The Corporation was created by a Certificate of Incorporation
filed by the Superintendent of Banks of the State of New York on February 14,
1916. On June 24, 1987, the Restated Organization Certificate of the Corporation
providing for the conversion of the Corporation from mutual to stock form was
filed with the Superintendent of Banks of the State of New York.
THIRD, The Restated Organization Certificate of the Corporation was
amended in accordance with Section 5002 of the Banking Law of the State of New
York by the addition of the Certificate of Designations of Series A ESOP
Convertible Preferred Stock, which stated the number, designation, relative
rights, preferences, and limitations of the Corporation's Series A ESOP
Convertible Preferred Stock.
FOURTH, The Restated Organization Certificate of the Corporation was
further amended in accordance with Section 5002 of the Banking Law of the State
of New York by the Certificate of Amendment providing for a series of preferred
stock of the Corporation designated as the Junior Participating Preferred Stock,
which stated the number, designation, relative rights, preferences, and
limitations of the Corporation's Junior Participating Preferred Stock.
<PAGE>
<PAGE>
FIFTH, The Restated Organization Certificate of the Corporation is hereby
amended in accordance with Section 5002 of the Banking Law of the State of New
York by the addition of the Certificate of Designations of 12% Noncumulative
Perpetual Preferred Stock, Series B, attached hereto as Exhibit A, which states
the number, designation, relative rights, preferences, and limitations of the
Corporation's 12% Noncumulative Perpetual Preferred Stock, Series B.
SIXTH, This amendment was authorized by the majority vote of the entire
Board of Directors of the Corporation as required by Section 5002 of the Banking
Law of the State of New York and Article III, Section 2 of the Corporation's
Restated Organization Certificate.
IN WITNESS WHEREOF, the undersigned officers of the Corporation have made,
signed and acknowledged this certificate, this 24th day of September, 1993.
/s/ Gerard C. Keegan
-------------------------------
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
/s/ Robert P. Carlson
-------------------------------
Robert P. Carlson
Senior Vice President,
Counsel and Secretary
2
<PAGE>
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 24th day of September, 1993, before me personally appeared GERARD
C. KEEGAN, to me known, who being by me duly sworn, did depose and say that he
is the Chairman, President and Chief Executive Officer of The Greater New York
Savings Bank described in the Certificate of Amendment of the Restated
Organization Certificate, that he executed the foregoing instrument, and he duly
acknowledged to me that he executed the same.
/s/ John J. Donohue, Jr.
- --------------------------
Notary Public
(Seal) JOHN J. DONOHUE, JR.
Notary Public State of New York
No. 4871090
Qualified in Nassau County
Commission Expires August 19, 1994
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 24th day of September, 1993, before me personally appeared ROBERT
P. CARLSON, to me known, who being duly sworn, did depose and say that he is the
Senior Vice President, Counsel and Secretary of The Greater New York Savings
Bank described in the Certificate of Amendment of the Restated Organization
Certificate, that he executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
/s/ John J. Donohue, Jr.
- --------------------------
Notary Public
(Seal) JOHN J. DONOHUE, JR.
Notary Public State of New York
No. 4871090
Qualified in Nassau County
Commission Expires August 19, 1994
3
<PAGE>
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATIONS
OF
12% NONCUMULATIVE PERPETUAL
PREFERRED STOCK, SERIES B
of
THE GREATER NEW YORK SAVINGS BANK
Pursuant to Section 5002 of the
Banking Law of the State of New York
I, GERARD C. KEEGAN, Chairman, President and Chief Executive Officer of
THE GREATER NEW YORK SAVINGS BANK (the "Corporation"), a corporation organized
and existing under the Banking Law of the State of New York (the "Banking Law"),
in accordance with the provisions of Section 5002 thereof, DO HEREBY CERTIFY
that, pursuant to the authority conferred upon the Board of Directors by the
Restated Organization Certificate of the Corporation, as amended (the
"Organization Certificate"), the Board of Directors authorized the series of
preferred stock hereinafter provided for and established the powers thereof and
has adopted the following resolution creating a series of two million
(2,000,000) shares of preferred stock, par value $1.00 per share, designated as
12% Noncumulative Perpetual Preferred Stock, Series B:
RESOLVED that, pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Organization
Certificate, a series of preferred stock of the Corporation be, and it hereby
is, created, and that the designation and amount thereof and the powers,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
<PAGE>
<PAGE>
Section 1. Designation and Amount.
(A) The shares of this series of preferred stock shall be designated as
12% Noncumulative Perpetual Preferred Stock, Series B ("Series B Preferred
Stock") and the number of shares constituting such series shall be two million
(2,000,000) shares. Shares of Series B Preferred Stock shall have a par value of
$1.00 per share.
(B) The number of authorized shares of Series B Preferred Stock may be
reduced from time to time, but not below the number of shares of Series B
Preferred Stock then outstanding, by further resolution duly adopted by the
Board of Directors. The number of authorized shares of Series B Preferred Stock
shall not be increased. Fractional shares of Series B Preferred Stock, rounded
to the nearest one-hundredth of a whole number, may be issued.
Section 2. Ranking; Attributable Capital and Adequacy of Surplus.
(A) With respect to dividend rights, the Series B Preferred Stock shall
rank prior to common stock of all classes of the Corporation (collectively, the
"Common Stock") and to all other classes and series of equity securities of the
Corporation now or hereafter authorized, issued or outstanding other than Parity
Dividend Stock and Senior Dividend Stock. Parity Dividend Stock shall mean any
class or series of equity securities of the Corporation expressly designated as
ranking, with respect to dividend rights, on a parity with the Series B
Preferred Stock, and Senior Dividend Stock shall mean any class or series of
equity securities of the Corporation expressly designated as ranking, with
respect to dividend rights, as senior to the Series B Preferred Stock. Shares of
the Corporation's Series A ESOP Convertible Preferred Stock (the "Series A
Preferred Stock") are hereby designated as Senior Dividend Stock.
(B) With respect to rights upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Series B Preferred Stock shall
rank prior to the Common Stock and to all other classes and series of equity
securities of the Corporation now or hereafter authorized, issued or outstanding
other than Parity Liquidation Stock and Senior Liquidation Stock. Parity
Liquidation Stock shall mean any class or series of equity securities of the
Corporation expressly designated as ranking, with respect to rights upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, on a parity with the Series B Preferred Stock, and Senior
Liquidation Stock shall mean any
2
<PAGE>
<PAGE>
class or series of equity securities of the Corporation expressly designated as
ranking, with respect to rights upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, as senior to the Series B
Preferred Stock. Shares of the Series A Preferred Stock are hereby designated as
Parity Liquidation Stock.
(C) To the extent not expressly prohibited by the Organization
Certificate, the Series B Preferred Stock shall be subject to the creation of
Parity Dividend Stock and Parity Liquidation Stock (collectively, "Parity
Stock") and of Common Stock and all other classes and series of equity
securities of the Corporation ranking junior to the Series B Preferred Stock
with respect to dividend rights ("Junior Dividend Stock") or rights upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation ("Junior Liquidation Stock" and, collectively with Junior Dividend
Stock, "Junior Stock"). Shares of the Corporation's Junior Participating
Preferred Stock are hereby designated as Junior Dividend Stock and as Junior
Liquidation Stock. No shares of Senior Dividend Stock or Senior Liquidation
Stock shall be created without the consent of the holders of Series B Preferred
Stock as provided in Section 6(C) hereof.
(D) The capital of the Corporation allocable to the Series B Preferred
Stock for purposes of the Banking Law shall be $1.00 per share. In addition to
any vote of stockholders required by law, the vote of the holders of a majority
of the outstanding shares of Series B Preferred Stock shall be required to
increase the par value of the Common Stock or otherwise increase the capital of
the Corporation allocable to the Common Stock for the purpose of the Banking Law
if, as a result thereof, the surplus of the Corporation for purposes of the
Banking Law would be less than the amount of dividends that would accrue on the
then-outstanding shares of Series B Preferred Stock during the following three
years.
Section 3. Noncumulative Dividends; Priority.
(A) (i) Subject to the restrictions and limitations on declaration and
payment of dividends specified in Section 11, the holders of record of shares of
Series B Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors, out of funds legally available therefor,
noncumulative cash dividends at an annual rate of 12% of the $25.00 liquidation
preference per share ($3.00 per share per annum), and no more. Dividends on the
Series B preferred Stock shall be declared and paid in cash only. Such
noncumulative cash dividends shall be declared and payable quarterly in arrears
in the amount set forth in Sec-
3
<PAGE>
<PAGE>
tion 3(A) (iii) on January 15, April 15, July 15 and October 15 of each year or,
if such day is not a Business Day (as defined in Section 9), on the next
Business Day (each such date, a "Dividend Payment Date"). The first Dividend
Payment Date shall be January 18, 1994. Each declared dividend shall be payable
to holders of record of the Series B Preferred Stock as they appear on the stock
books of the Corporation (or of any transfer agent for the Series B Preferred
Stock) at the close of business on such record dates, not more than fifty (50)
calendar days nor less than ten (10) calendar days preceding the Dividend
Payment Date therefor, as determined by the Board of Directors (each such date,
a "Record Date"). The initial period for which dividends shall be paid (the
"Initial Dividend Period") shall commence on the date of initial issuance of the
Series B Preferred Stock and shall end on November 30, 1993. Thereafter,
quarterly dividend periods (each, a "Dividend Period") shall commence on and
include December 1, March 1, June 1 and September 1 of each year (each such
date, a "Dividend Period Commencement Date") and shall end on and include the
date next preceding the Dividend Period Commencement Date of the following
Dividend Period.
(ii) Dividends on the Series B Preferred Stock shall be noncumulative. If
a dividend on the Series B Preferred Stock with respect to any Dividend Period
(including the Initial Dividend Period) is not declared by the Board of
Directors, the Corporation shall have no obligation at any time to pay a
dividend on the Series B Preferred Stock with respect to such Dividend Period,
whether or not dividends are declared payable with respect to any future
Dividend Period. The holders of the Series B Preferred Stock shall not be
entitled to any dividends in excess of the noncumulative dividends declared by
the Board of Directors, as set forth in this paragraph (A).
(iii) The amount of dividends payable on each share of Series B Preferred
Stock for each full Dividend Period during which such share is outstanding shall
be $0.75. The amount of dividends payable for the Initial Dividend Period and
for any Dividend Period which is less than a full three (3) months shall be
computed on the basis of a 360-day year composed of twelve (12) 30-day months
and the actual number of days elapsed in the Initial Dividend Period or such
Dividend Period.
(iv) The Series B Preferred Stock shall not participate in dividends with
the Common Stock.
(v) The holders of the Series B Preferred Stock shall not be entitled to
any interest, or any sum of money in
4
<PAGE>
<PAGE>
lieu of interest, in respect of any dividend payment or payments on the Series B
Preferred Stock declared by the Board of Directors which may be unpaid.
(B)(i) No full dividends shall be declared or paid or set apart for
payment on any Parity Dividend Stock for any Dividend Period unless full
dividends have been or contemporaneously are declared and paid (or declared and
a sum sufficient for the payment thereof set apart for such payment) on the
Series B Preferred Stock for such Dividend Period. When dividends are not paid
in full (or declared and a sum sufficient for such full payment is not so set
apart) for any Dividend Period on the Series B Preferred Stock and any other
Parity Dividend Stock, dividends declared on the Series B Preferred Stock and
other Parity Dividend Stock shall only be declared pro rata, such that the
amount of dividends declared per share on the Series B Preferred Stock and other
Parity Dividend Stock shall bear to each other the same ratio that, at the time
of such declaration, all accrued and payable but unpaid dividends for such
Dividend Period per share on shares of the Series B Preferred Stock (which shall
not include any accumulation in respect of unpaid dividends for prior Dividend
Periods) and other Parity Dividend Stock bear to each other.
(ii) The Corporation shall not (a) declare or (b) pay or set apart funds
for any dividends or other distributions (other than in Common Stock or other
Junior Stock) with respect to any Common Stock or other Junior Dividend Stock of
the Corporation, or (c) (except by conversion into or exchange for Junior Stock)
repurchase, redeem or otherwise acquire, or set apart funds for the repurchase,
redemption or other acquisition of, any Common Stock or other Junior Stock
through a sinking fund or otherwise, unless the Corporation shall have, in the
case of clause (a) declared, or in the case of clauses (b) or (c) paid or set
apart funds for the payment of, full dividends on the Series B Preferred Stock
with respect to the same calendar quarter for which (x) the dividend or other
distribution is being declared or paid, as the case may be, on the Common Stock
or other Junior Stock or (y) the Common Stock or other Junior Stock is being
repurchased, redeemed or otherwise acquired.
(C) Any reference to "dividends" or "distributions" in this Section 3
shall not be deemed to include any distribution made in connection with any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation.
5
<PAGE>
<PAGE>
Section 4. Redemption at the Option of the Corporation.
(A) (i) The shares of Series B Preferred Stock shall not be subject to
mandatory redemption, and shall not be redeemable by the Corporation prior to
October 1, 2003. On or after October 1, 2003, shares of Series B Preferred Stock
may be redeemed by the Corporation, at its option, in whole or in part, at any
time or from time to time, upon notice as provided in paragraph (B) of this
Section 4, by resolution of the Board of Directors, at the redemption prices set
forth below in cash, plus, in each case, an amount in cash equal to all accrued
and unpaid dividends thereon (whether or not declared) from the Dividend Period
Commencement Date next preceding the date fixed for redemption (the "Redemption
Date") to, but excluding, the Redemption Date (without accumulation of unpaid
dividends for prior Dividend Periods):
During the
Twelve-month Period Redemption Price
Beginning October 1, Per Share
- -------------------- ----------------
2003 ............................................ $27.250
2004 ............................................ 27.025
2005 ............................................ 26.800
2006 ............................................ 26.575
2007 ............................................ 26.350
2008 ............................................ 26.125
2009 ............................................ 25.900
2010 ............................................ 25.675
2011 ............................................ 25.450
2012 ............................................ 25.225
2013 and thereafter ............................. 25.000
(ii) The aggregate redemption price payable to each holder of record of
Series B Preferred Stock to be redeemed shall be rounded to the nearest cent
($0.01).
(B)(i) Notice of any redemption shall be given by first-class mail,
postage prepaid, mailed at least twenty (20) days but not more than sixty (60)
days prior to the Redemption Date to each holder of record of Series B Preferred
Stock to be redeemed at such holder's address as the same shall appear on the
stock books of the Corporation (or of any transfer agent for the Series B
Preferred Stock). Each such notice shall set forth: (a) the Redemption Date;
(b) the redemption price; (c) the number of shares of Series B Preferred Stock
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (d) the
place or places where cer-
6
<PAGE>
<PAGE>
tificates for such shares are to be surrendered for payment of the redemption
price; and (e) a statement that dividends on the shares of Series B Preferred
Stock to be redeemed shall cease to accrue on the Redemption Date. Neither
failure to mail such notice, nor any defect therein or in the mailing thereof,
to any particular holder shall affect the sufficiency of the notice or the
validity of the proceedings for redemption with respect to the other holders.
Any notice which was mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the holder receives such notice.
(ii) On or after the Redemption Date, each holder of shares of Series B
Preferred Stock to be redeemed shall present and surrender the certificate or
certificates for such shares to the Corporation at the place designated in the
notice given to such holder, and thereupon the redemption price of such shares
shall be paid to or on the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be cancelled. If fewer than all the shares represented by any
such certificate are redeemed, a new certificate representing the unredeemed
shares shall be issued to the holder of such shares.
(iii) If such notice of redemption shall have been so mailed, and if, on
or before the Redemption Date specified in such notice, all funds necessary for
such redemption shall have been set aside by the Corporation, separate and apart
from its other funds, in trust for the account of the holders of shares of
Series B Preferred Stock to be redeemed (so as to be and continue to be
available therefor), then, on and after the Redemption Date, notwithstanding
that any certificates for shares of Series B Preferred Stock so called for
redemption shall not have been surrendered for cancellation, the shares of
Series B Preferred Stock so called for redemption shall be deemed to be no
longer outstanding and the holders of such shares shall cease to be shareholders
of the Corporation and shall have no voting or other rights with respect to such
shares, except for the right to receive out of the funds so set aside in trust
the amount payable on redemption thereof, without interest, upon surrender (and
endorsement or assignment for transfer, if required by the Corporation) of their
certificates.
(iv) In the event that holders of shares of Series B Preferred Stock that
have been redeemed shall not, within two (2) years (or any longer period
required by law) after the Redemption Date, claim any amount deposited in trust
with a bank or trust company for the redemption of such shares, such
7
<PAGE>
<PAGE>
bank or trust company shall, upon demand by the Corporation and if permitted by
applicable law, pay over to the Corporation any such unclaimed amount so
deposited with it, and shall thereupon be relieved of all responsibility in
respect thereof, and thereafter the holders of such shares shall, subject to
applicable escheat laws, look only to the Corporation for payment of the
redemption price thereof, but without interest from the Redemption Date. Any
interest accrued on funds deposited in trust as aforesaid shall be paid to the
Corporation from time to time.
(C) If fewer than all the outstanding shares of Series B Preferred Stock
are to be redeemed, the shares to be redeemed shall be selected pro rata or by
lot or by such other method as the Board of Directors, in its sole discretion,
determines to be equitable.
(D) Shares of Series B Preferred Stock redeemed, purchased or otherwise
acquired for value by the Corporation shall, after such redemption, purchase or
acquisition, be retired and cancelled in accordance with the provisions of the
Banking Law. All such shares shall upon their cancellation become authorized but
unissued shares of preferred stock and may be reissued as part of a new series
of preferred stock to be created by resolution or resolutions of the Board of
Directors as permitted by law (other than as shares of Series B Preferred
Stock).
(E) The Series B Preferred Stock shall not be subject to the operation of
any mandatory purchase, retirement or sinking fund.
Section 5. Liquidation Preference.
(A) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the holders of shares of Series B Preferred
Stock shall be entitled to receive for each share thereof, out of the assets of
the Corporation which are legally available for distribution to shareholders
under applicable law, or the proceeds thereof, before any payment or
distribution of such assets or proceeds shall be made to holders of shares of
Common Stock or any other Junior Liquidation Stock, liquidating distributions in
the amount of $25.00 per share, plus an amount per share equal to all accrued,
undeclared and unpaid dividends thereon from the Dividend Period Commencement
Date next preceding the date fixed for such liquidation, dissolution or winding
up (the "Liquidation Date") to, but excluding, the Liquidation Date (without
accumulation of unpaid dividends for prior Dividend Periods), and no more;
provided, however, that the holders of
8
<PAGE>
<PAGE>
shares of Series B Preferred Stock and any Parity Liquidation Stock shall be
entitled to such liquidating distributions only after payment in full of
liquidating distributions to holders of shares of any Senior Liquidation Stock.
If the amounts available for distribution in respect of shares of Series B
Preferred Stock and any Parity Liquidation Stock are not sufficient to satisfy
the full liquidation rights of all the outstanding shares thereof, the holders
of such outstanding shares of Series B Preferred Stock and such Parity
Liquidation Stock shall share ratably in any such distribution of assets in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of shares of Series B Preferred Stock as
such shall not be entitled to any further participation in any distribution of
assets by the Corporation. All distributions made in respect of the Series B
Preferred Stock in connection with such a liquidation, dissolution or winding up
of the Corporation shall be made pro rata to the holders of the Series B
Preferred Stock entitled thereto.
(B) Neither the merger or consolidation of the Corporation with or into
any other entity, nor the merger or consolidation of any other entity with or
into the Corporation, nor the sale, transfer or lease of all or any portion of
the assets of the Corporation, shall be deemed to be a liquidation, dissolution
or winding up of the affairs of the Corporation for purposes of this Section 5.
(C) Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, stating the payment date or dates
when, and the place or places where, the amounts distributable to holders of
Series B Preferred Stock in such circumstances shall be payable, shall be given
by first-class mail, postage prepaid, mailed not less than twenty (20) days
prior to any payment date stated therein, to each holder of record of Series B
Preferred Stock, at such holder's address as the same shall appear on the stock
books of the Corporation (or of any transfer agent for the Series B Preferred
Stock).
Section 6. Voting Rights.
(A) Except as expressly provided in this Section 6, or as otherwise
required by applicable law or regulation, the holders of shares of Series B
Preferred Stock shall have no voting rights.
(B) (i) The holders of shares of Series B Preferred Stock shall be
entitled to exercise the voting rights
9
<PAGE>
<PAGE>
provided for in this paragraph (B) of Section 6 (the "Election Right") upon the
occurrence of a "Voting Event." It shall be a Voting Event if the Corporation
shall have failed to make the payment of full dividends on the Series B
Preferred Stock (or the declaration of such full dividends and the setting apart
of a sum sufficient for payment thereof) with respect to each of any six (6)
Dividend Periods (including the Initial Dividend Period), whether consecutive or
not. A Voting Event shall be deemed to have occurred as of the Dividend Payment
Date of the Dividend Period that is the sixth (6th) Dividend Period for which
the payment of full dividends on the Series B Preferred Stock has not been made
(or declared and set apart for payment).
(ii) Upon the occurrence of a Voting Event, the maximum authorized number
of directors of the Corporation, without further action, shall be increased by
two (2). The holders of shares of Series B Preferred Stock and the holders of
any other class or series of Parity Stock as to which the payment of dividends
is in arrears and unpaid in an aggregate amount equal to or exceeding the amount
of dividends payable for six (6) quarterly dividend periods (or if dividends are
payable other than on a quarterly basis the number of dividend periods, whether
or not consecutive, containing in the aggregate not less than five hundred forty
(540) calendar days) and upon which by its terms the same right to elect two (2)
directors has been conferred and is exercisable ("Voting Parity Stock"), shall
have the exclusive right, voting together as a single class, to elect the two
(2) additional directors at the Corporation's next annual meeting of
shareholders or at a special meeting of shareholders as provided below and to
reelect two (2) directors at each subsequent annual meeting of shareholders
until the Election Right terminates as provided in subsection (iv) of this
paragraph (B). At any time when the Election Right shall have so vested, the
Corporation may, and upon the written request of the holders of record of not
less than 20% of the total number of shares of the Series B Preferred Stock and
such Voting Parity Stock then outstanding shall, call a special meeting of the
holders of such shares to fill such newly-created directorships for the election
of directors. In the case of such a written request, such special meeting shall
be held within ninety (90) days after the delivery of such request and, in
either case, at the place and upon the notice provided by law and in the by-laws
of the Corporation, provided that the Corporation shall not be required to call
such a special meeting if such request is received less than one hundred twenty
(120) days before the date fixed for the next succeeding annual meeting of
shareholders of the Corporation, at which meeting such newly-created
directorships shall be filled by the holders of such
10
<PAGE>
<PAGE>
shares. If, prior to the end of the term of any director elected as aforesaid, a
vacancy in the office of such director shall occur by reason of death,
resignation, disability or disqualification, the remaining director elected as
aforesaid shall appoint a successor to hold office for the unexpired term of
such former director, and if both directors elected as aforesaid shall cease to
serve as directors before their terms shall expire, the holders of Series B
Preferred Stock and any Voting Parity Stock then outstanding may, at a meeting
of such holders duly held, elect successors to hold office for the unexpired
terms of such directors whose places shall be vacant. The election or
appointment of any person as a director pursuant to this Section 6 shall be
subject to compliance with any requirement for regulatory approval of (or
non-objection to) such person's serving as a director.
(iii) The majority of the holders of the Series B Preferred Stock and any
Voting Parity Stock then outstanding, voting together as a single class, shall
have the right at any time to remove without cause and replace any directors
which such holders have elected or who have been appointed pursuant to this
Section 6.
(iv) The Election Right of the holders of the Series B Preferred Stock and
the term of the directors elected to the Board of Directors pursuant to a
particular exercise of such Election Right shall continue until full dividends
have been declared and paid for four (4) consecutive Dividend Periods following
the vesting of such Election Right, at which time such Election Right and the
term of such directors shall, without further action, terminate, subject to
revesting of the Election Right upon the occurrence of a subsequent Voting
Event; provided, however, that if, at the time of termination of the Election
Right of the holders of the Series B Preferred Stock, there shall be outstanding
any Voting Parity Stock having similar voting rights which remain in effect, the
term of any directors elected by the holders of the Series B Preferred Stock and
such Voting Parity Stock shall continue until such time as the voting right of
the holders of such Voting Parity Stock shall terminate by its terms. Upon such
termination the number of directors constituting the Board of Directors of the
Corporation shall, without further action, be reduced by two (2), subject always
to increase of the number of directors pursuant to the foregoing provisions in
case of the revesting of the Election Right upon the occurrence of a subsequent
Voting Event.
(v) The directors elected pursuant to this Section 6 shall not become
members of any of the three classes of directors otherwise required by Article
IV, Section 2 of the
11
<PAGE>
<PAGE>
Organization Certificate. If the Organization Certificate, the Corporation's
by-laws and applicable law were construed to require classification of such
directors and as a result, or if for any other reason, the holders of the shares
of Series B Preferred Stock and any Voting Parity Stock then outstanding are not
able to elect the specified number of directors at the next annual meeting of
shareholders in the manner described above, the Corporation shall use its best
efforts to take all actions necessary to permit the full exercise of such voting
rights (including, if necessary, taking action to increase the authorized number
of directors standing for election at such next annual meeting of shareholders
or seeking to amend, alter or change the Organization Certificate or by-laws of
the Corporation).
(C)(i) So long as any shares of Series B Preferred Stock are outstanding,
the Corporation shall not, without the consent of the holders of at least
66-2/3% of the outstanding shares of Series B Preferred Stock, voting together
as a single class, (a) amend, alter or repeal or otherwise change any provision
of the Organization Certificate or this Certificate of Designations (including
any such amendment, alteration, repeal or change effected by any merger or
consolidation in which the Corporation is the surviving or resulting
corporation) if such amendment, alteration, repeal or change would materially
and adversely affect the rights, preferences, powers or privileges of the Series
B Preferred Stock, or (b) authorize, create or issue or increase the authorized
or issued amount of any class or series of Senior Dividend Stock or Senior
Liquidation Stock or any warrants, options or other rights convertible into or
exchangeable for any class or series of Senior Dividend Stock or Senior
Liquidation Stock.
(ii) The creation or issuance of Parity Stock or Junior Stock, or the
distribution of assets upon a voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, or a merger, consolidation, reorganization or
other business combination in which the Corporation is not the surviving or
resulting corporation, or an amendment which substitutes the surviving or
resulting corporation in a merger or consolidation for the Corporation or which
increases the number of shares of preferred stock which the Corporation is
authorized to issue, shall not be deemed to be a material and adverse change to
the rights, preferences, powers or privileges of the Series B Preferred Stock
requiring a vote of the holders of shares of Series B Preferred Stock pursuant
to this paragraph (C).
(iii) No vote of the Series B Preferred Stock shall be required if the
Series B Preferred Stock is to be redeemed
12
<PAGE>
<PAGE>
in whole on a Redemption Date occurring on or prior to the date of occurrence of
any event otherwise requiring a class vote by the Series B Preferred Stock.
(D) Except as provided by law or regulation or the provisions of the
Organization Certificate, the presence at a meeting, in person or by proxy, of
shareholders entitled to cast a majority of the shares of Series B Preferred
Stock outstanding and entitled to vote on any matter shall constitute a quorum
of such shareholders; provided, however, if any matter shall require a vote of
holders of shares of Series B Preferred Stock and any Voting Parity Stock,
voting together as a single class, the presence at a meeting, in person or
proxy, of shareholders entitled to cast a majority of the shares of Series B
Preferred Stock and such Voting Parity Stock which is outstanding and entitled
to vote on any matter shall constitute a quorum of such shareholders. In
connection with any matter on which holders of the Series B Preferred Stock are
entitled to vote as one class or otherwise pursuant to law or regulation or the
provisions of the Organization Certificate, each holder of Series B Preferred
Stock shall be entitled to one vote for each share of Series B Preferred Stock
held by such holder.
Section 7. No Conversion, Preemptive or Subscription Rights.
The holders of shares of Series B Preferred Stock shall not have any
rights to convert such shares into shares of any other class or series of
capital stock or into any other securities of, or any interest in, the
Corporation. The Series B Preferred Stock is not entitled to any preemptive or
subscription rights with respect to any securities of the Corporation.
Section 8. No Other Rights.
The shares of Series B Preferred Stock shall not have any powers,
designations, preferences and relative, participating, optional and other
special rights except as set forth herein or in any other provision of the
Organization Certificate or as otherwise required by applicable law or
regulation.
Section 9. Business Day.
For purposes hereof, the term "Business Day" shall mean any day other than
a Saturday, a Sunday or a day on which banking institutions in New York, New
York are obligated or authorized by law or executive order to be closed.
13
<PAGE>
<PAGE>
Section 10. Action by Committee of Board of Directors.
To the extent permitted by applicable law, any action specified herein as
being authorized or required to be taken by the Board of Directors may be taken
by a duly authorized committee thereof.
Section 11. Compliance with Applicable Law and Other Restrictions.
Declaration by the Board of Directors and payment by the Corporation of
dividends to the holders of the Series B Preferred Stock and the repurchase,
redemption or other acquisition by the Corporation of shares of Series B
Preferred Stock shall be subject in all respects to any restrictions and
limitations placed on dividends, repurchases, redemptions or other distributions
by the Corporation under (a) laws, rules, regulations and regulatory conditions
or limitations applicable to or regarding the Corporation from time to time
including, without limitation, Section 18(i) of the Federal Deposit Insurance
Act and (b) orders, judgments, injunctions or decrees issued by, or agreements
with, federal or state banking authorities with respect to the Corporation from
time to time in effect.
Section 12. Miscellaneous.
(A) All notices referred to herein shall be in writing, and except as
otherwise provided all notices hereunder shall be deemed to have been given upon
the earlier of receipt thereof or three (3) Business Days after the mailing
thereof if sent by registered mail (unless first-class mail shall be
specifically permitted for such notice under the terms of this Certificate of
Designations) with postage prepaid, addressed: (i) if to the Corporation, to its
office at One Penn Plaza, New York, New York 10119 (Attention: Secretary) or to
the transfer agent for the Series B Preferred Stock, if any, or other agent of
the Corporation designated as permitted by this Certificate of Designations; or
(ii) if to any holder of the Series B Preferred Stock, to such holder at the
address of such holder as listed in the stock books of the Corporation (which
may include the records of any transfer agent for the Series B Preferred Stock);
or (iii) to such other address as the Corporation or any such holder, as the
case may be, shall have designated by notice similarly given.
(B) In the event that a holder of shares of Series B Preferred Stock shall
not by written notice designate to whom payment upon redemption of shares of
Series B Preferred
14
<PAGE>
<PAGE>
Stock should be made or the address to which such payment should be sent, the
Corporation shall be entitled to make such payment in the name of the holder of
such Series B Preferred Stock as shown on the records of the Corporation and to
send such payment to the address of such holder shown on the records of the
Corporation.
(C) Unless otherwise provided herein or in the Organization Certificate,
all payments in the form of dividends, distributions on the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, or
otherwise made upon the shares of Series B Preferred Stock and any Parity Stock
shall be made pro rata, so that amounts paid per share on the Series B Preferred
Stock and such Parity Stock shall in all cases bear to each other the same ratio
that the required dividends, distributions or payments, as the case may be, then
payable per share on the shares of the Series B Preferred Stock and such Parity
Stock bear to each other.
(D) The Corporation may appoint, and from time to time discharge and
change, a transfer agent and registrar for the Series B Preferred Stock. Upon
any such appointment, discharge or change of a transfer agent and registrar, the
Corporation shall send notice thereof by first-class mail, postage prepaid, to
each holder of record of Series B Preferred Stock.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designations and do affirm the foregoing as true under the penalties of perjury
this 24th day of September, 1993.
/s/ Gerard C. Keegan
---------------------------------
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
ATTEST:
/s/ Robert P. Carlson
- ---------------------------------
Robert P. Carlson
Senior Vice President,
Counsel and Secretary
15
<PAGE>
<PAGE>
EXHIBIT B
CERTIFICATE OF AMENDMENT
OF THE
RESTATED ORGANIZATION CERTIFICATE
OF
THE GREATER NEW YORK SAVINGS BANK
UNDER SECTION 8005 OF THE BANKING LAW
We, Gerard C. Keegan and Robert P. Carlson, being the Chairman, President
and Chief Executive Officer, and the Secretary, respectively, of The Greater New
York Savings Bank (the "Bank"), in accordance with Section 8005 of the Banking
Law of the State of New York, do hereby certify as follows:
FIRST, The name of the Corporation is THE GREATER NEW YORK SAVINGS BANK.
SECOND, The Corporation was created by a Certificate of Incorporation
filed by the Superintendent of Banks of the State of New York on February 14,
1916. On June 24, 1987, the Restated Organization Certificate of the Corporation
providing for the conversion of the Corporation from mutual to stock form was
filed [with] the Superintendent of Banks of the State of New York.
THIRD, on February 13, 1989 the Corporation filed a Certificate of
Amendment of the Restated Organization Certificate of the Corporation under
Section 8005 of the Banking Law of the State of New York, which amendment
provided for the addition of the Certificate of Designations of Series A ESOP
Convertible Preferred Stock, which states the number, designation, relative
rights, preferences, and limitations of the Corporation's Series A ESOP
Convertible Preferred Stock.
FOURTH, on July 11, 1990 the Restated Organization Certificate of the
Corporation was amended in accordance with Section 5002 of the Banking Law of
the State of New York by the Certificate of Amendment providing for a series of
preferred stock of the Corporation designated as the Junior Participating
Preferred Stock, which stated the number, designation, relative rights,
preferences, and limitations of the Corporation's Junior Participating Preferred
Stock.
<PAGE>
<PAGE>
FIFTH, on September 27, 1993 the Restated Organization Certificate of the
Corporation was further amended in accordance with Section 5002 of the Banking
Law of the State of New York by the addition of the Certificate of Designations
of 12% Noncumulative Perpetual Preferred Stock, Series B, which stated the
number, designation, relative rights, preferences, and limitations of the
Corporation's 12% Noncumulative Perpetual Preferred Stock, Series B.
SIXTH, The Restated Organization Certificate of the Corporation is hereby
amended in accordance with Sections 5002 and 8001 of the Banking Law of the
State of New York by an amendment, attached hereto as Annex A, to Section 7 of
the Certificate of Designations of Series A ESOP Convertible Preferred Stock,
which amendment changes the terms for conversion of shares of the Corporation's
Series A ESOP Convertible Preferred Stock, par value $1.00 per share, into
shares of the Corporation's common stock, par value $1.00 per share.
SEVENTH, This amendment was authorized by the majority vote of the entire
Board of Directors of the Corporation as required by Sections 5002 and 8003 of
the Banking Law of the State of New York and Article III, Section 2 of the
Corporation's Restated Organization Certificate.
IN WITNESS WHEREOF, the undersigned officers of the Corporation have made,
signed and acknowledged this certificate, this 11th day of July, l996.
/s/ Gerard C. Keegan
---------------------------
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
/s/ Robert P. Carlson
---------------------------
Robert P. Carlson
Secretary
2
<PAGE>
<PAGE>
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 11th day of July, 1996, before me personally appeared GERARD C.
KEEGAN, to me known, who is the Chairman, President and Chief Executive Officer
of The Greater New York Savings Bank described in the Certificate of Amendment
of the Restated Organization Certificate, that he executed the foregoing
instrument, and he duly acknowledged to me that he executed the same.
/s/ Carol Ann Solferino
- -------------------------------
Notary Public
(seal) CAROL ANN SOLFERINO
NOTARY PUBLIC, State of New York
No. 4979051
Qualified in Nassau County
Commission Expires March 18, 1997
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 11th day of July, 1996, before me personally appeared ROBERT P.
CARLSON, to me known, who is the Secretary of The Greater New York Savings Bank
described in the Certificate of Amendment of the Restated Organization
Certificate, that he executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
/s/ Carol Ann Solferino
- -------------------------------
Notary Public
(seal) CAROL ANN SOLFERINO
NOTARY PUBLIC, State of New York
No. 4979051
Qualified in Nassau County
Commission Expires March 18, 1997
3
<PAGE>
<PAGE>
Annex A
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATIONS
OF
SERIES A ESOP CONVERTIBLE PREFERRED STOCK
OF
THE GREATER NEW YORK SAVINGS BANK
Pursuant to Section 5002 of the
Banking Law of the State of New York
I, Gerard C. Keegan, Chairman, President and Chief Executive Officer of
The Greater New York Savings Bank (the "Corporation"), a corporation organized
and existing under the Banking Law of the State of New York, in accordance with
the provisions of Section 5002 thereof, DO HEREBY CERTIFY that, pursuant to the
authority conferred upon the Board of Directors by the Organization Certificate
of the Corporation, the Board of Directors authorized the amendment of Section 7
of the Certificate of Designations of Series A ESOP Convertible Preferred Stock
(the "Certificate of Designations"):
RESOLVED, that Section 7 of the Certificate of Designations previously
filed with the Banking Department of the State of New York on February 13, 1989,
pursuant to the authority vested in the Board of Directors of the Corporation
<PAGE>
<PAGE>
in accordance with the provisions of its Restated Organization Certificate, is
amended in its entirety as follows:
Section 7. Special Conversion Rights.
A holder of shares of Series A Preferred Stock shall be entitled to cause
any or all of such shares to be converted into shares of Common Stock at a
conversion rate equal to the quotient of (A) $13.00 per share of Series A
Preferred Stock plus accumulated and unpaid dividends thereon to the date fixed
for conversion, divided by (B) the Common Stock Market Value (as defined below),
at any time and from time to time upon notice to the Company given not less than
five (5) business days prior to the date fixed by the holder in such notice for
such conversion, but only when and to the extent unavoidably necessary (i) for
such holder to provide for distributions required to be made under, or to
satisfy an investment election provided to participants in accordance with, The
Greater New York Savings Bank Employee Stock Ownership Plan, effective as of
January 1, 1989, as the same may be amended, or any successor plan (the "Plan")
to participants in the Plan; (ii) for such holder to make payment of principal,
interest or premium due and payable (whether as scheduled or upon acceleration)
on any indebtedness incurred for the bene-
2
<PAGE>
<PAGE>
fit of the Plan by the holder, the Plan or a trust under the Plan; or (iii) in
the event the Plan is determined by the Internal Revenue Service not to be
qualified within the meaning of Sections 401(a), the applicable provisions of
409, and 4975(e) (7) of the Internal Revenue Code of 1986, as amended; provided,
however, that if the "fair market value" of a share of Series A Preferred Stock
as of the most recent "Valuation Date" (as such terms are defined in Article I,
Sections 1.18(b) and 1.39 of The Greater New York Savings Bank Employee Stock
Ownership Plan, hereinafter referred to as the "Preferred Stock Fair Market
Value") exceeds $13.00 at the time of any such conversion, then such shares of
Series A Preferred Stock will be converted into shares of Common Stock at a
conversion rate equal to the quotient of (A) the Preferred Stock Fair Market
Value plus accumulated and unpaid dividends thereon to the date fixed for
conversion, divided by (B) the Common Stock Market Value; provided further,
however, that the Company may at its election substitute for any such conversion
a cash payment per share of Series A Preferred Stock sought to be converted
equal to the greater of (x) $13.00 and (y) the Preferred Stock Fair Market
Value, plus, in either case, accumulated and unpaid dividends thereon, if it has
received an
3
<PAGE>
<PAGE>
opinion of counsel or advice of the staff of the Federal Deposit Insurance
Corporation ("FDIC") to the effect that the exercise of such election will not
impair the treatment of the Series A Preferred Stock as permanent stockholders'
equity for purposes of the FDIC's capital regulations.
For the purposes of this Section 7, "Common Stock Market Value" shall mean
the average of the last reported sales prices quoted on the Nasdaq National
Market System (or, in case no sale occurs on a given day, the average of the
reported closing bid and asked prices shall be substituted for the last reported
sales price), regular way, of publicly traded shares of Common Stock over the
five consecutive trading days immediately preceding the date of conversion.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
July 11, 1996.
/s/ Gerard C. Keegan
------------------------------
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
4
<PAGE>
<PAGE>
[LOGO]
STATE OF NEW YORK
BANKING DEPARTMENT
TWO RECTOR STREET
NEW YORK, NY 10006
October 11, 1996
Mr. Robert P. Carlson
Senior Vice President
Counsel and Secretary
The Greater New York Savings Bank
One Penn Plaza
New York, NY 10119
Dear Mr. Carlson:
We are pleased to inform you that the Bank's application, dated September 13,
1996, for the Superintendent's approval to reclassify 227,922 canceled shares of
the Bank's Series A Preferred Stock as authorized but unissued Series A
Preferred Stock was approved today.
Very truly yours,
/s/ P. Vincent Conlon
P. Vincent Conlon
Deputy Superintendent of Banks
<PAGE>
<PAGE>
THE BY-LAWS
- OF -
THE GREATER NEW YORK SAVINGS BANK
(as amended June 24, 1987,
March 9, 1989,
May 24, 1989,
December 10, 1992,
April 23, 1993,
August 24, 1994,
July 11, 1996,
August 21, 1996 and
February 27, 1997)
<PAGE>
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
OFFICES
......................................................................... 1
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meetings............................................. 1
Section 2. Special Meetings............................................ 1
Section 3. Notice of Meetings.......................................... 2
Section 4. Waiver of Notice............................................ 2
Section 5. Fixing of Record Date....................................... 2
Section 6. Quorum...................................................... 3
Section 7. Conduct of Meetings......................................... 3
Section 8. Voting...................................................... 3
Section 9. Proxies..................................................... 4
Section 10. Inspectors of Election...................................... 4
Section 11. Nominating Committee; Nominating Procedure.................. 5
Section 12. New Business................................................ 6
ARTICLE III
CAPITAL STOCK
Section 1. Certificates of Stock....................................... 7
Section 2. Transfer Agent.............................................. 7
Section 3. Registration and Transfer of Shares......................... 8
Section 4. Limitation on Transferability of Stock...................... 8
Section 5. Lost, Destroyed and Mutilated Certificates.................. 8
Section 6. Holder of Record............................................ 9
(i)
<PAGE>
<PAGE>
Section Page
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Responsibilities; Number of Directors........................ 9
Section 2. Classification of Board...................................... 9
Section 3. Qualifications............................................... 10
Section 4. Mandatory Retirement......................................... 10
Section 5. Regular and Annual Meetings.................................. 10
Section 6. Special Meetings............................................. 10
Section 7. Notice of Special Meetings; Waiver of Notice................. 10
Section 8. Presence at Meetings by Conference Telephone................. 11
Section 9. Quorum and Voting Requirements............................... 11
Section 10. Compensation................................................. 11
Section 11. Removal...................................................... 12
Section 12. Vacancies.................................................... 12
Section 13. Amendments Concerning Classification of the Board............ 12
ARTICLE V
COMMITTEES
Section 1. Standing Committees........................................... 12
Section 2. Real Estate Committee......................................... 13
Section 3. Investment Committee.......................................... 13
Section 4. Audit Committee............................................... 13
Section 5. Compensation Committee........................................ 14
Section 6. Supervising Agency Reports Committee.......................... 14
Section 7. Benefits Committee............................................ 14
Section 8. Search Committee.............................................. 15
Section 9. CRA Committee................................................. 15
Section 10. Employment of Assistants for Certain Committees............... 15
Section 11. Ad Hoc Committees............................................. 15
Section 12. Meetings of Committees; Quorum................................ 15
Section 13. Removal....................................................... 16
(ii)
<PAGE>
<PAGE>
Section Page
ARTICLE VI
OFFICERS
Section 1. Number........................................................ 16
Section 2. Term; Removal................................................. 16
Section 3. Chairman and Chief Executive Officer.......................... 16
Section 4. President..................................................... 17
Section 5. Group Presidents, Vice Presidents and Other Officers.......... 17
Section 6. Secretary..................................................... 18
Section 7. Counsel....................................................... 18
Section 8. Auditor....................................................... 18
ARTICLE VII
DIVIDENDS
.............................................................. 19
ARTICLE VIII
INDEMNIFICATION
.............................................................. 19
ARTICLE IX
MISCELLANEOUS
Section 1. Corporate Seal................................................ 20
Section 2. Securities.................................................... 20
Section 3. Bank Accounts and Checks...................................... 20
Section 4. Bonds of Officers, Clerks and Employees....................... 20
Section 5. Rules and Regulations......................................... 20
Section 6. Officers' Authority........................................... 21
(iii)
<PAGE>
<PAGE>
Section Page
ARTICLE X
EMERGENCY MANAGEMENT
.............................................................. 21
ARTICLE XI
AMENDMENTS
.............................................................. 21
(iv)
<PAGE>
<PAGE>
BY-LAWS
OF
THE GREATER NEW YORK SAVINGS BANK
ARTICLE I
OFFICES
The principal office of The Greater New York Savings Bank (the "Bank"),
shall be located in the State of New York, in the Borough of Brooklyn, County of
Kings. Subject to applicable banking laws and any required approvals of the
Superintendent of Banks of the State of New York (the "Superintendent"), the
Bank may also have other offices at such other places as the Board of Directors
(the "Board") may from time to time designate or the business of the Bank may
require.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meetings. The annual meeting of the Bank for the
election of directors and the transaction of any other business as may properly
come before such meeting shall be held each year on a date to be fixed by the
Board at such time and at such place in the City of New York as may be
designated by the Board.
Section 2. Special Meetings. Special meetings of the stockholders, for
any purpose, may be called at any time by the Chairman, the President, or by
resolution of at least three-fourths of the entire Board and shall be called by
the Secretary upon the written request of the holders of record of three-fourths
of all the outstanding voting stock of the Bank. Special meetings shall be held
at such time and at such place as may be designated by the Board. At a special
meeting, no business shall be transacted and no corporate action shall be taken
other than that stated in the notice of meeting. Notwithstanding the foregoing,
the holders of ten percent of the shares entitled to vote in an election of
directors may, in the circumstances set forth in and subject to the
1
<PAGE>
<PAGE>
provisions of Section 6003 of the New York Banking Law, demand the call of a
special meeting for the election of directors.
Section 3. Notice of Meetings. Written notice stating the place, day
and hour of any meeting of stockholders and the purpose or purposes for which
the meeting is called shall be delivered to each stockholder of record entitled
to vote at such meeting, either personally or by mail not less than ten (10) nor
more than fifty (50) days before the date of such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the U.S. mail, with
postage thereon prepaid, addressed to the stockholder at his or her address as
it appears on the stock transfer books or records of the Bank as of the record
date prescribed in Section 5 of this Article II, or at such other address as the
stockholder shall have furnished in writing to the Secretary. Notice of any
special meeting shall indicate that the notice is being issued by or at the
direction of the person or persons calling such meeting. When any meeting of
stockholders, either annual or special, is adjourned to another time or place,
no notice of the adjourned meeting must be given, other than an announcement at
the meeting at which such adjournment is taken giving the time and place to
which the meeting is adjourned. However, if after adjournment the Board fixes a
new record date for the adjourned meeting, notice of the adjourned meeting shall
be given to each stockholder of record on the new record date.
Section 4. Waiver of Notice. Notice of meeting need not be given to any
stockholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting. The attendance of any stockholder at a
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of such meeting, shall constitute a waiver of
notice by such stockholder.
Section 5. Fixing of Record Date. For the purpose of determining
stockholders entitled to notice of and to vote at any meeting of stockholders or
any adjournment thereof, or stockholders entitled to receive payment of any
dividend or the allotment of any rights, or in order to make a determination of
stockholders for any other proper purpose, the Board shall fix in advance a date
as the record date for any such determination of stockholders. Such date in any
case shall be not more than fifty (50) days and, in the case of a meeting of
stockholders, not less than ten (10) days prior to
2
<PAGE>
<PAGE>
the date on which the particular action requiring such determination of
stockholders is to be taken. When a determination of stockholders entitled to
vote at any meeting of stockholders has been made as provided in this Section 5,
such determination shall, unless otherwise provided by the Board, also apply to
any adjournment thereof.
Section 6. Quorum. The holders of a majority of the outstanding shares
of the capital stock of the Bank issued and outstanding and entitled to vote
thereat, represented in person or by proxy, shall constitute a quorum at a
meeting of stockholders. If less than a majority of such shares are represented
at a meeting, a majority of the shares so represented may adjourn the meeting
from time to time without further notice. At such adjourned meeting at which a
quorum shall be represented, any business may be transacted which might have
been transacted at the meeting as originally noticed. When a quorum is once
present to organize a meeting, such quorum is not broken by the subsequent
withdrawal of any stockholders.
Section 7. Conduct of Meetings. The Chairman or, in his or her absence,
the President or, if both the Chairman and the President are absent or otherwise
unable to conduct any such meetings, such other person as shall be appointed by
a majority of the Board shall serve as chairman at all meetings of the
stockholders. The Secretary or, in his or her absence, such other person as the
chairman of the meeting shall appoint, shall serve as secretary of the meeting.
The chairman of the meeting shall conduct all meetings of the stockholders in
accordance with the best interests of the Bank and shall have the authority and
discretion to establish reasonable procedural rules for the conduct of such
meetings. The chairman of the meeting shall also have the authority to adjourn
the meeting from time to time and from place to place as he or she may deem
necessary and in the best interests of the Bank.
Section 8. Voting. Each stockholder entitled to vote at any meeting may
vote either in person or by proxy. Each stockholder entitled to vote shall be
entitled to one vote for each share of voting stock registered in his or her
name on the transfer books or records of the Bank as of the record date
prescribed in Section 5 of this Article II. Except for the election of directors
or as otherwise provided by law, these By-Laws, or the Organization
3
<PAGE>
<PAGE>
Certificate, at all meetings of stockholders all matters shall be determined by
a majority vote of the stockholders present in person or by proxy and entitled
to vote thereat. Directors shall, except as otherwise required by law or the
Organization Certificate, be elected by a plurality of the votes cast by each
class of shares entitled to vote at a meeting of stockholders present in
person or by proxy and entitled to vote in the election. At any meeting of the
stockholders of the Bank, when ownership of a share of voting stock stands in
the name of two or more persons or fiduciaries, in the absence of written
directions to the Bank to the contrary, any one or more of such stockholders may
cast, in person or by proxy, all votes to which such ownership is entitled. In
the event an attempt is made to cast conflicting votes, in person or by proxy,
by the several persons or fiduciaries in whose names shares of stock stand, the
vote or votes to which those persons or fiduciaries are entitled shall be cast
as directed by a majority of those holding such stock and present in person or
by proxy at such meeting, but no votes shall be cast for such stock if a
majority cannot agree.
Section 9. Proxies. All proxies shall be in writing, signed by the
stockholder or by his or her duly authorized attorney-in-fact, and shall be
filed with the Secretary before being voted. No proxy shall be valid after
eleven (11) months from the date of its execution unless otherwise provided in
the proxy. The attendance at any meeting by a stockholder who shall have
previously given a proxy applicable thereto shall not, as such, have the effect
of revoking the proxy. The Bank may treat any duly executed proxy as not revoked
and in full force and effect until it receives a duly executed instrument
revoking it, or a duly executed proxy bearing a later date.
Section 10. Inspectors of Election. In advance of any meeting of
stockholders, the Board shall appoint one or more persons, other than officers,
directors or nominees for office, as inspectors of election to act at such
meeting or any adjournment thereof. Such appointment shall not be altered at the
meeting. If inspectors of election are not so appointed, the chairman of the
meeting shall make such appointment at the meeting. In case any person appointed
as inspector fails to appear or fails or refuses to act, the vacancy may be
filled by appointment by the Board in advance of the meeting or at the meeting
by the chairman of the meeting.
4
<PAGE>
<PAGE>
Section 11. Nominating Committee; Nominating Procedure. The Board shall
act as a nominating committee for selecting the nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a nominee, the nominating committee shall deliver written
nominations to the Secretary at least sixty (60) days prior to the date of the
annual meeting. Provided such committee makes such nominations, no nominations
for directors except those made by the nominating committee shall be voted upon
at the annual meeting of stockholders unless other nominations by stockholders
are made in accordance with the provisions of this Section 11. Nominations of
individuals for election to the Board at an annual meeting of stockholders may
be made by any stockholder of the Bank entitled to vote for the election of
directors at such meeting who provides timely notice in writing to the Secretary
as set forth in this Section 11. To be timely, a stockholder's notice shall be
delivered to or received by the Secretary not later than November 30, 1987, in
the case of individuals to be nominated at the first annual meeting of the Bank,
and not less than ninety (90) calendar days nor more than one hundred and twenty
(120) calendar days prior to the anniversary date of the Bank's proxy statement
released to stockholders in connection with the previous year's annual meeting
of stockholders for all subsequent annual meetings. Such stockholder's notice
shall set forth (a) as to each person whom the stockholder proposes to nominate
for election or re-election as a director (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) such person's written consent to serve as a
director, if elected, and (iv) such other information regarding the nominee as
would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Federal Deposit Insurance Corporation; and (b) as to
stockholder giving the notice (i) the name and address of such stockholder, (ii)
the class and number of shares of the Bank which are owned of record by such
stockholder, and (iii) a description of all arrangements or understanding
between the stockholder and nominee and any other person or persons (naming such
person or persons) pursuant to which the nominations are to be made by the
stockholder. At the request of the Board, any person nominated by the Board for
election as a director shall furnish to the Secretary that information required
to be set forth in a stockholder's notice of nomination which pertains to the
nominee together with the required written consent. No person shall be elected
as a director of the Bank unless nominated in
5
<PAGE>
<PAGE>
accordance with the procedures set forth in this Section 11. Ballots bearing the
names of all the persons nominated by the nominating committee and by
stockholders shall be provided for use at the annual meeting.
Section 12. New Business. Any new business to be taken up at the annual
meeting at the request of the Chairman or the President shall be stated in
writing and filed with the Secretary at least fifteen (15) days before the date
of the annual meeting, and all business so stated, proposed and filed shall be
considered at the annual meeting, but, except as provided in this Section 12, no
other proposals shall be acted upon at the annual meeting. Any non-management
proposal offered by a stockholder may be made at the annual meeting and the same
may be discussed and considered, but unless properly brought before the meeting
such proposal shall not be acted upon at the meeting. For a proposal to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary. To be timely, a
stockholder's notice must be delivered to or received by the Secretary not later
than November 30, 1987, in the case of any proposal to be brought before the
first annual meeting of the Bank's stockholders, and not less than ninety (90)
nor more than one hundred and twenty (120) days prior to the anniversary date of
the Bank's proxy statement released to stockholders in connection with the
previous year's annual meeting of stockholders for all subsequent annual
meetings. A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (a) a brief
description of the proposal desired to be brought before the annual meeting; (b)
the name and address of the stockholder proposing such business; (c) the class
and number of shares of the Bank which are owned of record by the stockholder;
and (d) such other information regarding such proposal as would be required to
be included in a proxy statement filed pursuant to the proxy rules of the
Federal Deposit Insurance Corporation. This proposal shall not prevent the
consideration and approval or disapproval at the annual meetings of reports of
officers, directors and committees of the Board or the management of the Bank,
but in connection with such reports, no new business shall be acted upon at such
annual meeting unless stated and filed as herein provided.
6
<PAGE>
<PAGE>
ARTICLE III
CAPITAL STOCK
Section 1. Certificates of Stock. Certificates of stock shall be in
such form as shall be approved by the Board, provided that each certificate
shall when issued state upon the fact thereof (a) that the Bank is a corporation
organized under the laws of the State of New York; (b) the name of the person to
whom the certificate is issued; (c) the number, class and series, if any, which
the certificate represents; and (d) the par value of each share represented by
the certificate, and further provided, that each certificate shall, when issued,
state upon the back thereof the existence of any supermajority voting provisions
in the Organization Certificate required to be noted on such certificate under
Section 6016 of the Banking Law. Each certificate shall further state that the
Bank will furnish to any stockholder upon request and without charge a statement
of the rights and preferences of shares of each class or series of stock, or
shall set forth such statement on the certificate itself. The certificates shall
be numbered in the order of their issue, and shall be signed by the Chairman,
the President or any Vice President and the Secretary or any Assistant
Secretary, and the seal of the Bank or a facsimile thereof shall be impressed,
affixed or reproduced thereon. If the certificates are signed by a Transfer
Agent acting on behalf of the Bank, or are registered by a Registrar, the
signatures of the officers of the Bank may be facsimiles. In case any officer or
officers who shall have signed any such certificate or certificates shall cease
to be such officer or officers of the Bank, whether because of death,
resignation or otherwise, before such certificate or certificates shall have
been delivered by the Bank, such certificate or certificates may nevertheless be
adopted by the Bank and be issued and delivered as though the person or persons
who signed such certificate or certificates have not ceased to be such officer
or officer of the Bank.
Section 2. Transfer Agent. The Board shall have power to
appoint one or more Transfer Agents and Registrars for the transfer and
registration of certificates of stock of any class, and may require that stock
certificates shall be countersigned and registered by one or more of such
Transfer Agents and Registrars.
7
<PAGE>
<PAGE>
Section 3. Registration and Transfer of Shares. The name of each person
owning a share of the capital stock of the Bank shall be entered on the books of
the Bank together with the number of shares held by him or her, the numbers of
the certificates covering such shares and the dates of issue of such
certificates. The shares of stock of the Bank shall be transferable on the books
of the Bank by the holders thereof in person, or by their duly authorized
attorneys or legal representatives, on surrender and cancellation of
certificates for a like number of shares, accompanied by an assignment or power
of transfer endorsed thereon or attached thereto, duly executed, with such proof
of the authenticity of the signature as the Bank or its agents may reasonably
require and with proper evidence of payment of all applicable transfer taxes. A
record shall be made of each transfer.
Section 4. Limitation on Transferability of Stock. Any shares of common
stock issued pursuant to the conversion of the Bank from the mutual to the stock
form or organization or distributed as a stock dividend, stock split, or
otherwise with respect to any such stock, which shares are purchased or acquired
(directly or indirectly), or otherwise beneficially owned by any trustee,
director, or executive officer of this Bank shall be subject to the restriction
that said shares will not be sold or otherwise disposed of for value for a
period of one year from their purchase, acquisition or date of beneficial
ownership except for any disposition of such shares following the death or
judicial declaration of incompetency of such trustee, director or officer. Each
certificate for such shares shall bear a legend giving appropriate notice of
such restriction.
Section 5. Lost, Destroyed and Mutilated Certificates. The holder of
any shares of capital stock of the Bank shall immediately notify the Bank of any
loss, theft, destruction or mutilation of the certificates therefor. The Bank
may issue, or cause to be issued, a new certificate of stock in the place of any
certificate theretofore issued by it alleged to have been lost, stolen or
destroyed upon evidence satisfactory to the Bank of the loss, theft or
destruction of the certificate, and in the case of mutilation, the surrender of
the mutilated certificate. The Bank may, in its discretion, require the owner of
a lost, stolen or destroyed certificate, or his or her legal representatives, to
give the Bank a bond, in such sum not exceeding
8
<PAGE>
<PAGE>
double the value of the stock and with such surety or sureties as they may
require, to indemnify it against any claim that may be made against it by reason
of the issue of such new certificate and against all other liability in the
premises, or may refer such owner to such remedy or remedies as he or she may
have under the laws of the State of New York.
Section 6. Holder of Record. The Bank shall be entitled to treat the
holder of record of any share or shares of stock of the Bank as the holder
thereof in fact and shall not be bound to recognize any equitable or other claim
to or interest in such shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Responsibilities; Number of Directors. The affairs of the
Bank shall be managed and directed by a Board of Directors. The Board shall
consist of not less than seven (7) nor more than thirty (30) directors. Within
the foregoing limits, the number of directors shall be determined by resolution
of the Board.
Section 2. Classification of Board. Those persons who were trustees of
the Bank as of the effective date of its conversion from the mutual to the stock
form of organization shall continue as directors of the Bank. The Board shall be
divided into three classes in respect of term of office, each class to contain,
as nearly as may be practicable, one-third of the whole number of the board. The
initial terms of the directors will be staggered so that directors of one class
will be elected at each annual meeting of stockholders. The members of the first
class shall serve until the first annual meeting of stockholders, the members of
the second class shall serve until the annual meeting of stockholders held one
year thereafter, and the members of the third class shall serve until the annual
meeting of stockholders held two years thereafter; provided, however, that in
each case directors shall continue to serve until their successors shall be
elected and shall qualify. At each annual meeting of stockholders, one class of
directors shall be elected to serve until the annual meeting of stockholders
9
<PAGE>
<PAGE>
held three years next following and until their successors shall be elected and
shall qualify.
Section 3. Qualifications. Each director shall be at least twenty-five
(25) years of age and at least one-half of the directors shall be citizens of
the United States. Not more than one-third of the total number of directors, but
in no event more than five (5), may be officers or employees of the Bank.
Section 4. Mandatory Retirement. No person who is seventy-five (75)
years of age or more shall be eligible for election as a director. No person
shall continue to serve as a director beyond the next annual meeting of
stockholders of the Bank following such person's attainment of seventy-five (75)
years of age.
Section 5. Regular and Annual Meetings. An annual meeting for the
election of officers shall be held, without notice other than these By-Laws,
immediately after, and at the same place as the annual meeting of stockholders,
or at such other time or place within fifteen (15) days after the annual meeting
of the stockholders as the Board shall determine. Regular meetings of the Board
shall be held, without notice other than these By-Laws, at least once each month
on the second (2nd) Thursday of such month (or on the next following full
business day if the date so selected shall fall on a legal holiday), at the
principal administrative office of the Bank, at 10:30 a.m. or at such other
dates, time or place as the Board shall determine.
Section 6. Special Meetings. Special meetings of the Board, for any
purpose, may be called at any time by or at the request of the Chairman or the
President. Special meetings of the Board may also be convened upon the written
request of at least a majority of the entire Board. The persons authorized to
call special meetings of the Board may fix any place, within or without the
Bank's regular business area, as the place for holding any special meeting of
the Board called by such persons.
Section 7. Notice of Special Meetings; Waiver of Notice. At least 24
hours notice of special meetings shall be given to each director if given in
person or by telephone or telegraph. Three (3) days notice of special meetings
is required if notice is given by mail. The object of the special meeting and
10
<PAGE>
<PAGE>
the persons by whom the meeting has been called, if other than the Chairman or
the President, shall be stated in the notice. Such notice shall be deemed to be
given when deposited in the U.S. mail so addressed, with postage thereon prepaid
if mailed, or when delivered to the telegraph company if sent by telegram.
Notice of a special meeting need not be given to any director who submits a
signed waiver of notice to the Secretary, whether before or after the meeting.
The attendance or participation of a director at a special meeting shall
constitute a waiver of notice of such meeting, except where a director attends
or participates in a special meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 8. Presence at Meetings by Conference Telephone. Any member of
the Board or of any committee thereof may participate in a meeting of the Board
or of such committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation in a meeting by such means shall
constitute presence at the meeting.
Section 9. Quorum and Voting Requirements. A quorum at any meeting of
the Board shall consist of a majority of the directors then in office or such
greater number as shall be required by law. If less than a required quorum is
present, the majority of those directors present may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be represented, any business may be transacted which might have been
transacted at the meeting as originally notified. When a quorum is once present
to organize a meeting, such quorum is not broken by the subsequent withdrawal of
directors originally in attendance. Except as otherwise required by law or as
otherwise provided herein or in the Organization Certificate, all matters shall
be determined by a majority vote of those present at each meeting at which a
quorum is present.
Section 10. Compensation. From time to time, as the Board deems
necessary, the Board shall fix the compensation of:
(a) Directors for their service as such, for attendance at meetings of
the Board and of committees thereof,
11
<PAGE>
<PAGE>
and for such other purposes as are permitted by law; and
(b) Executive officers of the Bank.
Section 11. Removal. Notwithstanding any other provision of the
Organization Certificate or these By-Laws, a director may be removed for cause
at any time by the affirmative vote of two-thirds of the entire Board, or for
cause by the affirmative vote of the holders of record of not less than eighty
percent (80%) of the outstanding shares of capital stock of the Bank entitled to
vote generally in the election of directors at a meeting of the stockholders
called for that purpose.
Section 12. Vacancies. All vacancies in the office of director not
exceeding one-third of the entire Board, including vacancies created by newly
created directorships resulting from an increase in the number of directors, may
be filled by a vote of a majority of the directors then holding office at any
regular or special meeting of the Board called for that purpose. Any director so
elected by the Board shall serve until the next election of the class for which
such director shall have been chosen and until his or her successor shall be
elected and qualified. In the event that there are less than three (3)
vacancies, the Board, in its discretion, and with the consent of the
Superintendent, may leave such directorships unfilled until the next annual
election.
Section 13. Amendments Concerning Classification of the Board. The
number and classification of directors of the Bank may be altered only by a vote
of two-thirds of the entire Board or by the affirmative vote of the holders of
record of not less than eighty percent (80%) of the outstanding shares of
capital stock of the Bank entitled to vote generally in the election of
directors at a meeting of the stockholders called for that purpose.
ARTICLE V
COMMITTEES
Section 1. Standing Committees. At the annual meeting or as soon
thereafter as may be practicable, the Board, upon the recommendation of the
Chairman, shall elect from their own number the members of the Supervising
Agency Reports Committee, the
12
<PAGE>
<PAGE>
Audit Committee, the Real Estate Committee, the Investment Committee, the Search
Committee, the Benefits Committee, the Compensation Committee and the CRA
Committee. From time to time, the Chairman, with the approval of the Board, may
appoint such other or special committees as may be deemed necessary or
desirable. Except as otherwise provided in these By-Laws or the Banking Law, any
director may serve on two or more committees. The members of each committee
shall serve until the next succeeding annual meeting, or until their successor
shall have been appointed as provided herein. In appointing committees, the
Board shall seek to rotate members to encourage participation by all directors,
but such rotation shall not be required. The Chairman, with the approval of the
Board, may at any time appoint a director to fill any vacancy on any committee
of the Board. The Chairman shall be chairman and a member of all committees,
except the Audit Committee and the Compensation Committee.
Section 2. Real Estate Committee. The Real Estate Committee reviews the
Bank's non-performing and other problem assets and approves strategies for the
resolution of these assets. In addition, the Committee reviews proposals for the
modification of commercial real estate loans and oversees the real estate joint
ventures and the disposition of real estate acquired by the Bank through
foreclosure or similar proceedings or deeds taken in lieu thereof. The Committee
reviews proposals for new loans in excess of limits determined by the Board. The
Committee includes the Chairman and at least five other directors. This
Committee meets monthly.
Section 3. Investment Committee. The Investment Committee reviews
security transactions, the current and prospective liquidity and interest rate
sensitivity positions of the Bank, and changes to the composition of the
investment portfolio. Additionally, the Investment Committee reviews and
approves the Bank's investment policy and strategy. The Committee includes the
Chairman and at least five other directors. This Committee meets monthly.
Section 4. Audit Committee. The Audit Committee shall be the
examination committee specified in Section 254 of the New York State Banking
Law. The Committee examines the records and
13
<PAGE>
<PAGE>
affairs of the Bank once each year for the purpose of determining the financial
condition of the Bank and delivers a report of each such examination to the
Board of Directors and the Bank's regulatory authorities as prescribed by law.
In addition, the Audit Committee receives and reviews quarterly reports from the
Bank's Auditor and supervises the Auditor's activities. The Audit Committee
consists of at least five directors, none of whom is an officer or a salaried
employee of the Bank. The Committee may employ independent counsel. The
Committee elects its own Chairman, and meets at least quarterly at his call.
Section 5. Compensation Committee. The Compensation Committee reviews
and recommends the cash compensation of each officer and employee of the Bank
whose annual salary exceeds an amount specified by the Board. The Committee also
approves the Annual Incentive Plans and reviews performance under such plans. In
addition, the Committee administers the Bank's Long-Term Incentive Program
and the Bank's 1996 Equity Incentive Plan and is responsible for granting
stock options, stock appreciation rights and other awards under said plans.
The Committee consists of at least three directors, none of whom is an officer
or a salaried employee of the Bank. The Committee elects its own Chairman.
Section 6. Supervising Agency Reports Committee. The Chairman refers to
the Supervising Agency Reports Committee the reports, accompanying texts and
official communications of the Superintendent of Banks of the State of New York
(the "Superintendent"), the Federal Deposit Insurance Corporation (the "FDIC"),
and any other supervising agency with respect to any examination of the Bank.
The Supervising Agency Reports Committee examines and reviews such reports and
makes such studies and investigations of the assets, affairs and management of
the Bank as may be required or necessary to respond to such reports, and reports
its findings and recommendations to the Board of Directors. The Supervising
Agency Reports Committee consists of the Bank's Chairman, and at least four
other directors.
Section 7. Benefits Committee. The Benefits Committee administers the
Bank's Pension Plan, Incentive Savings Plan, Directors Pension Plan and the
Supplemental Executive Retirement Plan and carries out the provisions thereof.
The Committee consists of the Bank's Chairman and at least three other
non-salaried directors.
14
<PAGE>
<PAGE>
Section 8. Search Committee. The Search Committee recruits, interviews
and recommends to the Board candidates for directors, Chairman, President, and
other senior officers of the Bank. The Committee consists of the Chairman and at
least four other directors.
Section 9. CRA Committee. The CRA Committee reviews the Bank's
performance under the Community Reinvestment Act and the regulations issued
thereunder. The Committee consists of the Chairman and at least three other
directors.
Section 10. Employment of Assistants for Certain Committees. The
Supervising Agency Reports, Compensation. Audit and Search Committees may employ
such experts and assistants and incur such reasonable expense as they deem
necessary in making such reports, examinations or audits.
Section 11. Ad Hoc Committees. Ad hoc committees may be established and
directors may be appointed thereto by the Chairman at any time. Such committees,
the members thereof and the activities thereof, shall be reported at the next
meeting of the Board for approval and ratification.
Section 12. Meetings of Committees; Quorum. The committees of the Board
shall meet at the call of the Chairman whenever there shall be any business
requiring the attention of any such committee, except that the Audit Committee
and the Compensation Committee shall meet at the call of its chairman. Ad hoc
committees shall meet at such time or times as may be required by the Chairman.
Notice of an additional meeting need not be given to any director who submits a
signed waiver of notice to the Secretary, whether before or after the meeting.
The attendance or participation of a director at an additional meeting shall
constitute a waiver of notice of such meeting, except where a director attends
or participates at the additional meeting for the purposes of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. A majority of the members of each committee shall constitute a quorum
for the transaction of business. Each committee shall keep minutes of each
meeting which shall be presented at the next regular meeting of the Board.
Section 13. Removal. Unless otherwise specified herein, any member of
any committee may be removed at any regular meeting of the Board by an
affirmative vote of two-thirds of the entire Board.
15
<PAGE>
<PAGE>
ARTICLE VI
OFFICERS
Section 1. Number. The Board shall, immediately after and at the same
place as the annual meeting of stockholders, or at such other time or place
within fifteen (15) days after the annual meeting of stockholders as the Board
shall determine, elect a Chairman and Chief Executive Officer and such other
officers as the Board deems necessary. Any two or more offices may be held by
the same person, except the offices of Chairman and Secretary or President and
Secretary.
The election of all officers shall be by a majority of the entire
Board. If such election is not held at the meeting held annually for the
election of officers, such officers may be so elected at any subsequent regular
meeting or at a special meeting called for that purpose, in the same manner as
above provided. Each person elected shall have the authority, bear such title
and perform such duties as provided in these By-Laws and as the Board may
prescribe from time to time. All officers elected or appointed by the Board
shall hold office during the pleasure of the Board. Whenever a vacancy occurs
among the officers, it may be filled at any regular or special meeting called
for that purpose, in the same manner as above provided.
Section 2. Term; Removal. Each officer shall serve until his or her
successor is elected, the office is abolished, or he or she is removed. Any
officer may be removed at any regular meeting of the Board with or without cause
by an affirmative vote of a majority of the entire Board of Directors.
Section 3. Chairman and Chief Executive Officer. The executive power of
the Bank shall be vested in the Chairman and he or she shall be the Chief
Executive Officer and head of the Bank, in general charge and supervision of its
affairs and of the management and control thereof and of the conduct of its
business. The Chairman shall have all powers and perform all duties incidental
to his or her office. The decision of the Chairman in all matters shall be
conclusive unless overruled or modified by the Board. The Chairman shall be the
presiding officer at all meetings of the Board and of the committees thereof,
except the Audit Committee and the Compensation Committee. He or she shall
preside at all annual and special
16
<PAGE>
<PAGE>
meetings of the stockholders and any adjournments thereof. He or she may call
special meetings of the Board or of the committees thereof as and when he or she
may deem necessary or advisable and shall be a member of all committees,
except the Audit Committee, the Compensation Committee and as otherwise may
be provided by law. The Chairman shall sign and execute, by and in the name of
the Bank, and affix the corporate seal to all documents and instruments
of every name or nature, which are necessary or may be required in the course of
the conduct of the business and affairs of the Bank, except as hereinafter
provided. The Chairman shall exercise supervisory control and direction over all
officers. He or she shall exercise control and disciplinary power, including
discharge, over all officers and employees, including their absences from duty
and their vacations; provided, however, that such power of discharge with
respect to officers elected or appointed by the Board shall be subject
to approval by the Board.
Section 4. President. The President shall be the Chief Administrative
Officer of the Bank and shall assist the Chairman in the management, direction
and supervision of the business, operations and affairs of the Bank and
generally perform such other duties as may be designated by the Chairman or the
Board. In the absence or incapacity of the Chairman, or if there be no Chairman,
the President shall perform all of the duties and exercise all of the powers of
the Chairman in addition to those of the President.
Section 5. Group Presidents, Vice President and Other Officers. There
shall be such number of Group Presidents, Vice Presidents and other officers as
may be determined by the Board. The Group Presidents, Vice Presidents and such
other officers shall perform such duties and exercise such powers as may be
designated by the Chairman or the Board. Such officers may be assigned priority
in status and accorded such supplementary designations as may be determined by
the Board.
Section 6. Secretary. The Secretary shall attend all meetings of the
Board and of the stockholders, shall record, or cause to be recorded, all votes
and minutes of all proceedings in a book to be kept for that purpose, and shall
perform like duties for the committees when required. The Secretary shall give,
or cause to be given, notice of all meetings to stockholders and special
meetings of the Board, as required by statute or by these
17
<PAGE>
<PAGE>
By-Laws. The Secretary shall keep or cause to be kept accurate and complete
records of the ownership of shares of the Bank. The Secretary shall be the
custodian of the seal of the Bank, if any, and shall affix it to any document
requiring it when authorized by the Chairman or the Board to do so and, when so
affixed, it may be attested by his or her signature. The Secretary shall also
perform such other duties as are required by these By-Laws, as may be directed
by the Chairman or the President or as the Board may from time to time
prescribe.
Section 7. Counsel. The Counsel shall be the attorney and counsel of
the Bank and the legal advisor thereof, and of the directors, officers and
committees. The Chairman, with the approval of the Board, may retain additional
legal assistance when such retention appears prudent or desirable.
Section 8. Auditor. The Auditor shall be primarily accountable at all
times to the Audit Committee of the Board. The Auditor shall make regular
examinations and audits of the accounts, records and transactions of the Bank,
in conformity with the internal auditing program of the Bank, under the
direction and supervision of the Audit Committee and he or she shall maintain
records of such examinations and audits. The Auditor shall make such other
examinations as may be required by the Chairman, the Audit Committee or the
Board. All written reports of the Auditor shall be addressed to the officer
responsible for the area audited, with copies to all members of the Audit
Committee and with a copy, in the Auditor's discretion, or by direction of the
Chairman of the Audit Committee, to the Chairman of the Bank.
The Auditor shall meet at least quarterly with the Audit Committee and
at other times upon the Auditor's request or the request of the Chairman of the
Audit Committee, to report upon his or her audit and/or examinations and
findings of the accounts, records and transactions of the Bank.
The compensation of the Auditor shall be established and reviewed
annually by the Audit Committee and approved by a majority of the entire Board.
18
<PAGE>
<PAGE>
ARTICLE VII
DIVIDENDS
The Board shall have the power, subject to the requirements of the
Organization Certificate, the New York Banking Law and the regulations of the
New York Banking Board, to declare and pay dividends out of surplus or net
profits of the Bank except where there is any impairment of capital stock, and
to pay such dividends to the stockholders, and to fix the date or dates for
eligibility to receive such dividend and for the payment thereof.
ARTICLE VIII
INDEMNIFICATION
The Bank shall indemnify to the full extent permitted by law, any
person who is made, or threatened to be made, a party to any action or
proceeding, whether civil or criminal, by reason of the fact that such person,
or such person's testator or intestate, is or was a trustee, director, officer
or employee of the Bank or one of the Bank's subsidiary corporations, or serves
or served any other corporation, association, conference or group in any
capacity at the request of the Bank and is or was a trustee, director, officer
or employee of the Bank or one of the Bank's subsidiary corporations, against
judgment, fines, amounts paid in settlement, and reasonable expenses, including
attorney's fees, actually and necessarily incurred, which indemnification shall
be in addition to and not exclusive of any other rights or remedies to which
such person may be or become entitled.
The Bank may, but shall not be obliged to, purchase and maintain
insurance, to the full extent permitted by law, on behalf of any person who is
or was a trustee, director, officer or employee of the Bank or is or was serving
at the request of the Bank as a trustee, director, officer or employee of
another corporation of any type or kind, domestic or foreign, against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the Bank
would have the power to indemnify him or her against such liability under the
provisions of this section.
19
<PAGE>
<PAGE>
ARTICLE IX
MISCELLANEOUS
Section 1. Corporate Seal. There shall be a Corporate Seal, to be kept
in the Bank in the charge of the Secretary, to be used only by authority of the
Chairman or the Board.
Section 2. Securities. Access to the stocks, bonds and other securities
of the Bank shall be had by such officers and other persons as shall be
designated by resolution of the Board and under such restrictions or limitations
as the Board shall from time to time impose.
Section 3. Bank Accounts and Checks. All checks on the bank accounts
maintained by the Bank must be signed by such officers and other persons as
shall be designated by resolution of the Board, under such restrictions as the
Board may from time to time impose.
Section 4. Bonds of Officers, Clerks and Employees. Every director,
officer, clerk and employee of the Bank shall be bonded for the honest and
faithful discharge of his or her respective duties in such an amount as may be
prescribed by the Board.
Section 5. Rules and Regulations. The Board may adopt, post and make
available to depositors rules and regulations not inconsistent with law for
payment of deposits, and dividends or interest thereon, and generally for the
transaction and management of the affairs of the Bank, and all such rules and
regulations, from time to time in effect, and all amendments thereto, from time
to time in effect, shall be binding upon all depositors. Such rules and
regulations may include provisions for payment of dividends or interest without
requiring production of the passbook, and for credit of dividends on deposits
withdrawn before the close of a dividend period, and any other provisions
relating to payment of deposits, and dividends and interest thereon, which the
Board may be authorized by law to adopt in the By-Laws. Such rules and
regulations shall be deemed a part of the By-Laws for such purposes.
20
<PAGE>
<PAGE>
Section 6. Officers' Authority. Such officers of the Bank as may be
designated by the Board shall have power to execute for and in the name of the
Bank, with or without its corporate seal, all such documents as may be necessary
or proper to be executed in and about the business of the Bank.
ARTICLE X
EMERGENCY MANAGEMENT
When there shall occur or exist an acute emergency as defined in
Article 7, Chapter 1, Title 26 of the Unconsolidated Laws of the State of New
York, as the same be amended, from time to time, the management and control of
the Bank shall be conducted in conformance with said Article 7 as amended, any
provisions of these By-Laws or resolution of the Board to the contrary
notwithstanding.
ARTICLE XI
AMENDMENTS
These By-Laws may be amended at any meeting of the Board by the vote of
a majority of the entire Board; provided that any By-Law made by the Board may
be altered, amended, rescinded, or repealed by the holders of shares of capital
stock entitled to vote thereon at any annual meeting or at any special meeting
called for that purpose; and provided further that the Board shall not have the
authority to alter, amend, rescind, or repeal any By-Law which shall have been
made from time to time by the holders of shares of capital stock entitled to
vote thereon, unless otherwise provided by the holders of shares entitled to
vote thereon. Notwithstanding the foregoing, any provision of these By-Laws
which contains a supermajority voting requirement shall only be altered,
amended, rescinded, or repealed by a vote of the Board or holders of capital
stock entitled to vote thereon that is not less than the supermajority specified
in such provision.
21
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
THE GREATER NEW YORK SAVINGS BANK
and
MANUFACTURERS HANOVER TRUST COMPANY
Rights Agent
---------------------------
Rights Agreement
Dated as of June 14, 1990
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
Section 1. Certain Definitions................................... 4
Section 2. Appointment of Rights Agent........................... 7
Section 3. Issue of Rights Certificates.......................... 7
Section 4. Form of Rights Certificates........................... 9
Section 5. Countersignature and Registration..................... 10
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates,
Mutilated, Destroyed, Lost or Stolen
Rights Certificates................................... 11
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights............................. 12
Section 8. Cancellation and Destruction of Rights
Certificates.......................................... 15
Section 9. Reservation and Availability of Capital
Stock................................................. 15
Section 10. Preferred Stock Record Date........................... 17
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights.................... 18
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares................................... 30
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power................... 30
Section 14. Fractional Rights and Fractional Shares............... 33
Section 15. Rights of Action...................................... 35
Section 16. Agreement of Rights Holders........................... 35
Section 17. Rights Certificate Holder Not Deemed a
Stockholder........................................... 36
Section 18. Concerning the Rights Agent........................... 36
</TABLE>
-2-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
Section 19. Merger or Consolidation or Change of
Name of Rights Agent................................. 37
Section 20. Duties of Rights Agent............................... 38
Section 21. Change of Rights Agent............................... 40
Section 22. Issuance of New Rights Certificates.................. 41
Section 23. Redemption and Termination........................... 42
Section 24. Exchange............................................. 43
Section 25. Notice of Certain Events............................. 44
Section 26. Notices.............................................. 45
Section 27. Supplements and Amendments........................... 46
Section 28. Successors........................................... 47
Section 29. Determinations and Actions by the Board
of Directors, etc.................................... 47
Section 30. Benefits of this Agreement........................... 47
Section 31. Severability......................................... 48
Section 32. Governing Law........................................ 48
Section 33. Counterparts......................................... 48
Section 34. Descriptive Headings................................. 48
Exhibit A -- Certificate of Designation, Preferences and
Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
-3-
</TABLE>
<PAGE>
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of June 14, 1990 (the "Agreement"), between The
Greater New York Savings Bank, a New York banking stock corporation (the
"Company"), and Manufacturers Hanover Trust Company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on June 14, 1990 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of common stock, par value $1.00 per
share, of the Company (the "Common Stock") outstanding at the close of business
on June 25, 1990 (the "Record Date"), and has authorized the issuance of one
Right (as such number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date, each Right initially representing
the right to purchase one one-hundredth of a share of Junior Participating
Preferred Stock of the Company having the rights, powers and preferences set
forth in the form of Certificate of Designation attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person
(other than any employee benefit plan of the Company or any subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) who constitutes an
"Interested Shareholder" as defined in Section 912 of the New York Business
Corporation Law (the "NYBCL"); provided, however, that for purposes of
determining whether such Person is an "Acquiring Person," a Person engaged in
business as an underwriter of securities shall not be deemed to be the
"Beneficial Owner" of, or to "beneficially own," any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such acquisition.
-4-
<PAGE>
<PAGE>
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Section 912 of the NYBCL.
(c) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities if such Person
constitutes with respect to such securities a "Beneficial Owner" as defined in
Section 912 of the NYBCL; provided, however, that for purposes of this
Agreement, a Person engaged in business as an underwriter of securities shall
not be deemed to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the date of
such acquisition.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., New York time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York time, on the next
succeeding Business Day.
(f) "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(g) "Common stock equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(h) "Current market price" shall have the meaning set
forth in Section 11(D)(i) hereof.
(i) "Current value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(j) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(k) "Exchange Ratio" shall have the meaning set forth
in Section 24(a) hereof.
-5-
<PAGE>
<PAGE>
(l) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(m) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(n) "Person" shall mean any individual, firm,
corporation, partnership or any other entity.
(o) "Preferred Stock" shall mean shares of Junior
Participating Preferred Stock, $1.00 par value, of the Company, and, to the
extent that there is not a sufficient number of shares of Junior Participating
Preferred Stock authorized to permit the full exercise of the Rights, any other
series of Preferred Stock, $1.00 par value, of the Company designated for such
purpose containing terms substantially similar to the terms of the Junior
Participating Preferred Stock.
(p) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(q) "Purchase Price" shall have the meaning set forth
in Section 4(a) hereof.
(r) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(s) "Rights" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(t) "Rights Certificates" shall have the meaning set
forth in Section 3(a) hereof.
(u) "Section 11(a)(ii) Event" shall mean the event
described in Section 11(a)(ii) hereof.
(v) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(w) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(x) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.11
(y) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of
-6-
<PAGE>
<PAGE>
this definition, shall include, without limitation, a report filed pursuant to
Section 13(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) by the Company or an Acquiring Person that an Acquiring Person
has become such.
(z) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities sufficient to
elect at least a majority of the directors of such corporation is beneficially
owned, directly or indirectly, by such Person, or otherwise controlled by such
Person.
(aa) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(bb) "Trading Day" shall have the meaning
set forth in Section 11(d)(i) hereof.
(cc) "Triggering Event" shall mean any Section
11(a)(ii) Event or Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on
the tenth day after the Stock Acquisition Date (or, if the tenth day after the
Stock Acquisition Date occurs before the Record Date, the close of business on
the Record Date), or (ii) the close of business on the tenth business day after
the date that a tender offer or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Section
335.502(a) of the Rules and Regulations of the Federal Deposit Insurance
Corporation ("FDIC") or any successor provision thereto, if upon consummation
thereof, such Person would be the Beneficial Owner of 20% or more of the shares
of Common Stock then outstanding, (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the
-7-
<PAGE>
<PAGE>
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will, at the Company's expense, send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more right certificates,
in substantially the form of Exhibit B hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p) hereof,
at the time of distribution of the Right Certificates, the Company shall make
the necessary and appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration
Date (as such term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of all shares
of Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing such shares
of
-8-
<PAGE>
<PAGE>
Common Stock shall also be deemed to be certificates for Rights, and shall bear
the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between The
Greater New York Savings Bank (the "Company") and Manufacturers Hanover
Trust Company (the "Rights Agent") dated as of June 14, 1990 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
-9-
<PAGE>
<PAGE>
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-hundredths
of a share of Preferred Stock as shall be set forth therein at the price set
forth therein (such exercise price per one one-hundredth of a share, the
"Purchase Price"), but the amount and type of securities, purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant
to Section 3(a) or Section 22 hereof that represents Rights beneficially owned
by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after such Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible)
the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the
-10-
<PAGE>
<PAGE>
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights Certificates
shall be countersigned manually or by facsimile signature by the Rights Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its shareholder services office
or offices designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates, Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e), Section 14 and Section 24 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered holder
-11-
<PAGE>
<PAGE>
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the Person entitled thereto
a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to
-12-
<PAGE>
<PAGE>
the Rights Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price with respect to the total number of one one-hundredths of a share (or
other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earliest of (i) the
close of business on June 25, 2000 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) and (ii) being herein referred to as the "Expiration Date") or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one- hundredth of
a share of Preferred Stock pursuant to the exercise of a Right shall initially
be $24 and shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate on
the reverse side thereof duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-hundredth of a share
of Preferred Stock (or other shares, securities, cash or other assets, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of shares of Preferred Stock issuable upon exercise of the Rights hereunder with
a depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in
-13-
<PAGE>
<PAGE>
such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made by
certified check, bank draft or money order payable to the order of the Company
or the Rights Agent. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a direct or indirect transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a direct or
indirect transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts
-14-
<PAGE>
<PAGE>
to insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or any of its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless (i) such registered
holder shall have (A) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (B) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request and (ii) all
necessary regulatory or governmental approvals or consents required by the
Company or any such registered holder, as the case may be, for the valid and
legal exercise of such Rights and the issuance of any securities or distribution
of other property upon such exercise shall have been obtained.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and,
-15-
<PAGE>
<PAGE>
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, as provided in this Agreement, including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the first occurrence of a Section
11(a)(ii) Event, or, if applicable, as soon as practicable following the
earliest date after the first occurrence of a Section 11(a)(ii) Event on which
the consideration to be delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii) hereof, a registration
statement under the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date referred to in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company shall
-16-
<PAGE>
<PAGE>
determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such Jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all one one-hundredths
of a share of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any certificates for a
number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
is issued
-17-
<PAGE>
<PAGE>
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination
or reclassification, and the number and kind of shares of Preferred
Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately
-18-
<PAGE>
<PAGE>
adjusted so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the Purchase Price then
in effect, the aggregate number and kind of shares of Preferred Stock
or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
thin Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the
event any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and Associates, shall, at
any time after the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing such person to become an
Acquiring Person (A) is a transaction set forth in Section 13(a)
hereof, or (B) is an acquisition of shares of Common Stock pursuant to
a tender offer or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a majority
of the members of the Board of Directors of the Company who are not
officers of the Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person, after receiving advice
from one or more investment banking firms, to be (a) at a price which
is fair to stockholders (taking into account all factors which the
Board of Directors deems relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its stockholders,
then, promptly following the first occurrence of a Section 11(a)(ii)
Event, proper provision shall be made so that each holder of a Right
(except as provided
-19-
<PAGE>
<PAGE>
below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one
one-hundredths of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of
the lowest closing price (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) per share of Common Stock on any Trading
Day (as defined in Section 11(d)(i) hereof) occurring within the
twelve-month period immediately preceding the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which is authorized by the Company's Organization
Certificate but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall, to the
extent permitted by applicable law and regulation, and provided that
none of the following actions shall cause the Company to fail to meet
applicable capital adequacy standards of any federal or state
regulatory authority having jurisdiction over the capital adequacy of
the Company: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess, the "Spread"), and
(B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the
Board of Directors of the Company has deemed to have the
-20-
<PAGE>
<PAGE>
same value as shares of Common Stock (such shares of preferred stock,
"common stock equivalents")), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board of Directors of the Company based upon
the advice of a recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company's right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated, subject
to the proviso appearing immediately before clause (A) above, to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such period,
as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public
announcement stating that the
-21-
<PAGE>
<PAGE>
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Stock on such
date.
(b) In case the Company shall fix a record
date for the issuance of rights, options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record,date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("equivalent preferred stock")) or securities convertible into Preferred
Stock or equivalent preferred stock at a price per share of Preferred Stock or
per share of equivalent preferred stock (or having a conversion price per share,
if a security convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock and/or equivalent preferred stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or equivalent preferred stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for
-22-
<PAGE>
<PAGE>
the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights, options
or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record
date for a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per share of Preferred Stock. Such adjustments shall be
made successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d)(i) For the purpose of any computation hereunder
other than computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof,
the "current market price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of
-23-
<PAGE>
<PAGE>
such Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
current market price per share of the Common Stock is determined during
a period following the announcement by the issuer of such Common Stock
of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of
such Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassifica- tion shall not have
occurred prior to the commencement of the requisite thirty (30) Trading
Day or ten (10) Trading Day period, as set forth above, then, and in
each such case, the "current market price" shall be properly adjusted
to take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use,
or, if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors of the Company. If on
any such date no market maker is making a market in the Common Stock,
the fair value of such shares on such date as determined in good faith
by the Board of Directors of the Company shall be
-24-
<PAGE>
<PAGE>
used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, a Business Day. If the Common
Stock is not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in clause
(i) of this Section 11(d) (other than the last sentence thereof). If
the current market price per share of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement) multiplied by
the current market price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, "current market price" per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market
price" of one one-hundredth of a share of Preferred Stock shall be
equal to the "current market price" of one share of Preferred Stock
divided by 100.
(e) Anything herein to the contrary not-
withstanding, no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Purchase Price;
-25-
<PAGE>
<PAGE>
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-- hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths
of a share covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
-26-
<PAGE>
<PAGE>
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a share which
were expressed in the initial Rights Certificates issued hereunder.
-27-
<PAGE>
<PAGE>
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if any, of
the number of one one-hundredths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-hundredths of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised after
such record date the number of one one-hundredths of a share of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-hundredths of a share of Preferred
Stock and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other
-28-
<PAGE>
<PAGE>
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, options, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine
the outstanding shares of Common Stock into a smaller number of shares, the
number of Rights associated with each share of Common Stock then outstanding, or
issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
-29-
<PAGE>
<PAGE>
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 and Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock, a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained.,
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, and in
each such case (except as may be contemplated by Section 13(d) hereof), proper
provision shall be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
-30-
<PAGE>
<PAGE>
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such one one-hundredths of a share
for which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by (2) 50% of the current
market price (determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of such Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company' shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean (i) in the
case of any transaction described in clause (x) or (y) of the first sentence of
Section 13(a), the Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger or consolidation and
if no securities are so issued, the Person that is the other party to such
merger or consolidation and (ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions; provided, however, that in any
such case, (1) if the Common Stock of such Person is not at such time and has
not been continuously over the preceding twelve (12)
-31-
<PAGE>
<PAGE>
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
-32-
<PAGE>
<PAGE>
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock at a price and on terms determined to be in accordance with the
provisions of clause (B) of Section 11(a)(ii) hereof (or a wholly owned
subsidiary of any such Person or Persons), (ii) the price per share of Common
Stock offered in such transaction is not less than the price per share of Common
Stock paid to all holders of shares of Common Stock whose shares were purchased
pursuant to such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the
-33-
<PAGE>
<PAGE>
high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock) upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a share
of Preferred Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-hundredth of a share of Preferred Stock. For purposes of this Section 14(b),
the current market value of one one-hundredth of a share of Preferred Stock
shall be one one-hundredth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of Common-Stock. For
purposes of this Section 14(c), the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
-34-
<PAGE>
<PAGE>
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent designated
for such purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent,
-35-
<PAGE>
<PAGE>
subject to the last sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
one one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or
-36-
<PAGE>
<PAGE>
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in
the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have been
countersigned but not
-37-
<PAGE>
<PAGE>
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person and the determination of "current market price") be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same (except as to
its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
-38-
<PAGE>
<PAGE>
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after actual notice
of any such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or Preferred Stock to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common Stock or Preferred
Stock will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, or any Senior Vice
President of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
-39-
<PAGE>
<PAGE>
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company, and to
each transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
ten (10) days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail at the Company's expense. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of ten (10) days after giving
notice of such removal, or within a period of thirty (30) days after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit
-40-
<PAGE>
<PAGE>
his Rights Certificate for inspection by the Company), as the case may be, then
any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state of the United States so long as such corporation is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded on or prior to the Distribution Date, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of
-41-
<PAGE>
<PAGE>
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business on the
tenth day following the Stock Acquisition Date (or, if the Stock Acquisition
Date shall have occurred prior to the Record Date, the close of business on the
tenth day following the Record Date), or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the "current market price", as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice at the Company's expense to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the Transfer Agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall
-42-
<PAGE>
<PAGE>
be deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption Price
will be made.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time and from time to time on or after a Section 11(a)(ii) Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock or "common stock equivalents" (or any
combination thereof) at an exchange ratio of one share of Common Stock, or such
number of "common stock equivalents" or units representing fractions thereof as
would be deemed to have the same value as one share of Common Stocks per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock and/or "common stock equivalents" equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the shares of Common Stock and/or "common stock equivalents" for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of Rights.
-43-
<PAGE>
<PAGE>
(c) In the event that the number of shares of Common
Stock which are authorized by the Company's Organization Certificate but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 24, the Company shall take all such action as
may be necessary to authorize shares of "common stock equivalents" for issuance
upon exchange of the Rights.
(d) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of Rights with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the value of a whole share of
Common Stock. For purposes of this subsection (d), the value of a whole share of
Common Stock shall be the closing price (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24, and the value of any "common
stock equivalent" shall be deemed to have the same value as the Common Stock on
such date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which
-44-
<PAGE>
<PAGE>
complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur,
then, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
The Greater New York Savings Bank
One Penn Plaza
New York, New York 10119
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until
-45-
<PAGE>
<PAGE>
another address is filed in writing with the Company) as follows:
Manufacturers Hanover Trust Company
15th Floor
450 West 33rd Street
New York, NY 10001
Attention: Vice President - Stock Transfer
Administration Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person,
or an Affiliate or Associate of an Acquiring Person); provided, however, this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.
-46-
<PAGE>
<PAGE>
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date, the Purchase Price, or the number of one one-hundredths
of a share of Preferred Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Section 335.403(d)(1)(i) of the Rules and
Regulations of the FDIC as in effect on the date hereof. The Board of Directors
of the Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
-47-
<PAGE>
<PAGE>
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provision requiring that a determination
be made by less than the entire board is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall then be made by the entire board.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-48-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: THE GREATER NEW YORK SAVINGS BANK
By ____________________ By ______________________________
Name: Patrick J. Damanti Name: Charles J. Ohlig
Title: Assistant Secretary Title: Chairman and Chief
Excutive Officer
Attest: MANUFACTURERS HANOVER TRUST COMPANY
By _____________________ By _______________________________
STANLEY E. SIEKIERSKI Anthony J. Annucci
ASSISTANT VICE PRESIDENT Vice President
-49-
<PAGE>
<PAGE>
Exhibit A
CERTIFICATE OF AMENDMENT
OF
THE RESTATED ORGANIZATION CERTIFICATE
OF
THE GREATER NEW YORK SAVINGS BANK
Under Section 8005 of the Banking Law
------------------------------------
We, Gerard C. Keegan, and Patrick J. Damanti, being the
President and Chief Operating Officer and the Assistant Secretary, respectively,
of The Greater New York Savings Bank, in accordance with Section 8005 of the
Banking Law of the State of New York, DO HEREBY CERTIFY:
FIRST, the name of the Corporation is THE GREATER
NEW YORK SAVINGS BANK.
SECOND, The Corporation was created by a Certificate of
Incorporation filed by the Superintendent of Banks of the State of New York on
February 14, 1916. On June 24, 1987, the Restated Organization Certificate of
the Corporation providing for the conversion of the Corporation from mutual to
stock form was filed with the Superintendent of Banks of the State of New York.
THIRD, The Restated Organization Certificate of the
Corporation was amended in accordance with Section 5002 of the Banking Law of
the State of New York by the addition of the Certificate of Designations of
Series A ESOP Convertible Preferred Stock, which states the number, designation,
relative rights, preferences, and limitations of the Corporation's Series A ESOP
Convertible Preferred Stock.
FOURTH, the Restated Organization Certificate is hereby
amended by the addition of the following provisions stating the number,
designations, relative rights, preferences and limitations of a series of
preferred stock of the Corporation, designated as Junior Participating Preferred
Stock, as fixed by resolution of the Board of Directors of the Corporation
pursuant to the authority vested in it by the Restated Organization Certificate
of the Corporation. Article III, SECTION 2, PART A of the Restated
<PAGE>
<PAGE>
Organization Certificate of the Corporation is hereby amended by the addition of
the following at the end thereof:
(vii) Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Junior Participating Preferred Stock" and the number of
shares constituting such series shall be one hundred fifty thousand (150,000).
Section 2. Dividends and Distributions.
(A) The holders of shares of Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $1.00 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Junior
Participating Preferred Stock. In the event the Corporation shall at any time
after June 14, 1990 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of shares
of Junior Participating Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
-2-
<PAGE>
<PAGE>
(B) The Corporation shall declare a dividend or distribution
on the Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Junior
Participating Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Junior Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Junior
Participating Preferred Stock shall not by virtue of their ownership thereof be
entitled to vote upon any matter except as otherwise provided herein or by
applicable law.
(A) (i) If at any time dividends on any Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a
-3-
<PAGE>
<PAGE>
period (herein called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Junior
Participating Preferred Stock then outstanding shall have been declared and paid
or set apart for payment. During each default period, all holders of Preferred
Stock (including holders of the Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two (2)
Directors.
(ii) During any default period, such voting right of the
holders of Junior Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(A) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of Directors shall be exercised unless the holders
of ten percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of Common
Stock shall not affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Junior Participating
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of
-4-
<PAGE>
<PAGE>
the total number of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the President, a
Vice- President or the Secretary of the Corporation. Notice of such meeting and
of any annual meeting at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph (A)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last address as
the same appears on the books of the Corporation. Such meeting shall be called
for a time not earlier than 20 days and not later than 60 days after such order
or request or in default of the calling of such meeting within 60 days after
such order or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (A)(iii), no such special
meeting shall be called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided in
paragraph (A)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (A) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of paragraph
(A)(ii) of this Section 3 (such number being subject, however, to change
-5-
<PAGE>
<PAGE>
thereafter in any manner provided by law or in the certificate of incorporation
or by-laws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of
the remaining Directors.
(B) Except as set forth herein, holders of Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Junior Participating
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Participating
Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Junior Participating Preferred Stock, except dividends paid ratably on
the Junior Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Junior Participating Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution, liquidation
or
-6-
<PAGE>
<PAGE>
winding up) to the Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Junior Participating Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Junior Participating Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Liquidation Preference"). Following the payment of the full
amount of the Liquidation Preference, no additional distributions shall be made
to the holders of shares of Junior Participating Preferred Stock unless, prior
thereto, the
-7-
<PAGE>
<PAGE>
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Junior Participating Preferred Stock and Common Stock, respectively,
holders of Junior Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Junior Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment
-8-
<PAGE>
<PAGE>
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Junior Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Restated Organization Certificate
of the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Junior Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Junior Participating Preferred Stock.
-9-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this 14th day of June, 1990.
Attest:
By /s/ Charles H. Ahearn By /s/ Gerard C. Keegan
----------------------- ------------------------
Charles H. Ahearn Name: Gerard C. Keegan
Secretary Title: President and
Chief Operating
Officer
By /s/ Patrick J. Damanti
-----------------------------
Name: Patrick J. Damanti
Title: Assistant Secretary
-10-
<PAGE>
<PAGE>
Exhibit B
[Form of Rights Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER ________ __, 2000 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
THE GREATER NEW YORK SAVINGS BANK
This certifies that , or registered
assigns, is the registered Owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
condition of the Rights Agreement, dated as of June 14,1990 (the "Rights
Agreement"), between The Greater New York Savings Bank, a New York
state-chartered savings bank (the "Company"), and Manufacturers Hanover Trust
Company (the "Rights Agent"), to purchase from the Company at any time prior to
5:00 P.M. (New York City time) on June 25, 2000 at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, nonassessable share of Junior Participating
Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of
$24 per one one-hundredth of a share (the "Purchase
- --------------
* The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
<PAGE>
<PAGE>
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The number
of Rights evidenced by this Rights Certificate (and the number Of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price as of June 25,
1990, based on the Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering Event (as
such term is defined in the Rights Agreement) that a number of Rights be
exercised so that only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Company or the Rights Agent.
-2-
<PAGE>
<PAGE>
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the shareholder services office or offices of
the Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of one
one-hundredths of a share of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $.01 per Right at any time prior to the earlier of the
close of business on (a) the tenth day following the Stock Acquisition Date (as
such time period may be extended pursuant to the Rights Agreement), and (b) the
Final Expiration Date or (ii) may be exchanged in whole or in part for shares of
the Company's Common Stock, par value $1.00 per share, and/or other equity
securities of the Company deemed to have the same value as shares of Common
Stock, at any time after a Section 11(a)(ii) Event.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or
-3-
<PAGE>
<PAGE>
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
-4-
<PAGE>
<PAGE>
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ____________ __, 19__
ATTEST: THE GREATER NEW YORK
SAVINGS BANK
__________________ By ______________________
Secretary Title:
Countersigned:
MANUFACTURERS HANOVER TRUST COMPANY
- -------------------------
By _______________________
Authorized Signature
-5-
<PAGE>
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ___________________________________________________________
hereby sells, assigns and transfers unto _____________________________________
______________________________________________________________________________
(Please print name and address of transferee and insert
social security or other identifying number)
______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ____________________, 19__
----------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, 19__ ____________________________
Signature
<PAGE>
<PAGE>
Signature Guaranteed:
NOTICE
The Signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: THE GREATER NEW YORK SAVINGS BANK
The undersigned hereby irrevocably elects to exercise _____
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
-8-
<PAGE>
<PAGE>
Please insert social security
or other identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Dated: ______________, 19__
----------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [
] are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _______________, 19__ ___________________________
Signature
Signature Guaranteed:
<PAGE>
<PAGE>
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On June 14, 1990, the Board of Directors of The Greater New
York Savings Bank (the "Company") declared a dividend distribution of one Right
for each outstanding share of the Company's Common Stock, par value $1.00 per
share (the "Common Stock"), to stockholders of record at the close of business
on June 25, 1990. Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-hundredth of a share (a "Unit") of Junior
Participating Preferred Stock, par value $1.00 per share (the "Preferred Stock")
at a Purchase Price of $24 per Unit, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Manufacturers Hanover Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
and a Distribution Date will occur upon the earlier of (i) 10 days following a
public announcement that a person (an "Acquiring Person") has become an
"interested shareholder" as defined in Section 912 of The New York Business
Corporation Law (i.e., has, individually or with or through its affiliates or
associates acquired, or obtained the right to acquire, beneficial ownership of
20% or more of the outstanding shares of Common Stock) (the "Stock Acquisition
Date"), or (ii) 10 business days following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 20% or
more of such outstanding shares of Common Stock. Until the Distribution Date,
(i) the Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after June 14, 1990 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. Pursuant to the Rights Agreement, the Company reserves the right to
require prior to the occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
<PAGE>
<PAGE>
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on June 25, 2000, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a person becomes the beneficial owner of 20%
or more of the then outstanding shares of the Company's voting stock (except
pursuant to an offer for all outstanding shares of Common Stock which the
independent directors determine to be fair to and otherwise in the best
interests of the Company and its shareholders) (a "Flip-in Event"), each holder
of a Right will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value (based on the lowest closing price of the Common Stock
during the twelve-month period preceding the Flip-in Event) equal to two times
the exercise price of the Right. Notwithstanding any of the foregoing, following
the occurrence of the event set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of a Flip-in Event until
such time as the Rights are no longer redeemable by the Company as set forth
below.
For example, at an exercise price of $24 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$48 worth of Common Stock based on the lowest closing price of the Common Stock
during the twelve-month period preceding the Flip-in Event (or other
consideration, as noted above) for $24. Assuming that the lowest closing price
of the Common Stock during such period was $6, the holder of each valid Right
would be entitled to purchase 8 shares of Common Stock for $24.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger which
-2-
<PAGE>
<PAGE>
follows an offer described in the second preceding paragraph), or (ii) 50% or
more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the exercise price of
the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock
are granted certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred Stock
on the last trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the $.01 redemption
price.
At any time after the occurrence of a Flip-in Event, the Board
of Directors may exchange the Rights (other than Rights owned by an Acquiring
Person, which have become void), in whole or in part, at an exchange ratio of
one Common Share, and/or other equity securities deemed to have the same value
as one Common Share, per Right, subject to adjustment.
-3-
<PAGE>
<PAGE>
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above, or are
exchanged as provided in the preceding paragraph.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement has been filed with the Federal
Deposit Insurance Corporation as an Exhibit to a Registration Statement on Form
F-10 dated June 14, 1990. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
-4-
<PAGE>
<PAGE>
FIRST AMENDMENT TO SHAREHOLDER RIGHTS AGREEMENT
________________________________________________
First Amendment, dated as of August 12, 1996, to the Rights
Agreement, dated as of June 14, 1990 (the "Rights Agreement"), between The
Greater New York Savings Bank, a banking stock corporation organized under the
laws of the state of New York (the "Company") and The Chase Manhattan Bank (as
successor in interest to the Manufacturers Hanover Trust Company) as Rights
Agent (the "Rights Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Rights Agent have heretofore
executed and entered into the Rights Agreement; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement or amend the
Rights Agreement in accordance with the provisions of Section 27 thereof; and
WHEREAS a Distribution Date (as that term is defined in the
Rights Agreement) has not occurred;
WHEREAS, the Board of Directors of the Company has by resolution
approved and authorized this First Amendment to the Rights Agreement; and
WHEREAS, all actions necessary to make this First Amendment a
valid agreement, enforceable according to its terms have been taken, and the
execution and delivery of this First Amendment by the Company and the Rights
Agent have in all respects been duly authorized by the Company and the Rights
Agent.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the Company and the Rights Agent agree as follows:
I. Unless otherwise expressly defined in this First Amendment or
the context otherwise requires, capitalized and other terms for which meanings
are provided in the Rights Agreement shall have such meanings when used in this
First Amendment.
<PAGE>
<PAGE>
II. Effective August 12, 1996, the Rights Agreement shall be, and
it hereby is, amended by:
1. Deleting the legend required in Section 3(c) and restating it
in its entirety as follows:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between The Greater New York Savings Bank (the "Company") and The
Chase Manhattan Bank (as successor in interest to the
Manufacturers Hanover Trust Company) (the "Rights Agent") dated
as of June 14, 1990, as amended as of August 12, 1996 (as it may
be amended from time to time, the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of the Company.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any subsequent holder,
may become null and void.
2. Deleting and restating Section 11(a)(ii) of the Rights
Agreement in its entirety as follows:
(ii) Subject to Section 24 of this Agreement, in the event any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by
the Company for or
-2-
<PAGE>
<PAGE>
pursuant to the terms of any such plan), alone or together with its
Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, becomes an Acquiring Person, unless the
event causing such person to become an Acquiring Person is a
transaction set forth in Section 13(a) hereof, then, promptly
following the first occurrence of a Section 11(a)(ii) Event, proper
provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of a
number of one one-hundredths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the lowest closing price (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) per share of Common
Stock on any Trading Day (as defined in Section 11(d)(i) hereof)
occurring within the twelve-month period immediately preceding the
date of such first occurrence (such number of shares, the "Adjustment
Shares").
3. Deleting Section 13(d) in its entirety and deleting all
references to Section 13(d) in Section 13(a) and throughout the Rights
Agreement.
4. Deleting Exhibit C and replacing it in its entirety with a new
Exhibit C substantially in the form attached herewith as Annex A.
III. Nothing set forth in this First Amendment shall in any
manner be construed to alter the rights of the holders of the Rights or the
terms and conditions of the Rights other than as expressly or by necessary
implication set forth herein.
IV. This First Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and
-3-
<PAGE>
<PAGE>
delivered shall be an original, but all the counterparts shall together
constitute one and the same instrument.
-4-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to the Rights Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
THE GREATER NEW YORK
SAVINGS BANK
By: /s/ GERARD C. KEEGAN
----------------------------------------
Name: Gerard C. Keegan
Title: Chairman, President and
Chief Executive Officer
ATTEST
By: /s/ ROBERT P. CARLSON
-------------------------------
Name: Robert P. Carlson
Title: Senior Vice President,
Counsel and Secretary
THE CHASE MANHATTAN BANK (AS
SUCCESSOR IN INTEREST TO THE
MANUFACTURERS HANOVER TRUST
COMPANY)
By: /s/ MICHAEL A. NESPOLI
-----------------------------------------
Name: Michael A. Nespoli
Title: Vice President
ATTEST
By: /s/ ROBERT KAVANAGH
--------------------------------
Name: Robert Kavanagh
Title:
-5-
<PAGE>
<PAGE>
ANNEX A:
REVISED SUMMARY FOR THE RIGHTS AGREEMENT
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On June 14, 1990, the Board of Directors of The Greater New York
Savings Bank (the "Company") declared a dividend distribution of one Right for
each outstanding share of the Company's Common Stock, par value $1.00 per share
(the "Common Stock"), to stockholders of record at the close of business on June
25, 1990. Each Right entitles the registered holder to purchase from the Company
a unit consisting of one one-hundredth of a share (a "Unit") of Junior
Participating Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), at a Purchase Price of $24 per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated
June 14, 1990, as amended by a First Amendment, dated August 12, 1996 (the
"Rights Agreement"), between the Company and The Chase Manhattan Bank (as
successor in interest of the Manufacturers Hanover Trust Company), as Rights
Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
and a Distribution Date will occur upon the earlier of (i) 10 days following a
public announcement that a person (an "Acquiring Person") has become an
"interested shareholder" as defined in Section 912 of The New York Business
Corporation Law (i.e., has, individually or with or through its affiliates or
associates acquired, or obtained the right to acquire, beneficial ownership or
20% or more of the outstanding shares of Common Stock) (the "Stock Acquisition
Date"), or (ii) 10 business days following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 20% or
more of such outstanding shares of Common Stock. Until the Distribution Date,
(i) the Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after June 14, 1990 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for
-6-
<PAGE>
<PAGE>
Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. Pursuant to
the Rights Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock will be issued.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on June 25, 2000, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a person becomes the beneficial owner of 20% or
more of the then outstanding shares of the Company's voting stock (a "Flip-in
Event"), each holder of a Right will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value (based on the lowest closing price of
the Common Stock during the twelve-month period preceding the Flip-in Event)
equal to two times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void. However, Rights are not exercisable following the occurrence of a Flip-in
Event until such time as the Rights are no longer redeemable by the Company as
set forth below.
For example, at an exercise price of $24 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$48 worth of Common Stock based on the lowest closing price of the Common Stock
during the twelve-month period preceding the Flip-in Event (or other
consideration, as noted above) for $24. Assuming that the lowest closing price
of the Common Stock during such period was $6, the holder of each valid Right
would be entitled to purchase 8 shares of Common Stock for $24.
-7-
<PAGE>
<PAGE>
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or (ii) 50% or
more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the exercise price of
the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a price of $.01
per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the $.01 redemption
price.
At any time after the occurrence of a Flip-in Event, the Board of
Directors may exchange the Rights (other than Rights owned by an Acquiring
Person, which have become void), in whole or in part, at an exchange ratio of
one Common Share, and/or other equity securities deemed to have
-8-
<PAGE>
<PAGE>
the same value as one Common Share, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above, or are
exchanged as provided in the preceding paragraph.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes which do
not adversely affect the interest of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made after such time as the Rights are not
redeemable.
A copy of the Rights Agreement has been filed with the Federal
Deposit Insurance Corporation as an Exhibit to a Registration Statement on Form
F-10 dated June 14, 1990, and a copy of the First Amendment, dated August 12,
1996, has been filed as an amendment to such Registration Statement. A copy of
the Rights Agreement and the First Amendment is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
as amended, which is incorporated herein by reference.
-9-
<PAGE>
<PAGE>
SECOND AMENDMENT TO RIGHTS AGREEMENT
SECOND AMENDMENT, dated as of March 7, 1997 (this "Second
Amendment"), to the Rights Agreement, dated as of June 14, 1990, as amended by
the First Amendment, dated as of August 12, 1996 (as so amended, the "Rights
Agreement"), between The Greater New York Savings Bank, a banking stock
corporation organized under the laws of the state of New York (the "Company")
and The Chase Manhattan Bank (as successor in interest to the Manufacturers
Hanover Trust Company), as Rights Agent (the "Rights Agent").
W I T N E S S E T H :
---------------------
WHEREAS, the Company and the Rights Agent have
heretofore executed and entered into the Rights Agreement;
and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement or amend the
Rights Agreement in accordance with the provisions of Section 27 thereof;
WHEREAS, a Distribution Date (as that term is
defined in the Rights Agreement) has not occurred;
WHEREAS, the Board of Directors of the Company has by
resolution approved and authorized this Second Amendment to the Rights
Agreement; and
WHEREAS, all actions necessary to make this Second Amendment a
valid agreement, enforceable according to its terms have been taken, and the
execution and delivery of this Second Amendment by the Company and the Rights
Agent have in all respects been duly authorized by the Company and the Rights
Agent.
NOW THEREFORE, in consideration of the foregoing and the
mutual agreements set forth herein, the Company and the Rights Agent agree as
follows:
I. Unless otherwise expressly defined in this Second
Amendment or the context otherwise requires, capitalized and other terms for
which meanings are provided in the Rights Agreement shall have such meanings
when used in this Second Amendment.
II. Effective as of the date hereof, the Rights
Agreement shall be, and it hereby is, amended as follows:
1. Subsection (a) of Section 1 of the
Rights Agreement is hereby amended to delete in its entirety the definition of
"Acquiring Person" contained therein and
<PAGE>
<PAGE>
to substitute the following definition of "Acquiring Person" therefor:
"'Acquiring Person' shall mean any Person (other than
(i) any subsidiary of the Company, (ii) any employee benefit
plan of the Company, (iii) any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan (iv) Greater New York Bancorp Inc., a
Delaware corporation or (v) The Greater Interim Savings Bank,
a New York State- chartered capital stock savings bank) who
constitutes an "Interested Shareholder" as defined in Section
912 of the New York Business Corporation Law (the "NYBCL");
provided, however, that for purposes of determining whether
such Person is an "Acquiring Person," a Person engaged in
business as an underwriter of securities shall not be deemed
to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in
good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
2. Subsection 3(a)(i) and Subsection
(a)(ii) of Section 11 of the Rights Agreement are hereby amended to delete in
their entirety, in the case of Subsection 3(a)(i), the second parenthetical
therein and, in the case of Subsection 3(a)(ii), the first parenthetical therein
and to, in each case, substitute the following in the place of such deletions:
"(other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, any person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan, Greater New York Bancorp Inc., a
Delaware corporation, or The Greater Interim Savings Bank, a
New York State-chartered capital stock savings bank)"
Any other parenthetical in the Rights Agreement substantially identical to the
parentheticals so deleted and replaced shall likewise be deleted and replaced by
the foregoing parenthetical.
3. Subsection (a) of Section 23 is hereby
amended to add the following sentence immediately after the first sentence
thereof:
"The redemption of the Rights by the Board of
Directors of the Company may be made effective at
<PAGE>
<PAGE>
such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish."
4. Subsection (b) of Section 23 is hereby
amended to delete in its entirety such subsection (b) and to substitute the
following therefore:
"(b) Effective at the time of any such redemption as
provided for in Section 23(a) hereof and without any further action or notice,
the right to exercise the Rights shall terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash without
interest."
III. This Second Amendment shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such state.
IV. Nothing set forth in this Second Amendment
shall in any manner be construed to alter the rights of the holders of the
Rights other than as expressly or by necessary implication set forth herein.
V. This Second Amendment may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all the
counterparts shall together constitute one and the same instrument.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to the Rights Agreement to be duly executed by their respective
officers thereunto duly authorized as of the day and year first above written.
THE GREATER NEW YORK
SAVINGS BANK
By: /s/ GERARD C. KEEGAN
-----------------------
Name: Gerard C. Keegan
Title: President
ATTEST
By: /s/ ROBERT P. CARLSON
---------------------------
Name: Robert P. Carlson
Title: Senior Vice President
THE CHASE MANHATTAN BANK
(AS SUCCESSOR IN INTEREST TO
THE MANUFACTURERS HANOVER
TRUST COMPANY)
By: /s/ ERIC LEASON
------------------------
Name: Eric Leason
Title: Vice President
ATTEST
By: /s/ MICHAEL A. NESPOLI
--------------------------
Name: Michael A. Nespoli
<PAGE>
<PAGE>
AMENDATORY AGREEMENT
TO
EMPLOYMENT AGREEMENT
This Agreement is made as of June 22, 1994, by and between The Greater New
York Savings Bank, a savings bank organized under the laws of the State of New
York and having its principal office at 451 Fifth Avenue, Brooklyn, New York
(the "Company"), and Gerard C. Keegan (the "Executive"); and
WHEREAS, the Company and the Executive entered into an Employment Agreement
made as of October 18, 1988, (the "Employment Agreement"); and
WHEREAS, the Company and the Executive desire to amend the Employment
Agreement; and
WHEREAS, the Company's Board of Directors has duly authorized the
appropriate officers of the Company to execute this Amendatory Agreement to
Employment Agreement;
NOW, THEREFORE, in consideration of the provisions and the covenants and
obligation set forth herein, the Company and the Executive do hereby declare and
agree that effective as of June 22, 1994, the Employment Agreement is hereby
amended as follows:
FIRST: The third sentence of Section 2 of the Employment Agreement is
amended by deleting the words "June 30" and replacing same with the words "July
31".
SECOND: Subsection 5(c) of the Employment Agreement is hereby amended by
adding the following language after the words ("Pension Plan") on the fifth line
thereof:
"Employment Stock Ownership Plan ("ESOP"), Supplemental Executive
Retirement Plan ("SERP")"
THIRD: Subsection 8(a)(i)(C) of the Employment Agreement is deleted in its
entirety and replaced with the following:
"the assignment to the Executive of any duties inconsistent with the
position in the Company that he then holds, or a significant adverse
alteration in the nature or status of his responsibilities or the
conditions of his employment; or"
FOURTH: Subsection 8(a)(ii) is hereby deleted in its entirety and replaced
with the following:
"the discharge of the Executive by the Company for any reason other than
for "Cause" as provided in Section 9(c); or"
<PAGE>
<PAGE>
FIFTH: Subsection 8(b)(v) is deleted in its entirety and replaced with the
following:
"within thirty (30) days following his termination of employment with the
Company, a lump sum payment in an amount equal to the excess, if any, of:
(A) the present value of the pension benefits to which the Executive would
be entitled under the Company's Pension Plan and SERP if he had continued
working for the Company during the remaining unexpired Employment Term
earning the highest rate of base salary achieved at any time during the
Employment Term, over (B) the present value of the pension benefits to
which he is actually entitled under the Company's Pension Plan and SERP, as
of his Date of Termination, where such present values are to be determined
using a discount rate of 8%;"
SIXTH: Subsection 8(b)(vi) is deleted in its entirety and replaced with the
following:
"within thirty (30) days following his termination of employment with the
Company, a lump sum payment in an amount equal to present value of the
contributions and forfeitures ("allocations") that would have been made to
the Company's ESOP and SERP on the Executive's behalf if a) the Executive
had continued working for the Company during the remaining unexpired
Employment Term earning the highest rate of base salary achieved during the
Employment Term, and b) an allocation had been made on the last day of each
calendar year during the remaining unexpired Employment Term and on the
final day of the Employment Term (in which case the allocation shall be
prorated based upon the number of days in the final year of the Employment
Term) based upon the ESOP allocation rate for the year immediately
preceding the Executive's Date of Termination, where such present value is
to be determined using a discount rate of 8%; and"
SEVENTH: Section 21 of the Employment Agreement is hereby renumbered
Section 22 and the following new Section 21 is added to the Employment
Agreement:
"Limitations. If at the time the Company is obligated to make a payment
hereunder such payment constitutes a "golden parachute payment", as defined
in Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(k)
("Act"), and the regulations promulgated thereunder, the Company will make
such payment only if, and to the extent that, such payment is not
prohibited by the Act or the regulations promulgated thereunder. If at the
time the Company is obligated to make a payment hereunder which constitutes
an "indemnification payment", as defined in the Act and the regulations
promulgated thereunder, the Company will make such payment
<PAGE>
<PAGE>
only if, and to the extent that, such payment is not prohibited by the Act
of the regulations promulgated thereunder."
IN WITNESS WHEREOF, the Company and the Executive, have executed this
Agreement, as of the day and year first above written.
THE GREATER NEW YORK SAVINGS BANK
ATTEST:
/s/ [SIGNATURE] By: /s/ Michael J. Henchy
- ----------------------------- -------------------------------
Secretary Michael J. Henchy, Executive
Vice President and Chief
Administrative Officer
WITNESS: EXECUTIVE
/s/ [SIGNATURE] /s/ Gerard C. Keegan
- ----------------------------- -------------------------------
Gerard C. Keegan, Chairman,
President and Chief Executive
Officer
<PAGE>
<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 18th day of October, 1988, between The Greater
New York Savings Bank, a New York banking corporation (the "Company"), and
Gerard C. Keegan (the "Executive").
The Executive is presently employed by the Company as its President and
Chief Operating Officer.
The Board of Directors of the Company (the "Board") recognizes that
Executive's contribution to the growth and success of the Company has been
substantial. The Board desires to provide for the continued employment of the
Executive and to make certain changes in the Executive's employment
arrangements with the Company which the Board has determined will reinforce and
encourage the continued attention and dedication to the Company of the Executive
as a member of the Company's management, in the best interest of the Company and
its shareholders. The Executive is willing to commit himself to continue to
serve the Company, on the terms and conditions herein provided.
In order to effect the foregoing, the Company and the Executive wish to
enter into an employment agreement on the terms and conditions set forth below.
Accordingly, in consideration of the premises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to serve the Company, on
the terms and conditions set forth herein.
2. Employment Term. Except as otherwise provided in this Agreement to the
contrary, the terms and conditions of this Agreement shall remain in effect
during the period of employment ("Employment Term") established under this
Section 2. The employment of the Executive by the Company as provided in Section
1 will commence on the date hereof and end on October 31, 1993 unless further
extended or sooner terminated as hereinafter provided. Commencing on November 1,
1989 and each November 1 thereafter, the tern of the Executive's employment
shall automatically be extended for one additional year to October 31, 1994 and
each October 31, thereafter, unless, not later than June 30 of the year
immediately preceding such November 1, the Company or the Executive shall have
given notice to the other party that it does not wish to extend this Agreement.
In no event, however, shall the term of the Executive's employment hereunder
extend beyond the earlier of (a) the date of the Executive's actual retirement
under the Company's Pension Plan (as hereinafter defined) or (b) the end of the
month in which the Executive's sixty-fifth (65th) birthday occurs. Nothing in
this Agreement, however, shall prohibit a continuation of the Executive's
employment following the expiration of the Employment Term upon such terms and
conditions as the Company and the Executive may mutually agree upon.
<PAGE>
<PAGE>
3. Position and Duties. The Executive shall serve as President and Chief
Operating Officer of the Company and shall have such responsibilities, duties
and authority as he may have as of the date hereof (or any position to which he
may be promoted after the date hereof) and as may from time to time be assigned
to the Executive by the Board that are consistent with such responsibilities,
duties and authority. The Executive shall devote substantially all his working
time and efforts to the business and affairs of the Company.
4. Place of Performance. In connection with the Executive's employment by
the Company, the Executive shall be based at One Penn Plaza, 27th Floor, New
York, New York 10119, or at such other office within the New York City
Metropolitan Area, as the Company may from time to time determine, provided that
such office is within a fifty (50) mile radius of the Company's present
administrative headquarters located at One Penn Plaza, New York, New York,
except for required travel on the Company's business to an extent substantially
consistent with present business travel obligations.
5. Compensation and Related Matters.
(a) Salary. During the Executive's Employment Term, hereunder, the
Company shall pay to the Executive an annual base salary ("salary") equal to the
greater of a) the annual base salary in effect as of the date hereof or b) such
higher salary as may from time to time be determined by the Board, such salary
to be paid in substantially equal bi-weekly installments or otherwise in
accordance with the Company's then customary payroll practice. This salary may,
be increased from time to time in accordance with normal business practices of
the Company and, if so increased, shall not thereafter during the Employment
Term be decreased. Compensation of the Executive by salary payments shall not be
deemed exclusive and shall not prevent the Executive from participating in any
other compensation or benefit plan of the Company. The salary payments
(including any increased salary payments) hereunder shall not in any way limit
or reduce any other obligation of the Company hereunder, and no other
compensation, benefit or payment hereunder shall in any way limit or reduce the
obligation of the Company to pay the Executive's salary hereunder.
(b) Expenses. During the Executive's Employment Term, the Executive
shall be entitled to receive prompt reimbursement for all reasonable and
customary expenses incurred by the Executive in performing services hereunder,
including all expenses of travel and living expenses while away from home on
business or at the request of and in the service of the Company, provided that
such expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company from time to time.
(c) Other Benefits. The Company shall maintain in full force and
effect, and the Executive shall, upon satisfaction of any applicable service
requirements, be entitled to participate in, all of the employee benefit plans
and arrangements in effect on the date hereof (including, without limitation,
the Company Plan of Pension and Retirement Benefits ("Pension Plan"), Incentive
Savings Plan, the Long-Term Incentive Plan, group life insurance and accident
plan, medical and dental insurance plans, and disability plan, and such other
employee benefit plans and programs and other compensation plans or programs,
providing the Executive with at least equivalent benefits thereunder, as the
Company may maintain from time to time, provided that the Company shall not make
any changes in such plans or arrangements that would adversely affect the
Executive's rights or benefits thereunder; provided, however, that, such a
2
<PAGE>
<PAGE>
change may be made, including termination of such plans or arrangements if it
occurs pursuant to a program applicable to all executives of the Company and
does not result in a proportionately greater reduction in the rights of or
benefits to the Executive as compared with any other executive of the Company.
The Executive shall be entitled to participate in or receive benefits under any
employee benefit plan or arrangement made available by the Company in the future
to its executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. Nothing paid to the Executive under any such plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to the Executive pursuant to paragraph (a)
of this Section. Any payments or benefits payable to the Executive hereunder in
respect of any calendar year during which the Executive is employed by the
Company for less than the entire such year shall, unless otherwise provided in
the applicable plan or arrangement, be prorated in accordance with the number of
days in such calendar year during which he is so employed.
(d) Vacations. The Executive shall be entitled to no less than the
number of vacation days in each calendar year determined in accordance with the
Company`s vacation policy as in effect on the date hereof. The Executive shall
also be entitled to all paid holidays and personal days given by the Company to
its executives.
(e) Services Furnished. The Company shall furnish the Executive with
office space, secretarial assistance and such other facilities and services as
shall be suitable to the Executive's position and adequate for the performance
of his duties as set forth in Section 3 hereof.
6. Offices. Subject to Sections 3 and 4, the Executive agrees to serve
without additional compensation, if elected or appointed thereto, as a director
of the Company and any of its subsidiaries and in one or more executive offices
of any of the Company's subsidiaries, provided that the Executive is
indemnified for serving in any and all such capacities on a basis no less
favorable than is currently provided by the Company to any other officer or
director of the Company or any of its subsidiaries.
7. Board Memberships. The Executive may serve as a member of the board of
directors of such business organizations as he may disclose to the Board;
provided, however, that such service shall not materially interfere with the
performance of his duties under this Agreement.
8. Termination of Employment with Company Liability.
(a) In the event that the Executive's employment with the Company
shall terminate during the Employment Term on account of:
(i) the Executive's resignation from employment with the Company
within sixty (60) days following:
(A) the failure of the Company to elect or to re-elect the
Executive following its annual shareholder's meeting to serve as
an officer of the Company in a position at least equivalent in
seniority to the most senior position at the Company theretofore
held by the Executive during
3
<PAGE>
<PAGE>
the Employment Terms;
(B) a failure by the Company to comply with any material
provision of this Agreement which as not been cured within ten
(10) days after notice of such noncompliance has been given by
the Executive to the Company;
(C) the assignment to the Executive of any duties inconsistent
with the position in the Company that he holds as of the
effective date of the Agreement, or a significant adverse
alteration in the nature or status of his responsibilities or the
conditions of his employment from those in effect as of the
effective date of the Agreement; or
(D) any purported termination of the Executive's employment which
is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 11 hereof, and for purposes of this
Agreement no such purported termination of the Executive by the
Company shall be effective;
(ii) the discharge of the Executive by the Bank for any reason other
than for "Cause" as provided in Section 9(a); or
(iii) the Executive's death
then the Company shall pay to the Executive the amounts provided for under
Section 8(b), Section 8(c) or Section 8(d), as set forth below.
(b) Upon the termination of the Executive's employment with the Company
under circumstances described in Section 8(a)(i) or (ii), the Company shall pay
and provide to the Executive:
(i) within thirty (30) days following his termination of employment
with the Company, his earned but unpaid base salary as of the Date of
Termination;
(ii) the benefits, if any, to which he is entitled as a former
employee under the Company's employee benefit plans and programs and
compensation plans and programs; and
(iii) subject to Section 8(c) and Section 12, continued group life,
health (including medical and major medical), accident and dental
insurance benefits, in addition to that provided pursuant to Section
8(b)(ii), if and to the extent necessary to provide to or on behalf
of the Executive, for the remaining unexpired portion of the
Employment Term, coverage equivalent to the coverage to which he could
have been entitled if he had continued working for the Company during
the remaining unexpired Employment Term at the highest annual rate of
base salary achieved at any time during the Employment Term;
(iv) subject to Section 8(c) and Section 12, in lieu of any further
salary payments to the Executive for periods subsequent to the Date of
Termination, the Company shall pay as liquidated damages to the
4
<PAGE>
<PAGE>
Executive an amount equal to the product of (A) the Executive's
annual base salary rate in effect as of the Date of Termination and
(B) the number of years (including partial years) remaining in the
Executive's Employment Term; such amount to be paid in equal
bi-weekly payments over the remaining term of this Agreement;
(v) within thirty (30) days following his termination of employment
with the Company, a lump sum payment in an amount equal to the excess,
if any, of: (A) the present value of the benefits to which the
Executive would be entitled under the Company's Plan of Pensions and
Retirement Benefits if he had continued working for the Company during
the remaining unexpired Employment Term earning the highest rate of
base salary achieved at any time during the Employment Term, over (B)
the present value of the benefits to which he is actually entitled
under the Company's Plan of Pensions and Retirement Benefits, as of
his Date of Termination, where such present values are to be
determined using a discount rate of 8%;
(vi) within thirty (30) days following his termination of employment
with the Company, a lump sum payment in an amount equal to the present
value of the Company's matching contributions that would have been
made on the Company's Incentive Savings Plan if he had continued
working for the Company during the remaining unexpired Employment Term
earning the highest rate of base salary achieved during the Employment
Term and if the Company had made the maximum amount of Bank matching
contributions permitted under the Incentive Savings Program, where
such present value is to be determined using a discount rate of 8%;
and
(vii) at the election of the Executive made within thirty (30) days
following his Date of Termination of employment with the Company, upon
the surrender of all outstanding options or appreciation rights issued
to him under the Company's Long-Term Incentive Program, or under any
other stock option or appreciation rights plan or program maintained
by the Company, a lump sum payment in an amount equal to the product
of:
(A) the excess of (I) the fair market value of a share of stock
of the Company of the same class as the stock subject to the
option or appreciation right, determined as of the Date of
Termination of employment, over (II) the exercise price per share
for such option or appreciation right, as specified in or under
the relevant plan or program; multiplied by
(B) the number of shares with respect to which options or
appreciation rights are being surrendered.
For purposes of this Section 8(b) (vii), the Executive shall be
5
<PAGE>
<PAGE>
deemed to be fully vested in all outstanding options and
appreciation rights previously granted to him under the Company's
Long-Term Incentive Program or under any other stock option or
appreciation rights plan or program maintained by the Company.
(c) Anything to the contrary notwithstanding, the Company's
obligation to provide benefits and payments to the Executive
pursuant to Section 8(b) (iii) and (iv) hereof shall terminate
upon the Executive's death. In the event, however, the Executive
dies within six (6) months following his termination of
employment with the Company under circumstances described in
Section 8(a) (i) or (ii), the Company shall be obligated to pay
to the Executive's designated beneficiary, or if none, to his
estate, the benefits and payments described in Section 8(b)
(iii) and (iv) until the earlier of 1) six (6) months after the
Executive's death or 2) the expiration of the Executive's
Employment Term.
(d) If the Executive's employment is terminated by his death, the
Company shall pay any amounts due to the Executive under Section
5 through the date of his death to the Executive's designated
beneficiary, or if none, to his estate. In addition, the Company
shall pay to the Executive's designated beneficiary, or if none,
to his estate, within thirty (30) days of the date of his death,
a lump sum payment equal to three times the Executive's annual
base salary determined under Section 5(a) hereof.
(e) Notwithstanding the foregoing provisions of this Section 8,
any benefit to which the Executive would otherwise be entitled
under this Agreement shall be offset by, and to the extent of,
any benefit that the Executive receives pursuant to a
Severance/Change In Control Agreement between the Company and the
Executive dated August 1, 1988, as the same may be amended from
time to time.
9. Termination without Additional Company Liability.
In the event that the Executive's employment with the Company shall
terminate during the Employment Term on account of:
(a) the Executive's voluntary resignation from employment with the Company
for reasons other than those specified in Section 8(a) (i);
(b) the Executive's absence from the full-time performance of his duties
hereunder for six (6) consecutive months as a result of the Executive's
incapacity due to physical or mental illness; it being understood that the
Company may terminate the Executive's employment after such absence if
within thirty (30) days after written Notice of Termination is given, the
Executive shall not have returned to the full-time performance of his
duties hereunder;
(c) the discharge of the Executive for "Cause". For purposes of this
Agreement, the Company shall have "Cause" to terminate the Executive's
employment hereunder upon (i) the willful and continued failure by the
Executive to substantially perform his duties hereunder (other than any
such failure resulting from the Executive's incapacity due to physical or
mental illness) after a written demand for substantial performance is
6
<PAGE>
<PAGE>
delivered by the Company that specifically identifies the manner in which
the Company believes the Executive has not substantially performed his
duties, or (ii) the willful engaging by the Executive in misconduct which
is materially injurious to the Company, monetarily or otherwise. For
purposes of this paragraph, no act, or failure to act, on the Executive's
part shall be considered "willful" unless done, or omitted to be done, by
him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for
Cause without (1) reasonable notice to the Executive setting forth the
reasons for the Company's intention to terminate for Cause, (2) an
opportunity for the Executive, together with his counsel, to be heard
before the Board, and (3) delivery to the Executive of a Notice of
Termination, as defined in Section 11 hereof, from the Board finding that
in the good faith opinion of three quarters (3/4) of the Board, the
Executive was guilty of conduct set forth above in clause (i) or (ii)
hereof, and specifying the particulars thereof in detail;
then the Company shall have no further obligations under this Agreement, other
than the payment to the Executive of his earned but unpaid salary as of the Date
of Termination of his employment, and the provision of such other benefits, if
any, to which he is entitled as a former employee under the Company employee
benefit plans and programs and compensation plans and programs.
10. Compensation During Disability. During any period that the Executive
fails to perform his duties hereunder as a result of incapacity due to physical
or mental illness ("disability period"), the Executive shall continue to receive
his full salary at the rate then in effect for such period until his employment
is terminated pursuant to Section 9(b) hereof, provided that payments so made to
the Executive during the disability period shall be reduced by the sum of the
amounts, if any, payable to the Executive at or prior to the time of any such
payment under disability benefit plans wage continuation or sick pay plans of
the Company or under the Social Security disability insurance program, and which
amounts were not previously applied to reduce any such payment.
11. Notice of Termination and Date of Termination. Any termination of the
Executive's employment by the Company or by the Executive shall be communicated
by a written Notice of Termination to the other party in accordance with Section
14 hereof. A "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision of this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment and the provision
so indicated. "Date of Termination" shall mean (i) if the Executive's employment
is terminated by his death, the date of his death, (ii) if the Executive's
employment is terminated on account of Disability, thirty (30) days after Notice
of Termination is given (provided the Executive shall not have returned to the
performance of his duties on a full time basis during such thirty (30) day
period, (iii) if the Executive's employment is terminated for Cause, the date
specified in the Notice of Termination and (iv) if the Executive's employment
is terminated for any other reason, the date on which the Notice of Termination
is given; provided,
7
<PAGE>
<PAGE>
however, that if within thirty (30) days after any Notice of Termination is
given the party receiving such Notice of Termination notifies the other party
hereto that a dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined.
12. Mitigation. If the Executive's employment shall terminate with Company
liability in accordance with Section 8 (a) (i) or (ii) hereof, then not later
than six months after such termination, the Executive shall make reasonable good
faith efforts to mitigate damages by seeking other comparable employment;
provided, however, that the Executive shall not be required to accept a position
at a reduced level of compensation, of less dignity and importance or of
substantially different character than the highest position theretofore held by
him with the Company during the Employment Term, nor shall he be required to
accept a position in a location outside the greater New York City Metropolitan
area. To the extent that the Executive shall receive compensation or benefits
from such other employment, the payments to be made and the benefits to be
provided by the Company under the provisions of Section 8 (b) (iii) and (iv)
shall be correspondingly reduced. If the Executive shall fail to make reasonable
good faith efforts to mitigate damages by seeking other comparable employment,
the Company's obligations hereunder shall cease until such time as the Executive
commences to make such efforts.
13. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, to expressly assume and agree
to perform this Agreement, in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if he terminated his
employment in accordance with Section 8(a) (i), except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 13 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs distributees,
devisees and legatees. If the Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amount unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee, or other designee or, if there be
no such designee, to the Executive's estate.
14. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
8
<PAGE>
<PAGE>
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Gerard C. Keegan
151 Brixton Road
Garden City, New York 11530
If to the Company:
The Greater New York Savings Bank
Administrative Headquarters
One Penn Plaza
New York, New York 10119
Attn: Secretary
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Outplacement Service. In the event of a termination of employment with
Company liability pursuant to Section 8, the Company shall retain for the
Executive a recognized, professional outplacement service in the New York City
Metropolitan area, mutually acceptable to the Company and the Executive to
assist the Executive in his relocation efforts, such assistance to include
secretarial and office facilities if necessary.
16. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its conflicts of law principles.
17. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
18. Indemnification and Attorneys' Fees. The Company shall indemnify, hold
harmless and defend the Executive against reasonable costs, including legal
fees, incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved, as a result of his efforts, in good
faith, to defend or enforce the terms of this Agreement.
9
<PAGE>
<PAGE>
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
20. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators in New York, New York, in accordance with
the rules of the American Arbitration Association then in Effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction;
provided, however, that the Executive shall be entitled to seek specific
performance of his right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement. The expense of such arbitration shall be borne by the Company.
21. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supercedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by an officer, employee
or representative of any party hereto; and any prior agreement of the parties
hereto in respect of the subject matter contained herein is hereby terminated
and cancelled.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
Attest: THE GREATER NEW YORK SAVINGS BANK
BY: /s/ [SIGNATURE] By: /s/ Charles J. Ohlig
------------------------------- --------------------------------
Assistant Secretary Charles J. Ohlig
Chairman
Witness: EXECUTIVE
/s/ [SIGNATURE] /s/ Gerard C. Keegan
- ---------------------------------- ------------------------------------
Gerard C. Keegan
President
10
<PAGE>
<PAGE>
AMENDATORY AGREEMENT
TO
EMPLOYMENT AGREEMENT
This Agreement is made as of June 22, 1994, by and between The Greater New
York Savings Bank, a savings bank organized under the laws of the State of New
York and having its principal office at 451 Fifth Avenue, Brooklyn, New York
(the "Company"), and Michael J. Henchy (the "Executive"); and
WHEREAS, the Company and the Executive entered into an Employment Agreement
made as of October 18, 1988, (the "Employment Agreement"); and
WHEREAS, the Company and the Executive desire to amend the Employment
Agreement; and
WHEREAS, the Company's Board of Directors has duly authorized the
appropriate officers of the Company to execute this Amendatory Agreement to
Employment Agreement;
NOW, THEREFORE, in consideration of the provisions and the covenants and
obligation set forth herein, the Company and the Executive do hereby declare and
agree that effective as of June 22, 1994, the Employment Agreement is hereby
amended as follows:
FIRST: The third sentence of Section 2 of the Employment Agreement is
amended by deleting the words "June 30" and replacing same with the words
"July 31".
SECOND: Subsection 5(c) of the Employment Agreement is hereby amended by
adding the following language after the words ("Pension Plan") on the fifth
line thereof:
"Employment Stock Ownership Plan ("ESOP"), Supplemental Executive
Retirement Plan ("SERP")"
THIRD: Subsection 8(a)(i)(C) of the Employment Agreement is deleted in
its entirety and replaced with the following:
"the assignment to the Executive of any duties inconsistent with the
position in the Company that he then holds, or a significant adverse
alteration in the nature or status of his responsibilities or the
conditions of his employment; or"
FOURTH: Subsection 8(a) (ii) is hereby deleted in its entirety and
replaced with the following:
"the discharge of the Executive by the Company for any reason other than
for "Cause" as provided in Section 9(c); or"
<PAGE>
<PAGE>
FIFTH: Subsection 8(b) (v) is deleted in its entirety and replaced with the
following:
"within thirty (30) days following his termination of employment with the
Company, a lump sum payment in an amount equal to the excess, if any, of:
(A) the present value of the pension benefits to which the Executive would
be entitled under the Company's Pension Plan and SERP if he had continued
working for the Company during the remaining unexpired Employment Term
earning the highest rate of base salary achieved at any time during the
Employment Term, over (B) the present value of the pension benefits to
which he is actually entitled under the Company's Pension Plan and SERP, as
of his Date of Termination, where such present values are to be determined
using a discount rate of 8%;"
SIXTH: Subsection 8(b) (vi) is deleted in its entirety and replaced with
the following:
"within thirty (30) days following his termination of employment with the
Company, a lump sum payment in an amount equal to present value of the
contributions and forfeitures ("allocations") that would have been made to
the Company's ESOP and SERP on the Executive's behalf if a) the Executive
had continued working for the Company during the remaining unexpired
Employment Term earning the highest rate of base salary achieved during the
Employment Term, and b) an allocation had been made on the last day of each
calendar year during the remaining unexpired Employment Term and on the
final day of the Employment Term (in which case the allocation shall be
prorated based upon the number of days in the final year of the Employment
Term) based upon the ESOP allocation rate for the year immediately
preceding the Executive's Date of Termination, where such present value is
to be determined using a discount rate of 8%; and"
SEVENTH: Section 21 of the Employment Agreement is hereby renumbered
Section 22 and the following new Section 21 is added to the Employment
Agreement:
"Limitations. If at the time the Company is obligated to make a payment
hereunder such payment constitutes a "golden parachute payment", as defined
in Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(k)
("Act"), and the regulations promulgated thereunder, the Company will make
such payment only if, and to the extent that, such payment is not
prohibited by the Act or the regulations promulgated thereunder. If at the
time the Company is obligated to make a payment hereunder which constitutes
an "indemnification payment", as defined in the Act and the regulations
promulgated thereunder, the Company will make such payment
<PAGE>
<PAGE>
only if, and to the extent that, such payment is not prohibited by the Act
of the regulations promulgated thereunder."
IN WITNESS WHEREOF, the Company and the Executive, have executed this
Agreement, as of the day and year first above written.
ATTEST: THE GREATER NEW YORK SAVINGS BANK
BY: /s/ [SIGNATURE] By: /s/ Gerard C. Keegan
------------------------------- --------------------------------
Secretary Gerard C. Keegan, Chairman,
President and Chief Executive
Officer
WITNESS: EXECUTIVE
/s/ [SIGNATURE] /s/ Michael J. Henchy
- ---------------------------------- ------------------------------------
Michael J. Henchy, Executive
Vice President and Chief
Administrative Officer
<PAGE>
<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 18th day of October, 1988, between The Greater
New York Savings Bank, a New York banking corporation (the "Company"), and
Michael J. Henchy (the "Executive").
The Executive is presently employed by the Company as an Executive Vice
President.
The Board of Directors of the Company (the "Board") recognizes that
Executive's contribution to the growth and success of the Company has been
substantial. The Board desires to provide for the continued employment of the
Executive and to make certain changes in the Executive's employment arrangements
with the Company which the Board has determined will reinforce and encourage the
continued attention and dedication to the Company of the Executive as a member
of the Company's management, in the best interest of the Company and its
shareholders. The Executive is willing to commit himself to continue to serve
the Company, on the terms and conditions herein provided.
In order to effect the foregoing, the Company and the Executive wish to
enter into an employment agreement on the terms and conditions set forth below.
Accordingly, in consideration of the premises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to serve the Company, on
the terms and conditions set forth herein.
2. Employment Term. Except as otherwise provided in this Agreement to the
contrary, the terms and conditions of this Agreement shall remain in effect
during the period of employment ("Employment Term") established under this
Section 2. The employment of the Executive by the Company as provided in Section
1 will commence on the date hereof and end on October 31, 1991 unless further
extended or sooner terminated as hereinafter provided. Commencing on November 1,
1989 and each November 1 thereafter, the term of the Executive's employment
shall automatically be extended for one additional year to October 31, 1992 and
each October 31, thereafter, unless, not later than June 30 of the year
immediately preceding such November 1, the Company or the Executive shall have
given notice to the other party that it does not wish to extend this Agreement.
In no event, however, shall the term of the Executive's employment hereunder
extend beyond the earlier of (a) the date of the Executive's actual retirement
under the Company's Pension Plan (as hereinafter defined) or (b) the end of the
month in which the Executive's sixty-fifth (65th) birthday occurs. Nothing in
this Agreement, however, shall prohibit a continuation of the Executive's
employment following the expiration of the Employment term upon such terms and
conditions as the Company and the Executive may mutually agree upon.
<PAGE>
<PAGE>
3. Position and Duties. The Executive shall serve as an Executive Vice
President of the Company and shall have such responsibilities, duties and
authority as he may have as of the date hereof (or any position to which he may
be promoted after the date hereof) and as may from time to time be assigned to
the Executive by the Board that are consistent with such responsibilities,
duties and authority. The Executive shall devote substantially all his working
time and efforts to the business and affairs of the Company.
4. Place of Performance. In connection with the Executive's employment by
the Company, the Executive shall be based at One Penn Plaza, 27th Floor, New
York, New York 10119, or at such other office within the New York City
Metropolitan Area, as the Company may from time to time detemine, provided that
such office is within a fifty (50) mile radius of the Company's present
administrative headquarters located at One Penn Plaza, New York, New York,
except for required travel on the Company's business to an extent substantially
consistent with present business travel obligations.
5. Compensation and Related Matters.
(a) Salary. During the Executive's Employment Term, hereunder, the
Company shall pay to the Executive an annual base salary ("salary") equal to the
greater of a) the annual base salary in effect as of the date hereof or b) such
higher salary as may from time to time be determined by the Board, such salary
to be paid in substantially equal bi-weekly installments or otherwise in
accordance with the Company's then customary payroll practice. This salary may
be increased from time to time in accordance with normal business practices of
the Company and, if so increased, shall not thereafter during the Employment
Term be decreased. Compensation of the Executive by salary payments shall not be
deemed exclusive and shall not prevent the Executive from participating in any
other compensation or benefit plan of the Company. The salary payments
(including any increased salary payments) hereunder shall not in any way limit
or reduce any other obligation of the Company hereunder, and no other
compensation, benefit or payment hereunder shall in any way limit or reduce the
obligation of the Company to pay the Executive's salary hereunder.
(b) Expenses. During the Executive's Employment Term, the Executive
shall be entitled to receive prompt reimbursement for all reasonable and
customary expenses incurred by the Executive in performing services hereunder,
including all expenses of travel and, living expenses while away from home on
business or at the request of and in the service of the Company, provided that
such expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company from time to time.
(c) Other Benefits. The Company shall maintain in full force and
effect, and the Executive shall, upon satisfaction of any applicable service
requirements, be entitled to participate in, all of the employee benefit plans
and arrangements in effect on the date hereof (including, without limitation,
the Company's Plan of Pension and Retirement Benefits ("Pension Plan"),
Incentive Savings Plan, the Long-Term Incentive Plan, group life insurance and
accident plan, medical and dental insurance plans, and disability plan, and such
other employee benefit plans and programs and other compensation plans or
programs, providing the Executive with at least equivalent benefits thereunder,
as the Company may maintain from time to time, provided that the Company shall
not make any changes in such plans or arrangements that would adversely affect
the Executive's rights or benefits thereunder; provided, however, that, such a
2
<PAGE>
<PAGE>
change may be made, including termination of such plans or arrangements if it
occurs pursuant to a program applicable to all executives of the Company and
does not result in a proportionately greater reduction in the rights of or
benefits to the Executive as compared with any other executive of the Company.
The Executive shall be entitled to participate in or receive benefits under any
employee benefit plan or arrangement made available by the Company in the future
to its executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. Nothing paid to the Executive under any such plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to the Executive pursuant to paragraph (a)
of this Section. Any payments or benefits payable to the Executive hereunder in
respect of any calendar year during which the Executive is employed by the
Company for less than the entire such year shall, unless otherwise provided in
the applicable plan or arrangement, be prorated in accordance with the number
of days in such calendar year during which he is so employed.
(d) Vacations. The Executive shall be entitled to no less than the
number of vacation days in each calendar year determined in accordance with the
Company's vacation policy as in effect on the date hereof. The Executive shall
also be entitled to all paid holidays and personal days given by the Company to
its executives.
(e) Services Furnished. The Company shall furnish the Executive with
office space, secretarial assistance and such other facilities and services as
shall be suitable to the Executive's position and adequate for the performance
of his duties as set forth in Section 3 hereof.
6. Offices. Subject to Sections 3 and 4, the Executive agrees to serve
without additional compensation, if elected or appointed thereto, as a director
of the Company and any of its subsidiaries and in one or more executive offices
of any of the Company's subsidiaries, provided that the Executive is indemnified
for serving in any and all such capacities on a basis no less favorable than is
currently provided by the Company to any other officer or director of the
Company or any of its subsidiaries.
7. Board Memberships. The Executive may serve as a member of the board of
directors of such business organizations as he may disclose to the Board;
provided, however, that such service shall not materially interfere with the
performance of his duties under this Agreement.
8. Termination of Employment with Company Liability.
(a) In the event that the Executive's employment with the Company
shall terminate during the Employment Term on account of:
(i) the Executive's resignation from employment with the Company
within sixty (60) days following:
(A) the failure of the Company to elect or to re-elect the
Executive following its annual shareholder's meeting to
serve as an officer of the Company in a position at least
equivalent in seniority to the most senior position at the
Company theretofore held by the Executive during
3
<PAGE>
<PAGE>
the Exployment Term;
(B) a failure by the Company to comply with any material
provision of this Agreement which as not been cured within
ten (10) days after notice of such noncompliance has been
given by the Executive to the Company;
(C) the assignment to the Executive of any duties
inconsistent with the position in the Company that he holds
as of the effective date of the Agreement, or a significant
adverse alteration in the nature or status of his
responsibilities or the conditions of his employment from
those in effect as of the effective date of the Agreement;
or
(D) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 11 hereof, and for
purposes of this Agreement no such purported termination of
the Executive by the Company shall be effective;
(ii) the discharge of the Executive by the Bank for any reason
other than for "Cause" as provided in Section 9(a); or
(iii) the Executive's death
then the Company shall pay to the Executive the amounts provided for under
Section 8(b), Section 8 (c) or Section 8(d), as set forth below.
(b) Upon the termination of the Executive's employment with the
Company under circumstances described in Section 8(a) (i) or (ii), the Company
shall pay and provide to the Executive:
(i) within thirty (30) days following his termination of
employment with the Company, his earned but unpaid base salary as
of the Date of Termination;
(ii) the benefits, if any, to which he is entitled as a former
employee under the Company's employee benefit plans and programs
and compensation plans and programs; and
(iii) subject to Section 8(c) and Section 12, continued group
life, health (including medical and major medical), accident and
dental insurance benefits benefits, in addition to that provided
pursuant to Section 8(b) (ii), if and to the extent necessary to
provide to or on behalf of the Executive, for the remaining
unexpired portion of the Employment Term, coverage equivalent to
the coverage to which he would have been entitled if he had
continued working for the Company during the remaining unexpired
Employment Term at the highest annual rate of base salary
achieved at any time during the Employment Term;
(iv) subject to Section 8(c) and Section 12, in lieu of any
further salary payments to the Executive for periods subsequent
to the Date of Termination, the Company shall pay as liquidated
damages to the
4
<PAGE>
<PAGE>
Executive an amount equal to the product of (A) the Executive's
annual base salary rate in effect as of the Date of Termination
and (B) the number of years (including partial years) remaining
in the Executive's Employment Term; such amount to be paid in
equal bi-weekly payments over the remaining term of this
Agreement;
(v) within thirty (30) days following his termination of
employment with the Company, a lump sum payment in an amount
equal to the excess, if any, of: (A) the present value of the
benefits to which the Executive would be entitled under the
Company's Plan of Pensions and Retirement Benefits if he had
continued working for the Company's during the remaining
unexpired Employment Term earning the highest rate of base salary
achieved at any time during the Employment Term, over (B) the
present value of the benefits to which he is actually entitled
under the Company's Plan of Pensions and Retirement Benefits, as
of his Date of Termination, where such present values are to be
determined using a discount rate of 8%;
(vi) within thirty (30) days following his termination of
employment with the Company, a lump sum payment in an amount
equal to the present value of the Company's matching
contributions that would have been made on the Company's
Incentive Savings Plan if he had continued working for the
Company during the remaining unexpired Employment Term during the
highest rate of base salary achieved during the Employment Term
and if the Company had made the maximum amount of Bank matching
contributions permitted under the Incentive Savings Program,
where such present value is to be determined using a discount
rate of 8%; and
(vii) at the election of the Executive made within thirty (30)
days following his Date of Termination of employment with the
Company, upon the surrender of all outstanding options or
appreciation rights issued to him under the Company's Long-Term
Incentive Program, or under any other stock option or
appreciation rights plan or program maintained by the Company, a
lump sum payment in an amount equal to the product of:
(A) the excess of (I) the fair market value of a share of
stock of the Company of the same class as the stock subject
to the option or appreciation right, determined as of the
Date of Termination of employment, over (II) the exercise
price per share for such option or appreciation right, as
specified in or under the relevant plan or program;
multiplied by
(B) the number of shares with respect to which options or
appreciation rights are being surrendered.
For purposes of this Section 8(b) (vii), the Executive shall be
5
<PAGE>
<PAGE>
deemed to be fully vested in all outstanding options and
appreciation rights previously granted to him under the
Company's Long-Term Incentive Program or under any other
stock option or appreciation rights plan or program
maintained by the Company.
(c) Anything to the contrary notwithstanding, the Company's
obligation to provide benefits and payments to the Executive
pursuant to Section 8(b)(iii) and (iv) hereof shall
terminate upon the Executive's death. In the event, however,
the Executive dies within six (6) months following his
termination of employment with the Company under
circumstances described in Section 8(a)(i) or (ii), the
Company shall be obligated to pay to the Executive's
designated beneficiary, or if none, to his estate, the
benefits and payments described in Section 8 (b) (iii) and
(iv) until the earlier of 1) six (6) months after the
Executive's death or 2) the expiration of the Executive's
Employment Term.
(d) If the Executive's employment is terminated by his
death, the Company shall pay any amounts due to the
Executive under Section 5 through the date of his death to
the Executive's designated beneficiary, or if none, to his
estate. In addition, the Company shall pay to the
Executive's designated beneficiary, or if none, to his
estate, within thirty (30) days of the date of his death, a
lump sum payment equal to three times the Executive's
annual base salary determined under Section 5(a) hereof.
(e) Notwithstanding the foregoing provisions of this Section
8, any benefit to which the Executive would otherwise be
entitled under this Agreement shall be offset by, and to the
extent of, any benefit that the Executive receives pursuant
to a Severance/Change In Control Agreement between the
Company and the Executive dated August 1, 1988, as the same
may be amended from time to time.
9. Termination without Additional Company Liability.
In the event that the Executive's employment with the Company shall
terminate during the Employment Term on account of:
(a) the Executive's voluntary resignation from employment with the Company
for reasons other than those specified in Section 8(a) (i);
(b) the Executive's absence from the full-time performance of his duties
hereunder for six (6) consecutive months as a result of the Executive's
incapacity due to physical or mental illness; it being understood that the
Company may terminate the Executive's employment after such absence if
within thirty (30) days after written Notice of Termination is given, the
Executive shall not have returned to the full-time performance of his
duties hereunder;
(c) the discharge of the Executive for "Cause". For purposes of this
Agreement, the Company shall have "Cause" to terminate the Executive's
employment hereunder upon (i) the willful and continued failure by the
Executive to substantially perform his duties hereunder (other than any
such failure resulting from the Executive's incapacity due to physical or
mental illness) after a written demand for substantial performance is
6
<PAGE>
<PAGE>
delivered by the Company that specifically identifies the manner
in which the Company believes the Executive has not substantially
performed his duties, or (ii) the willful engaging by the
Executive in misconduct which is materially injurious to the
Company, monetarily or otherwise. For purposes of this paragraph,
no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for Cause without (1) reasonable notice to the
Executive setting forth the reasons for the Company's intention to
terminate for Cause, (2) an opportunity for the Executive,
together with his counsel, to be heard before the Board, and (3)
delivery to the Executive of a Notice of Termination, as defined
in Section 11 hereof, from the Board finding that in the good
faith opinion of three-quarters (3/4) of the Board, the Executive
was guilty of conduct set forth above in clause (i) or (ii)
hereof, and specifying the particulars thereof in detail;
then the Company shall have no further obligations under this Agreement, other
than the payment to the Executive of his earned but unpaid salary as of the Date
of Termination of his employment, and the provision of such other benefits, if
any, to which he is entitled as a former employee under the Company employee
benefit plans and programs and compensation plans and programs.
10. Compensation During Disability. During any period that the Executive
fails to perform his duties hereunder as a result of incapacity due to physical
or mental illness ("disability period"), the Executive shall continue to receive
his full salary at the rate then in effect for such period until his employment
is terminated pursuant to Section 9(b) hereof, provided that payments so made to
the Executive during the disability period shall be reduced by the sum of the
amounts, if any, payable to the Executive at or prior to the time of any such
payment under disability benefit plans wage continuation or sick pay plans of
the Company or under the Social Security disability insurance program, and which
amounts were not previously applied to reduce any such payment.
11. Notice of Termination and Date of Termination. Any termination of the
Executive's employment by the Company or by the Executive shall be communicated
by a written Notice of Termination to the other party in accordance with Section
14 hereof. A "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision of this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment and the provision
so indicated. "Date of Termination" shall mean (i) if the Executive's employment
is terminated by his death, the date of his death, (ii) if the Executive's
employment is terminated on account of Disability, thirty (30) days after Notice
of Termination is given (provided the Executive shall not have returned to the
performance of his duties on a full time basis during such thirty (30) day
period, (iii) if the Executive's employment is terminated for Cause, the date
specified in the Notice of Termination and (iv) if the Executive's employment is
terminated for any other reason, the date on which the Notice of Termination is
given; provided,
7
<PAGE>
<PAGE>
however, that if within thirty (30) days after any Notice of Termination is
given the party receiving such Notice of Termination notifies the other party
hereto that a dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined.
12. Mitigation. If the Executive's employment shall terminate with Company
liability in accordance with Section 8(a)(i) or (ii) hereof, then not later
than six months after such termination, the Executive shall make reasonable good
faith efforts to mitigate damages by seeking other comparable employment;
provided, however, that the Executive shall not be required to accept a position
at a reduced level of compensation, of less dignity and importance or of
substantially different character than the highest position theretofore held by
him with the Company during the Employment Term, nor shall he be required to
accept a position in a location outside the greater New York City Metropolitan
area. To the extent that the Executive shall receive compensation or benefits
from such other employment, the payments to be made and the benefits to be
provided by the Company under the provisions of Section 8 (b) (iii) and (iv)
shall be correspondingly reduced. If the Executive shall fail to make reasonable
good faith efforts to mitigate damages by seeking other comparable employment,
the Company's obligations hereunder shall cease until such time as the Executive
commences to make such efforts.
13. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, to expressly assume and agree
to perform this Agreement, in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if he terminated his
employment in accordance with Section 8(a)(i), except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 13 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs distributees,
devisees and legatees. If the Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amount unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee, or other designee or, if there be
no such designee, to the Executive's estate.
14. Notice. For the Purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
8
<PAGE>
<PAGE>
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Michael J. Henchy
74 Atlas Avenue
Malverne, New York 11565
If to the Company:
The Greater New York Savings Bank
Administrative Headquarters
One Penn Plaza
New York, New York 10119
Attn: Secretary
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Outplacement Service. In the event of a termination of employment with
Company liability pursuant to Section 8, the Company shall retain for the
Executive a recognized, professional outplacement service in the New York City
Metropolitan area, mutually acceptable to the Company and the Executive to
assist the Executive in his relocation efforts, such assistance to include
secretarial and office facilities if necessary.
16. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its conflicts of law principles.
17. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
18. Indemnification and Attorneys' Fees. The Company shall indemnify, hold
harmless and defend the Executive against reasonable costs, including legal
fees, incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved, as a result of his efforts, in good
faith, to defend or enforce the terms of this Agreement.
9
<PAGE>
<PAGE>
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
20. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators in New York, New York, in accordance with
the rules of the American Arbitration Association then in Effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall be entitled to seek specific performance of
his right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement. The
expense of such arbitration shall be borne by the Company.
21. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supercedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by an officer, employee
or representative of any party hereto; and any prior agreement of the parties
hereto in respect of the subject matter contained herein is hereby terminated
and cancelled.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
Attest: THE GREATER NEW YORK SAVINGS BANK
BY: /s/ [SIGNATURE] By: /s/ Charles J. Ohlig
------------------------------- --------------------------------
Assistant Secretary Charles J. Ohlig
Chairman
Witness: EXECUTIVE
/s/ [SIGNATURE] /s/ Michael J. Henchy
- ---------------------------------- ------------------------------------
Michael J. Henchy
Executive Vice President
10
<PAGE>
<PAGE>
Charles J. Ohlig
Chairman
and Chief Executive Officer
September 1, 1989
Mr. Gerard C. Keegan
151 Brixton Road
Garden City, New York 11530
Dear Mr. Keegan:
The Greater New York Savings Bank (the "Company") considers it essential
to the best interests of its stockholders to foster the continuous employment of
key management personnel. In this connection, the Board of Directors of the
Company (the "Board") recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a change in control of the Company, although no such change is
now contemplated.
In order to induce you to remain in the employ of the Company and in
consideration of your agreement set forth in Subsection 2(ii) hereof, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement ("Agreement") in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through August 31, 1992; provided, however, that
commencing on September 1, 1990 and each September 1 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than the May 31 preceding each such September 1, the Company shall
have given notice that it does not wish to extend this Agreement; provided,
further, if a change in control of the Company shall have occurred during the
original or extended term of this Agreement, this Agreement shall continue in
effect for the later of (i) the original or extended term or (ii) a period of
twenty-four (24) months beyond the month in which such change in control
occurred.
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 2
2. Change in Control. (i) No benefits shall be payable hereunder unless
there shall have been a change in control of the Company, as set forth below.
For purposes of this Agreement, a "change in control of the Company" shall be
deemed to have occurred if (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of l934, as amended (the
"Exchange Act"), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; or (B)
during any period of two consecutive years (not including any period prior to
the execution of this Agreement), individuals who at the beginning of such
period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clauses (A) or (C) of this Subsection) whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
(ii) For purposes of this Agreement, a "potential change in control of the
Company" shall be deemed to have occurred if (A) the Company enters into an
agreement, the consummation of which would result in the occurrence of a change
in control of the Company, (B) any person (including the Company) publicly
announces an intention to take or to consider taking actions which if
consummated would constitute a change in control of the Company; (C) any person,
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, who is or becomes the beneficial owners,
directly or indirectly, of securities of the Company representing 10% or more of
the combined voting power of the Company's then outstanding securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof; or (D) the Board adopts a
resolution to the effect that, for purposes of this
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 3
Agreement, a potential change in control of the Company has occurred. You agree
that, subject to the terms and conditions of this Agreement, in the event of a
potential change in control of the Company, you will remain in the employ of the
Company until the earliest of (i) a date which is six (6) months from the
occurrence of such potential change in control of the Company, (ii) the
termination by you of your employment by reason of Disability or Retirement as
defined in Subsection 3(i), or (iii) the occurrence of a change in control of
the Company.
3. Termination Following Change in Control. If any of the events described
in Subsection 2(i) hereof constituting a change in control of the Company shall
have occurred, you shall be entitled to the benefits provided in Subsections
4(iii), 4(iv) and 4(v) hereof upon the subsequent termination of your employment
during the term of this Agreement unless such termination is (A) because of your
death or Disability, (B) by the Company for Cause, or (C) by you other than for
Good Reason.
(i) Disability. If, as a result of your incapacity due to physical or
mental illness, you shall have been absent from the full-time performance of
your duties with the Company for six (6) consecutive months, and within thirty
(30) days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, your employment may be
terminated for "Disability".
(ii) Cause. Termination by the Company of your employment for "Cause"
shall mean termination upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a Notice of Termination, by
you for Good Reason as defined in Subsections 3(iv) and 3(iii), respectively)
after a written demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, or (B) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purpose of this
Subsection, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the Board)
finding that in the good faith opinion of the Board you were guilty of conduct
set forth above in clauses (A) or (B) of the first sentence of this Subsection
and specifying the particulars thereof in detail.
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 4
(iii) Good Reason. You shall be entitled to terminate your employment for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean, without
your express written consent, the occurrence after a change in control of the
Company of any of the following circumstances unless, in the case of paragraphs
(A), (E), (F), (G) or (H), such circumstances are fully corrected prior to the
Date of Termination specified in the Notice of Termination, as defined in
Subsections 3(v) and 3(iv), respectively, given in respect thereof:
(A) the assignment to you of any duties inconsistent with your present
status as a President and Chief Operating Officer of the Company (or such
other title or titles as you may be holding immediately prior to the
change in control of the Company) or a substantial adverse alteration in
the nature or status of your responsibilities from those in effect
immediately prior to the change in control of the Company;
(B) a reduction by the Company in your annual base salary as in effect on
the date hereof or as the same may be increased from time to time except
for across-the-board salary reductions similarly affecting all senior
executives of the Company and each of its affiliated companies and all
senior executives of any person in control of the Company and each of its
affiliated companies;
(C) the relocation of the Company's principal executive offices to a
location outside the New York City Metropolitan Area (or, if different,
the metropolitan area in which such offices are located immediately prior
to the change in control of the Company) or the Company's requiring you to
be based anywhere other than the Company's principal executive offices
except for required travel on the Company's business to an extent
substantially consistent with your present business travel obligations;
(D) the failure by the Company, without your consent, to pay to you any
portion of your current compensation except pursuant to an
across-the-board compensation deferral similarly affecting all senior
executives of the Company and all senior executives of any person in
control of the Company, or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of the
Company within seven (7) days of the date of such compensation is due;
(E) the failure by the Company to continue in effect any compensation plan
in which you participate immediately prior to the change in control of the
Company which is material to your total compensation, including but not
limited to the Company's Long-Term Incentive Program and Employee Stock
Ownership Plan or any substitute plans adopted prior to the change in
control of the Company, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue your participation therein
(or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level
of your participation relative to other participants, as existed at the
time of the change in control of the Company;
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 5
(F) the failure by the Company to continue to provide you with benefits
substantially similar to those enjoyed by you under the Company's Plan of
Pensions and Retirement Benefits (the "Pension Plan"), the Company's
Supplemental Executive Retirement Plan (the "Supplemental Plan") if you
are a participant in such Supplemental Plan at the time of a change in
control of the Company or under any of the Company's life insurance,
medical, health and accident, or disability plans in which you were
participating at the time of the change in control of the Company, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive you of any material
fringe benefit enjoyed by you at the time of the change in control of the
Company, or the failure by the Company to provide you with the number of
paid vacation days to which you are entitled on the basis of years of
service with the Company in accordance with the Company's normal vacation
policy in effect at the time of the change in control of the Company;
(G) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated
in Section 5 hereof; or
(H) any purported termination of your employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of
Subsection (iv) below (and, if applicable, the requirements of Subsection
(ii) above); for purposes of this Agreement, no such purported termination
shall be effective.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(iv) Notice of Termination. Any purported termination of your employment
by the Company or by you shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 6 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provisions so
indicated.
(v) Date of Termination, Etc. "Date of Termination" shall mean (A) if your
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such thirty (30) day period), and (B) if your
employment is terminated pursuant to Subsection (ii) or (iii) above or for any
reason (other than Disability), the date specified in the Notice of Termination
(which, in the case of a termination pursuant to Subsection (ii) above shall not
be less than thirty (30) days, and in the case of a termination
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 6
pursuant to Subsection (iii) above shall not be less than fifteen (15) nor more
than sixty (60) days, respectively, from the date such Notice of Termination is
given); provided that if within fifteen (15) days after any Notice of
Termination is given, or, if later, prior to the Date of Termination (as
determined without regard to this proviso), the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement.
4. Compensation Upon Termination or During Disability. Following a change
in control of the Company, as defined in Subsection 2(i), upon termination of
your employment or during a period of Disability you shall be entitled to the
following benefits:
(i) During any period that you fail to perform your full-time duties with
the Company as a result of incapacity due to physical or mental illness, you
shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all compensation payable to you
under any compensation plan of the Company in which you are a participant during
such period, until this Agreement is terminated pursuant to Section 3(i) hereof
reduced by any payments made to you during such period pursuant to any statutory
disability plan or the Company's long-term disability plans or programs.
Thereafter, or in the event your employment shall be terminated by the Company
or by reason of your death, your benefits shall be determined upon the Company's
retirement, insurance and other compensation plans and programs then in effect
in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by
you other than for Good Reason, Disability or death, the Company shall pay you
your full base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which you are
entitled under any compensation plan of the Company at the time such payments
are due, and the Company shall have no further obligations to you under this
Agreement.
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 7
(iii) If your employment by the Company shall be terminated (a) by the
Company other than for Cause or Disability or (b) by you for Good Reason, then
you shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts to which you are entitled under any
compensation plan of the Company, at the time such payments are due,
except as otherwise provided below;
(B) in lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to you
a lump sum severance payment (together with the payments provided in
paragraphs C and D below, the "Severance Payments") equal to three (3)
times the sum of (x) your annual base salary in effect immediately prior
to the occurrence of the circumstance giving rise to the Notice of
Termination given in respect thereof, and (y) the highest annual amount
paid to you as bonus compensation during the three-year period preceding
that in which the Date of Termination occurs;
(C) notwithstanding any provisions of the Long-Term Incentive Program and
in lieu of payment thereunder, the Company shall pay to you a lump sum
amount equal to the sum of (x) any incentive compensation which has been
allocated or awarded to you under the Long-Term Incentive Program for a
fiscal year or other measuring period preceding the Date of Termination
but has not yet been paid, and (y) a pro rata portion to the Date of
Termination of the aggregate value of all contingent incentive
compensation awards to you under the Long-Term Incentive Program for all
uncompleted periods under the Long-Term Incentive Program calculated as to
each such award by multiplying the maximum value of a performance unit by
(i) the percentage of the target level that has been achieved as of the
Date of Termination, and (ii) a fraction, the numerator of which is the
number of days that have elapsed in the performance cycle as of the Date
of Termination and the denominator of which is the total number of days in
the performance cycle;
(D) notwithstanding any provision of the Long Term Incentive Program and
in lieu of shares of common stock of the Company ("Company Shares")
issuable upon exercise of outstanding options ("Options") or any related
stock appreciation rights ("Rights"), if any, granted to you under the
Long-Term Incentive Program (which Options and Rights shall be cancelled
upon the making of the payment referred to below), you shall receive an
amount in cash equal to the product of (i) the excess of the higher of
such closing price on the date immediately preceding the date of payment
or the highest per share price for Company Shares actually paid in
connection with any change in control of the Company, over the per share
exercise price of each Option or Right held by you (whether or not then
fully exercisable), times (ii) the number of Company Shares covered by
each such Option or Right;
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 8
(E) an amount in cash equal to the sum of (i) the present value of your
accrued benefit (determined by using the ongoing actuarial assumptions in
effect immediately prior to your Date of Termination under the Company's
tax qualified defined benefit plan in which you are a participant) under
any tax qualified or non-qualified defined benefit plan sponsored by the
Company and (ii) your account balance under any tax qualified or
non-qualified defined contribution plan sponsored by the Company, in
either case to the extent that such accrued benefit or account balance, as
the case may be, shall not be fully vested at the time of your Date of
Termination;
(F) in the event that you become entitled to the payments (the "Severance
Payments") provided under paragraphs (B), (C), (D) and (E), above, and
Subsections (iv) and (v) below, if any of the Severance Payments or any
portion of the Other Payments (as defined below) will be subject to the
tax (the "Excise Tax") imposed by section 4999 of the Code, the Company
shall pay to you at the time specified in paragraph (G) below, an
additional amount (the "Gross-Up Payment") such that the net amount
retained by you, after deduction of any Excise Tax on the Total Payments
(as defined below) and any federal and state and local income tax solely
upon the Gross-Up Payment shall be equal to the Total Payments minus the
Gross-Up Payment. For purposes of determining whether any of the Severance
Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) any other payments or benefits received or to be received by you
in connection with a change of control of the Company or your termination
of employment (whether payable pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, its successors,
any person whose actions result in a change in control of the Company or
any person affiliated with (or which, as a result of the completion of the
transactions causing a change in control of the Company, will become
affiliated) the Company or such person within the meaning of section 1504
of the Code (the "Other Payments") (together with the Severance Payments,
the "Total Payments")) shall be treated as "parachute payments" within the
meaning of section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel selected
by the Company's independent auditors and acceptable to you, the Total
Payments (in whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of section
280G(b)(4) of the Code in excess of the base amount within the meaning of
section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax, (ii) the amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Total Payments or (B) the amount of excess parachute
payments within the meaning of section 280G(b)(1) (after applying cause
(i), above, and (iii) the value of any non-cash benefits or any deferred
payment or benefit shall be determined
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 9
by the Company's independent auditors in accordance with the principles of
sections 280G(d)(3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, you shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state
and locality of your residence in the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time of
termination of your employment, you shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal
and state and local income tax imposed on the Gross-Up Payment being
repaid by you if such repayment results in a reduction in Excise Tax
and/or a federal and state and local income tax deduction) plus interest
on the amount of such repayment at the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined
to exceed the amount taken into account hereunder at the time of the
termination of your employment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional gross-up payment
in respect of such excess (plus any interest payable with respect to such
excess) at the time that the amount of such excess is finally determined;
(G) the payments provided for in paragraphs (B), (C), (D), (E) and (F),
above, shall be made not later than the fifth day following the Date of
Termination, provided, however, that if the amounts of such payments,
cannot be finally determined on or before such day, the Company shall pay
to you on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payments and shall pay the
remainder of such payments (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to you, payable on the fifth day
after demand by the Company (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code); and
(H) the Company also shall pay to you all legal fees and expenses incurred
by you as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination
or in seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 10
of the Code to any payment or benefit provided hereunder). Such payments
shall be made at the later of the times specified in paragraph (G) above,
or within five (5) days after your request for payment accompanied with
such evidence of fees and expenses incurred as the Company reasonably may
require.
(iv) If your employment shall be terminated (A) by the Company other than
for Cause or Disability or (B) by you for Good Reason, then for a twenty-four
(24) month period after such termination, the Company shall arrange to provide
you at the Company's expense with life, disability, accident and health
insurance benefits substantially similar to those which you are receiving
immediately prior to the Note of Termination. Benefits otherwise receivable by
you pursuant to this Subsection 4(iv) shall be reduced to the extent comparable
benefits are actually received by you during the twenty-four (24) month period
following your termination, and any such benefits actually received by you shall
be reported to the Company.
(v) If your employment shall be terminated (A) by the Company other than
for Cause or Disability or (B) by you for Good Reason, then in addition to the
retirement benefits to which you are entitled under the Pension Plan or any
successor plans thereto and any supplemental pension benefits to which you are
entitled under the Supplemental Plan or any successor plans thereto, the Company
shall pay you in cash at the time and in the manner provided in paragraph (E) of
subsection 4(iii), a lump sum equal to the actuarial equivalent of the excess of
(x) the retirement pension (determined as a straight life annuity commencing at
age 65) which you would have accrued under the terms of the Pension Plan or the
Supplemental Plan (without regard either to any amendment to the Pension Plan or
the Supplemental Plan made subsequent to a change in control of the Company and
on or prior to the Date of Termination, which amendment adversely affects in any
manner the computation of retirement benefits thereunder, or the limitations
imposed by Section 415, 401(a)(17) or any other section of the Code), determined
as if you were fully vested thereunder, without actuarial reduction for early
retirement in the event that you have attained age fifty-five (55) and have met
at your Date of Termination the Early Retirement Pension eligibility standard
set forth in the Pension Plan, and (y) the retirement pension determined as a
straight life annuity commencing at age sixty-five (65) which you had then
accrued pursuant to the provisions of the Pension Plan and the Supplemental
Plan. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under the Pension
Plan immediately prior to the change in control of the Company.
(vi) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 11
(vii) In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all benefits payable to you, at the
respective time or times such payments are due, under the Pension Plan, the
Incentive Savings Plan, the Employee Stock Ownership Plan and any other plan or
agreement relating to retirement benefits.
5. Successor; Binding Agreement. (i) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to compensation from the
Company in the same amount and on the same terms as you would be entitled to
hereunder if you terminate your employment for Good Reason following a change in
control of the Company, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date
of Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
7. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 12
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law. The
obligations of the Company under Section 4 shall survive the expiration of the
term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled, at the Company's expense, exclusively by
arbitration in New York City, New York in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that you
shall be entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
11. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supercedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by an
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto including but not limited to the Change in Control
Agreement between the Company and you dated August 1, 1988, in respect to the
subject matter contained herein is hereby terminated, cancelled and superceded
hereby.
<PAGE>
<PAGE>
Mr. Gerard C. Keegan
September 1, 1989
Page 13
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE GREATER NEW YORK SAVINGS BANK
by: /s/ Charles J. Ohlig
---------------------------------
Charles J. Ohlig
Chairman
Agreed to this 1st day of
September, 1989
/s/ Gerard C. Keegan
- ------------------------------
Gerard C. Keegan
<PAGE>
<PAGE>
Charles J. Ohlig
Chairman
and Chief Executive Officer
September 1, 1989
Mr. Michael J. Henchy
74 Atlas Avenue
Malverne, New York 11565
Dear Mr. Henchy:
The Greater New York Savings Bank (the "Company") considers it essential
to the best interests of its stockholders to foster the continuous employment of
key management personnel. In this connection, the Board of Directors of the
Company (the "Board") recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a change in control of the Company, although no such change is
now contemplated.
In order to induce you to remain in the employ of the Company and in
consideration of your agreement set forth in Subsection 2(ii) hereof, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement ("Agreement") in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through August 31, 1992; provided, however, that
commencing on September 1, 1990 and each September 1 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than the May 31 preceding each such September 1, the Company shall
have given notice that it does not wish to extend this Agreement; provided,
further, if a change in control of the Company shall have occurred during the
original or extended term of this Agreement, this Agreement shall continue in
effect for the later of (i) the original or extended term or (ii) a period of
twenty-four (24) months beyond the month in which such change in control
occurred.
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 2
2. Change in Control. (i) No benefits shall be payable hereunder unless
there shall have been a change in control of the Company, as set forth below.
For purposes of this Agreement, a "change in control of the Company" shall be
deemed to have occurred if (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of l934, as amended (the
"Exchange Act"), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; or (B)
during any period of two consecutive years (not including any period prior to
the execution of this Agreement), individuals who at the beginning of such
period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clauses (A) or (C) of this Subsection) whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
(ii) For purposes of this Agreement, a "potential change in control of the
Company" shall be deemed to have occurred if (A) the Company enters into an
agreement, the consummation of which would result in the occurrence of a change
in control of the Company, (B) any person (including the Company) publicly
announces an intention to take or to consider taking actions which if
consummated would constitute a change in control of the Company; (C) any person,
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, who is or becomes the beneficial owners,
directly or indirectly, of securities of the Company representing 10% or more of
the combined voting power of the Company's then outstanding securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof; or (D) the Board adopts a
resolution to the effect that, for purposes of this
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 3
Agreement, a potential change in control of the Company has occurred. You agree
that, subject to the terms and conditions of this Agreement, in the event of a
potential change in control of the Company, you will remain in the employ of the
Company until the earliest of (i) a date which is six (6) months from the
occurrence of such potential change in control of the Company, (ii) the
termination by you of your employment by reason of Disability or Retirement as
defined in Subsection 3(i), or (iii) the occurrence of a change in control of
the Company.
3. Termination Following Change in Control. If any of the events described
in Subsection 2(i) hereof constituting a change in control of the Company shall
have occurred, you shall be entitled to the benefits provided in Subsections
4(iii), 4(iv) and 4(v) hereof upon the subsequent termination of your employment
during the term of this Agreement unless such termination is (A) because of your
death or Disability, (B) by the Company for Cause, or (C) by you other than for
Good Reason.
(i) Disability. If, as a result of your incapacity due to physical or
mental illness, you shall have been absent from the full-time performance of
your duties with the Company for six (6) consecutive months, and within thirty
(30) days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, your employment may be
terminated for "Disability".
(ii) Cause. Termination by the Company of your employment for "Cause"
shall mean termination upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a Notice of Termination, by
you for Good Reason as defined in Subsections 3(iv) and 3(iii), respectively)
after a written demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, or (B) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purpose of this
Subsection, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the Board)
finding that in the good faith opinion of the Board you were guilty of conduct
set forth above in clauses (A) or (B) of the first sentence of this Subsection
and specifying the particulars thereof in detail.
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 4
(iii) Good Reason. You shall be entitled to terminate your employment for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean, without
your express written consent, the occurrence after a change in control of the
Company of any of the following circumstances unless, in the case of paragraphs
(A), (E), (F), (G) or (H), such circumstances are fully corrected prior to the
Date of Termination specified in the Notice of Termination, as defined in
Subsections 3(v) and 3(iv), respectively, given in respect thereof:
(A) the assignment to you of any duties inconsistent with your present
status as an Executive Vice President of the Company (or such other title
or titles as you may be holding immediately prior to the change in control
of the Company) or a substantial adverse alteration in the nature or
status of your responsibilities from those in effect immediately prior to
the change in control of the Company;
(B) a reduction by the Company in your annual base salary as in effect on
the date hereof or as the same may be increased from time to time except
for across-the-board salary reductions similarly affecting all senior
executives of the Company and each of its affiliated companies and all
senior executives of any person in control of the Company and each of its
affiliated companies;
(C) the relocation of the Company's principal executive offices to a
location outside the New York City Metropolitan Area (or, if different,
the metropolitan area in which such offices are located immediately prior
to the change in control of the Company) or the Company's requiring you to
be based anywhere other than the Company's principal executive offices
except for required travel on the Company's business to an extent
substantially consistent with your present business travel obligations;
(D) the failure by the Company, without your consent, to pay to you any
portion of your current compensation except pursuant to an
across-the-board compensation deferral similarly affecting all senior
executives of the Company and all senior executives of any person in
control of the Company, or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of the
Company within seven (7) days of the date of such compensation is due;
(E) the failure by the Company to continue in effect any compensation plan
in which you participate immediately prior to the change in control of the
Company which is material to your total compensation, including but not
limited to the Company's Long-Term Incentive Program and Employee Stock
Ownership Plan or any substitute plans adopted prior to the change in
control of the Company, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue your participation therein
(or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level
of your participation relative to other participants, as existed at the
time of the change in control of the Company;
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 5
(F) the failure by the Company to continue to provide you with benefits
substantially similar to those enjoyed by you under the Company's Plan of
Pensions and Retirement Benefits (the "Pension Plan"), the Company's
Supplemental Executive Retirement Plan (the "Supplemental Plan") if you
are a participant in such Supplemental Plan at the time of a change in
control of the Company or under any of the Company's life insurance,
medical, health and accident, or disability plans in which you were
participating at the time of the change in control of the Company, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive you of any material
fringe benefit enjoyed by you at the time of the change in control of the
Company, or the failure by the Company to provide you with the number of
paid vacation days to which you are entitled on the basis of years of
service with the Company in accordance with the Company's normal vacation
policy in effect at the time of the change in control of the Company;
(G) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated
in Section 5 hereof; or
(H) any purported termination of your employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of
Subsection (iv) below (and, if applicable, the requirements of Subsection
(ii) above); for purposes of this Agreement, no such purported termination
shall be effective.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(iv) Notice of Termination. Any purported termination of your employment
by the Company or by you shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 6 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provisions so
indicated.
(v) Date of Termination, Etc. "Date of Termination" shall mean (A) if your
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such thirty (30) day period), and (B) if your
employment is terminated pursuant to Subsection (ii) or (iii) above or for any
reason (other than Disability), the date specified in the Notice of Termination
(which, in the case of a termination pursuant to Subsection (ii) above shall not
be less than thirty (30) days, and in the case of a termination
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 6
pursuant to Subsection (iii) above shall not be less than fifteen (15) nor more
than sixty (60) days, respectively, from the date such Notice of Termination is
given); provided that if within fifteen (15) days after any Notice of
Termination is given, or, if later, prior to the Date of Termination (as
determined without regard to this proviso), the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue you
as a participant in all compensation, benefit and insurance plans in which you
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement.
4. Compensation Upon Termination or During Disability. Following a change
in control of the Company, as defined in Subsection 2(i), upon termination of
your employment or during a period of Disability you shall be entitled to the
following benefits:
(i) During any period that you fail to perform your full-time duties with
the Company as a result of incapacity due to physical or mental illness, you
shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all compensation payable to you
under any compensation plan of the Company in which you are a participant during
such period, until this Agreement is terminated pursuant to Section 3(i) hereof
reduced by any payments made to you during such period pursuant to any statutory
disability plan or the Company's long-term disability plans or programs.
Thereafter, or in the event your employment shall be terminated by the Company
or by reason of your death, your benefits shall be determined upon the Company's
retirement, insurance and other compensation plans and programs then in effect
in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by
you other than for Good Reason, Disability or death, the Company shall pay you
your full base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which you are
entitled under any compensation plan of the Company at the time such payments
are due, and the Company shall have no further obligations to you under this
Agreement.
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 7
(iii) If your employment by the Company shall be terminated (a) by the
Company other than for Cause or Disability or (b) by you for Good Reason, then
you shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts to which you are entitled under any
compensation plan of the Company, at the time such payments are due,
except as otherwise provided below;
(B) in lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to you
a lump sum severance payment (together with the payments provided in
paragraphs C and D below, the "Severance Payments") equal to two (2) times
the sum of (x) your annual base salary in effect immediately prior to the
occurrence of the circumstance giving rise to the Notice of Termination
given in respect thereof, and (y) the highest annual amount paid to you as
bonus compensation during the three-year period preceding that in which
the Date of Termination occurs;
(C) notwithstanding any provisions of the Long-Term Incentive Program and
in lieu of payment thereunder, the Company shall pay to you a lump sum
amount equal to the sum of (x) any incentive compensation which has been
allocated or awarded to you under the Long-Term Incentive Program for a
fiscal year or other measuring period preceding the Date of Termination
but has not yet been paid, and (y) a pro rata portion to the Date of
Termination of the aggregate value of all contingent incentive
compensation awards to you under the Long-Term Incentive Program for all
uncompleted periods under the Long-Term Incentive Program calculated as to
each such award by multiplying the maximum value of a performance unit by
(i) the percentage of the target level that has been achieved as of the
Date of Termination, and (ii) a fraction, the numerator of which is the
number of days that have elapsed in the performance cycle as of the Date
of Termination and the denominator of which is the total number of days in
the performance cycle;
(D) notwithstanding any provision of the Long Term Incentive Program and
in lieu of shares of common stock of the Company ("Company Shares")
issuable upon exercise of outstanding options ("Options") or any related
stock appreciation rights ("Rights"), if any, granted to you under the
Long-Term Incentive Program (which Options and Rights shall be cancelled
upon the making of the payment referred to below), you shall receive an
amount in cash equal to the product of (i) the excess of the higher of
such closing price on the date immediately preceding the date of payment
or the highest per share price for Company Shares actually paid in
connection with any change in control of the Company, over the per share
exercise price of each Option or Right held by you (whether or not then
fully exercisable), times (ii) the number of Company Shares covered by
each such Option or Right;
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 8
(E) an amount in cash equal to the sum of (i) the present value of your
accrued benefit (determined by using the ongoing actuarial assumptions in
effect immediately prior to your Date of Termination under the Company's
tax qualified defined benefit plan in which you are a participant) under
any tax qualified or non-qualified defined benefit plan sponsored by the
Company and (ii) your account balance under any tax qualified or
non-qualified defined contribution plan sponsored by the Company, in
either case to the extent that such accrued benefit or account balance, as
the case may be, shall not be fully vested at the time of your Date of
Termination;
(F) in the event that you become entitled to the payments (the "Severance
Payments") provided under paragraphs (B), (C), (D) and (E), above, and
Subsections (iv) and (v) below, if any of the Severance Payments or any
portion of the Other Payments (as defined below) will be subject to the
tax (the "Excise Tax") imposed by section 4999 of the Code, the Company
shall pay to you at the time specified in paragraph (G) below, an
additional amount (the "Gross-Up Payment") such that the net amount
retained by you, after deduction of any Excise Tax on the Total Payments
(as defined below) and any federal and state and local income tax solely
upon the Gross-Up Payment shall be equal to the Total Payments minus the
Gross-Up Payment. For purposes of determining whether any of the Severance
Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) any other payments or benefits received or to be received by you
in connection with a change of control of the Company or your termination
of employment (whether payable pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, its successors,
any person whose actions result in a change in control of the Company or
any person affiliated with (or which, as a result of the completion of the
transactions causing a change in control of the Company, will become
affiliated) the Company or such person within the meaning of section 1504
of the Code (the "Other Payments") (together with the Severance Payments,
the "Total Payments")) shall be treated as "parachute payments" within the
meaning of section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel selected
by the Company's independent auditors and acceptable to you, the Total
Payments (in whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of section
280G(b)(4) of the Code in excess of the base amount within the meaning of
section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax, (ii) the amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Total Payments or (B) the amount of excess parachute
payments within the meaning of section 280G(b)(1) (after applying cause
(i), above, and (iii) the value of any non-cash benefits or any deferred
payment or benefit shall be determined
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 9
by the Company's independent auditors in accordance with the principles of
sections 280G(d)(3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, you shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state
and locality of your residence in the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time of
termination of your employment, you shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal
and state and local income tax imposed on the Gross-Up Payment being
repaid by you if such repayment results in a reduction in Excise Tax
and/or a federal and state and local income tax deduction) plus interest
on the amount of such repayment at the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined
to exceed the amount taken into account hereunder at the time of the
termination of your employment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional gross-up payment
in respect of such excess (plus any interest payable with respect to such
excess) at the time that the amount of such excess is finally determined;
(G) the payments provided for in paragraphs (B), (C), (D), (E) and (F),
above, shall be made not later than the fifth day following the Date of
Termination, provided, however, that if the amounts of such payments,
cannot be finally determined on or before such day, the Company shall pay
to you on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payments and shall pay the
remainder of such payments (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to you, payable on the fifth day
after demand by the Company (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code); and
(H) the Company also shall pay to you all legal fees and expenses incurred
by you as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination
or in seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 10
of the Code to any payment or benefit provided hereunder). Such payments
shall be made at the later of the times specified in paragraph (G) above,
or within five (5) days after your request for payment accompanied with
such evidence of fees and expenses incurred as the Company reasonably may
require.
(iv) If your employment shall be terminated (A) by the Company other than
for Cause or Disability or (B) by you for Good Reason, then for a twenty-four
(24) month period after such termination, the Company shall arrange to provide
you at the Company's expense with life, disability, accident and health
insurance benefits substantially similar to those which you are receiving
immediately prior to the Note of Termination. Benefits otherwise receivable by
you pursuant to this Subsection 4(iv) shall be reduced to the extent comparable
benefits are actually received by you during the twenty-four (24) month period
following your termination, and any such benefits actually received by you shall
be reported to the Company.
(v) If your employment shall be terminated (A) by the Company other than
for Cause or Disability or (B) by you for Good Reason, then in addition to the
retirement benefits to which you are entitled under the Pension Plan or any
successor plans thereto and any supplemental pension benefits to which you are
entitled under the Supplemental Plan or any successor plans thereto, the Company
shall pay you in cash at the time and in the manner provided in paragraph (E) of
subsection 4(iii), a lump sum equal to the actuarial equivalent of the excess of
(x) the retirement pension (determined as a straight life annuity commencing at
age 65) which you would have accrued under the terms of the Pension Plan or the
Supplemental Plan (without regard either to any amendment to the Pension Plan or
the Supplemental Plan made subsequent to a change in control of the Company and
on or prior to the Date of Termination, which amendment adversely affects in any
manner the computation of retirement benefits thereunder, or the limitations
imposed by Section 415, 401(a)(17) or any other section of the Code), determined
as if you were fully vested thereunder, without actuarial reduction for early
retirement in the event that you have attained age fifty-five (55) and have met
at your Date of Termination the Early Retirement Pension eligibility standard
set forth in the Pension Plan, and (y) the retirement pension determined as a
straight life annuity commencing at age sixty-five (65) which you had then
accrued pursuant to the provisions of the Pension Plan and the Supplemental
Plan. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under the Pension
Plan immediately prior to the change in control of the Company.
(vi) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 11
(vii) In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all benefits payable to you, at the
respective time or times such payments are due, under the Pension Plan, the
Incentive Savings Plan, the Employee Stock Ownership Plan and any other plan or
agreement relating to retirement benefits.
5. Successor; Binding Agreement. (i) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to compensation from the
Company in the same amount and on the same terms as you would be entitled to
hereunder if you terminate your employment for Good Reason following a change in
control of the Company, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date
of Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
7. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 12
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law. The
obligations of the Company under Section 4 shall survive the expiration of the
term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled, at the Company's expense, exclusively by
arbitration in New York City, New York in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that you
shall be entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
11. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supercedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by an
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto including but not limited to the Change in Control
Agreement between the Company and you dated August 1, 1988, in respect to the
subject matter contained herein is hereby terminated, cancelled and superceded
hereby.
<PAGE>
<PAGE>
Mr. Michael J. Henchy
September 1, 1989
Page 13
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE GREATER NEW YORK SAVINGS BANK
by: /s/ Charles J. Ohlig
---------------------------------
Charles J. Ohlig
Chairman
Agreed to this 1st day of
September, 1989
/s/ Michael J. Henchy
- ------------------------------
Michael J. Henchy
<PAGE>
<PAGE>
THE GREATER
The Greater New York Savings Bank Gerard C. Keegan
Administrative Headquarters Chairman, President and
One Penn Plaza, New York, NY 10119 Chief Executive Officer
Telephone 212 613-4070
June 4, 1996
Ms. Janet Knipfing
8 Highland Mews
Glen Cove, New York 11542
Dear Ms. Knipfing:
The Greater New York Savings Bank (the "Company") considers it essential
to the best interests of its stockholders to foster the continuous employment of
key management personnel. In this connection, the Board of Directors of the
Company (the "Board") recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a change in control of the Company, although no such change is
now contemplated.
In order to induce you to accept employment with the Company and in
consideration of your agreement set forth in Subsection 2(ii) hereof, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement ("Agreement") in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as defined in
Section 2 hereof) under the circumstances described below.
1. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through May 31, 1999; provided, however, that
commencing on June 1, 1997 and each June 1
<PAGE>
<PAGE>
Page 2
June 4, 1996
thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than the February 28 preceding each such June
1, the Company shall have given notice that it does not wish to extend this
Agreement; provided, further, if a change in control of the Company shall have
occurred during the original or extended term of this Agreement, this Agreement
shall continue in effect for the later of (i) the original or extended term or
(ii) a period of twenty-four (24) months beyond the month in which such change
in control occurred.
2. Change in Control. (i) No benefits shall be payable hereunder unless
there shall have been a change in control of the Company, as set forth below.
For purposes of this Agreement, a "change in control of the Company" shall be
deemed to have occurred if (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; or (B)
during any period of two consecutive years (not including any period prior to
the execution of this Agreement), individuals who at the beginning of such
period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clauses (A) or (C) of this Subsection) whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the combined voting power
<PAGE>
<PAGE>
Page 3
June 4, 1996
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all the
Company's assets.
(ii) For purposes of this Agreement, a "potential change in control of the
Company" shall be deemed to have occurred if (A) the Company enters into an
agreement, the consummation of which would result in the occurrence of a change
in control of the Company, (B) any person (including the Company) publicly
announces an intention to take or to consider taking actions which if
consummated would constitute a change in control of the Company; (C) any person,
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, who is or becomes the beneficial owners,
directly or indirectly, of securities of the Company representing 10% or more of
the combined voting power of the Company's then outstanding securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof; or (D) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a potential
change in control of the Company has occurred. You agree that, subject to the
terms and conditions of this Agreement, in the event of a potential change in
control of the Company, you will remain in the employ of the Company until the
earliest of (i) a date which is six (6) months from the occurrence of such
potential change in control of the Company, (ii) the termination by you of your
employment by reason of Disability or Retirement as defined in Subsection 3(i),
or (iii) the occurrence of a change in control of the Company.
3. Termination Following Change in Control. If any of the events described
in Subsection 2(i) hereof constituting a change in control of the Company shall
have occurred, you shall be entitled to the benefits provided in Subsections
4(iii), 4(iv), and 4(v) hereof upon the subsequent termination of your
employment during the term of this Agreement unless such termination is (A)
because of your death or Disability, (B) by the Company for Cause, or (C) by you
other than for Good Reason.
<PAGE>
<PAGE>
Page 4
June 4, 1996
(i) Disability. If, as a result of your incapacity due to physical or
mental illness, you shall have been absent from the full-time performance of
your duties with the Company for six (6) consecutive months, and within thirty
(30) days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, your employment may be
terminated for "Disability".
(ii) Cause. Termination by the Company of your employment for "Cause"
shall mean termination upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a Notice of Termination, by
you for Good Reason as defined in Subsections 3(iv) and 3(iii), respectively)
after a written demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, or (B) the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purpose of this
Subsection, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission was in the best interest of the
Company. Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the Board)
finding that in the good faith opinion of the Board you were guilty of conduct
set forth in clauses (A) or (B) of the first sentence of this Subsection and
specifying the particulars thereof in detail.
(iii) Good Reason. You shall be entitled to terminate your employment for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean, without
your express written consent, the occurrence after a change in control of the
Company of any of the following circumstances unless, in the case of paragraphs
(A), (E), (F), (G) or (H), such circumstances are fully corrected prior to
<PAGE>
<PAGE>
Page 5
June 4, 1996
the Date of Termination specified in the Notice of Termination, as defined in
Subsections 3(v) and 3(iv), respectively, given in respect thereof;
(A) the assignment to you of any duties inconsistent with your present
status as an officer of the Company (or such other title or titles as you
may be holding immediately prior to the change in control of the Company)
or a substantial adverse alteration in the nature or status of your
responsibilities from those in effect immediately prior to the change in
control of the Company;
(B) a reduction by the Company in your annual base salary as in effect on
the date hereof or as the same may be increased from time to time except
for across-the-board salary reductions similarly affecting all senior
executives of the Company and each of its affiliated companies and all
senior executives of any person in control of the Company and each of its
affiliated companies;
(C) the relocation of the Company's principal executive offices to a
location outside the New York City Metropolitan Area (or, if different,
the metropolitan area in which such offices are relocated immediately
prior to the change in control of the Company) or, if currently based at
the Company's principal executive offices, the Company's requiring you to
be based anywhere other than the Company's principal executive offices
except for required travel on the Company's business to an extent
substantially consistent with your present business travel obligations;
(D) the failure by the Company, without your consent, to pay to you any
portion of your current compensation except pursuant to an
across-the-board compensation deferral similarly affecting all senior
executives of the Company and all senior executives of any person in
control of the Company, or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of the
Company, within seven (7) days of the date of such compensation is due;
<PAGE>
<PAGE>
Page 6
June 4, 1996
(E) the failure by the Company to continue in effect any compensation plan
in which you participate immediately prior to the change in control of the
Company which is material to your total compensation, including but not
limited to the Company's Employee Stock Ownership Plan or any substitute
plans adopted prior to the change in control of the Company, unless an
equitable arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure by the
Company to continue your participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms
of the amount of benefits provided and the level of your participation
relative to other participants, as existed at the time of the change in
control of the Company;
(F) the failure by the Company to continue to provide you with benefits
substantially similar to those enjoyed by you under the Company's Plan of
Pensions and Retirement Benefits (the "Pension Plan") or under any of the
Company's life insurance, medical, health and accident, or disability
plans in which you were participating at the time of the change in control
of the Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive
you of any material fringe benefit enjoyed by you at the time of the
change in control of the Company, or the failure by the Company to provide
you with the number of paid vacation days to which you are entitled on the
basis of years of service with the Company in accordance with the
Company's normal vacation policy in effect at the time of the change in
control of the Company;
(G) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated
in Section 5 hereof; or
(H) any purported termination of your employment which is not affected
pursuant to a Notice of Termination satisfying the requirements of
Subsection (iv) below (and, if applicable, the requirements of Subsection
(ii) above); for purposes of this Agreement, no such purported termination
shall be effective.
<PAGE>
<PAGE>
Page 7
June 4, 1996
Your right to terminate your employment pursuant to this Subsection shall
not be affected by your incapacity due to physical or mental illness. Your
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.
(iv) Notice of Termination. Any purported termination of your employment
by the Company or by you shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 6 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provisions so
indicated.
(v) Date of Termination, Etc. "Date of Termination" shall mean (A) if your
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such thirty (30) day period), and (B) if your
employment is terminated pursuant to Subsection (ii) or (iii) above or for any
reason (other than Disability), the date specified in the Notice of Termination
(which, in the case of a termination pursuant to Subsection (ii) above shall not
be less than thirty (30) days, and in the case of a termination pursuant to
Subsection (iii) above shall not be less than fifteen (15) nor more than sixty
(60) days, respectively, from the date such Notice of Termination is given);
provided that if within fifteen (15) days after any Notice of Termination is
given, or, if later, prior to the Date of Termination (as determined without
regard to this proviso), the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (which
is not appealable or with respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided further that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with
<PAGE>
<PAGE>
Page 8
June 4, 1996
reasonable diligence. Notwithstanding the pendency of any such dispute, the
Company will continue to pay you your full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to, base
salary) and continue you as a participant in all compensation, benefit and
insurance plans in which you were participating when the notice giving rise to
the dispute was given, until the dispute is finally resolved in accordance with
this Subsection. Amounts paid under this Subsection are in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement.
4. Compensation Upon Termination or During Disability. Following a change
in control of the Company, as defined in Subsection 2(i), upon termination of
your employment or during a period of Disability you shall be entitled to the
following benefits:
(i) During any period that you fail to perform your full-time duties with
the Company as a result of incapacity due to physical or mental illness, you
shall continue to receive your base salary at the rate in effect at the
commencement of any such period, together with all compensation payable to you
under any compensation plan of the Company in which you are a participant during
such period, until such Agreement is terminated pursuant to Section 3(i) hereof
reduced by any payments made to you during such period pursuant to any statutory
disability plan or the Company's long-term disability plans or programs.
Thereafter, or in the event your employment shall be terminated by the Company
or by reason of your death, your benefits shall be determined upon the Company's
retirement, insurance and other compensation plans and programs then in effect
in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by
you other than for Good Reason, Disability or death, the Company shall pay you
your full base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which you are
entitled under any compensation plan of the Company at the time such payments
are due, and the Company shall have no further obligations to you under this
Agreement.
<PAGE>
<PAGE>
Page 9
June 4, 1996
(iii) If your employment by the Company shall be terminated (a) by the
Company other than for Cause or Disability or (b) by you for Good Reason, then
you shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination
is given, plus all other amounts to which you are entitled under any
compensation plan of the Company, at the time such payments are due,
except as otherwise provided below;
(B) in lieu of any further salary payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay
to you a lump sum severance payment (together with the payments
provided in paragraphs C and D below, the "Severance Payments")
equal to one (1) times the sum of (x) your annual base salary in
effect immediately prior to the occurrence of the circumstance
giving rise to the Notice of Termination given in respect thereof,
and (y) the highest annual amount paid to you as bonus compensation
during the three-year period preceding that in which the Date of
Termination occurs;
(C) intentionally deleted;
(D) an amount in cash equal to the sum of (i) the present value of your
accrued benefit (determined by using the ongoing actuarial
assumptions in effect immediately prior to your Date of Termination
under the Company's defined benefit plan in which you are a
participant) under any defined benefit plan sponsored by the Company
and (ii) your account balance under any defined contribution plan
sponsored by the Company, in either case to the extent that such
accrued benefit or account balance, as the case may be, shall not be
fully vested at the time of your Date of Termination.
(E) the payments provided for in paragraphs (B), (C) and (D) above,
shall be made not later than the fifth day following the Date of
Termination, provided, however, that if the amounts of such
payments, cannot be finally
<PAGE>
<PAGE>
Page 10
June 4, 1996
determined on or before such day, the Company shall pay to you on
such day an estimate, as determined in good faith by the Company, of
the minimum amount of such payments and shall pay the remainder of
such payments (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the
Date of Termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company to you,
payable on the fifth day after demand by the Company, (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code);
(F) the Company also shall pay to you all legal fees and expenses
incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement or in connection with any tax
audit or proceeding to the extent attributable to the application of
section 4999 of the Code to any payment or benefit provided
hereunder). Such payments shall be made at the later of the times
specified in paragraph (E) above, or within five (5) days after your
request for payment accompanied with such evidence of fees and
expenses incurred as the Company reasonably may require.
(iv) If your employment shall be terminated (A) by the Company other
than for Cause or Disability or (B) by you for Good Reason, then for a
twenty-four (24) month period after such termination, the Company shall arrange
to provide you at the Company's expense with life, disability, accident and
health insurance benefits substantially similar to those which you are receiving
immediately prior to the Note of Termination. Benefits otherwise receivable by
you pursuant to this Subsection 4(iv) shall be reduced to the extent comparable
benefits are actually received by you during the twenty-four (24) month period
following your termination, and any such benefits actually received by you shall
be reported to the Company.
<PAGE>
<PAGE>
Page 11
June 4, 1996
(v) If your employment shall be terminated (A) by the Company other
than for Cause or Disability or (B) by you for Good Reason, then in addition to
the retirement benefits to which you are entitled under the Pension Plan or any
successor plans thereto, the Company shall pay you in cash at the time and in
the manner provided in paragraph (E) of Subsection 4(iii), a lump sum equal to
the actuarial equivalent of the excess of (x) the retirement pension (determined
as a straight life annuity commencing at age 65) which you would have accrued
under the terms of the Pension Plan (without regard either to any amendment to
the Pension Plan made subsequent to a change in control of the Company and on or
prior to the Date of Termination, which amendment adversely affects in any
manner the computation of retirement benefits thereunder, or the limitations
imposed by Section 415 of the Code), determined as if you were fully vested
thereunder, without actuarial reduction for early retirement in the event that
you have attained age fifty-five (55) and have met at your Date of Termination
the Early Retirement Pension eligibility standard set forth in the Pension Plan,
and (y) the retirement pension determined as a straight life annuity commencing
at age sixty-five (65) which you had then accrued pursuant to the provisions of
the Pension Plan. For purposes of this Subsection, "actuarial equivalent" shall
be determined using the same methods and assumptions utilized under the Pension
Plan immediately prior to the change in control of the Company.
(vi) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by you as a result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by you to the Company, or otherwise except as specifically provided in this
Section 4.
(vii) In addition to all other amounts payable to you under this Section
4, you shall be entitled to receive all benefits payable to you, at the
respective time or times such payments are due, under the Pension Plan, the
Incentive Savings Plan, the Employee Stock Ownership Plan and any other plan or
agreement relating to retirement benefits.
<PAGE>
<PAGE>
Page 12
June 4, 1996
5. Successor; Binding Agreement. (i) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to compensation from the
Company in the same amount and on the same terms as you would be entitled to
hereunder if you terminate your employment for Good Reason following a change in
control of the Company, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date
of Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
<PAGE>
<PAGE>
Page 13
June 4, 1996
7. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law. The
obligations of the Company under Section 4 shall survive the expiration of the
term of this Agreement.
8. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled, at the Company's expense, exclusively by
arbitration in New York City, New York in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that you
shall be entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
11. Limitations. If at the time the Company is obligated to
<PAGE>
<PAGE>
Page 14
June 4, 1996
make a payment hereunder such payment constitutes a "golden parachute payment,"
as defined in Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C.
1828(k) ("Act"), and the regulations promulgated thereunder, the Company will
make such payment only if, and to the extent that, such payment is not
prohibited by the Act or the regulations promulgated thereunder. If at the time
the Company is obligated to make a payment hereunder which constitutes an
"indemnification payment," as defined in the Act and the regulations promulgated
thereunder, the Company will make such payment only if, and to the extent that,
such payment is not prohibited by the Act or the regulations promulgated
thereunder.
12. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect to the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by an
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated, cancelled and superseded hereby.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
THE GREATER NEW YORK SAVINGS BANK
BY: /s/ Gerard C. Keegan
---------------------------------
Gerard C. Keegan
Chairman, President and Chief
Executive Officer
Agreed to this tenth day of
June, l996
/s/ Janet Knipfing
- ---------------------------------
Janet Knipfing
<PAGE>
<PAGE>
RETIREMENT PLAN OF THE GREATER NEW YORK SAVINGS BANK
FOR NON-EMPLOYEE DIRECTORS
ARTICLE I.
1.1 Purpose: The purpose of the Retirement Plan is to provide
non-employee directors with pension benefits at retirement.
ARTICLE II.
DEFINITIONS AND CONSTRUCTION
2.1 Definitions: The following definitions shall apply for purposes of
the Plan, unless a different meaning is plainly indicated by the context:
(a) "Accrued Benefit:" The amount determined in accordance
with Article IV, Section 4.1 for Retirement at Normal Retirement; Article IV,
Section 4.2 for Retirement for Disability; and Article IV, Section 4.3 for Early
Retirement.
(b) "Actuary:" The individual actuary or firm of actuaries, if
any, selected by the Company to provide actuarial services in connection with
the administration of the Plan.
(c) "Board:" The Board of Directors of The Greater New
York Savings Bank, as constituted from time to time.
(d) "Code:" The Internal Revenue Code of 1986, as amended, and
the applicable rulings and regulations thereunder (including the corresponding
revisions of any succeeding law).
(e) "Company:" the Greater New York Savings Bank, a banking
corporation, organized and existing under the laws of the State of New York, its
successors and assigns.
(f) "Change in Control:" A "Change in Control" of the Company
shall be deemed to have occurred if (A) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than
<PAGE>
<PAGE>
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or become the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities; or (B) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described
in clauses (A) or (C) of this Subsection) whose election by the Board or
nomination for election by the Company's stockholders were approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or (C) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
(g) "Director:" Any non-employee director of The Greater New
York Savings Bank. An employee director of The Greater New York Savings Bank
shall not be considered a Director under this Plan.
(h) "Disability:" A condition of total incapacity, mental or
physical, for further performance of duty as a Director which the Board shall
have determined, on the basis of competent medical evidence, is likely to be
permanent.
(i) "Effective Date:" October 1, 1988.
2
<PAGE>
<PAGE>
(j) "Eligible Spouse:" The husband or wife to whom the
Participant had been legally married throughout the six-month period ending on
the earlier of 1) the pension commencement date or 2) the date of the
Participant's death.
(k) "ERISA:" Public Law No. 93-406, the Employee Retirement
Income Security Act of 1974, as may be amended from time to time.
(l) "Mandatory Retirement Date:" The day of the annual meeting
of stockholders of the Company immediately following the Participant's
attainment of age 75.
(m) "Normal Retirement Date:" The day on which the
Participant attains age 65.
(n) "Participant:" A Director participating in the Plan in
accordance with the provisions of Article III or a former Director entitled to
receive a Pension under this Plan.
(o) "Pension:" A series of monthly amounts which are payable
to a person who is entitled to receive benefits under the Plan.
(p) "Plan:" The Retirement Plan of The Greater New York
Savings Bank Non-Employee Directors, as amended from time to time.
(q) "Plan Year:" The 12 month period commencing on October 1,
and ending on September 30.
(r) "Retirement:" Termination of service as a Director for
reason other than death after a Participant has fulfilled all requirements for a
Normal, Early or Disability Retirement Pension. Retirement shall be considered
as commencing on the day immediately following a Participant's last day of
service as a Director.
(s) "Service:" The period of a Participant's service as a
Director or Trustee of the Company considered in the determination of his/her
eligibility for benefits under the Plan in accordance with Section 3.1 of
Article III.
(t) "Year of Service:" A twelve month period commencing on the
anniversary date of a Director's election to the Board.
3
<PAGE>
<PAGE>
Notwithstanding the foregoing, a Director who was a Trustee of the Company on
the date of its conversion from the mutual to the stock form of ownership shall
have his/her Service measured from his/her election as a Trustee of the Company.
2.2 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary. The words
"hereof", "herein", "hereunder" and other similar compounds of the word "here"
shall mean and refer to the entire Plan, not to any particular provision or
Section.
ARTICLE III.
PARTICIPATION AND SERVICE
3.1 Participation. All Directors on the Effective Date of the Plan
shall be eligible to participate in the Plan as of the Effective Date. All other
Directors shall become Participants in this Plan on the date they are elected
Directors of the Company. Any Director who was previously an employee director
of the Company shall be eligible to participate in this Plan upon his/her
retirement as an employee of the Company provided he/she remains a Director.
ARTICLE IV.
RETIREMENT
4.1 Normal Retirement Pension: Upon completion of five (5) Years of
Service and the attainment of the Normal Retirement Age, a Participant shall
become fully vested in a nonforfeitable annual Normal Retirement Pension, equal
to one hundred (100%) percent of the annual retainer payable to him/her as a
Director ("Annual Retainer") on the date of his Retirement.
4.2 Disability Retirement Pension: In the event that a Participant
shall retire as a Director of the Company by reason of Disability after he/she
has completed five (5) Years of Service, he/she shall be granted a Disability
Retirement Pension. The
4
<PAGE>
<PAGE>
annual amount of the disability Retirement Pension shall be equal to one hundred
(100%) percent of the Annual Retainer payable to him/her as a Director on the
date of his/her Retirement by Reason of Disability, without reduction for age.
For all purposes of the Plan, Disability shall mean physical or
mental impairment which totally incapacitates the Participant from performance
of his/her duties.
4.3(a) Early Retirement Pension: A Participant may retire at any time
after he/she reaches age 55 and has completed five (5) Years of Service. In the
event a Participant shall retire hereunder, the annual amount of this Early
Retirement Pension shall be equal to one hundred (100%) percent of his/her
Annual Retainer payable to him/her as a Director on the date of his/her Early
Retirement, which amount shall be reduced by 5% per year for each year (or major
fraction of a year) his/her Pension commencement date precedes age 65. This
Early Retirement Pension shall commence on the first day of the calendar month
next following the month in which he/she actually retires and terminates Service
with the Company.
(b) Late Retirement Pension: In the event a Participant shall retire
after he/she has attained age 65 and has completed five (5) Years of Service,
the annual amount of this Late Retirement Pension shall be equal to the
actuarial equivalent of the Normal Retirement Pension, determined using a 5.0%
interest rate assumption, and the GAM'71 mortality table. This Late Retirement
Pension shall commence on the first day of the calendar month next following the
month in which he/she actually retires and terminates service with the Company.
4.4 Notwithstanding anything to the contrary herein, in the event of a
Change in Control, all Participants shall become immediately vested in their
Accrued Benefit irrespective of whether they have completed five (5) Years of
Service. A Participant shall be entitled to receive his/her Pension on the first
day of the month following a Change in Control and there shall be no reduction
in a Participant's Pension despite the fact that the Participant starts to
receive such Pension prior to his/her attainment of age 65. In no event,
however, shall a Pension be paid to a Participant prior to his/her actual
termination of Service.
5
<PAGE>
<PAGE>
4.5 Deferred Vested Pension: If a Participant should resign or not be
re-elected as a Director at an annual Shareholder meeting before the time he is
entitled to a Pension under Section 4.1, 4.2 or 4.3 herein, but after the time
he has completed five (5) Years of Service, he shall thereupon become entitled
to a Pension, equal to 100% of the final Annual Retainer payable to him/her as a
Director, which Pension shall commence on the first day of the calendar month
next following the date which he attains age 55. However, in such case, his/her
Deferred Vested Pension shall be reduced as provided in Section 4.3.
4.6 Payment of Pension: Pensions shall be paid in monthly installments,
each installment equaling 1/12 of the annual Pension. For a Pension under
Sections 4.1 (Normal Retirement or 4.2 (Disability Retirement) of this Plan, the
first installment shall be paid to a retired Participant on the first day of the
month next following the month in which he actually retires and terminates
his/her Service with the Company.
In no event shall any Pension be paid to a Participant prior
to actual termination of Service. In the event a Participant does not retire at
the Normal Retirement Age, but continues to serve as a Director of the company
beyond the attainment of such age, his/her Pension shall be determined based
upon his/her Annual Retainer on the date of his/her Retirement, however, his/her
Pension shall not be otherwise increased by reason of the fact that he/she
continued to serve as a Director after the date he/she was entitled to receive a
Normal Retirement Pension hereunder.
Upon the death of a Participant or retired Participant all of
his/her interest in or right to Pension benefits shall cease except as set forth
under the provisions of article V of Section 4.10.
4.7 Optional Forms of Payment. Notwithstanding any provisions in the
Plan herein to the contrary (including the provisions of Article V), a
Participant may elect to receive the Actuarial Equivalent of his/her Pension in
accordance with the optional forms of payment specified below, by filing an
election with the Committee at any time on or before the earlier of (A) last day
of the calendar year immediately preceding the date on which his/her Pension
would commence in absence of an election under this Section 4.7 ("Pension Date")
or (B) six months before his/her
6
<PAGE>
<PAGE>
Pension Date (such latest permitted election date is the "Election Deadline").
The election shall be on a form provided or permitted by the Committee in which,
if applicable, the Participant shall designate a person to be his/her
beneficiary. The Participant may change or revoke an election under this Section
4.7 at any time on or before the Participant's Election Deadline. An election
under this Section shall be irrevocable after the Participant's Election
Deadline and shall be ineffective if the Participant dies before his/her Pension
Date. If the Participant does not have an election in effect prior to the
Participant's Election Deadline, his/her Pension shall be paid in accordance
with Section 4.6 or Article V, as applicable.
(a) Lump Sum Option. Either (i) an immediate single lump sum
payment on his/her Pension Date in an amount that is the Actuarial Equivalent of
the 100% Joint and Survivor Pension described in Section 5.1 or (ii) a deferred
lump sum payable at such date as the Participant shall elect in an amount equal
to the amount determined for an immediate lump sum increased or decreased by the
investment return for income, gains, losses and expenses which would result from
investment of the Participant's immediate lump sum amount in accordance with the
Participant's investment elections, to be made substantially in accordance with
the provisions of Section 4.8 hereof. If the Participant dies after his/her
Pension Date and before receiving an immediate or deferred lump sum, payment
shall be made to the beneficiary designated by the Participant under Section 4.9
hereof as soon as possible after the Participant's death in an amount equal to
the immediate lump sum increased or decreased by the investment return for
income, gains, losses and expenses determined in accordance with the
Participant's investment election through the date preceding the date of the
payout.
(b) Variable Annuity Option.
(A) Life Annuity Option. A monthly amount payable to
the Participant for life that is initially equal to 1/12 of the Participant's
annual Pension (the "Initial Annuity amount"). The monthly amount payable after
each December 31 following the date on which the Pension commences in the form
of the variable annuity option, shall be adjusted to equal the Initial Annuity
Amount multiplied by the ratio of x to y where:
7
<PAGE>
<PAGE>
x equals the amount of the single lump sum
that would have been payable to the
Participant had he/she elected the immediate
lump sum option (the "Lump Sum Amount")
payable on his/her Pension Date plus income
and gains and less expenses and losses
attributable thereto assuming that such
amount was invested in the investment fund
or funds selected by the Participant in
accordance with his/her investment election
made in accordance with Section 4.8, and
reduced by the aggregate amount of any
Pension payments made to the Participant
prior to the applicable December 31; and
y equals the Lump Sum Amount plus income
attributable thereto assuming such amount
earned income at a rate of 6% compounded
annually and reduced by the aggregate amount
of any Pension payments that would have been
made to the Participant prior to the
applicable December 31 if the Participant
were receiving his/her Pension in the form
of a 100% Joint and Survivor Pension.
As soon as practicable following the death of the Participant,
the Beneficiary designated by the Participant in accordance with Section 4.9
shall receive a single sum payment equal to x (as determined above) taking into
account all income, gains, losses and expenses and distributions prior to the
date of payment to the Beneficiary.
(B) Installment Payment Option. A Participant may
elect to receive his/her Lump Sum Amount in installment payments over a period
not in excess of fifteen years. Installments shall be payable annually (or more
frequently if permitted by the Committee), in an amount equal to the quotient of
the Lump Sum Amount (as adjusted on each December 31 in accordance with the
following sentence) immediately prior to payment of the installment divided by
the number of remaining installment payments. As of each December 31 after the
first installment is paid, the Lump Sum Amount shall be increased for the
income, gains and reduced by the expenses and losses that would be attributable
to the Lump Sum
8
<PAGE>
<PAGE>
Amount if such amount were invested in the investment fund or funds selected by
the Participant in accordance with the investment election made in accordance
with Section 4.8 and reduced by the aggregate amount of any payments made to the
Participant prior to the applicable December 31. As soon as practicable
following the death of the Participant, the Participant's Beneficiary shall
receive a single sum payment equal to the Lump Sum Amount adjusted to take into
account all income, gains, losses and expenses and distributions prior to the
date of payment to the Beneficiary.
4.8 Investment Election. A Participant must make an investment election
at the time he/she elects the variable annuity option or a deferred lump sum
election. The investment election shall designate the investment fund or funds
in which part or all of his/her Lump Sum Amount shall be treated as invested.
The available investment funds shall consist of any security or securities
issued by an investment company registered under the Investment Company Act of
1940, any separate account or accounts of any insurance company or any other
investment vehicle permitted by the Committee. A Participant's investment
election shall remain in effect until such time as a change in investment
election is filed with and approved by the Committee. A change in investment
election must be filed with the Committee on a form prescribed by the Committee
and shall become effective on such date as it is approved by the Committee.
While the Company, in the discretion of the Committee, may direct the Trustee of
the grantor trust for the plan to make investments in the mutual funds, separate
accounts or other permitted investment vehicle designated by Participants, the
Company and Trustee shall not be under any obligation to make such investments
and any such investments shall remain as investments of the Trust.
4.9 Beneficiary. A Participant may designate a Beneficiary to receive
any benefits which may become payable under Section 4.7 or Section 4.10 after
the death of the Participant. To be effective any Beneficiary designation shall
be filed in writing with the Committee. A Participant may revoke an existing
Beneficiary designation by filing another written Beneficiary designation with
the Committee. The latest Beneficiary designation received by the Committee
shall be controlling. If no Beneficiary is named by a Participant or if he/she
survives all of his/her named Beneficiaries, any benefits payable after his/her
death shall be paid to the Participant's spouse and if none his/her estate.
9
<PAGE>
<PAGE>
4.10 Death Benefit. If a Participant (i) dies prior to his/her Pension
Date and (ii) either (A) the Participant has filed a written election with the
Committee electing the Section 4.10 death benefit in lieu of the Section 5.2
Automatic Option or (B) is not married to an Eligible Spouse on the date of the
Participant's death, a death benefit in the amount provided below shall be
payable to the beneficiary of the Participants pursuant to Section 4.9 hereof.
(a) Age 65 Death Benefit. If a Participant who has completed
not less than five (5) Years of Service, has attained his/her Normal Retirement
Date and is entitled to a death benefit under this Section 4.10, the amount of
the death benefit shall be the Lump Sum Amount which would have been payable to
the Participant if the Participant had a termination of service the day before
his/her death and had elected to receive an immediate lump sum payment under
Section 4.7(a)(i) on the day before his/her death.
(b) Pre Age 65 Death Benefit. If a Participant who has
completed not less than five (5) Years of Service, has not attained his/her
Normal Retirement Date dies and is entitled to a death benefit under this
Section 4.10, the amount of the death benefit shall be a lump sum amount which
is the Actuarial Equivalent of the benefit which would be payable to the spouse
of the Participant under Section 5.2.(a)(1) or (2) in the case of a Participant
who is married on the date of his/her death, and in the case of a Participant
who is not married on his/her date of death, the benefit which would be payable
to a hypothetical spouse of the Participant if the Participant were married to a
spouse who is the same age as the Participant.
4.11 Actuarial Equivalent. For purposes of determining Optional Forms
of Payment under Section 4.7 hereof and Death Benefits under Section 4.10
hereof, an Actuarial Equivalent benefit shall be determined using a 5-1/2%
interest rate assumption, the GAM '83 mortality table, and assuming that a
single Participant has a spouse who is the same age as the Participant.
ARTICLE V.
JOINT AND SURVIVOR PENSION
10
<PAGE>
<PAGE>
5.1 100% Joint and Survivor Pension: If a Participant has an Eligible
Spouse on the date his/her Pension payments commence, his/her Pension shall be
paid in the form of a 100% Joint and Survivor Pension.
Under the 100% Joint and Survivor Pension, a Pension equal to
one hundred (100%) percent of the Annual Retainer payable to him/her as a
Director ("Annual Retainer") on the date of his/her Retirement (or on the date
he/she ceases to be a Director in the case of a Deferred Vested Pension) shall
be paid to the Participant for life, and the same amount shall then be paid to
his/her Eligible Spouse, if surviving at the Participant's death, for life.
5.2 Automatic Option:
(a)(1) If a Participant dies after he/she has attained age 55
and has completed five (5) Years of Service and leaves surviving an Eligible
Spouse, he/she shall automatically be deemed, as of the date of his/her death,
to have:
(i) been entitled to receive a Normal Retirement
Pension, or an immediate Early Retirement Pension,
(whichever is appropriate), and
(ii) to have retired.
The Pension shall be paid in the form of a 100% Joint and
Survivor Pension as described in Section 5.1 and his/her surviving Eligible
Spouse, shall thereupon become entitled to receive a Pension thereunder
commencing on the first day of the calendar month next following his/her date of
death which Pension shall be reduced by 5% per year for each year (or major
fraction of a year) the Pension commencement date precedes age 65.
(a)(2) If a Participant dies before he becomes eligible for an
Automatic Option Pension payable in accordance with Section 5.2.(a)(1), but
after he/she has completed five (5) Years of Service, and leaves surviving an
Eligible Spouse, such Eligible Spouse, shall be deemed his/her designated
beneficiary and shall be entitled to a Pension in the form of a 100% Joint and
Survivor Pension as described in Section 5.1, which Pension shall be paid to and
for the lifetime of his/her Eligible Spouse. Such Pension shall be computed in
accordance with Sections 4.3 and 5.1 and shall
11
<PAGE>
<PAGE>
commence on the date the Participant would have been entitled to have his/her
Deferred Vested Pension commence had he/she terminated employment on the date of
his/her death and survived to such date.
(b) If a Participant has elected the death benefit provided
under Section 4.10 hereof, no benefit shall be payable to the Participant's
surviving spouse under Sections 5.2.(a)(1) or (2) hereof.
ARTICLE VI.
ADMINISTRATION
6.1 Administration: The Plan shall be administered by the Benefits
Committee (sometimes referred to herein as the Committee) consisting of the
Chairman and not less than three non-salaried members of the Board of Directors
of the Employer, who shall be appointed annually by the Board of Directors of
the Employer, upon recommendation by the Chairman. The Committee members shall
hold office until their successors have been duly appointed or until death,
resignation or removal.
6.2 Duties: The Committee shall perform the required duties and it
shall have the necessary powers of administering the Plan and carrying out the
provisions thereof.
6.3 Powers: The powers of the Committee shall be as follows:
(a) To determine any question arising in connection with the
Plan, and its decision or action in respect thereof shall be final, conclusive,
and binding upon the Company, and the Participant.
(b) To engage the services of counsel or attorney (who may be
counsel or attorney for the Company), and an Actuary, if it deems necessary, and
such other agents or assistants as it deems advisable for the proper
administration of the Plan. The Board may direct such reasonable expenses as may
be incurred in the administration of the Plan shall be paid out of the funds of
the Plan, unless the Company shall pay them.
12
<PAGE>
<PAGE>
(c) To receive from the Company and from Participants such
information as shall be necessary for the proper administration of the Plan.
6.4 Claims Procedure. The Committee shall make all determinations as to
the right of any person to a benefit. Any denial by the Committee of the claim
for benefits under the Plan by a Participant or beneficiary shall be stated in
writing by the Committee and delivered or mailed to the Participant or
beneficiary. Such notice shall set forth the specific reasons for the denial,
written to the best of the Committee's ability in a manner that may be
understood without legal or actuarial counsel. In addition, the Committee shall
afford a reasonable opportunity to any Participant or his/her beneficiary whose
claim for benefits has been denied for a review of the decision denying the
claim.
6.5 Records and Reports: The Committee shall exercise such authority
and responsibility as it deems appropriate in order to comply with ERISA and
governmental regulations issued thereunder relating to the following: records of
Participant's Service, Accrued Benefits and the percentage of such benefits
which are nonforfeitable under the Plan; notifications to Participants; and any
reports to the Department of Labor.
ARTICLE VII.
AMENDMENTS BY EMPLOYER
7.1 Amendments: The Company reserves the right at any time by action of
the Board of Directors to make any amendments to this Plan. Notwithstanding the
foregoing, no amendment of the Plan may reduce the benefit payable under the
Plan to a Participant (or his/her Eligible Spouse) if the Participant has
retired prior to such amendment or reduce the benefit to be paid with respect to
the Participant on the date of such amendment below the amount which would have
been paid with respect to the Participant if his/her employment had terminated
on the day before such amendment.
13
<PAGE>
<PAGE>
ARTICLE VIII.
TERMINATION
8.l Right to Terminate: The Company may terminate the Plan at any time,
however, in the event of termination, all Participants shall become immediately
vested and shall become entitled to receive a Pension in accordance with terms
hereof.
ARTICLE IX.
SUCCESSOR EMPLOYER AND MERGER
AND CONSOLIDATION OF PLANS
9.1 Successor Company: In the event of a dissolution, merger,
consolidation, or reorganization of the Company, provision may be made by which
the Plan will be continued by the successor; and in that event, such successor
shall be substituted for the Company under the Plan. The substitution of the
successor shall constitute an assumption of Plan liabilities by the successor,
and the successor shall have all of the powers, duties and responsibilities of
the Company under the Plan.
ARTICLE X.
MISCELLANEOUS
10.1 Status: This Plan is not intended to satisfy the requirements for
qualification under section 401(a) of the Code. It is intended to be a
non-qualified defined benefit plan that is exempt from the regulatory
requirements of ERISA. The Plan shall be construed and administered so as to
effectuate this intent. To the extent the Participant or any other person
acquires a right to receive benefits under this Plan, such right shall be no
greater than the right of any unsecured creditor of the Company.
10.2 Construction of Language: Whenever appropriate, in the Plan, words
used in the singular may be read in the plural, words used in the plural may be
read in the singular, and words importing the masculine gender may read as
referring equally to the feminine or the neuter. Any reference to an Article or
section number shall
14
<PAGE>
<PAGE>
refer to an Article or section of this Plan unless otherwise indicated.
10.3 Governing Law: The Plan shall be construed and enforced in
accordance with the laws of the State of New York, except to the extent that
such laws are preempted by the federal laws of the United States of America.
10.4 Headings: The headings of Articles and Sections are included
solely for convenience of reference. If there is any conflict between such
headings and the text of the Plan, the text shall control.
10.5 Non-Alienation of Benefits: The right to receive a benefit under
the Plan shall not be subject in any manner to anticipation, alienation or
assignment, nor shall such right be liable for or subject to debts, contracts,
liabilities, engagements or torts.
15
<PAGE>
<PAGE>
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
1.1 Purpose: The purpose of The Greater New York Savings Bank
Supplemental Executive Retirement Plan is to provide certain executives of the
Company with additional retirement income by supplementing the pension benefits
provided to such individuals under The Plan of Pensions and Retirement Benefits
of The Greater New York Savings Bank and by supplementing contributions made on
behalf of such individuals to The Greater New York Savings Bank Employee Stock
Ownership Plan to the extent pension benefits payable and contributions made
under such plans are limited by Section 415 and Section 401(a)(17) of the
Internal Revenue Code of 1986, as amended.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions: The following definitions shall apply for purposes of
the Plan, unless a different meaning is plainly indicated by the context:
(a) "Board:" The Board of Directors of The Greater New
York Savings Bank, as constituted from time to time.
(b) "Code:" The Internal Revenue Code of 1986, as amended, and
the applicable rulings and regulations thereunder (including the corresponding
revisions of any succeeding law).
(c) "Company:" The Greater New York Savings Bank, a banking
corporation, organized and existing under the laws of the State of New York, its
successors and assigns, and any of its subsidiaries participating in the Pension
Plan.
(d) "Effective Date:" January 1, 1989.
(e) "Eligible Spouse:" The husband or wife to whom the
Participant had been legally married throughout the six-month period ending on
the earlier of 1) the pension commencement date
1
<PAGE>
<PAGE>
under the Pension Plan or 2) the date of the Participant's death.
(f) "ERISA:" Public Law No. 93-406, the Employee Retirement
Income Security Act of 1974, as may be amended from time to time.
(g) "Executive Officer:" The officers of The Greater New York
Savings Bank elected and designated by the Board as executive officers.
(h) "ESOP:" The Greater New York Savings Bank Employee Stock
Ownership Plan, as amended from time to time.
(i) "Normal Retirement Date:" The first day of the month
following the Participant's sixty-fifth birthday.
(j) "Participant:" An Executive Officer or the president of
any subsidiary of The Greater New York Savings Bank who is an active Participant
in the Company's Pension Plan or ESOP and whose pension benefits and/or
contributions by the Company to his account in the ESOP, determined on the basis
of the provisions of such Pension Plan and such ESOP, without regard to the
limitation of Sections 401(a)(17) and 415 of the Code, would exceed the benefits
or contributions payable under such plans as a result of the limitations imposed
by Sections 401(a)(17) and 415 of the Code.
(k) "Pension Plan:" The Plan of Pensions and Retirement
Benefits of The Greater New York Savings Bank, as amended from time to time.
(l) "Retirement:" Termination of employment from the Company
with a right to collect a pension benefit under the Pension Plan.
(m) "Plan:" The Greater New York Savings Bank Supplemental
Executive Retirement Plan, as set forth in this plan instrument, and as it may
be amended from time to time.
(n) "Retirement Date:" The first day of the month coincident
with or next following the date on which a Participant retires.
(o) "Trustee": The trustee of any grantor trust which
2
<PAGE>
<PAGE>
exists pursuant to Section 4.2.
2.2 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary. The words
"hereof", "herein", "hereunder" and other similar compounds of the word "here"
shall mean and refer to the entire Plan, not to any particular provision or
Section.
ARTICLE III
3.1 Supplemental Pension Benefits: A Participant or his beneficiary, as
the case may be, will receive a supplemental monthly pension benefit
("Retirement Benefit") equal to the excess, if any, of the amount determined
under Subparagraph (a) over the amount determined under Subparagraph (b):
(a) The amount of the Normal Retirement Benefit, Early Retirement
Benefit, Deferred Vested Benefit, Disability Benefit, Automatic Option Benefit,
Modified Automatic Option Benefit or any other form of benefit, whichever is
applicable, that would have been payable to the Participant or his beneficiary
under the Pension Plan in such month but for 1) the limitation on annual
benefits set forth in Section 415 of the Code as in effect on the date the
Participant's Retirement Benefits hereunder commence ("Retirement Benefit
Commencement Date") and 2) the limitations on annual compensation that must be
taken into account for the calculation of benefits payable under the Pension
Plan pursuant to Section 401(a)(17) of the Code as in effect on the Retirement
Benefit Commencement Date ("Unrestricted Benefit");
(b) The amount payable to the Participant under the Pension Plan in
such month, whether or not Pension benefits under the Pension Plan actually
commence at such time ("Maximum Benefit").
3.2 Commencement of Retirement Benefits: The Participant's Retirement
Benefits under this Plan shall be payable on the earliest possible date the
Participant or his beneficiary, as the case may be, is entitled to receive a
Pension benefit under the Pension Plan irrespective of whether the Participant
or his
3
<PAGE>
<PAGE>
beneficiary elects to have such Pension benefits commence on such
date.
3.3 Normal Form of Retirement Benefit
(a) If a Participant has an Eligible Spouse on the date his Retirement
Benefits commence hereunder, his Retirement Benefits shall be paid in the form
of a 100% Joint and Survivor Pension, which provides for a Retirement Benefit in
a reduced amount and the continuation of the same reduced amount to the
surviving Eligible Spouse. The reduced amount shall be a percentage of the
single life pension to which the Participant would have otherwise been entitled
to under Section 3.1 hereof, and shall be calculated in accordance with the
provisions of the Pension Plan.
(b) If the Participant does not have an Eligible Spouse on the date his
Retirement Benefits commence hereunder, his Retirement Benefits shall be paid in
the form of a 15 Year Term Certain Pension. This form of Retirement Benefit
provides that monthly benefits will be paid for the longer of the Participant's
life or a guaranteed period of fifteen (15) years. In the event of the
Participant's death prior to expiration of the fifteen (15) year guaranteed
term, monthly retirement benefits will continue to be paid for the balance of
the fifteen (15) year guaranteed period. The beneficiary or beneficiaries
designated must be natural persons in being at the time of their designation.
The amount of the Retirement Benefits payable hereunder shall be the Actuarial
Equivalent of a single life pension to which the Participant would have
otherwise been entitled to under Section 3.1 hereof. For the purpose hereof,
Actuarial Equivalent shall have the same definition as in the Pension Plan.
3.4 Optional Forms of Retirement Benefit: Notwithstanding Section 3.3
herein to the contrary, a Participant may elect to receive the Actuarial
Equivalent of his Retirement Benefit in accordance with the optional forms of
payment specified below, by filing an election with the Committee at any time on
or before the earlier of (A) last day of the calendar year immediately preceding
the date on which his/her Retirement Benefit would commence in absence of an
election under the Section 3.4 ("Pension Date") or (B) six months before his/her
Pension Date (such latest permitted election date is the "Election Deadline").
The election shall be on a form provided or permitted by the Committee in which,
if
4
<PAGE>
<PAGE>
applicable, the Participant shall designate a person to be his/her beneficiary.
The Participant may change or revoke an election under this Section 3.4 at any
time on or before the Participant's Election Deadline. An election under this
Section shall be irrevocable after the Participant's Election Deadline and shall
be ineffective if the Participant dies before his/her Pension Date.
If the Participant does not have an election in effect prior to the
Participant's Election Deadline, his/her Pension shall be paid in accordance
with Section 3.3 as applicable.
(a) Lump Sum Option. Either (i) an immediate single lump sum
payment on his/her Pension Date in an amount that is the
Actuarial Equivalent of the Retirement Benefit described in
Section 3.1 or (ii) a deferred lump sum payable at such date
as the Participant shall elect in an amount equal to the
amount determined for an immediate lump sum increased or
decreased by the investment return for income, gains, losses
and expenses which would result from investment of the
Participant's immediate lump sum amount in accordance with the
Participant's investment elections, to be made substantially
in accordance with the provisions of section 3.5 hereof. If
the Participant dies after his/her Pension Date and before
receiving an immediate or deferred lump sum, payment shall be
made to the beneficiary designated by the Participant under
Section 3.6 hereof as soon as possible after the Participant's
death in an amount equal to the immediate lump sum increased
or decreased by the investment return for income, gains,
losses and expenses determined in accordance with the
Participant's investment election through the date preceding
the date of the payout.
5
<PAGE>
<PAGE>
(b) Variable Annuity Option.
(1) Life Annuity Option.
A monthly amount payable to the Participant for life
that is initially equal to 1/12 of the Participant's
annual Retirement Benefit (the "Initial Annuity
Amount"). The monthly amount payable after each
December 31 following the date on which the
Retirement Benefit commences in the form of the
variable annuity option, shall be adjusted to equal
the Initial Annuity Amount multiplied by the ratio of
x to y where:
x equals the amount of the single lump sum
that would have been payable to the
Participant and he/she elected the immediate
lump sum option (the "Lump Sum Amount")
payable on his/her Pension Date plus income
and gains and less expenses and losses
attributable thereto assuming that such
amount was invested in the investment fund
or funds selected by the Participant in
accordance with his/her investment election
made in accordance with Section 3.5, and
reduced by the aggregate amount of any
Pension payments made to the Participant
prior to the applicable December 31; and
y equals the Lump Sum Amount plus income
attributable thereto assuming such amount
earned income at a rate of 6% compounded
annually and reduced by the aggregate amount
of any Pension payments that would have been
made to the Participant prior to the
applicable December 31 if the Participant
were receiving his/her Retirement Benefit in
the form of a single life person described
in section 3.1.
As soon as practicable following the death of the Participant,
the Beneficiary designated by the Participant in accordance
with Section 3.6 shall receive
6
<PAGE>
<PAGE>
a single sum payment equal to x (as determined above) taking
into account all income, gains, losses and expenses and
distributions prior to the date of payment to the Beneficiary.
(2) Installment Payment Option. A Participant may elect
to receive his/her Lump Sum Amount in installment
payments over a period not in excess of fifteen
years. Installments shall be payable annually (or
more frequently if permitted by the Committee), in an
amount equal to the quotient of the Lump Sum Amount
(as adjusted on each December 31 in accordance with
the following sentence) immediately prior to payment
of the installment divided by the number of remaining
installment payments. As of each December 31 after
the first installment is paid, the Lump Sum Amount
shall be increased for the income, gains and reduced
by the expenses and losses that would be attributable
to the Lump Sum Amount if such amount were invested
in the investment fund or funds selected by the
Participant in accordance with the investment
election made in accordance with Section 3.5 and
reduced by the aggregate amount of any payments made
to the Participant prior to the applicable December
31. As soon as practicable following the death of the
Participant, the Participant's Beneficiary shall
receive a single sum payment equal to the Lump Sum
Amount adjusted to take into account all income,
gains, losses and expenses and distributions prior to
the date of payment of the Beneficiary.
3.5 Investment Election: A Participant must make an investment election
at the time he/she elects the variable annuity option or a deferred lump sum
election. The investment election shall designate the investment fund or funds
in which part or all of his/her Lump Sum Amount shall be treated as invested.
The available investment funds shall consist of any security or securities
issued by an investment company registered under the Investment Company Act of
1940, any separate account or accounts of any insurance company or any other
investment vehicle permitted by the Committee. A Participant's investment
election shall remain in
7
<PAGE>
<PAGE>
effect until such time as a change in investment election is filed with and
approved by the Committee. A change in investment election must be filed with
the Committee on a form prescribed by the Committee and shall become effective
on such date as it is approved by the Committee. While the Company, in the
discretion of the Committee, may direct the Trustee of the grantor trust for the
Plan to make investments in the mutual funds, separate accounts or other
permitted investment vehicle designated by Participants, the Company and Trustee
shall not be under any obligation to make such investments and any such
investments shall remain as investments of the Trust.
3.6 Beneficiary: A Participant may designate a Beneficiary to receive
any benefits which may become payable under Section 3.4 after the death of the
Participant. To be effective, any Beneficiary designation shall be filed in
writing with the Committee. A Participant may revoke an existing Beneficiary
designation by filing another written Beneficiary designation with the
Committee. The latest Beneficiary designation received by the Committee shall be
controlling. If no Beneficiary is named by a Participant or if he/she survives
all of his/her named Beneficiaries, any benefits payable after his/her death
shall be paid to the Participant's spouse and if none his/her estate.
3.7 Actuarial Equivalent: For purposes of determining Optional Forms of
Payment under Section 3.4 hereof, an Actuarial Equivalent benefit shall be
determined using a 5-1/2% interest rate assumption, the GAM '83 mortality table,
and assuming that a single Participant has a spouse who is the same age as the
Participant.
3.8 Supplemental ESOP Contribution: The Company will make a
Supplemental ESOP Contribution on behalf of the Participant each year equal to
the fair market value of the excess, if any, of:
(a) The number of shares of Company Stock (as defined in the ESOP) that
would have been contributed to the Participant's Account in the ESOP that year
but for 1) the limitations on annual contributions set forth in Section 415 of
the Code as in effect at the time such contributions would have been made and 2)
the limitations on annual compensation that must be taken into account that year
in determining the maximum annual contribution that may be made to the ESOP
under Section 401(a)(17) of the Code; over
8
<PAGE>
<PAGE>
(b) The number of shares of Company Stock actually contributed to
the ESOP that year on behalf of the Participant.
The "fair market value" of the shares of Company Stock shall
mean the "fair market value" as defined in the ESOP. The fair market value, for
the purposes of the Supplemental ESOP Contribution under this Section 3.4 shall
be determined as of December 31 of the year for which such contribution is to be
made, but in no event shall the fair market value of any convertible preferred
stock contributed to the Participant's account in the ESOP be less than $13.00
per share. Such contributions shall earn interest, credited semi-annually on
January and July 1, at the annual interest rate of eight and one-quarter (8
1/4%) percent. The Supplemental ESOP Contributions made under this Section 3.4
and all interest credited thereon shall collectively be referred to as the
"Supplemental ESOP Benefit."
3.9 Form and Time of Payment of Supplemental ESOP Benefit: The
Supplemental ESOP Benefit made on behalf of each Participant will be payable to
such Participant in a lump sum on the sixtieth (60th) day following the earlier
of the Participant's termination of employment with the Company or the
Participant's death.
3.10 Vesting: A Participant shall be vested in his Supplemental Pension
Benefit to the extent he is vested in his pension benefit under the Pension
Plan. A Participant shall be vested in his Supplemental ESOP Benefit to the
extent he is vested in his account balance in the ESOP.
3.11 Automatic Acceleration of Retirement Benefits: Notwithstanding any
other provisions of the Plan, the Participant's Retirement Benefits under the
Plan shall become due and payable immediately upon the earlier of the following
two events:
a) the Change of Control of the Company;
b) a finding by the Internal Revenue Service that the
Retirement Benefits under the Plan are taxable.
The Committee shall pay the amounts due under this Section
3.11 within 10 days after the occurrence of one of the events specified in this
Section.
9
<PAGE>
<PAGE>
For the purpose hereof, Change of Control shall have the same
meaning as provided in the Grantor Trust Agreement, dated January 1, 1989.
ARTICLE IV
4.1 Benefits Not Currently Funded: Nothing in this Plan will be
construed to create a trust or to obligate the Company or any other entity to
segregate a fund, purchase an insurance contract, or in any other way currently
to fund the future payment of any benefits hereunder, nor will anything herein
be construed to give the Participant or any other person rights to any specific
assets of the Company.
4.2 Grantor Trust: Notwithstanding Section 4.1, the Company in its sole
discretion may establish a grantor trust of which it is treated as the owner
under Section 671 of the Internal Revenue Code (a "grantor trust") to provide
for the payment of benefits hereunder, subject to such terms and conditions as
the Company may deem necessary or advisable to ensure that benefits are not
includable, by reason of the trust, in income of trust beneficiaries before
actual distribution and that the existence of the trust does not cause the Plan
or any other arrangement to be considered funded for purposes of Title I of
ERISA.
ARTICLE V
ADMINISTRATION
5.1 Administration: The Plan shall be administered by the Benefits
Committee (sometimes referred to herein as the Committee) consisting of the
Chairman and not less than three non-salaried members of the Board of Directors
of the Employer, who shall be appointed annually by the Board of Directors of
the Employer, upon recommendation by the Chairman. The Committee members shall
hold office until their successors have been duly appointed or until death,
resignation or removal.
5.2 Duties: The Committee shall perform the required duties and it
shall have the necessary powers of administering the Plan and carrying out the
provisions thereof.
10
<PAGE>
<PAGE>
5.3 Powers: The powers of the Committee shall be as follows:
(a) To determine any question arising in connection with the
Plan, and its decision or action in respect thereof shall be final, conclusive,
and binding upon the Company, and the Participant.
(b) To engage the services of counsel or attorney (who may be
counsel or attorney for the Company), and an Actuary, if it deems necessary, and
such other agents or assistants as it deems advisable for the proper
administration of the Plan. The Committee may direct that such reasonable
expenses as may be incurred in the administration of the Plan shall be paid out
of the funds of the Plan, unless the Company shall pay them.
(c) To receive from the Company and from Participants such
information as shall be necessary for the proper administration of the Plan.
5.4 Claims Procedure: The Committee shall make all determinations as to
the right of any person to a benefit. Any denial by the Committee of the claim
for benefits under the Plan by a Participant or beneficiary shall be stated in
writing by the Committee and delivered or mailed to the Participant or
beneficiary. Such notice shall set forth the specific reasons for the denial,
written to the best of the Committee's ability in a manner that may be
understood without legal or actuarial counsel. In addition, the Committee shall
afford a reasonable opportunity to any Participant or his beneficiary whose
claim for benefits has been denied for a review of the decision denying the
claim.
5.5 Records and Reports: The Committee shall exercise such authority
and responsibility as it deems appropriate in order to comply with ERISA and
governmental regulations issued thereunder relating to the following: records of
Participant's Service, Accrued Benefits and the percentage of such benefits
which are nonforfeitable under the Plan; notifications to Participants; and any
reports to the Department of Labor.
11
<PAGE>
<PAGE>
ARTICLE VI
6.1 Non-Alienation of Benefits: The right to receive a benefit under
the Plan shall not be subject in any manner to anticipation, alienation, or
assignment, nor shall such right be liable for or subject to debts, contracts,
liabilities, engagements or torts. The foregoing shall not apply to any benefit
payable pursuant to a qualified domestic relations order, as defined in Section
414(p) of the Code with respect to which any benefits hereunder are determined
by the Board to be subject.
ARTICLE VII
7.1 Amendments and Termination: The Company reserves the right at any
time by action of the Board to terminate the Plan or to amend its provisions in
any way. Notwithstanding the foregoing, no termination or amendment of the Plan
may reduce the benefits payable under the Plan to the Participant (or his
Eligible Spouse) if the Participant has retired prior to such termination or
amendment or reduce the benefit to be paid with respect to the Participant on
the date of such termination or amendment below the amount which would have been
paid with respect to the Participant if his employment had terminated on the day
before such termination or amendment.
12
<PAGE>
<PAGE>
ARTICLE VIII
MISCELLANEOUS
8.1 No Right to Employment: This Plan shall not be construed as
providing any Participant with the right to be retained in the Company's employ
or to receive any benefit not specifically provided hereunder.
8.2 No Affect on Other Compensation and Benefits: Nothing contained
herein shall exclude or in any manner modify or otherwise affect any existing or
future rights of any Participant to participate in and receive the benefits of
any compensation, bonus, pension, life insurance, medical and hospitalization
insurance or other employee benefit plan or program to which he otherwise might
be or become entitled as an officer and/or employee of the Company.
8.3 No Amendment to Pension Plan or ESOP: This Plan shall not be deemed
to constitute an amendment to, or a part of, the Pension Plan or the ESOP. All
references hereunder to the Pension Plan and the ESOP shall include any amended
or successor plan or plans maintained by the Company, the terms of which may be
applicable at any time to a Participant's Retirement. However, if the Pension
Plan or the ESOP terminates, merges with, or is superseded by a successor plan,
and as a result thereof the amount of the Retirement Benefit or the Supplemental
ESOP Benefit to be paid to any Participant hereunder would be reduced or
calculated on a different basis, or commence at a later date or dates, such
Retirement Benefit and the Supplemental ESOP Benefit shall not be less than an
amount calculated pursuant to the provisions of this Plan and in accordance with
the terms of the Pension Plan and ESOP as in effect on the date on which occurs
such termination, merger or suppression.
8.4 Governing Law: This Plan shall be construed in accordance with and
governed by the laws of the State of New York, without regard to its conflicts
of law principles.
8.5 Disability: If the Company shall find that any Participant is
unable to care for his affairs because of illness or accident, any payment due
hereunder (unless a prior claim therefor shall have been made by a duly
appointed guardian, committee, or other legal representative) may be paid to
such Participant's
13
<PAGE>
<PAGE>
spouse, child, brother or sister, or to any person deemed by the Company to have
incurred expense for such person otherwise entitled to payment. Any such payment
shall be a complete discharge of the liabilities of the Company hereunder.
8.6 Status: This Plan is not intended to satisfy the requirements for
qualification under Section 401(a) of the Code. It is intended to be a
non-qualified plan which is, in part, an unfunded excess benefit plan as defined
in ERISA Section 3(36) and in part an unfunded "top hat" plan exempt from the
participation, vesting, funding and fiduciary requirements of ERISA pursuant to
Department of Labor Regulations, Section 2520.104-23(a). The Plan shall be
construed and administered as to effectuate this intent. To the extent the
Participant or any other person acquires a right to receive benefits under this
Plan, such right shall be no greater than the right of any unsecured creditor of
the Company.
8.7 Expenses: All expenses of establishing and administering the Plan
shall be paid by the Company.
8.8 Successors: The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume the Company's obligations hereunder in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place. As used in the Plan, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Article
8 or which otherwise becomes bound by all the terms and provisions of the Plan
by operation of law.
14
<PAGE>
<PAGE>
EXHIBIT A
THE GREATER NEW YORK SAVINGS BANK
LONG-TERM INCENTIVE PROGRAM
------------------------
AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 21, 1990
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
PURPOSE
SECTION 1.1 General Purpose of the Incentive Program................................................ 1
ARTICLE II
DEFINITIONS
SECTION 2.1 Appreciation Right...................................................................... 1
SECTION 2.2 Bank.................................................................................... 1
SECTION 2.3 Board................................................................................... 1
SECTION 2.4 Cause................................................................................... 1
SECTION 2.5 Code.................................................................................... 1
SECTION 2.6 Committee............................................................................... 1
SECTION 2.7 Conversion Price........................................................................ 1
SECTION 2.8 Disability.............................................................................. 1
SECTION 2.9 Eligible Employee....................................................................... 1
SECTION 2.10 Exercise Price.......................................................................... 1
SECTION 2.11 Fair Market Value....................................................................... 1
SECTION 2.12 Incentive Stock Option.................................................................. 2
SECTION 2.13 Key Executive........................................................................... 2
SECTION 2.14 Non-Qualified Stock Option.............................................................. 2
SECTION 2.15 Option.................................................................................. 2
SECTION 2.16 Option Period........................................................................... 2
SECTION 2.17 Outside Director........................................................................ 2
SECTION 2.18 Performance Award....................................................................... 2
SECTION 2.19 Performance Cycle....................................................................... 2
SECTION 2.20 Performance Unit........................................................................ 2
SECTION 2.21 Incentive Program....................................................................... 2
SECTION 2.22 Retirement.............................................................................. 2
SECTION 2.23 Share................................................................................... 2
SECTION 2.24 The Greater............................................................................. 2
SECTION 2.25 Unit Value Schedule..................................................................... 2
ARTICLE III
ADMINISTRATION
SECTION 3.1 Committee............................................................................... 2
SECTION 3.2 Committee Action........................................................................ 2
SECTION 3.3 Committee Responsibilities.............................................................. 3
ARTICLE IV
PERFORMANCE AWARDS
SECTION 4.1 In General.............................................................................. 3
SECTION 4.2 Performance Cycle....................................................................... 3
SECTION 4.3 Unit Value Schedule..................................................................... 3
SECTION 4.4 Payment of Performance Awards........................................................... 4
SECTION 4.5 Termination of Employment During Performance Cycle...................................... 4
</TABLE>
i
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE V
STOCK OPTIONS
SECTION 5.1 In General.............................................................................. 4
SECTION 5.2 Available Shares........................................................................ 4
SECTION 5.3 Size of Option.......................................................................... 4
SECTION 5.4 Exercise Price.......................................................................... 5
SECTION 5.5 Option Period........................................................................... 5
SECTION 5.6 Method of Exercise...................................................................... 5
SECTION 5.7 Limitations on Options.................................................................. 6
SECTION 5.8 Vesting of Options...................................................................... 6
ARTICLE VI
APPRECIATION RIGHTS
SECTION 6.1 In General.............................................................................. 6
SECTION 6.2 Exercise of Appreciation Rights......................................................... 7
SECTION 6.3 Limitations on Exercise................................................................. 7
SECTION 6.4 Effect of Exercise...................................................................... 7
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.1 Termination............................................................................. 7
SECTION 7.2 Amendment............................................................................... 7
SECTION 7.3 Adjustments in the Event of a Reorganization or Recapitalization........................ 7
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.1 Status as an Employee Benefit Plan...................................................... 8
SECTION 8.2 No Right to Continued Employment........................................................ 8
SECTION 8.3 Construction of Language................................................................ 8
SECTION 8.4 Governing Law........................................................................... 8
SECTION 8.5 Headings................................................................................ 9
SECTION 8.6 Non-Alienation of Benefits.............................................................. 9
SECTION 8.7 Taxes................................................................................... 9
SECTION 8.8 Approval of Shareholders and Superintendent of Banks.................................... 9
SECTION 8.9 Notices................................................................................. 9
SECTION 8.10 Effective Date.......................................................................... 9
</TABLE>
ii
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
LONG-TERM INCENTIVE PROGRAM
ARTICLE I
PURPOSE
SECTION 1.1 General Purpose of the Incentive Program. The purpose of the
Incentive Program is to promote the growth and profitability of the Bank and to
provide certain key executives of the Bank with an incentive to achieve
corporate objectives, to attract and retain key executives of outstanding
competence and to provide officers and employees with an equity interest in the
Bank.
ARTICLE II
DEFINITIONS
The following definitions shall apply for purposes of the Incentive
Program, unless a different meaning is plainly indicated by the context:
SECTION 2.1 Appreciation Right means a right granted pursuant to section
6.1.
SECTION 2.2 Bank means The Greater and any direct or indirect, wholly owned
subsidiary of The Greater to which the Board shall specifically extend this
Incentive Program.
SECTION 2.3 Board means the Board of Directors of The Greater.
SECTION 2.4 Cause means an individual's (i) willful failure to perform his
assigned duties and his failure to cure such failure to perform within a
reasonable period following notice thereof from the Bank, or (ii) intentional
dishonest or illegal conduct in connection with his performance of services for
the Bank.
SECTION 2.5 Code means the Internal Revenue Code of 1986, as amended, and
the applicable rulings and regulations thereunder (including the corresponding
provisions of any succeeding law).
SECTION 2.6 Committee means the committee described in section 3.1.
SECTION 2.7 Conversion Price means, with respect to a Share, the price per
Share at which Shares were offered for sale to the depositors of The Greater in
the subscription offering of such Shares that was made in connection with the
conversion of The Greater from a New York mutual savings bank to a New York
stock-form savings bank.
SECTION 2.8 Disability means a condition of total incapacity, mental or
physical, for further performance of duty with the Bank which the Committee
shall have determined, on the basis of competent medical evidence, is likely to
be permanent.
SECTION 2.9 Eligible Employee means an employee or an officer of the Bank,
including a member of the Board who is an officer or an employee of the Bank,
whom the Committee determines to have significant supervisory responsibilities
within the Bank.
SECTION 2.10 Exercise Price means the price per Share at which Shares
subject to an Option may be purchased upon exercise of the Option, determined in
accordance with section 5.4.
SECTION 2.11 Fair Market Value means, with respect to a Share on a
specified date:
(a) the average of the high and low quoted sales prices on the date in
question (or, if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) on the principal United
States securities exchange on which the Shares are listed or admitted to
trading; or
(b) if the Shares are not listed or admitted to trading on any such
exchange, the closing bid quotation with respect to a Share on such date on
the National Association of Securities Dealers, Inc., Automated Quotation
System, or, if no such quotation is provided, on another similar system,
selected by the Committee, then in use; or
(c) if sections 2.11(a) and (b) are not applicable, the fair market
value of a Share as the Committee may determine, taking into account, among
other things, the difference between the
<PAGE>
<PAGE>
market value and the book value of the shares of common stock of financial
institutions comparable to the Bank and the trend of the Bank's earnings
and its book value.
SECTION 2.12 Incentive Stock Option means a right to purchase Shares that
is granted pursuant to section 5.1 and that is designated by the Committee to be
an Incentive Stock Option and is intended to satisfy the requirements of section
422A(b) of the Code.
SECTION 2.13 Key Executive means an officer of the Bank who has a major
executive responsibility for the performance of one or more units or departments
of the Bank which contribute significantly to the annual net income of the Bank
and shall include, without limiting the generality of the foregoing, the
Chairman and Chief Executive Officer, the Group Presidents, the Presidents of
direct or indirect, wholly owned significant subsidiaries of the Bank and all
Senior Vice Presidents.
SECTION 2.14 Non-Qualified Stock Option means a right to purchase Shares
that is granted pursuant to section 5.1 and that is designated by the Committee
to be a Non-Qualified Stock Option and is not intended to satisfy the
requirements of section 422A(b) of the Code.
SECTION 2.15 Option means either an Incentive Stock Option or a
Non-Qualified Stock Option.
SECTION 2.16 Option Period means the period during which an Option or an
Appreciation Right may be exercised, determined in accordance with section 5.5.
SECTION 2.17 Outside Director means a member of the Board who is not
currently, and has not been at any time during the preceding one-year period, an
officer or employee of the Bank and, in addition, who is a 'disinterested'
person within the meaning of section 335.411(c)(4)(iii) (or any other comparable
or succeeding provision) of the Federal Deposit Insurance Corporation
regulations.
SECTION 2.18 Performance Award means the cash payment made to a Key
Executive, pursuant to section 4.4, following the end of a Performance Cycle.
SECTION 2.19 Performance Cycle means a period of three calendar years, as
designated by the Board pursuant to section 4.2.
SECTION 2.20 Performance Unit means a unit of measure granted to a Key
Executive which shall be used to determine the amount of the Performance Award
to be paid to such Key Executive, pursuant to section 4.4.
SECTION 2.21 Incentive Program means The Greater New York Savings Bank
Long-Term Incentive Program.
SECTION 2.22 Retirement means retirement under the Retirement Plan of The
Greater New York Savings Bank in the Retirement System for Savings Institutions
or under the Plan of Pensions and Retirement Benefits of The Greater New York
Savings Bank.
SECTION 2.23 Share shall mean a share of common stock of The Greater.
SECTION 2.24 The Greater means The Greater New York Savings Bank and any
successor thereto, including a company which holds all the stock of The Greater.
SECTION 2.25 Unit Value Schedule means the schedule approved by the Board,
pursuant to section 4.3, for determining the value of a Performance Unit granted
with respect to a specified Performance Cycle, in accordance with Article IV.
ARTICLE III
ADMINISTRATION
SECTION 3.1 Committee. The Incentive Program shall be administered by a
Committee consisting of not less than three nor more than the entire number of
Outside Directors, as the Board shall from time to time designate and determine.
SECTION 3.2 Committee Action. The Committee shall hold meetings, at least
annually, and may make such administrative rules and regulations as it may deem
proper. A majority of the members of the Committee shall constitute a quorum,
and the action of a majority of the members of the Committee present at a
meeting at which a quorum is present, as well as actions taken pursuant to the
unanimous written consent of all of the members of the Committee without holding
a meeting, shall be
2
<PAGE>
<PAGE>
deemed to be actions of the Committee. All actions of the Committee shall be
final and conclusive and shall be binding upon the Bank and all other interested
parties. Any person dealing with the Committee shall be fully protected in
relying upon any written notice, instruction, direction or other communication
signed by the secretary of the Committee and one member of the Committee, by two
members of the Committee or by a representative of the Committee authorized to
sign the same in its behalf.
SECTION 3.3 Committee Responsibilities. Subject to the terms and conditions
of the Incentive Program and such limitations as the Board may from time to time
impose, the Committee shall be responsible for the overall management and
administration of the Incentive Program and shall have such authority as shall
be necessary or appropriate in order to carry out its responsibilities,
including, without limitation, the authority:
(a) to interpret and construe the Incentive Program, and to determine
all questions that may arise under the Incentive Program as to eligibility
for participation in the Incentive Program, the amount of Options,
Appreciation Rights and Performance Units, if any, to be granted, and the
terms and conditions thereof;
(b) to adopt rules and regulations and to prescribe forms for the
operation and administration of the Incentive Program; and
(c) to take any other action not inconsistent with the provisions of
the Incentive Program that it may deem necessary or appropriate.
ARTICLE IV
PERFORMANCE AWARDS
SECTION 4.1 In General. Performance Units shall be granted only to Key
Executives. The number of Performance Units granted to each Key Executive shall
be determined in the discretion of the Committee. For the Performance Cycle
beginning January 1, 1988, the Committee may grant Performance Units at any time
prior to May 15, 1988, subject to such adjustments, if any, as the Committee
deems appropriate to take into account the lapse of time between January 1, 1988
and the date on which such Performance Units are granted. Performance Units for
Performance Cycles beginning after 1988 shall be granted prior to the beginning
of the Performance Cycle to which such Performance Units relate.
Performance Units shall be evidenced by a written agreement which shall:
(a) specify the number of Performance Units granted;
(b) specify the Performance Cycle with respect to which the
Performance Units are being granted;
(c) set forth the Unit Value Schedule to be used to determine the
value of a Performance Unit at the end of the Performance Cycle; and
(d) contain such other terms and conditions not inconsistent with the
Incentive Program as the Committee may, in its discretion, prescribe.
SECTION 4.2 Performance Cycle. From time to time, the Board may, in its
discretion, establish a Performance Cycle or Performance Cycles. Each
Performance Cycle shall be for a period of calendar years, commencing on January
1 of the first year in the Performance Cycle and ending on December 31 of the
last year in the Performance Cycle. Not more than one Performance Cycle shall
begin on January 1 of any calendar year and not more than one Performance Cycle
shall end on December 31 of any calendar year. Not more than three Performance
Cycles shall be in effect at any time.
SECTION 4.3 Unit Value Schedule. Prior to May 15, 1988, in the case of the
Performance Cycle beginning January 1, 1988, and prior to the commencement of a
Performance Cycle, in all other cases, the Board shall establish a Unit Value
Schedule for determining the value of Performance Units to be granted with
respect to such Performance Cycle. The Unit Value Schedule shall specify the
value of a Performance Unit at target levels of performance established for the
Bank based on a combination of financial and other objectives set by the Board.
3
<PAGE>
<PAGE>
SECTION 4.4 Payment of Performance Awards. As soon as practicable following
the end of a Performance Cycle, the value of a Performance Unit granted with
respect to such Performance Cycle shall be determined in accordance with the
Unit Value Schedule established by the Board for such Performance Cycle, and a
Key Executive who has been granted Performance Units for such Performance Cycle
shall receive a Performance Award from the Bank in the form of a cash payment
(including check, bank draft or money order) equal to the value of a Performance
Unit as determined according to the Applicable Unit Value Schedule, multiplied
by the number of Performance Units granted to such Key Executive for the
Performance Cycle.
SECTION 4.5 Termination of Employment During Performance Cycle. (a) Except
as may be provided to the contrary in section 4.5(b), no Performance Award shall
be paid with respect to a Performance Cycle to a Key Executive who ceases to be
employed by the Bank prior to the end of the applicable Performance Cycle.
(b) Notwithstanding section 4.5(a), if prior to the end of a Performance
Cycle with respect to which a Key Executive has been granted Performance Units,
such Key Executive's employment with the Bank ceases as a result of his death,
Disability or Retirement, or as a result of his discharge by the Bank for any
reason other than for Cause, the Committee may, in its discretion, determine
that all or any portion of the Performance Award that would have been
attributable to such Key Executive's Performance Units shall be paid to the Key
Executive (or his beneficiary) at the end of the Performance Cycle, or, in lieu
thereof, that a cash settlement in respect of the Performance Award shall be
paid to the Key Executive (or his beneficiary) as soon as it is practicable
following termination of employment with the Bank.
ARTICLE V
STOCK OPTIONS
SECTION 5.1 In General. Subject to the limitations of the Incentive
Program, the Committee may, in its discretion, grant to an Eligible Employee an
Option to purchase Shares. Any such Option shall be evidenced by a written
agreement which shall:
(a) designate the Option as either an Incentive Stock Option or a
Non-Qualified Stock Option;
(b) specify the number of Shares covered by the Option;
(c) specify the Exercise Price, determined in accordance with section
5.4, for the Shares subject to the Option;
(d) specify the Option Period determined in accordance with section
5.5;
(e) set forth specifically or incorporate by reference the applicable
provisions of the Incentive Program; and
(f) contain such other terms and conditions not inconsistent with the
Incentive Program as the Committee may, in its discretion, prescribe.
SECTION 5.2 Available Shares. Subject to section 7.3, the maximum aggregate
number of Shares with respect to which Options may be granted at any time shall
be equal to the excess of:
(a) 1,031,235 Shares; over
(b) the sum of:
(i) the number of Shares with respect to which previously granted
Options may then or may in the future be exercised; plus
(ii) the number of Shares with respect to which previously granted
Options have been exercised.
For purposes of this section 5.2, an Option shall not be considered as having
been exercised to the extent that such Option terminates by reason other than
the purchase of the related Shares.
SECTION 5.3 Size of Option. Subject to section 5.2 and such limitations as
the Board may from time to time impose, the number of Shares as to which an
Eligible Employee may be granted Options shall be determined by the Committee in
its discretion.
4
<PAGE>
<PAGE>
SECTION 5.4 Exercise Price. The price per Share at which an Option may be
exercised shall be determined by the Committee, in its discretion; provided,
however, that the Exercise Price of a Non-Qualified Stock Option granted in
connection with the conversion of The Greater from a New York mutual savings
bank to a New York stock-form savings bank shall be the Conversion Price; and
provided, further, that the Exercise Price of each other Option granted
hereunder shall not be less than 100 percent of the Fair Market Value of a Share
on the date such Option is granted.
SECTION 5.5 Option Period. The Option Period during which an Option may be
exercised shall commence on the first anniversary of the date on which the
Option is granted and shall expire on the earliest of:
(a) the date specified by the Committee in the Option agreement;
(b) the date of the Option holder's termination of employment with the
Bank for Cause;
(c) the last day of the one-year period commencing on the date of the
Option holder's termination of employment for reason of death, Retirement
or Disability;
(d) the last day of the 60-day period commencing on the date of the
Option holder's termination for a reason other than a reason specified in
section 5.5(b) or (c);
(e) the last day of the one-year period commencing on the date of the
Option holder's death, in the event that the Option holder dies during a
period of time after termination of employment when the Option is
exercisable by reason of the Retirement or Disability provisions of section
5.5(c) or by reason of section 5.5(d); and
(f) the last day of the ten-year period commencing on the date on
which the Option was granted.
The Committee may, in its discretion, extend the post-termination exercise
periods described in sections 5.5(c), (d) and (e) above; provided, however, that
no such extension shall result in an Option being exercisable after the date
specified in section 5.5(f) above. An Option which, because of the operation of
this section 5.5, is exercisable after the Option holder's termination of
employment with the Bank shall be exercisable only to the extent it was
exercisable on the date of the Option holder's termination of employment.
SECTION 5.6 Method of Exercise. (a) Subject to the limitations of the
Incentive Program and the Option agreement, an Option holder may, at any time
during the Option Period, exercise his right to purchase all or any part of the
Shares to which the Option relates; provided, however, that the minimum number
of Shares which may be purchased shall be 100, or, if less, the total number of
Shares relating to the Option which remain unpurchased. An Option holder shall
exercise an Option to purchase Shares by:
(i) giving written notice to the Committee, in such form and manner as
the Committee may prescribe, of his intent to exercise the Option;
(ii) delivering to the Committee full payment for the Shares as to
which the Option is to be exercised; and
(iii) satisfying such other conditions as may be prescribed in the
Option agreement.
Payment shall be made, at the election of the Eligible Employee, in any one or
any combination of the following:
(i) cash, certified check, money order or bank draft drawn payable to
the order of The Greater;
(ii) Shares held by the Eligible Employee for at least 6 months prior
to exercise of the option, valued at its Fair Market Value on the date of
exercise;
(iii) through simultaneous sale through a broker of shares acquired on
exercise, as permitted under Regulation T of the Federal Reserve Board.
(b) When the requirements of section 5.6(a) have been satisfied, the
Committee shall take such action as is necessary to cause The Greater to issue a
stock certificate evidencing the Option holder's ownership of such Shares,
legended to reflect such restrictions as the Committee shall determine are
required by applicable law or by the terms of the Plan or applicable Option
agreement. The person exercising the Option shall have no right to vote or to
receive dividends, nor have any other rights with respect to the Shares, prior
to the date as of which such Shares are transferred to such person on the stock
transfer records of The Greater, and no adjustments shall be made for any
dividends or other rights for which the record date is prior to the date as of
which such transfer is effected, except as may be required under section 7.3.
5
<PAGE>
<PAGE>
SECTION 5.7 Limitations on Options. (a) To the extent required by New York
State Banking Law, Shares acquired in connection with the exercise of an Option
shall not be transferable, other than by will or by the laws of descent and
distribution, during the one-year period commencing on the date of acquisition;
provide, however, that the provisions of this section 5.7(a) shall not apply if
the application of this section has been waived in writing by the Superintendent
of Banks of the State of New York.
(b) An Option by its terms shall not be transferable by the Option holder
other than by will or by the laws of descent and distribution, and shall be
exercisable, during the lifetime of the Option holder, only by the Option
holder.
(c) No person shall be granted an Option if, immediately prior to such
grant, he or she owns 10 percent or more of the total combined voting power of
all classes of stock of The Greater.
(d) The Bank's obligation to deliver Shares with respect to an Option
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Option holder to whom such
Shares are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of applicable federal,
state or local law. It may be provided that any such representation shall become
inoperative upon a registration of the Shares or upon the occurrence of any
other event eliminating the necessity of such representation. The Bank shall not
be required to deliver any Shares under the Incentive Program prior to (i) the
admission of such Shares to listing on any stock exchange on which Shares may
then be listed, or (ii) the completion of such registration or other
qualification under any state or federal law, rule or regulation as the
Committee shall determine to be necessary or advisable.
SECTION 5.8 Vesting of Options. The Committee may, in its discretion,
provide in the applicable Option agreement that Options granted to an Option
holder shall vest over such period of time as may be specified in a schedule of
vesting set forth in such agreement, and Options granted subject to such a
vesting schedule may thereafter be exercised (subject to section 5.7(d) hereof),
only to the extent that the Option holder is vested in such Options.
ARTICLE VI
APPRECIATION RIGHTS
SECTION 6.1 In General. Subject to the limitations on the exercise of
Appreciation Rights set forth in Section 6.3 hereof, if the Committee grants an
Eligible Employee an Option, it may, in its discretion, grant to such Eligible
Employee an Appreciation Right relating to all or any portion of the Shares
subject to such Option. The terms of such Appreciation Right shall be
incorporated in full into the corresponding Option agreement and shall include:
(a) the number of Shares covered by the Appreciation Right;
(b) the Exercise Price at which the Appreciation Right may be
exercised;
(c) if the Appreciation Right is granted in tandem with an Incentive
Stock Option, then, to the extent required by the Code, a statement that
(i) the Appreciation Right shall expire no later than the Incentive Stock
Option, (ii) the Appreciation Right shall not be exercisable for more than
100 percent of the difference between the Exercise Price and the Fair
Market Value of the Shares subject to the Incentive Stock Option, (iii) the
Appreciation Right shall be transferable only to the extent that the
Incentive Stock Option is transferable, (iv) the Appreciation Right shall
be exercisable only when, and to the extent that, the Incentive Stock
Option is exercisable and (v) the Appreciation Right shall be exercisable
only when the Fair Market Value of the corresponding Shares exceeds the
Exercise Price; and
(d) such other terms and conditions not inconsistent with the
Incentive Program as the Committee may, in its discretion, prescribe.
Except as provided otherwise in this Article VI, Appreciation Rights shall be
exercisable in accordance with and subject to the terms and conditions imposed
under the Incentive Program and the relevant Option agreement.
6
<PAGE>
<PAGE>
SECTION 6.2 Exercise of Appreciation Rights. An individual in possession of
an Appreciation Right who desires to exercise such Appreciation Right shall do
so by delivering to the Committee advance written notice, in the form and manner
prescribed by the Committee, of his intent to exercise the Appreciation Right
and of the proposed date of exercise. On the date of exercise or as soon
thereafter as is practicable, the Bank shall pay to the person exercising the
Appreciation Right an amount equivalent to the excess of (a) the Fair Market
Value of the Shares on the date of exercise, over (b) the Exercise Price of such
Shares. Payment may, in the Committee's discretion, be made in cash (including
check, bank draft or money order), in Shares equivalent in value to the excess
of such Fair Market Value over such Exercise Price, or in a combination of cash
and Shares which, together, are equivalent in value to the excess of such Fair
Market Value over such Exercise Price.
SECTION 6.3 Limitations on Exercise. If and to the extent required by law,
an Appreciation Right shall not be exercisable, and the written agreement
governing such Appreciation Right shall provide that such Appreciation Right
shall not be exercised, except in the event of a 'change in control' of The
Greater. For purposes of this section 6.3, the term 'change in control' of The
Greater shall mean:
(a) the reorganization, merger or consolidation of The Greater with
one or more other banks, savings banks, savings and loan associations or
other financial institutions, other than a transaction following which at
least 51% of the ownership interest of the institutions resulting from such
transaction are owned by individuals who, prior to such transaction, owned
at least 51% of the outstanding voting shares of The Greater;
(b) the acquisition of substantially all of the assets of The Greater
or of more than 25% of the voting shares of The Greater by any person or
entity, or by any persons or entities acting in concert; or
(c) the occurrence of any event if, immediately following such event,
the management and control of The Greater ceases to rest in the hands of
individuals who, prior to such event, constituted a majority of the members
of the Board.
SECTION 6.4 Effect of Exercise. The exercise of an Appreciation Right
shall, for all purposes of the Incentive Program other than determining the
amount of Shares available for Options pursuant to section 5.2, be treated as an
exercise of the related Option and a subsequent resale of the Shares acquired
thereby.
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.1 Termination. The Board may suspend or terminate the Incentive
Program in whole or in part at any time prior to June 30, 1997 by giving written
notice of such suspension or termination to the Committee. Unless sooner
terminated, the Incentive Program shall terminate automatically on June 30,
1997.
Section 7.2 Amendment. The Board may amend or revise the Incentive Program
in whole or in part at any time; provided, however, that any such amendment or
revision to a provision other than Article IV shall be subject to approval by
the Superintendent of Banks of the State of New York and no such amendment shall
be effective prior to the date on which such approval is obtained; and provided,
further, that, subject to section 7.3, the following amendments or revisions
shall be subject to approval of the stockholders of The Greater:
(a) an increase in the number of Shares as to which Options may be
granted;
(b) a decrease in the Exercise Price for an Option previously granted;
(c) an extension of the term of the Incentive Program or the Option
Period for an Option previously granted;
(d) a change in the class of employees eligible to be granted Options;
and
(e) any change which requires an amendment of The Greater's
certificate of organization.
SECTION 7.3 Adjustments in the Event of a Reorganization or
Recapitalization. (a) In the event of any merger, consolidation or other
business reorganization in which the Bank is the surviving entity, and
7
<PAGE>
<PAGE>
in the event of any stock split, stock dividend or other event generally
affecting the number of Shares held by each person who is then a holder of
record of Shares, the number of Shares covered by each outstanding Option shall
be adjusted to account for such event. Such adjustment shall be effected by
multiplying the number of Shares then covered by such outstanding Option by an
amount equal to the number of Shares that would be owned after such event by a
person who, immediately prior to such event, was the holder of record of one
Share, and the Exercise Price of the Shares then covered by each outstanding
Option shall be adjusted by dividing the Exercise Price by such amount;
provided, however, that the Committee may, in its discretion, establish another
appropriate method of adjustment.
(b) In the event of any merger, consolidation or other business
reorganization in which the Bank is not the surviving entity:
(i) any Options granted under the Incentive Program which remain
outstanding may be cancelled by the Board upon 30 days' written notice to
each Option holder in advance of the effective date of such merger,
consolidation, business reorganization, liquidation or sale; and
(ii) any Option which is not cancelled pursuant to section 7.3(b)(i)
shall be adjusted in such manner as the Committee, with the approval of the
Superintendent of Banks of the State of New York, shall deem appropriate to
account for such merger, consolidation or other business reorganization.
(c) In the event of a merger, consolidation or reorganization in which The
Greater becomes a wholly owned subsidiary of a bank holding company, then this
Incentive Program and any outstanding Option, Appreciation Rights and
Performance Units granted hereunder may be assumed by such bank holding company
and the shares of common stock of said bank holding company may be substituted
for the Shares under the Incentive Program, subject to such adjustments as the
Board shall deem necessary or as may be required by the terms of such merger,
consolidation or reorganization and applicable law.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Status as an Employee Benefit Plan. This Incentive Program is
not intended to satisfy the requirements for qualification under section 401(a)
of the Code or to satisfy the definitional requirements for an 'employee benefit
plan' under section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ('ERISA'). It is intended to be a non-qualified incentive
compensation program that is exempt from the regulatory requirements of ERISA.
The Incentive Program shall be construed and administered so as to effectuate
this intent.
SECTION 8.2 No Right to Continued Employment. Neither the establishment of
the Incentive Program nor any provisions of the Incentive Program nor any action
of the Board or the Committee with respect to the Incentive Program shall be
held or construed to confer upon any Key Executive or Eligible Employee any
right to a continuation of employment by the Bank. The Bank reserves the right
to dismiss any Key Executive or Eligible Employee or otherwise deal with any Key
Executive or Eligible Employee to the same extent as though the Incentive
Program had not been adopted.
SECTION 8.3 Construction of Language. Whenever appropriate in the Incentive
Program, words used in the singular may be read in the plural, words used in the
plural may be read in the singular, and words importing the masculine gender may
read as referring equally to the feminine or the neuter. Any reference to an
Article or section number shall refer to an Article or section of this Incentive
Program unless otherwise indicated.
SECTION 8.4 Governing Law. The Incentive Program shall be construed and
enforced in accordance with the laws of the State of New York, except to the
extent that such laws are preempted by the federal laws of the United States of
America, and shall be subject to the provisions of section 140-a of the New York
Banking Law and the regulations of the Banking Board of the State of New York
and any other applicable law or regulation.
SECTION 8.5 Headings. The headings of Articles and sections are included
solely for convenience of reference. If there is any conflict between such
headings and the text of the Incentive Program, the text shall control.
8
<PAGE>
<PAGE>
SECTION 8.6 Non-Alienation of Benefits. The right to receive a benefit
under the Incentive Program shall not be subject in any manner to anticipation,
alienation or assignment, nor shall such right be liable for or subject to
debts, contracts, liabilities, engagements or torts.
SECTION 8.7 Taxes. (a) The Bank shall have the right to deduct from all
amounts paid by the Bank in cash with respect to an Option, Appreciation Right
or Performance Award under the Incentive Program any taxes required by law to be
withheld with respect to such Option, Appreciation Right or Performance Award.
Where any person is entitled to receive Shares pursuant to the exercise of an
Option or Appreciation Right, the Bank shall have the right to require such
person to pay the Bank the amount of any tax which the Bank is required to
withhold with respect to such Shares, or, in lieu thereof, to retain, or to sell
without notice, a sufficient number of Shares to cover the amount required to be
withheld.
(b) Subject to Section 8.7(c), an Eligible Employee may elect the
withholding ("Share Withholding") by the Bank of a portion of the Shares
otherwise deliverable to such Eligible Employee upon the exercise of an Option,
Appreciation Right or Performance Award (a "Taxable Event") having a Fair Market
Value equal to:
(i) the minimum amount necessary to satisfy required federal, state,
and local tax withholding liability attributable to the Taxable Event; or
(ii) with the Committee's prior approval, a greater amount, not to
exceed the estimated total amount of such Eligible Employee's tax liability
with respect to the Taxable Event.
(c) Each Share Withholding election by an Eligible Employee shall be
subject to the following restrictions:
(i) any Eligible Employee's election shall be subject to the
Committee's right to revoke such election of Share Withholding by such
Eligible Employee at any time before the Eligible Employee's election,
whether or not the Committee has reserved the right to do so;
(ii) the Eligible Employee's election must be made before the date
(the "Tax Date") on which the amount of tax to be withheld is determined;
(iii) the Eligible Employee's election shall be irrevocable;
(iv) any person who is subject to potential liability under Section
16(b) of the Securities Exchange Act of 1934 with respect to transactions
involving equity securities of the Bank (a "Section 16 Person") may not
elect Share Withholding within six months after the grant of the related
option or stock appreciation rights (except if the Eligible Employee dies
or incurs a Disability before the end of the six-month period); and
(v) except to the extent that the Bank receives an opinion from its
securities law counsel to the effect that such condition is not required
for Share Withholding by Section 16 Persons to be eligible for the
exemption provided by SEC Rule 16b-3, a Section 16 Person must elect Share
Withholding either six months before the Tax Date or during the ten
business day period beginning on the third business day after the release
of the Bank's quarterly or annual summary statement of revenues and
earnings.
SECTION 8.8 Approval of Shareholders and Superintendent of Banks. This
amendment and restatement of the Incentive Program shall be contingent on the
approval thereof by the shareholders of The Greater no later than the first
Annual Meeting of shareholders held after the adoption by the Board of this
amendment and restatement, and on the final approval of this amendment and
restatement by the Superintendent of Banks of the State of New York in
accordance with Part 26 of the General Regulations of the Banking Board. Prior
to the approval of the shareholders and the Superintendent, Options,
Appreciation Rights and Performance Units granted to individuals shall be deemed
made under the terms of the Incentive Program as approved by the shareholders of
The Greater at the 1988 Annual Meeting of shareholders. No Option or
Appreciation Right granted hereunder shall be effective, nor shall any such
Option or Appreciation Right be exercised or any Shares issued or purchased
hereunder, prior to the approval of this amendment and restatement of the
Incentive Program by the shareholders of The Greater and the final approval of
this amendment and restatement of the Incentive Program by the Superintendent of
Banks of the State of New York.
SECTION 8.9 Notices. Any notice required or permitted to be given to a
party under the Incentive Program shall be deemed given if personally delivered
or if mailed, postage pre-paid, by certified mail, return receipt requested, to
the party at the address listed below, or at such other address as one such
party may by written notice specify to the other:
(a) If to the Committee:
The Greater New York Savings Bank
One Penn Plaza
New York, New York 10119
Attention: Secretary of the Bank
(b) If to an Option holder, to the Option holder's address as shown in
the Bank's personnel records.
SECTION 8.10 Effective Date. The effective date of this Incentive Program
shall be July 1, 1987.
9
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
1996 ANNUAL INCENTIVE PLAN
ARTICLE I
1.1 Purpose: The purpose of The Greater New York Savings Bank 1996 Annual
Incentive Plan ("Incentive Plan") is to encourage and reward the performance of
Bank Officers by providing incentive compensation to such Officers based upon
the attainment of corporate and individual goals.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions: The following definitions shall apply for purposes of the
Plan, unless a different meaning is plainly indicated by the context:
(a) "Board:" The Board of Directors of The Greater New York Savings
Bank, as constituted from time to time.
(b) "Bank:" The Greater New York Savings Bank, a banking corporation,
organized and existing under the laws of the State of New York.
(c) "Chairman:" The Chairman, President and Chief Executive Officer of
the Bank.
(d) "Chief Administrative Officer:" The Chief Administrative Officer is
the Bank's Executive Vice President and Chief Administrative Officer.
(e) "Class A Officer:" An Officer who has been designated a Class A
Officer for purposes of the Plan.
(f) "Class B Officer:" An Officer who has been designated a Class B
Officer for purposes of the Plan.
(g) "Committee:" The Committee shall mean the Compensation and
Long-Term Incentive Program Committee of the Board.
(h) "Compensation:" Compensation shall mean the Officer's annual base
salary on December 31, 1996, unreduced by contributions to any benefit plans
maintained by the Bank, including but not limited to the Contribution Spending
Account.
(i) "Department Manager:" The department manager is the
<PAGE>
<PAGE>
officer-in-charge of a department of the Bank.
(j) "Effective Date:" January 1, 1996
(k) "Efficiency Ratio:" The efficiency ratio of an institution is
measured by dividing such institution's "other operating expenses" by its "net
revenue".
(l) "Executive Vice President:" An Executive Vice President of the
Bank.
(m) "Executive Officers:" The Bank's Executive Officers for purposes of
this Plan are the Senior Vice Presidents (except the Senior Vice President and
Auditor), the Executive Vice Presidents and the Chairman.
(n) "Extraordinary Items:" Extraordinary items are gains or losses
included in the Bank's income which are not part of the Bank's normal recurring
operating activities. Such items include gains or losses on the disposition of
its assets or branches not originally acquired with the intent to resell.
(o) "Net Income:" The Bank's net income as disclosed in the Bank's
Annual Report.
(p) "Officer:" Each officer of the Bank on January 1, 1996 other than
officers in the Audit Department.
(q) "Participant:" An Officer who is employed by the Bank on December
31, 1996.
(r) "Plan" or "Incentive Plan:" The Greater New York Savings Bank 1996
Annual Incentive Plan, as set forth in this plan document.
(s) "Senior Vice President:" A Senior Vice President of the Bank.
(t) "Tax Benefits:" Tax benefits are benefits recognized in accordance
with SFAS 109 - Accounting for Income Taxes.
2.2 Construction: The masculine gender, where appearing in the Plan, shall
be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary. The words
"hereof", "herein",
2
<PAGE>
<PAGE>
"hereunder" and other similar compounds of the word "here" shall mean and refer
to the entire Plan, not to any particular provision or Section.
ARTICLE III
3.1 Awards: An award to an Officer under the Plan is based upon the
achievement of i) the individual Officer's Goals and ii) the Bank's Goals, as
described in this Article III. In addition, the Bank's Net Income before
Extraordinary Items and Tax Benefits ("Adjusted Net Income") during calendar
year 1996 must exceed the Bank's Adjusted Net Income during calendar year 1995
for an award to be made under the Plan for calendar year 1996.
3.2 Individual Officer Goals: Each Officer other than the Bank's Executive
Officers has established individual performance goals with his Department
Manager, which goals have been reviewed and approved by either the Chairman or
the Chief Administrative Officer. The Chairman has established goals with the
Committee and all other Executive Officers have established goals with either
the Chairman or the Chief Administrative Officer, as appropriate. An interim
evaluation of each non-Executive Officer's performance shall be made by such
Officer's Department Manager in June, 1996, which interim evaluation shall be
reviewed by the Chairman or the Chief Administrative Officer, as appropriate. A
final evaluation shall be made by the Department Manager in January, 1997, which
final evaluation shall be reviewed and approved by the Chairman or Chief
Administrative Officer, as appropriate. An interim evaluation and final
evaluation of each Executive Officer (except the Chairman) shall be made in
June, 1996 and January, 1997, respectively, by the Chairman or the Chief
Administrative Officer, as appropriate. An evaluation of the Chairman shall be
made in January, 1997, by the Committee. The final evaluation of each Officer
shall grade the Officer's performance as "Standard", "Above Standard", "Well
Above Standard" or "Excellent".
3.3 Bank Goal: The Bank's goal for 1996 is to have a lower Efficiency Ratio
than the Efficiency Ratio of the following peer group (the "Peer Group"): "NY
Metro Thrifts". The Efficiency Ratios of the Bank and the Peer Group are
published quarterly by SNL Securities. The Bank's performance will be measured
by comparing its Efficiency Ratio for the twelve (12) month period ending with
the third quarter of 1996 to the Efficiency Ratio of the Peer Group for the
twelve (12) month period ending with the third quarter of 1996.
3.4 Awards: Awards are based on the level of performance
3
<PAGE>
<PAGE>
achieved by the Officer and the Bank. Each Participant shall be entitled to an
award which is based, in part, on i) his level of performance during 1996, as
determined by his final evaluation, and 2) his Compensation as of December 31,
1996, as follows:
Officer Performance Award
-------------------------
Well
Above Above
Title Standard Standard Standard Excellent
- ----- -------- -------- -------- ---------
Chairman 0% 10% 20% 30%
Executive
Vice President 0% 10% 15% 20%
Senior Vice
President 0% 4% 8% 13%
Class A
Officer 0% 2% 5% 8%
Class B
Officer 0% 1% 3% 5%
In the event an Officer is promoted during 1996, such Officer's award shall
be determined based upon his title on December 31, 1996.
Each Participant's award shall also be based upon the achievement of the
Bank's Goal, as follows:
Bank Performance Level
----------------------
The Bank's Efficiency Ratio
as of Percentage of the Peer Award as Percentage of
Group: Officer Performance Award:
- ----- --------------------------
a) less than 99% 150%
b) between 99% and 101% 100%
c) greater than 101% and
less than or equal to 102% 50%
d) greater than 102% 0%
4
<PAGE>
<PAGE>
Awards, if any, shall be paid to the Participants, net of applicable
withholding taxes, on or before February 28, 1997.
ARTICLE IV
4.1 Benefits Not Currently Funded: Nothing in this Plan will be construed
to create a trust or to obligate the Bank or any other entity to segregate a
fund, purchase an insurance contract, or in any other way currently to fund the
future payment of any benefits hereunder, nor will anything herein be construed
to give the Participant or any other person rights to any specific assets of the
Bank.
ARTICLE V
5.1 Non-Alienation of Benefits: The right to receive a benefit under the
Plan shall not be subject in any manner to anticipation, alienation, or
assignment, nor shall such right be liable for or subject to debts, contracts,
liabilities, engagements or torts, prior to actually being received by the
Officer being entitled to receive the benefits under terms of the Plan.
ARTICLE VI
6.1 Amendments and Termination: The Bank reserves the right at any time by
action of the Board to terminate the Plan or to amend its provisions in any way.
ARTICLE VII
MISCELLANEOUS
7.1 No Right to Employment: This Plan shall not be construed as providing
any Participant with the right to be retained in the Bank's employ or to receive
any benefit not specifically provided hereunder.
7.2 No Affect on Other Compensation and Benefits: Nothing contained herein
shall exclude or in any manner modify or otherwise affect any existing or future
rights of any Participant to participate in and receive the benefits of any
compensation, bonus, pension, life insurance, medical and hospitalization
insurance or other employee benefit plan or program to which he otherwise might
be or become entitled as an officer and/or employee of the Bank.
7.3 Governing Law: This Plan shall be construed in accordance
5
<PAGE>
<PAGE>
with and governed by the laws of the State of New York, without regard to its
conflicts of law principles.
7.4 Status: This Plan is not intended to satisfy the requirements for
qualification under Section 401(a) of the Code.
7.5 Expenses: All expenses of establishing and administering the Plan shall
be paid by the Bank.
7.6 Successors: The Bank shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank to expressly assume
the Bank's obligations hereunder in the same manner and to the same extent that
the Bank would be required to perform if no such succession had taken place. As
used in the Plan, "Bank" shall mean the Bank as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Article 7 or which otherwise becomes bound by
all the terms and provisions of the Plan by operation of law.
6
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
1997 ANNUAL INCENTIVE PLAN
ARTICLE I
1.1 Purpose: The purpose of The Greater New York Savings Bank 1997 Annual
Incentive Plan ("Incentive Plan") is to encourage and reward the performance of
Bank Officers by providing incentive compensation to such Officers based upon
the attainment of corporate and individual goals.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions: The following definitions shall apply for purposes of the
Plan, unless a different meaning is plainly indicated by the context:
(a) "Board:" The Board of Directors of The Greater New York Savings
Bank, as constituted from time to time.
(b) "Bank:" The Greater New York Savings Bank, a banking
corporation, organized and existing under the laws of the State of New York.
(c) "Chairman:" The Chairman, President and Chief Executive Officer
of the Bank.
(d) "Chief Administrative Officer:" The Chief Administrative Officer
is the Bank's Executive Vice President and Chief Administrative Officer.
(e) "Class A Officer:" An Officer who has been designated a Class A
Officer for purposes of the Plan.
(f) "Class B Officer:" An Officer who has been designated a Class B
Officer for purposes of the Plan.
(g) "Committee:" The Committee shall mean the Compensation Committee
of the Board.
(h) "Compensation:" Compensation shall mean the Officer's annual
base salary on December 31, 1997, unreduced by contributions to any benefit
plans maintained by the Bank,
<PAGE>
<PAGE>
including but not limited to the Contribution Spending Account.
(i) "Department Manager:" The department manager is the
officer-in-charge of a department of the Bank.
(j) "Effective Date:" January 1, 1997
(k) "Efficiency Ratio:" The efficiency ratio shall mean the
efficiency ratio published quarterly by SNL Securities.
(l) "Efficiency Ratio Measurement Period:" The Effective Ratio
measurement period shall mean the twelve (12) month period ending on September
30, 1997.
(m) "Executive Vice President:" An Executive Vice President of the
Bank.
(n) "Executive Officers:" The Bank's Executive Officers for purposes
of this Plan are the Senior Vice Presidents (except the Senior Vice President
and Auditor), the Executive Vice Presidents and the Chairman.
(o) "Extraordinary Items:" Extraordinary items are gains or losses
included in the Bank's income, which are not part of the Bank's normal recurring
operating activities, including but not limited to gains or losses on the
disposition of its assets or branches not originally acquired with the intent to
resell. Extraordinary items also include all income and expenses incurred and
expensed by the Bank related to the opening of new Bank branches.
(p) "Net Income:" The Bank's net income as disclosed in the Bank's
Annual Report.
(q) "Officer:" Each officer of the Bank on January 1, 1997 other
than officers in the Audit Department.
(r) "Participant:" An Officer who is employed by the Bank on
December 31, 1997.
(s) "Plan" or "Incentive Plan:" The Greater New York Savings Bank
1997 Annual Incentive Plan, as set forth in this plan document.
2
<PAGE>
<PAGE>
(t) "Senior Vice President:" A Senior Vice President of the Bank.
2.2 Construction: The masculine gender, where appearing in the Plan, shall
be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary. The words
"hereof", "herein", "hereunder" and other similar compounds of the word "here"
shall mean and refer to the entire Plan, not to any particular provision or
Section.
ARTICLE III
3.1 Awards: An award to an Officer under the Plan is based upon the
achievement of i) the individual Officer's Goals and ii) the Bank's Goals, as
described in this Article III. In addition, the Bank's Net Income before
Extraordinary Items ("Adjusted Net Income") during calendar year 1997 must
exceed the Bank's Adjusted Net Income during calendar year 1996 for an award to
be made under the Plan for calendar year 1997.
3.2 Individual Officer Goals: Each Officer other than the Bank's Executive
Officers has established individual performance goals with his Department
Manager, which goals have been reviewed and approved by either the Chairman or
the Chief Administrative Officer. The Chairman has established goals with the
Committee and all other Executive Officers have established goals with either
the Chairman or the Chief Administrative Officer, as appropriate. An interim
evaluation of each non-Executive Officer's performance shall be made by such
Officer's Department Manager in June, 1997, which interim evaluation shall be
reviewed by the Chairman or the Chief Administrative Officer, as appropriate. A
final evaluation shall be made by the Department Manager in January, 1998, which
final evaluation shall be reviewed and approved by the Chairman or Chief
Administrative Officer, as appropriate. An interim evaluation and final
evaluation of each Executive Officer (except the Chairman) shall be made in
June, 1997 and January, 1998, respectively, by the Chairman or the Chief
Administrative Officer, as appropriate. An evaluation of the Chairman shall be
made in January, 1998, by the Committee. The final evaluation of each Officer
shall grade the Officer's performance as "Standard", "Above Standard", "Well
Above Standard" or "Excellent".
3
<PAGE>
<PAGE>
3.3 Bank Goal: The Bank's goal is to have a lower Efficiency Ratio than
the Efficiency Ratio of the following peer group (the "Peer Group"): "NY Metro
Thrifts". The Bank's performance will be measured by comparing its Efficiency
Ratio adjusted for Extraordinary Items ("Adjusted Efficiency Ratio") to the
Efficiency Ratio of the Peer Group during the Efficiency Ratio Measurement
Period.
3.4 Awards: Awards are based on the level of performance achieved by the
Officer and the Bank. Each Participant shall be entitled to an award which is
based, in part, on i) his level of performance during 1997, as determined by his
final evaluation, and 2) his Compensation as of December 31, 1997, as follows:
Officer Performance Award
Well
Above Above
Title Standard Standard Standard Excellent
- ----- -------- -------- -------- ---------
Chairman 0% 10% 20% 30%
Executive
Vice President 0% 10% 15% 20%
Senior Vice
President 0% 4% 8% 13%
Class A
Officer 0% 2% 5% 8%
Class B
Officer 0% 1% 3% 5%
In the event an Officer is promoted during 1996, such Officer's award
shall be determined based upon his title on December 31, 1997.
Each Participant's award shall also be based upon the achievement of the
Bank's Goal, as follows:
4
<PAGE>
<PAGE>
Bank Performance Level
The Bank's Adjusted Efficiency
Ratio as of Percentage of the Award as Percentage of
Peer Group Efficiency Ratio: Officer Performance Award:
- ------------------------------ --------------------------
a) less than 100% 150%
b) between 100% and 102% 100%
c) greater than 102% and
less than or equal to 103% 50%
d) greater than 103% 0%
Awards, if any, shall be paid to the Participants, net of applicable
withholding taxes, on or before February 28, 1998.
ARTICLE IV
4.1 Benefits Not Currently Funded: Nothing in this Plan will be construed
to create a trust or to obligate the Bank or any other entity to segregate a
fund, purchase an insurance contract, or in any other way currently to fund the
future payment of any benefits hereunder, nor will anything herein be construed
to give the Participant or any other person rights to any specific assets of the
Bank.
ARTICLE V
5.1 Non-Alienation of Benefits: The right to receive a benefit under the
Plan shall not be subject in any manner to anticipation, alienation, or
assignment, nor shall such right be liable for or subject to debts, contracts,
liabilities, engagements or torts, prior to actually being received by the
Officer being entitled to receive the benefits under terms of the Plan.
ARTICLE VI
6.1 Amendments and Termination: The Bank reserves the right at any time by
action of the Board to terminate the Plan or to amend its provisions in any way.
5
<PAGE>
<PAGE>
ARTICLE VII
MISCELLANEOUS
7.1 No Right to Employment: This Plan shall not be construed as providing
any Participant with the right to be retained in the Bank's employ or to receive
any benefit not specifically provided hereunder.
7.2 No Affect on Other Compensation and Benefits: Nothing contained herein
shall exclude or in any manner modify or otherwise affect any existing or future
rights of any Participant to participate in and receive the benefits of any
compensation, bonus, pension, life insurance, medical and hospitalization
insurance or other employee benefit plan or program to which he otherwise might
be or become entitled as an Officer and/or employee of the Bank.
7.3 Governing Law: This Plan shall be construed in accordance with and
governed by the laws of the State of New York, without regard to its conflicts
of law principles.
7.4 Status: This Plan is not intended to satisfy the requirements for
qualification under Section 401(a) of the Code.
7.5 Expenses: All expenses of establishing and administering the Plan
shall be paid by the Bank.
7.6 Successors: The Bank shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank to expressly assume
the Bank's obligations hereunder in the same manner and to the same extent that
the Bank would be required to perform if no such succession had taken place. As
used in the Plan, "Bank" shall mean the Bank as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Article 7 or which otherwise becomes bound by
all the terms and provisions of the Plan by operation of law.
6
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
1996 EQUITY INCENTIVE PLAN
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. PURPOSE. ................................................................................................... 1
2. DEFINITIONS................................................................................................. 1
3. SCOPE OF THE PLAN........................................................................................... 4
4. ADMINISTRATION.............................................................................................. 4
5. ELIGIBILITY................................................................................................. 6
6. CONDITIONS TO GRANTS......................................................................................... 7
(a) GENERAL CONDITIONS............................................................................. 7
(b) GRANT OF OPTIONS AND OPTION PRICE............................................................. 7
(c) GRANT OF INCENTIVE STOCK OPTIONS.............................................................. 7
(d) GRANT OF STOCK APPRECIATION RIGHTS............................................................ 8
(e) GRANT OF PERFORMANCE UNITS.................................................................... 9
7. NO EMPLOYMENT RIGHTS........................................................................................ 9
8. NON-TRANSFERABILITY......................................................................................... 10
9. EXERCISE ................................................................................................... 10
(a) EXERCISE OF OPTIONS........................................................................... 10
(b) EXERCISE OF STOCK APPRECIATION RIGHTS......................................................... 10
(c) EXERCISE OF PERFORMANCE UNITS................................................................. 11
(d) SPECIAL RULES FOR SECTION 16 PERSONS.......................................................... 12
(e) FULL VESTING UPON CHANGE OF CONTROL........................................................... 12
10. MANDATORY TAX WITHHOLDING.................................................................................. 13
11. ELECTIVE SHARE WITHHOLDING................................................................................. 13
12. TERMINATION OF EMPLOYMENT.................................................................................. 14
(a) FOR CAUSE..................................................................................... 14
(b) ON ACCOUNT OF DEATH OR DISABILITY............................................................. 14
(c) ON ACCOUNT OF RETIREMENT...................................................................... 14
(d) ANY OTHER REASON.............................................................................. 15
(e) EXTENSION OF TERM............................................................................. 15
(f) ACCELERATION OF EXERCISABILITY................................................................ 15
13. LIMITATION ON TRANSFER OF OPTION SHARES.................................................................... 15
-i-
<PAGE>
<PAGE>
14. APPROVAL OF STOCKHOLDERS AND SUPERINTENDENT OF BANKS....................................................... 15
15. AMENDMENT.................................................................................................. 16
16. SUBSTITUTED AWARDS......................................................................................... 17
17. SECURITIES LAW MATTERS..................................................................................... 17
18. CODE SECTION 162(m)........................................................................................ 17
19. FUNDING ................................................................................................... 18
20. RIGHTS AS A STOCKHOLDER.................................................................................... 18
21. NATURE OF PAYMENTS......................................................................................... 18
22. NON-UNIFORM DETERMINATIONS................................................................................. 18
23. ADJUSTMENTS................................................................................................ 19
24. TERMINATION OF THE PLAN.................................................................................... 19
25. NO ILLEGAL TRANSACTIONS.................................................................................... 19
26. CONTROLLING LAW............................................................................................ 19
27. SEVERABILITY............................................................................................... 19
</TABLE>
-ii-
<PAGE>
<PAGE>
INTRODUCTION. The Greater New York Savings Bank (the "Bank"), hereby
establishes the Greater New York Savings Bank 1996 Equity Incentive Plan (the
"Plan"), effective on the Effective Date (as defined below).
1. PURPOSE.
The purpose of the Plan is to advance the interest of the Bank by
encouraging and enabling the acquisition of a larger personal financial interest
in the Bank by those employees upon whose judgment and efforts the Bank is
largely dependent for the successful conduct of its operations. An additional
purpose of the Plan is to provide a means by which employees of the Bank and its
Subsidiaries can acquire and maintain Stock ownership, thereby strengthening
their commitment to the success of the Bank and their desire to remain employed
by the Bank and its Subsidiaries. It is anticipated that the acquisition of such
financial interest and Stock ownership will stimulate the efforts of such
employees on behalf of the Bank, strengthen their desire to continue in the
service of the Bank and encourage stockholder perspectives through employee
stock ownership. It is also anticipated that the opportunity to obtain such
financial interest and Stock ownership will prove attractive to promising new
employees and will assist the Bank in attracting such employees.
2. DEFINITIONS.
As used in the Plan, terms defined parenthetically immediately after
their use shall have the respective meanings provided by such definitions and
the terms set forth below shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
(a) "Award" means options, stock appreciation rights, or performance
units granted under the Plan.
(b) "Award Agreement" has the meaning specified in Section 4(b)(v).
(c) "Board" means the Board of Directors of the Bank.
(d) "Cause" means an individual's (i) willful failure to perform his
assigned duties and his failure to cure such failure to perform within a
reasonable period following notice thereof from the Bank, or (ii) intentional
dishonest or illegal conduct in connection with his performance of services for
the Bank; provided however that if an individual has entered into an employment
agreement with the Bank which is effective as of the individual's termination of
employment and which defines Cause different than the foregoing, the definition
of Cause under such employment agreement shall be the definition of Cause herein
for such individual.
(e) "Change of Control" means any of the following:
(i) the reorganization, merger or consolidation of the Bank
with one or more other banks, savings banks, savings and loan
associations or other financial institutions, other than a transaction
following which at least 51% of the ownership interest of the
institutions resulting from such transaction are owned by individuals
who, prior to such transaction,
<PAGE>
<PAGE>
owned at least 51% of the outstanding voting shares of the Bank in
substantially the same proportions as after such transaction;
(ii) the acquisition of substantially all of the assets of the
Bank or of more than 25% of the voting shares of the Bank by any person
or entity, or by any persons or entities acting in concert; or
(iii) the occurrence of any event if, immediately following
such event, the manage ment and control of the Bank ceases to rest in
the hands of individuals who, immediately prior to such event,
constituted a majority of the members of the Board.
(f) "Code" means the Internal Revenue Code of 1986, as amended, and
regulations and rulings thereunder. References to a particular section of the
Code shall include references to successor provisions.
(g) "Committee" means the committee of the Board appointed pursuant to
Section 4(a).
(h) "Bank" has the meaning set forth in the introductory paragraph.
(i) "Disability" means, for purposes of the exercise of an incentive
stock option after termination of employment, a disability within the meaning of
Section 22(e)(3) of the Code, and for all other purposes, a mental or physical
condition which, in the opinion of the Committee, renders a Grantee unable or
incompetent to carry out the job responsibilities which such Grantee held or the
tasks to which such Grantee was assigned at the time the disability was
incurred, and which is expected to be permanent or for an indefinite duration
exceeding one year.
(j) "Effective Date" means April 26, 1996;
(k) "Fair Market Value" of a security means, as of any applicable
date:
(i) if the security is listed on a national securities
exchange or the NASDAQ National Market, the closing price, regular way,
of the security as reported on the consolidated transaction reporting
system applicable to such security, or if no such reported sale of the
security have occurred on such date, on the next preceding date on
which there was such a reported sale, or
(ii) if the security is not listed on a national securities
exchange or the NASDAQ National Market, but is listed on the NASDAQ
SmallCap Market, the average of the closing bid and asked prices,
regular way, on the NASDAQ SmallCap Market or, if no such prices have
been so reported for such date, on the latest preceding date for which
such prices were so reported, or
-2-
<PAGE>
<PAGE>
(iii) if the security is not listed on a national securities
exchange, the NASDAQ National Market or the NASDAQ SmallCap Market, the
fair market value of the security as determined in good faith by the
Board.
(l) "Grant Date" means the date on which an Award shall be granted, as
determined in accordance with Section 6(a)(i).
(m) "Grantee" means an individual to whom an Award has been granted.
(n) "including" or "includes" means "including, without limitation" or
"includes, without limitation", respectively.
(o) "Measuring Period" has the meaning specified in Section
6(e)(ii)(B).
(p) "Minimum Consideration" means $1.00 per share of Stock or such
other amount that is from time to time considered to be capital for purposes of
the New York Business Corporation Law.
(q) "1934 Act" means the Securities Exchange Act of 1934. References to
a particular section of, or rule under, the 1934 Act shall include references to
successor provisions.
(r) "Option Price" means the per share purchase price of Stock subject
to an option.
(s) "Outside Director" means a member of the Board who is not
currently, and has not been at any time during the preceding one-year period, an
officer or employee of the Bank and, in addition, who is a "disinterested"
person within the meaning of SEC Rule 16b-3(c)(2)(i) (or any other comparable or
succeeding provision), to the extent that such Rule is made applicable to the
Bank by the regulations of the Federal Deposit Insurance Corporation.
(t) "Performance Percentage" has the meaning specified in Section
6(e)(ii)(C).
(u) "Plan" has the meaning set forth in the introductory paragraph.
(v) "Retirement" means a termination of employment with the Bank and
its Subsidiaries other than for Cause at any time after attaining age 65.
(w) "SEC" means the Securities and Exchange Commission.
(x) "Section 16 Person" means a person who is subject to potential
liability under Section 16(b) of the 1934 Act with respect to transactions
involving equity securities of the Bank.
(y) "Stock" means the common stock, $1.00 par value, of the Bank.
(z) "Subsidiary" means, for purposes of grants of incentive stock
options, a corporation as defined in Section 424(f) of the Code (with the Bank
being treated as the employer corporation for
-3-
<PAGE>
<PAGE>
purposes of this definition) and, for all other purposes, a corporation with
respect to which the Bank owns, directly or indirectly, 50% or more of the
then-outstanding common shares.
(aa) "10% Owner" means a person who owns capital stock (including stock
treated as owned under Section 424(d) of the Code) possessing more than 10% of
the total combined voting power of all classes of capital stock of the Bank or
any Subsidiary.
(bb) "Window Period" means the 10-business day period beginning on the
third business day after the release of the Bank's quarterly or annual summary
statement of revenues and earnings.
3. SCOPE OF THE PLAN.
(a) Subject to Section 23, an aggregate of 1,000,000 shares of Stock
are hereby made available and are reserved for delivery on account of the grant
and exercise of Awards and the payment of benefits in connection with Awards
under the Plan, all of which shall be available for delivery on account of the
grant and exercise of stock options under the Plan. Such shares must be
authorized and unissued shares of Stock.
(b) If and to the extent an Award shall expire or terminate for any
reason without having been exercised in full (including a cancellation and
regrant of an option), or shall be forfeited, without, in either case, the
Grantee having enjoyed any of the benefits of stock ownership, the shares of
Stock associated with such Award shall again become available for other Awards.
4. ADMINISTRATION.
(a) Subject to Section 4(b), the Plan shall be administered by a
committee ("Committee") which shall consist of not less than three persons who
are Outside Directors of the Bank. Membership on the Committee shall from time
to time (a) be increased or decreased (but not below two) and (b) shall be
subject to such limitations, in each case as the Board deems appropriate to
permit transactions in Stock by Section 16 Persons pursuant to the Plan to be
exempt from potential liability under Section 16(b) of the 1934 Act pursuant to
SEC Rule 16b-3 thereunder.
(b) The Committee shall have full and final authority and sole
discretion, but subject to the express provisions of the Plan, as follows:
(i) to grant Awards and determine the Grant Date and term
thereof;
(ii) to determine (A) when and to whom Awards may be granted,
(B) the terms and conditions applicable to each Award, including the
Option Price of an option, whether an option shall qualify as an
incentive stock option and the benefit payable under any stock
appreciation right or performance unit, and (C) whether or not specific
Awards shall be identified with other specific Awards, and if so
whether they shall be exercisable cumulatively with, or alternatively
to, such other specific Awards;
-4-
<PAGE>
<PAGE>
(iii) to interpret the Plan and to make all determinations
necessary or advisable for the administration of the Plan;
(iv) to prescribe, amend, and rescind rules relating to the
Plan, including rules with respect to the exercisability and
nonforfeitability of Awards upon the termination of employment of a
Grantee;
(v) to determine the terms and provisions and any restrictions
or conditions (including specifying such performance criteria,
Measuring Period, and Performance Percentages as the Committee deems
appropriate and imposing restrictions with respect to Stock acquired
upon exercise of an option, which restrictions may continue beyond the
Grantee's termination of employment) of the written agreements by which
all Awards shall be evidenced ("Award Agreements") which need not be
identical and, with the consent of the Grantee, to modify any such
Award Agreement at any time;
(vi) to cancel, with the consent of the Grantee, outstanding
Awards and to grant new Awards in substitution therefor;
(vii) to accelerate the exercisability (including
exercisability within a period of less than one year after the Grant
Date) of, and to accelerate or waive any or all of the restrictions and
conditions applicable to, any Award or any group of Awards for any
reason and at any time, including in connection with a termination of
employment (other than for Cause);
(viii) subject to Section 6(a)(ii) and 6(c)(ii), to extend the
time during which any Award or group of Awards may be exercised;
(ix) to amend Award Agreements with the consent of the
Grantee; provided that the consent of the Grantee shall not be required
for any amendment which (A) does not adversely affect the rights of the
Grantee, or (B) is necessary or advisable (as determined by the
Committee) to carry out the purpose of the Award as a result of any new
or change in existing applicable law, regulation, ruling or judicial
decision; provided that any such change shall be applicable only to
Awards which have not been exercised;
(x) to take any action at any time before the exercise of an
option (whether or not an incentive stock option), without the consent
of the Grantee, to prevent such option from being treated as an
incentive stock option;
(xi) to impose such additional conditions, restrictions, and
limitations upon the grant, exercise or retention of Awards as the
Committee may, before or concurrently with the grant thereof, deem
appropriate, including requiring simultaneous exercise of related
identified Awards, and limiting the percentage of Awards which may from
time to time be exercised by a Grantee;
-5-
<PAGE>
<PAGE>
(xii) to certify in writing before the payment of any
performance based Awards (except for a payment that is attributable
solely to the increase in the price of the Stock) that the underlying
performance goals and any other material terms have been satisfied;
(xiii) to permit an employee to elect, prior to earning
compensation, to acquire options pursuant to Section 6(b)(ii) in lieu
of receiving such compensation, determine the terms and conditions of
such options and determine the value of such options on the Grant Date
in accordance with Section 6(b);
(xiv) to specify the manner of designating a beneficiary to
exercise Awards after the Grantee's death or transferring an option
(other than an incentive stock option), stock appreciation right or
performance unit to a revocable inter vivos trust;
(xv) to approve the manner of payment and determine the terms
related thereto by a Grantee in connection with an Award, including
deferral of the payment and elective share withholding pursuant to
Section 11;
(xvi) to require a written investment representation by a
Grantee as provided in Section 17;
(xvii) to make equitable adjustment of Awards as provided in
Section 23;
(xviii) to cancel stock appreciation rights or to pay such
benefits in stock rather than cash as provided in Sections 9(b) and
9(e); and
(xix) to take any other action with respect to any matters
relating to the Plan for which it is responsible.
The determination of the Committee on all matters relating to the Plan or any
Award Agreement shall be conclusive and final. No member of the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Award.
5. ELIGIBILITY. Awards may be granted to any full-time employee
(including any officer) of the Bank or any of its Subsidiaries. A Grantee may,
if otherwise eligible, be granted any additional Awards. In selecting the
individuals to whom Awards may be granted, as well as in determining the number
of shares of Stock subject to, and the other terms and conditions applicable to,
each Award, the Committee shall take into consideration such factors as it deems
relevant in promoting the purposes of the Plan.
-6-
<PAGE>
<PAGE>
6. CONDITIONS TO GRANTS.
(a) GENERAL CONDITIONS.
(i) The Grant Date of an Award shall be the date on which the
Committee grants the Award or such later date as specified in advance
by the Committee.
(ii) The term of each Award (subject to Section 6(c)(ii) with
respect to incentive stock options) shall be a period of not more than
10 years from the Grant Date, and shall be subject to earlier
termination as herein provided.
(iii) To the extent not set forth in the Plan, the terms and
conditions of each Award shall be set forth in an Award Agreement.
(b) GRANT OF OPTIONS AND OPTION PRICE.
(i) No later than the Grant Date of any option, the Committee
shall determine the Option Price of such option. The Option Price of an
option shall not be less than 100% of the Fair Market Value of the
Stock on the Grant Date.
(ii) The Committee may, in its discretion, permit an employee
to elect, before earning compensation, to be granted an Award in lieu
of receiving such compensation; provided that, in the judgment of the
Committee, the value of such Award on the Grant Date equals the amount
of compensation foregone by such employee.
(iii) Any such Award shall be evidenced by an Award Agreement
which shall (x) designate the option as either an incentive stock
option or a non-qualified stock option; (y) specify the number of
shares of stock subject to the option, the Option Price, and the term
of the option; and (z) set forth specifically or incorporate by
reference the applicable provisions of the Plan and contain such other
terms and conditions not inconsistent with the Plan as the Committee
may, in its discretion, prescribe.
(c) GRANT OF INCENTIVE STOCK OPTIONS. At the time of the grant of any
option, the Committee may designate that such option shall be made subject to
additional restrictions to permit it to qualify as an "incentive stock option"
under the requirements of Section 422 of the Code. Any option designated as an
incentive stock option:
(i) shall have an Option Price of not less than 100% (110% if
granted to a 10% Owner) of the Fair Market Value of the Stock on the
Grant Date;
(ii) shall be for a period of not more than 10 years (five
years if granted to a 10% Owner) from the Grant Date, and shall be
subject to earlier termination as provided herein or in the applicable
Award Agreement;
-7-
<PAGE>
<PAGE>
(iii) shall not have an aggregate Fair Market Value
(determined for each incentive stock option at its Grant Date) of Stock
with respect to which incentive stock options are exercisable for the
first time by such Grantee during any calendar year (under the Plan and
any other employee stock option plan of the Grantee's employer or any
parent or Subsidiary thereof ("Other Plans")), determined in accordance
with the provisions of Section 422 of the Code, which exceeds $100,000
(the "$100,000 Limit");
(iv) shall, if the aggregate Fair Market Value of Stock
(determined on the Grant Date) with respect to the portion of such
grant which is exercisable for the first time during any calendar year
("Current Grant") and all incentive stock options previously granted
under the Plan and any Other Plans which are exercisable for the first
time during a calendar year ("Prior Grants") would exceed the $100,000
Limit, be exercisable as follows:
(A) the portion of the Current Grant which would,
when added to any Prior Grants, be exercisable with respect to
Stock which would have an aggregate Fair Market Value
(determined as of the respective Grant Date for such options)
in excess of the $100,000 Limit shall, notwithstanding the
terms of the Current Grant, be exercisable for the first time
by the Grantee in the first subsequent calendar year or years
in which it could be exercisable for the first time by the
Grantee when added to all Prior Grants without exceeding the
$100,000 Limit; and
(B) if, viewed as of the date of the Current Grant,
any portion of a Current Grant could not be exercised under
the preceding provisions of this Section 6(c)(iv) during any
calendar year commencing with the calendar year in which it is
first exercisable through and including the last calendar year
in which it may by its terms be exercised, such portion of the
Current Grant shall not be an incentive stock option, but
shall be exercisable as a separate option at such date or
dates as are provided in the Current Grant;
(v) shall be granted within 10 years from the earlier of the
date the Plan is adopted or the date the Plan is approved by the
stockholders of the Bank;
(vi) shall require the Grantee to notify the Committee of any
disposition of any Stock issued pursuant to the exercise of the
incentive stock option under the circumstances described in Section
421(b) of the Code (relating to certain disqualifying dispositions),
within 10 days of such disposition;
Notwithstanding the foregoing and Section 4(c)(vi), the Committee may, without
the consent of the Grantee, at any time before the exercise of an option
(whether or not an incentive stock option), take any action necessary to prevent
such option from being treated as an incentive stock option.
(d) GRANT OF STOCK APPRECIATION RIGHTS. When granted, stock
appreciation rights shall be identified with shares of Stock subject to a
specific option of the Grantee (including any option granted on or before the
Grant Date of the stock appreciation rights) in a number equal to or smaller
-8-
<PAGE>
<PAGE>
than the number of shares of Stock subject to such option. Unless otherwise
provided in the applicable Award Agreement, the Grantee's associated stock
appreciation rights shall terminate upon (i) the expiration, termination,
forfeiture or cancellation of such option, or (ii) the exercise of such option.
(e) GRANT OF PERFORMANCE UNITS.
(i) When granted, performance units may, but need not, be
identified with shares of Stock subject to a specific option of the
Grantee (including any option granted on or before the Grant Date of
the performance unit) in a number equal to or different from the number
of options so granted. If performance units are identified with shares
of Stock subject to an option, then, unless otherwise provided in the
applicable Award Agreement, the Grantee's associated performance units
shall terminate upon (x) the expiration, termination, forfeiture or
cancellation of such option or (y) the exercise of such option.
(ii) Before the grant of any performance unit the Committee
shall:
(A) determine objective performance goals and the
amount of compensation under the goals applicable to such
grant;
(B) designate a period, of not less than one year for
the measurement of the extent to which performance goals are
attained, which period may begin prior to the Grant Date (the
"Measuring Period"); and
(C) assign a "Performance Percentage" to each level
of attainment of performance goals during the Measuring
Period, with the percentage applicable to minimum attainment
being zero percent (0%) and the percentage applicable to
maximum attainment to be determined by the Committee from time
to time.
(iii) The benefit for each performance unit shall be
determined in accordance with Section 9(c)(ii).
(iv) If a Grantee is promoted, demoted or transferred to a
different business unit of the Bank during a Measuring Period, then, to
the extent the Committee determines the performance goals or Measuring
Period are no longer appropriate, the Committee may adjust, change or
eliminate the performance goals or the applicable Measuring Period as
it deems appropriate in order to make them appropriate and comparable
to the initial performance goals or Measuring Period.
7. NO EMPLOYMENT RIGHTS. No obligation of the Bank or any of its
Subsidiaries as to the length of any Grantee's employment shall be implied by
the terms of the Plan, any grant of an Award hereunder or any Award Agreement.
The Bank and its Subsidiaries reserve the same rights to terminate the
employment of any Grantee as existed before the Effective Date.
-9-
<PAGE>
<PAGE>
8. NON-TRANSFERABILITY. Each Award granted hereunder shall not be
assignable or transferable other than by will or the laws of descent and
distribution and may be exercised, during the Grantee's lifetime, only by the
Grantee; provided, however, that a Grantee may in a manner specified by the
Committee and to the extent provided in the Plan designate in writing a
beneficiary to exercise his Award after the Grantee's death.
9. EXERCISE.
(a) EXERCISE OF OPTIONS. Subject to Section 4(b)(ix) and such terms and
conditions as the Committee may impose, each option shall become exercisable the
first anniversary of the Grant Date of such option unless the Committee provides
otherwise in the Award Agreement.
Each option shall be exercised by delivery to the Bank of written
notice of intent to purchase a specific number of shares of Stock subject to the
option; provided, however, that the minimum number of shares which may be
purchased shall be 100, or, if less, the total number of Shares relating to the
option which remain unpurchased. The Option Price of any shares of Stock as to
which an option shall be exercised shall be paid in full at the time of the
exercise. Payment may be made, at the election of the Grantee, in any one or any
combination of the following:
(i) cash;
(ii) Stock held by the Grantee for at least 6 months prior to
exercise of the option, valued at its Fair Market Value on the date of
exercise;
(iii) through simultaneous sale through a broker of shares
acquired on exercise, as permitted under Regulation T of the Federal
Reserve Board.
(b) EXERCISE OF STOCK APPRECIATION RIGHTS. Subject to Section 4(b)(ix),
New York State Banking Law, and such terms and conditions as the Committee may
impose, each stock appreciation right affiliated with an option shall become
exercisable not earlier than the first anniversary of the Grant Date of such
stock appreciation right, to the extent that the option with which it is
identified may be exercised; provided, however, that a stock appreciation right
may be exercised by a Section 16 Person for cash only during a Window Period
unless such exercise is automatic or fixed in advance and is outside the control
of such Section 16 Person. Stock appreciation rights shall be exercised by
delivery to the Bank of written notice of intent to exercise a specific number
of stock appreciation rights. Unless otherwise provided in the applicable Award
Agreement, the exercise of stock appreciation rights which are identified with
shares of Stock subject to an option shall result in the cancellation or
forfeiture of such option to the extent of such exercise.
The benefit for each stock appreciation right exercised shall be equal
to:
(i) the Fair Market Value of a share of Stock on the date of
such exercise, reduced by
-10-
<PAGE>
<PAGE>
(ii) an amount equal to the Option Price of such option,
unless the Committee in the grant of the stock appreciation right
specified a higher amount
provided that the Committee may provide that the benefit for any stock
appreciation right shall not exceed such percentage of the Fair Market Value of
a share of Stock on such Grant Date as the Committee shall specify. The benefit
upon the exercise of a stock appreciation right shall be payable in cash, except
that the Committee, may provide in the Award Agreement or at the time of
exercise that benefits, with respect to any particular exercise, may be paid
wholly or partly in Stock.
Notwithstanding the foregoing, if the Committee in its discretion
determines that the exercise of the stock appreciation rights would preclude the
use of pooling of interests accounting following a sale of the Bank which is
reasonably likely to occur and that such preclusion of pooling would have a
material adverse effect on the sale of the Bank, the Committee, in its
discretion may unilaterally preclude stock appreciation rights from being
exercised.
(c) EXERCISE OF PERFORMANCE UNITS.
(i) Subject to Section 4(b)(vii) and such terms and conditions
as the Committee may impose, if, with respect to any performance unit,
the minimum performance goals have been achieved during the applicable
Measuring Period, then such performance unit shall be exercisable
commencing on the first day after the end of the applicable Measuring
Period. Performance units shall be exercised by delivery to the Bank of
written notice of intent to exercise a specific number of performance
units; provided, however, that performance units not identified with
shares of Stock subject to an option shall be deemed exercised on the
date on which they first become exercisable. Unless otherwise provided
in the applicable Award Agreement, the exercise of performance units
which are identified with shares of Stock subject to an option shall
result in the cancellation or forfeiture of such shares of Stock
subject to option, as the case may be, to the extent of such exercise.
(ii) The benefit for each performance unit exercised shall be
an amount equal to the product of:
(A) the Unit Value (as defined below)
multiplied by
(B) the Performance Percentage attained during the
Measuring Period for such performance unit.
(iii) The Unit Value shall be, as specified by the Committee,
(A) a dollar amount, or
-11-
<PAGE>
<PAGE>
(B) an amount equal to the Fair Market Value of a
share of Stock on the Grant Date or date of exercise.
(iv) The benefit upon the exercise of a performance unit shall
be payable as soon as is administratively practicable after the later
of (A) the date the Grantee exercises or is deemed to exercise such
performance unit, or (B) the date (or dates in the event of installment
payments) as provided in the applicable Award Agreement. Such benefit
shall be payable in cash, except that the Committee may provide in the
Award Agreement or at the time of exercise that benefits, with respect
to any particular exercise, may be paid wholly or partly in shares of
Stock. Notwithstanding the foregoing, if the Committee in its
discretion determines that the exercise of performance units would
preclude the use of pooling of interests accounting following a sale of
the Bank which is reasonably likely to occur and that such preclusion
of pooling would have a material adverse effect on the sale of the
Bank, the Committee, in its discretion may either unilaterally bar the
exercise of performance units by canceling the performance units prior
to the Change of Control or cause the Bank to pay the performance units
rights benefit in Stock if it determines that such payment would not
cause the transaction to be ineligible for pooling. If the Award
Agreement provides that the benefit may be paid wholly in Stock unless
the Committee specifies at the time of exercise that the benefit shall
be paid partly or wholly in cash, the number of shares of Stock payable
in lieu of cash shall be determined by valuing the Stock at its Fair
Market Value on the date such benefit is to be paid.
(d) SPECIAL RULES FOR SECTION 16 PERSONS. No exercise of, or payments
of benefits in connection with, any option, stock appreciation right, or
performance unit awarded to a Section 16 Person shall be made during the first
six months after the applicable Grant Date, except as may from time to time be
permitted by the Committee.
(e) FULL VESTING UPON CHANGE OF CONTROL. Subject to Section 9(d), in
the event of a Change of Control, all unvested Awards shall become immediately
vested and exercisable; provided that the benefit payable with respect to any
performance unit with respect to which the Measuring Period has not ended as of
the date of such Change of Control shall be equal to the product of the Unit
Value multiplied successively by each of the following:
(i) a fraction, the numerator of which is the number of whole
and partial months that have elapsed between the beginning of such Performance
Period and the date of such Change of Control and the denominator of which is
the number of whole and partial months in the Performance Period; and
(ii) a percentage equal to the greater of (x) the target
percentage, if any, specified in the applicable Award Agreement or (y) the
maximum percentage, if any, that would be earned under the terms of the
applicable Award Agreement assuming that the rate at which the performance goals
have been achieved as of the date of such Change of Control would continue until
the end of the Performance Period.
-12-
<PAGE>
<PAGE>
10. MANDATORY TAX WITHHOLDING.
(a) Whenever under the Plan, cash or shares of Stock are to be
delivered upon exercise or payment of an Award, or any other event with respect
to rights and benefits hereunder, the Bank shall be entitled to require as a
condition of delivery (i) that the Grantee remit an amount sufficient to satisfy
all federal, state, and local tax withholding requirements related thereto, (ii)
the withholding of such sums from compensation otherwise due to the Grantee or
from any shares of Stock due to the Grantee under the Plan or (iii) any
combination of the foregoing.
(b) If any disqualifying disposition described in Section 6(c)(vi) is
made with respect to shares of Stock acquired under an incentive stock option
granted pursuant to the Plan, the person making such disqualifying disposition
shall remit to the Bank an amount sufficient to satisfy all federal, state, and
local tax withholding requirements thereby incurred; provided that, in lieu of
or in addition to the foregoing, the Bank shall have the right to withhold such
sums from compensation otherwise due to the Grantee or from any shares of Stock
due to the Grantee under the Plan.
11. ELECTIVE SHARE WITHHOLDING.
(a) Subject to Section 11(b), a Grantee may elect the withholding
("Share Withholding") by the Bank of a portion of the shares of Stock otherwise
deliverable to such Grantee upon the exercise of an Award (a "Taxable Event")
having a Fair Market Value equal to:
(i) the minimum amount necessary to satisfy required federal,
state, and local tax withholding liability attributable to the Taxable
Event; or
(ii) with the Committee's prior approval, a greater amount,
not to exceed the estimated total amount of such Grantee's tax
liability with respect to the Taxable Event.
(b) Each Share Withholding election by a Grantee shall be subject to
the following restrictions:
(i) any Grantee's election shall be subject to the Committee's
right to revoke such election of Share Withholding by such Grantee at
any time before the Grantee's election, whether or not the Committee
has reserved the right to do so;
(ii) the Grantee's election must be made before the date (the
"Tax Date") on which the amount of tax to be withheld is determined;
(iii) the Grantee's election shall be irrevocable;
(iv) a Section 16 Person may not elect Share Withholding
within six months after the grant of the related option or stock
appreciation rights (except if the Grantee dies or incurs a Disability
before the end of the six-month period); and
-13-
<PAGE>
<PAGE>
(v) except to the extent that the Bank receives an opinion
from its securities law counsel to the effect that such condition is
not required for Share Withholding by Section 16 Persons to be eligible
for the exemption provided by SEC Rule 16b-3, a Section 16 Person must
elect Share Withholding either six months before the Tax Date or during
a Window Period.
12. TERMINATION OF EMPLOYMENT. Except as otherwise provided by the
Committee in the Award Agreement or otherwise:
(a) FOR CAUSE. If a Grantee has a termination of employment for Cause,
any unexercised option, stock appreciation right or performance unit shall
thereupon terminate.
(b) ON ACCOUNT OF DEATH OR DISABILITY. If a Grantee has a termination
of employment on account of the Grantee's death or Disability, then, except as
otherwise provided in the Award Agreement,
(i) any unexercised option or stock appreciation right,
whether or not exercisable on the date of such termination of
employment on account of death or Disability may be exercised, in whole
or in part, at any time within one year after such termination of
employment by the Grantee, or after the Grantee's death, by (A) his
personal representative or by the person to whom the option or stock
appreciation right is transferred by will or the applicable laws of
descent and distribution, or (B) the Grantee's beneficiary designated
in accordance with Section 8;
(ii) no performance unit shall be paid with respect to a
Measuring Period of a Grantee who ceases to be employed by the Bank
prior to the end of an applicable Measuring Period; provided, however,
that the Committee may, in its discretion, determine that all or any
portion of the Performance Units shall be paid to the Grantee (or his
beneficiary) at the end of the Measuring Period, or, in lieu thereof,
that a cash settlement in respect of the Performance Units shall be
paid to the Grantee (or his beneficiary) as soon as it is practicable
following termination of employment with the Bank; and
(iii) any unexercised option or stock appreciation right which
is exercisable on account of the Grantee's Retirement pursuant to
Section 12(c) or the Grantee's Disability pursuant to Section 12(b) may
be exercised, in whole or in part, within one (1) year of the Grantee's
death.
(c) ON ACCOUNT OF RETIREMENT. If a Grantee has a termination of
employment on account of Retirement, any unexercised option or stock
appreciation right to the extent then exercisable, may be exercised, in whole or
in part, at any time within 90 days after such Retirement. The nonforfeitability
and exercisability of the Grantee's performance units shall be determined under
Section 12(b)(ii).
-14-
<PAGE>
<PAGE>
(d) ANY OTHER REASON. If a Grantee has a termination of employment for
a reason other than for Cause, death, Disability, or Retirement,
(i) any unexercised option or stock appreciation right to the
extent exercisable on the date of the Grantee's termination of
employment, may be exercised in whole or in part, not later than the
60th day following the Grantee's termination of employment; provided,
however, that (x) if such 60th day is not a business day, such option
or stock appreciation right may be exercised not later than the first
business day following such 60th day and (y) if the Grantee has entered
into an agreement with the Bank not to sell any shares of Stock (or the
capital stock of a successor to the Bank) for a specified period
following the consummation of a business combination between the Bank
and another corporation or entity (the "Specified Period"), such option
or stock appreciation right may be exercised in whole or in part until
the later of the period described in subparagraph (a), (b), or (c)
above or 10 business days following the expiration of the Specified
Period; and
(ii) the nonforfeitability and exercisability of the Grantee's
performance units shall be determined under Section 12(b)(ii).
(e) EXTENSION OF TERM. In the event of termination of the Grantee's
employment other than for Cause, the term of any Award (whether or not
exercisable on the date of the Grantee's termination of employment) which by its
terms would otherwise expire after the Grantee's termination of employment but
prior to the end of the period following the Grantee's termination of employment
described in Sections 12(b), (c), and (d) above for exercise of Awards may, in
the discretion of the Committee, be extended so as to permit any unexercised
portion thereof to be exercised at any time within such period. The Committee
may further extend the period of exercisability to permit any unexercised
portion thereof to be exercised within a specified period provided by the
Committee. However, in no event may the term of any Award expire more than 10
years after the Grant Date of such Award.
(f) ACCELERATION OF EXERCISABILITY. In the event of termination of the
Grantee's employment other than for Cause, the Committee may, in its discretion,
accelerate the exercisability (including exercisability within a period of less
than one year after the Grant Date) of, and accelerate or waive any or all of
the terms and conditions applicable to, any Award or any group of Awards.
13. LIMITATION ON TRANSFER OF OPTION SHARES. To the extent required by
New York State Banking Law, shares of Stock acquired upon the exercise of an
Award shall not be transferable, other than by will or by the laws of descent
and distribution, during the one-year period commencing on the date of such
exercise; provided, however, that the provisions of this Section 13 shall not
apply if the application of this Section has been waived in writing by the
Superintendent of Banks of the State of New York.
14. APPROVAL OF STOCKHOLDERS AND SUPERINTENDENT OF BANKS. This Plan
shall be contingent on the approval thereof by the holders of a majority of the
outstanding shares of the capital stock of the Bank no later than the first
Annual Meeting of Stockholders held after the
-15-
<PAGE>
<PAGE>
adoption of the Plan by the Board, and on the final approval of the Plan by the
Superintendent of Banks of the State of New York in accordance with Part 26 of
the General Regulations of the Banking Board. No Award granted hereunder shall
be effective, nor shall any such Award be exercised or any shares of Stock
issued or purchased hereunder, prior to such approval of the Plan by the
stockholders of the Bank and the final approval of the Plan by the
Superintendent of Banks of the State of New York.
15. AMENDMENT. The Board may amend or revise the Plan in whole or in
part at any time; provided, however, that:
(i) any such amendment or revision to a provision other than
Sections 6(e), 9(c) or Section 12 as it applies to performance units
shall be subject to approval by the Superintendent of Banks of the
State of New York and no such amendment shall be effective prior to the
date on which such approval is obtained;
(ii) subject to Section 23, the following amendments or
revisions shall be subject to the approval of the holders of a majority
of the Bank's outstanding shares of capital stock:
(A) an increase in the number of shares of Stock as
to which options may be granted;
(B) a change in the number of shares of Stock which
may be optioned to any single individual;
(C) a decrease in the option price for an option
previously granted;
(D) an extension of the term of the Plan or the term
of an option previously granted;
(E) a change in the class of employees eligible to be
granted an option; or
(F) any change which requires an amendment of the
Bank's Restated Organization Certificate.
(iii) any amendment or revision of the Plan, subject to the
provisions of Section 15(ii) above, shall be subject to the approval of
the holders of a majority of the shares of Stock present and entitled
to vote at a meeting of the Bank's stockholders to the extent that such
approval is required (a) to permit the grant of Awards to Section 16
Persons under, and transactions in Stock by Section 16 Persons pursuant
to, the Plan to be exempt from potential liability under Section 16(b)
of the 1934 Act, or (b) by the listing requirements of any securities
exchange or national market system on which are then listed the Bank's
equity securities.
-16-
<PAGE>
<PAGE>
16. SUBSTITUTED AWARDS. If the Committee cancels any Award (granted
under this Plan or any plan of any entity acquired by the Bank or any of its
Subsidiaries), and a new Award is substituted therefor, then the Committee may
determine the terms and conditions of such new Award; provided that (i) the
Option Price of any new option shall not be less than 100% (110% in the case of
incentive stock options granted to a 10% Owner) of the Fair Market Value of a
share of Stock on the date of grant of the new Award; (ii) no Award shall be
canceled without the consent of the Grantee if the terms and conditions of the
new Award to be substituted are not at least as favorable as the terms and
conditions of the Award to be canceled (and the Grant Date of the new Award
shall be the date on which such new Award is granted); and (c) no Section 16
Person may exercise a substituted stock appreciation right or a substituted
option (or substituted performance unit) identified with a stock appreciation
right within six months after the Grant Date (calculated without reference to
this Section 16) of such substituted option.
17. SECURITIES LAW MATTERS.
(a) If the Committee deems necessary to comply with any applicable
securities law, the Committee may require a written investment intent
representation by the Grantee and may require that a restrictive legend be
affixed to certificates for shares of Stock.
(b) If, based upon the advice of counsel for the Bank, the Committee
determines that the exercise or nonforfeitability of, or delivery of benefits
pursuant to, any Award would violate any applicable provision of (i) federal or
state securities laws or (ii) the listing requirements of any national
securities exchange or national market system on which are listed any of the
Bank's equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as applicable, but the Bank shall use all
reasonable efforts to cause such exercise, nonforfeitability or delivery to
comply with all such provisions at the earliest practicable date.
18. CODE SECTION 162(m). If the Bank determines that compensation
payable under the Plan is subject to the Code Section 162(m) limitation on
deduction and if the Bank determines that a particular grant should qualify as
performance-based compensation so as to be exempt from the deduction limitation,
the following provisions to the extent applicable shall apply with respect to
such grant:
(i) The Option Price for any option and the amount described
in Section 9(b)(ii) with respect to stock appreciation rights shall
equal 100% of the Fair Market Value of a share of the Stock on the
Grant Date.
(ii) No individual Grantee may be granted, in any calendar
year, options or stock appreciation rights to purchase more than
150,000 shares of Stock.
(iii) The performance units awarded under the Plan to any
Grantee for any Measuring Period shall not have a value in excess of
the Grantee's base annual salary in effect at the time of the grant of
the Award multiplied by the number of years in the Measuring Period.
The Performance Percentage with respect to performance units attained
-17-
<PAGE>
<PAGE>
during the Measuring Period for such performance units shall not exceed
150%. The value of any stock bonuses awarded to a Grantee for each
calendar year shall not exceed the Grantee's base annual salary in
effect for such year.
(iv) The performance goals and the amount of compensation
under the goals applicable to the grant of any performance unit shall
be set forth in a written document prior to the commencement of the
Grantee's services to which the performance goals relate and while the
outcome is still substantially uncertain. In establishing performance
goals, the Committee may consider any performance factor or factors it
deems appropriate, including stock price, market share, sales, earnings
per share, return on equity, costs, or any other business criteria as
contemplated in Section 162(m) of the Code. The Committee shall certify
in writing prior to payment of compensation related to any performance
unit that the performance goals and any other material terms were
satisfied.
(v) The Committee shall be comprised solely of two or more
outside directors as defined in the regulations under Code Section
162(m).
19. FUNDING. Benefits payable under the Plan to any person shall be
paid directly by the Bank. The Bank shall not be required to fund, or otherwise
segregate assets to be used for payment of, benefits under the Plan.
20. RIGHTS AS A STOCKHOLDER. A Grantee shall not, by reason of any
Award have any right as a stockholder of the Bank with respect to the shares of
Stock which may be deliverable upon exercise or payment of such Award until such
shares have been delivered to him.
21. NATURE OF PAYMENTS. Any and all grants, payments of cash, or
deliveries of shares of Stock hereunder shall constitute special incentive
payments to the Grantee and except as otherwise provided in the Award Agreement
or by the Committee at a later date, shall not be taken into account in
computing the amount of salary or compensation of the Grantee for the purposes
of determining any pension, retirement, death or other benefits under (a) any
pension, retirement, profit-sharing, bonus, life insurance or other employee
benefit plan of the Bank or any of its Subsidiaries or (b) any agreement between
the Bank or any Subsidiary, on the one hand, and the Grantee, on the other hand,
except as such plan or agreement shall otherwise expressly provide.
22. NON-UNIFORM DETERMINATIONS. Neither the Committee's nor the Board's
determinations under the Plan need be uniform and may be made by the Committee
or the Board selectively among persons who receive, or are eligible to receive,
Awards (whether or not such persons are similarly situated). Without limiting
the generality of the foregoing, the Committee shall be entitled, among other
things, to make non-uniform and selective determinations, to enter into
non-uniform and selective Award Agreements as to (i) the identity of the
Grantees, (ii) the terms and provisions of Awards, and (iii) the treatment,
under Section 12, of terminations of employment. Notwithstanding the foregoing,
the Committee's interpretation of Plan provisions shall be uniform as to
similarly situated Grantees.
-18-
<PAGE>
<PAGE>
23. ADJUSTMENTS. The Committee shall make equitable adjustment of:
(i) the numbers of shares of Stock available under Section 3(a);
(ii) the number of shares of Stock, stock appreciation rights, or
performance units covered by an Award;
(iii) the Option Price of all outstanding options; and
(iv) the Fair Market Value of Stock to be used to determine the amount
of the benefit payable upon exercise of stock appreciation rights or performance
units
to reflect a stock dividend, stock split, reverse stock split, share
combination, recapitalization, merger, consolidation, acquisition of property or
shares, asset spin-off, split-off, reorganization, stock rights offering,
liquidation or similar event, of or by the Bank.
24. TERMINATION OF THE PLAN. The Plan shall terminate on the tenth
(10th) anniversary of the Effective Date or at such earlier time as the Board
may determine. Any termination, whether in whole or in part, shall not affect
any Award then outstanding under the Plan.
25. NO ILLEGAL TRANSACTIONS. The Plan and all Awards granted pursuant
to it are subject to all laws and regulations of any governmental authority
which may be applicable thereto; and notwithstanding any provision of the Plan
or any Award, Grantees shall not be entitled to exercise Awards or receive the
benefits thereof and the Bank shall not be obligated to deliver any Stock or pay
any benefits to a Grantee if such exercise, delivery, receipt or payment would
constitute a violation by the Grantee or the Bank of any such law or regulation.
26. CONTROLLING LAW. The law of New York, except its law with respect
to choice of law, shall be controlling in all matters relating to the Plan,
except to the extent that such laws are preempted by the federal laws of the
United States of America, and shall be subject to the provisions of section
140-a of the New York State Banking Law and the regulations of the Banking Board
of the State of New York and any other applicable law or regulation.
27. SEVERABILITY. If all or any part of the Plan is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any
-19-
<PAGE>
<PAGE>
portion of the Plan not declared to be unlawful or invalid. Any Section or part
of a Section so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.
-20-
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of The Greater New York Savings Bank 1996 Non-Employee
Directors Stock Option Plan (as set forth herein and as amended from time to
time, the "Plan") is to encourage qualified persons to become and remain
directors of The Greater New York Savings Bank (the "Company") and to provide
directors of the Company with a more direct stake in its success.
ARTICLE II
DEFINITIONS
2.1 "Annual Meeting" means an annual meeting of the stockholders of the Company.
2.2 "Article" means an Article of this Plan.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Common Stock" means the common stock, par value $1.00 per share, of the
Company.
2.5 "Director" means a member of the Board.
2.6 "Effective Date" shall have the meaning provided in Article XII.
2.7 "Eligible Director" means a Director who is not an employee of the Company
or any of its subsidiaries as of the date of any grant of an Option to him.
2.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.9 "Fair Market Value" of a security means, as of any applicable date:
(i) if the security is listed for trading on a national securities
exchange or the NASDAQ National Market, the closing price, regular way, of
the security as reported on the consolidated transaction reporting system
applicable to such security, or if no such reported sale of the security
shall have occurred on such date, on the next preceding date on which there
was such a reported sale, or
(ii) if the security is not listed for trading on a national securities
exchange or the NASDAQ National Market, but is listed on the NASDAQ SmallCap
Market, the average of the closing bid and asked prices, regular way, on the
NASDAQ SmallCap Market or, if no such prices shall have been so reported for
such date, on the latest preceding date for which such prices were so
reported.
<PAGE>
<PAGE>
2.10 "Grantee" means the holder of an Option or any person entitled to exercise
an Option under Article VI.
2.11 "Option" means a right to purchase Common Stock granted under this Plan.
2.12 "Section 16 Person" means a person who is subject to potential liability
under Section 16(b) of the Exchange Act with respect to transactions
involving equity securities of the Company.
2.13 "Term" shall have the meaning provided in Article 5.2.
ARTICLE III
ADMINISTRATION
The Plan is intended to allow Eligible Directors to receive Options without
such Options causing them to cease to be "disinterested persons" (within the
meaning of Rule 16b-3 (or any successor rule) under the Exchange Act) with
respect to other stock plans of the Company. Accordingly, the Plan is intended
not to require discretionary action by any administrative body with regard to
any transaction under the Plan. Subject to the provisions of the Plan, the Board
shall have the power to construe and interpret the Plan, to determine all
questions (including factual questions) arising thereunder, and to adopt and
amend such rules for the administration of the Plan as it may deem desirable;
provided, however, that no such interpretation or rule shall change the number
of Options that may be granted under the Plan or the terms upon which, or the
times at which, or the periods within which, such Options may be exercised. Any
decision of the Board in the administration of the Plan shall be final. No
Director shall be liable for anything done or omitted to be done by such
Director or by any other Director in connection with the Plan, except for such
Director's willful misconduct.
ARTICLE IV
AMOUNT OF COMMON STOCK
The aggregate number of shares of Common Stock in respect of which Options
may be exercised shall not exceed 200,000, subject to adjustment pursuant to
Article VII. Such shares of Common Stock shall be authorized but unissued shares
of Common Stock. If any Options terminate or expire without being exercised in
whole or in part, new Options may be granted covering the shares not purchased
under such lapsed Options.
ARTICLE V
GRANT OF OPTIONS
5.1 Grant of Options. On the date of the Annual Meeting for 1996 and each
Annual Meeting thereafter, each Eligible Director who is elected or
re-elected to serve as a Director shall automatically be granted an Option
in respect of 4,000 shares of Common Stock.
5.2 Term of Options. Each Option shall have a term ("Term") of 10 years from
the date of grant, unless earlier terminated as provided herein.
-2-
<PAGE>
<PAGE>
5.3 Exercise Price. The exercise price per share for each Option shall be 100%
of the Fair Market Value of a share of Common Stock on the date of grant,
subject to adjustment pursu ant to Article VII.
5.4 Option Agreements. Each Option shall be evidenced by an agreement in such
form as the Board shall prescribe from time to time which shall set forth
or incorporate by reference the terms and conditions of the Option.
ARTICLE VI
EXERCISE OF OPTIONS
6.1 Vesting. An Option shall become exercisable on the earlier of (i) the first
anniversary of the grant date of such Option or (ii) death or disability;
provided in each such case that the Grantee has remained a Director at all
times since such grant date.
6.2 Exercise. An Option shall be exercised by delivery to the Company during
the Term of the Option of (i) written notice of the exercise specifying the
number of shares of Common Stock to be purchased and (ii) payment in full
for the shares of Common Stock being acquired thereunder. Payment may be
made in cash or alternatively, the exercise price may be paid by exchanging
previously owned shares of Common Stock that have been held by the Director
for at least 6 months with a fair market value equal to the Option exercise
price.
6.3 Limitation on Transferability of Shares.
(a) To the extent required by New York State Banking Law, shares of Common
Stock acquired in connection with the exercise of an Option shall not be
transferable, other than by will or by the laws of descent and
distribution, during the one-year period commencing on the date of
acquisition; provided, however, that the provisions of this Section 6.3(a)
shall not apply if the application of this section has been waived in
writing by the Superintendent of Banks of the State of New York.
(b) So long as the provisions of Section 6.3(a) hereof shall remain in
effect, all certificates for shares of Common Stock acquired in connection
with an Option shall bear the following restrictive legend:
THE TRANSFERABILITY OF SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS PURSUANT TO THE GREATER NEW YORK
SAVINGS BANK 1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN, A
COPY OF WHICH IS AVAILABLE FROM THE SECRETARY OF THE COMPANY.
6.4 Limitation on Transferability of Options. An Option by its terms shall not
be transferable by the Option holder other than by will or by the laws of
descent and distribution, and shall be exercisable, during the lifetime of
the Option holder, only by the Option holder.
-3-
<PAGE>
<PAGE>
6.5 Exercise After Termination of Directorship. If a person shall cease to be a
Director for any reason while holding an unexpired Option that has not been
fully exercised, such Option shall thereupon terminate; provided that such
person, or in the case of his death or adjudication of incompetency, his
executor, administrator, distributees, guardian or legal representative, as
the case may be, may exercise the Option (to the extent that it was
exercisable pursuant to Section 6.1 on the date the person ceased to be a
Director) at any time until the earliest to occur of (i) 30 days after the
date such person ceased to be a Director (if for any reason other than
death), (ii) one year after the date such person ceased to be a Director
(if on account of death), or (iii) the expiration of the Term of such
Option.
6.6 Exercise after Death. If an Option is exercised by the executors,
administrators, legatees or distributees of the estate of a deceased
Grantee or by the guardian or legal representative of a Grantee, the
Company shall be under no obligation to issue Common Stock thereunder
unless it is satisfied that the person or persons exercising the Option are
the duly appointed legal representatives of the optionee or of the deceased
optionee's estate or the proper legatees or distributees of such estate, as
applicable.
ARTICLE VII
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
7.1 Adjustments. If the outstanding Common Stock is changed by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
stock split, reverse stock split, stock dividend, rights offering,
combination, spinoff, exchange of shares, or the like, an appropriate
adjustment shall be made by the Board to (i) the aggregate number of shares
then-remaining available under the Plan, (ii) the number of shares of
Common Stock in respect of which Options are subsequently to be granted,
and (iii) to the extent that the following adjustments are necessary to
preserve the economic value of unexercised Options, the number or type of
shares of Common Stock subject to, and the exercise price of, outstanding
Options.
7.2 No Fractional Shares. If a fraction of a share would otherwise result from
any adjustment pursuant to Section 7.1, the adjusted share amount shall be
reduced to the next lower whole number.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses. The expenses of the Plan shall be borne by the Company. Any taxes
imposed on a Grantee upon exercise of an Option shall be paid by such
Grantee.
8.2 No Right to Re-Election. Neither the Plan nor any action taken hereunder
shall be construed as giving any Director any right to be retained or
re-elected as a Director.
8.3 Securities Registration. The Company shall not be obligated to deliver any
shares of Common Stock hereunder until such shares have been listed on each
securities exchange or
-4-
<PAGE>
<PAGE>
national market system on which the Common Stock may then be listed, and
until there has been compliance with such state or federal laws as the
Company may deem applicable.
8.4 Taxes. The Company shall not be required to issue shares of Common Stock
upon the exercise of an Option unless the Grantee first pay to the Company
such amount, if any, as may be requested by the Company to satisfy any
liability to withhold federal, state, local or foreign income or other
taxes relating to such exercise.
8.5 Rights as Stockholder. A Grantee shall not by reason of any Option have any
right as a stockholder of the Company with respect to the shares of Common
Stock which may be deliverable upon exercise of such Option until such
shares have been delivered to him.
8.6 Severability. If all or any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not
declared to be unlawful or invalid. Any Article or part of an Article so
declared to be unlawful or invalid shall, if possible, be construed in a
manner which gives effect to the terms of such Article or part of an
Article to the fullest extent possible while remaining lawful and valid.
8.7 Applicable Law. The law of New York, except its law with respect to choice
of law, shall be controlling in all matters relating to the Plan, except to
the extent that such laws are preempted by the federal laws of the United
States of America, and shall be subject to the provisions of section 140-a
of the New York State Banking Law and the regulations of the Banking Board
of the State of New York and any other applicable law or regulation.
ARTICLE IX
AMENDMENT
9.1 Amendment. The Board may amend or revise the Plan in whole or in part at
any time; provided, however, that:
(i) no amendment of the Plan shall adversely affect the rights of any
Grantee under an Option without the consent of such Grantee;
(ii) any such amendment or revision shall be subject to approval by the
Superintendent of Banks of the State of New York and no such amendment
shall be effective prior to the date on which such approval is obtained;
(iii) subject to section 7.1, the following amendments or revisions shall
be subject to approval of the holders of a majority of the Company's
outstanding capital stock:
(a) an increase in the number of shares of Common Stock as to which
Options may be granted;
-5-
<PAGE>
<PAGE>
(b) a change in the number of shares of Common Stock which may be
optioned to any single individual;
(c) the vesting conditions, terms of exercisability, timing, amount or
exercise price of Options;
(d) an extension of the term of the Plan or the term of an Option
previously granted;
(e) a change in the class of individuals eligible to be granted an
Option; or
(f) any change which requires an amendment of the Company's Restated
Organization Certificate; and
(iv) any amendment or revision of the Plan, subject to the provisions of
Section 9.1(iii) above, shall be subject to the approval of the holders of
a majority of the shares of Common Stock present and entitled to vote at a
meeting of the Company's stockholders to the extent that such approval is
required (a) to permit the grant of Options to Section 16 Persons under,
and transactions in Common Stock by Section 16 Persons pursuant to, the
Plan to be exempt from potential liability under Section 16(b) of the
Exchange Act, or (b) by the listing requirements of any securities exchange
or national market system on which are then listed the Company's equity
securities.
ARTICLE X
APPROVAL OF PLAN
This Plan shall be contingent on the approval thereof by the stockholders
of the Company no later than the first Annual Meeting of Stockholders held after
the adoption by the Board of the Plan, and on the final approval of the Plan by
the Superintendent of Banks of the State of New York in accordance with Part 26
of the General Regulations of the Banking Board. No Award granted hereunder
shall be effective, nor shall any such Award be exercised or any shares of
Common Stock issued or purchased hereunder, prior to the approval of the Plan by
the stockholders of the Company and the final approval of the Plan by the
Superintendent of Banks of the State of New York.
ARTICLE XI
TERMINATION
The Plan shall terminate on the 10th anniversary of the Effective Date of
the Plan, unless sooner terminated by the Board. Any termination of the Plan
shall not affect any Option then outstanding.
-6-
<PAGE>
<PAGE>
ARTICLE XII
EFFECTIVE DATE
The Plan shall become effective on April 26, 1996.
-7-
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
INCENTIVE SAVINGS PLAN
ARTICLE I.
PURPOSE
Effective as of December 1, 1972, THE GREATER NEW YORK SAVINGS BANK
adopted The Greater New York Savings Bank Incentive Savings Plan, and executed a
trust agreement to enable its eligible Employees to participate therein.
The Plan was subsequently amended on July 12, 1973. Effective as of
December 31, 1975, The Greater New York Savings Bank adopted the amended and
restated Plan as set forth herein. The amended and restated Plan was further
amended effective November 1, 1977, July 1, 1978, November 1, 1982 and January
1, 1983.
Effective May 1, 1983, the Plan was amended and restated to meet the
requirements of Sections 401(k) and 402(a)(8) of the Internal Revenue Code of
1954. The Plan was subsequently amended effective January 1, 1984, October 1,
1984, August 23, 1984 and January 1, 1985. The Plan was again amended on a) July
17, 1986, effective July 1, 1986 and August 1, 1986; on b) November 26, 1986,
effective November 26, 1986; on c) December 23, 1986, effective December 23,
1986; on d) March 12, 1987, effective March 31, 1987; and on e) November 30,
1988, effective July 1, 1988 and August 8, 1988.
On December 8, 1988, the Plan was amended and restated as of January 1,
1989, to comply with applicable provisions of the Tax Reform Act of 1986 ("TRA")
and the Employer adopted such amended and restated Plan, all amendments being
effective retroactively to the date required by TRA. The Plan was subsequently
amended January 25, 1989, effective January 25, 1989, and February 16, 1989,
effective March 10, 1989. The Plan was amended and restated on June 8, 1989,
effective January 1, 1989. The Plan was further amended on April 23, 1993,
effective April 23, 1993, on July 28, 1993, effective January 1, 1993, on
December 9, 1993, effective January 1, 1992 and January 1, 1994, and on October
26, 1994, effective October 26, 1994. The Plan was again amended and reinstated
on August 10, 1995, effective September 1, 1995 ("Effective Date"). The Plan, as
in effect from time to time prior
1
<PAGE>
<PAGE>
to the Effective Date is referred to herein as the "prior provisions of the
Plan".
The Greater New York Savings Bank Incentive Savings Trust, which was
established by trust agreement on December 1, 1972, was amended and restated on
July 12, 1973, and again on December 31, 1975, on September 13th, 1984, and as
of March 31, 1987. The Trust was amended and reinstated in its entirety by
agreement dated August 10, 1995, and is intended to form a part of the Plan.
The Plan and Trust are intended to meet the requirements of The
Internal Revenue Code of 1986 ("Code") Sections 401(a) and 501(a), as amended by
the Employee Retirement Income Security Act of 1974.
The provisions of this Plan shall apply only to an Employee who
terminates employment on or after the Effective Date. The rights and benefits,
if any, of a former employee shall be determined in accordance with the prior
provisions of the Plan in effect on the date his employment terminated.
ARTICLE II.
DEFINITIONS AND CONSTRUCTION
2.1 Definitions: The following words and phrases, when used herein,
unless their context clearly indicates otherwise, shall have the following
respective meanings:
(a) Plan: The Greater New York Savings Bank Incentive Savings Plan, the Plan set
forth herein, as amended from time to time.
(b) Trust: The fund known as The Greater New York Savings Bank Incentive
Savings Plan Trust, as from time to time amended, which constitutes a part of
this Plan.
(c) Employer: The Greater New York Savings Bank, a banking corporation organized
and existing under the laws of the State of New York, or its successors in
interest, all corporations which are part of a controlled group of corporations
(as defined in Section 414(b) of the Internal Revenue Code, all other trades or
businesses (whether or not incorporated) which are under common control (as
defined in Section 414(c) of the Internal Revenue Code), all
2
<PAGE>
<PAGE>
affiliated service groups (as defined in Section 414(m) of the Internal Revenue
Code and any other entity required to be aggregated with the Employer pursuant
to Section 414 (o) of the Internal Revenue Code.
(d) Effective Date: September 1, 1995, the date on which the provisions of this
amended and restated Plan became effective.
(e) Committee: The directors appointed under the provisions of Article X to
administer the Plan.
(f) Employee: Any person who, on or after the Effective Date, is receiving
remuneration for personal service rendered to the Employer (or who would be
receiving such remuneration except for an Authorized Leave of Absence). In
addition, any leased employee shall be treated as an Employee of the Employer.
However, contributions or benefits provided by the leasing organization for any
leased Employee which are attributable to services performed for the Employer
shall be treated as provided by the Employer. Any leased employee shall not be
treated as an Employee if such Employee is covered by a money purchase pension
providing: (1) a nonintegrated employer contributions rate of at least 10% of
compensation, as defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Section 125 of the Code, (2)
immediate participation, and (3) full and immediate vesting, and leased
Employees do not constitute more than 20% of the Employer's non-highly
compensated workforce. For purposes of this Plan, the term "leased employee"
means any person who, on or after the Effective Date, and pursuant to an
agreement between the Employer and any other person ("leasing organization") has
performed services for the Employer (or for the Employer and related persons
determined in accordance with Section 414(n) (6) of the Internal Revenue Code on
a substantially full time basis for a period of at least one year and such
services are of a type historically performed by employees in the business field
of the Employer.
(g) Participant: An Employee participating in the Plan who satisfies the
requirements of Article III.
(h) Participation: The period commencing as of the date the Employee became a
Participant and ending on the date his employment
3
<PAGE>
<PAGE>
with the Employer terminated except that with respect to a Former Participant,
limited participation in the Trust Income continues until his vested account
balance is distributed.
(i) Former Participant: A Participant whose employment with the Employer has
terminated but who has a vested account balance under the Plan which has not
been paid in full, and, therefore is continuing in the allocation of Trust
Income.
(j) Plan Year: The 12-month period commencing on January 1 and ending on
December 31.
(k) Authorized Military Leave of Absence: An Authorized Leave of Absence due to
service in the Armed Forces of the United States shall constitute hours of
employment under the Plan, provided that the absence is caused by war, or other
emergency, or provided that the Employee is required to serve under the laws of
conscription in time of peace, and further provided that the Employee returns to
employment with the Employer within the period of six months. In addition, the
term "military service" may include such other public service and for such
periods as the Board of Trustees may from time to time approve and determine, so
long as all Employees in like circumstances are similarly treated.
(l) Authorized Non-Military Leave of Absence: An authorized non-military leave
of absence shall constitute hours of employment under the Plan in the event of
temporary absence from work for any period not exceeding one year for which a
Participant shall have been granted leave of absence by the Employer. Absence
from work for a period greater than one year, or failure to return to work upon
the expiration of the period of leave of absence granted by the Employer, shall
terminate participation in the Plan. Upon expiration of a one year period of
absence, the leave of absence may be extended for such further period as may be
determined by the Employer provided that all Employees in like circumstances
shall be similarly treated in the granting of such leave of absence.
Contributions to the Plan by the Employee may be made provided the Employee is a
Participant in the Plan and is receiving full or partial wages from the Employer
for the period of the authorized leave.
(m) Employee Contribution Account: The account maintained for a Participant to
record his voluntary, non-deductible contributions
4
<PAGE>
<PAGE>
made pursuant to the prior provisions of the Plan and adjustments relating
thereto.
(n) Elective Contribution Account: The account maintained for a Participant to
record contributions made on his behalf by the Employer pursuant to salary
reduction agreement described in Section 4.1, and any adjustments relating
thereto.
(o) Employer Contribution Account: The account maintained for a Participant to
record his share of the contributions of the Employer and adjustments relating
thereto.
(p) Compensation: An Employee's regular wages including all contributions to his
Elective Contribution Account and all amounts deferred under Code Section 125,
but excluding all extra payments or other special compensation, such as but not
limited to overtime pay, bonuses, commissions, fringe benefits and any
contributions to either his Employee Contribution Account or Employer
Contribution Account. Effective for Plan Years beginning after December 31,
1988, this Plan shall not take into consideration a Participant's Compensation
to the extent it exceeds $200,000.00, as indexed under Code Section 415(d).
Effective for Plan Years beginning after December 31, 1993, this Plan shall not
take into consideration a Participant's Compensation to the extent it exceeds
$150,000, as indexed under Code Sections 401(a)(17) and 415(d). In determining
the Compensation of a Participant for purposes of this limitation, the rules of
section 414(q)(6) of the Code shall apply, except in applying such rules, the
term "family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the Plan Year.
(q) Forfeitures: The portion of a Participant's Employer Contribution Account
which is forfeited because of termination of employment before full vesting.
(r) Income: The net income of the Trust Fund from investments, as reflected by
interest payments, dividends, realized and unrealized gains and losses on
securities, other investment transactions and expenses paid from the Trust Fund.
In determining the Income of the Trust Fund for any period, assets shall be
valued on the basis of their fair market value.
5
<PAGE>
<PAGE>
(s) Valuation Date: The Trust Fund shall be valued on a daily basis.
(t) Disability: A physical or mental impairment, which totally incapacitates the
Participant from performance of his duties. The Committee shall abide by the
determination of the Social Security Administration for purposes of its
determination.
(u) Beneficiary: A person or persons (natural or otherwise) designated by a
Participant in accordance with the provisions of Article VIII to receive any
benefit which shall be payable under this Plan.
(v) ERISA: Public Law No. 93-406, the Employee Retirement Income Security Act of
1974, as amended from time to time.
(w) Fiduciaries: The Employer, the Committee, the Plan Administrator, and the
Trustee, but only with respect to the specific responsibilities of each for Plan
and Trust administration, all described in Article X.
(x) Trustee: The corporation or individuals appointed by the Committee to
administer the Trust.
(y) Investment Unit: The unit of measure of a Participant's proportionate
undivided beneficial interest in one or more of Fund A, Fund B, Fund C, Fund D
and Fund E, of the Trust Fund, which units shall be known as "A Investment
Units", "B Investment Units", "C Investment Units", "D Investment Units" and "E
Investment Units", respectively.
(z) Value of Account: The value of all Investment Units and/or shares of
Employer stock credited to the Employee Contribution Account, Elective
Contribution Account and Employer Contribution Account for the Participant.
(aa) Hours of Service: An Hour of Service shall mean (i) Each hour for which an
Employee is directly or indirectly paid, or entitled to payment by the Employer
for the performance of duties during an applicable computation period. These
hours shall be credited to the Employee for the computation period or periods in
which the duties were performed; or (ii) Each hour for which back pay,
irrespective of mitigation of damages, has either been awarded or
6
<PAGE>
<PAGE>
agreed to be paid by the Employer. These hours shall be credited to the Employee
for computation period or periods to which the award or agreement pertains,
rather than for the computation periods in which the awards, agreement or
payment is made; or (iii) Each hour for which an Employee is directly or
indirectly paid or entitled to such payment by Employer for reasons (such as
vacation, sickness or disability) other than the performance of duties during an
applicable computation period. Irrespective of whether these hours have accrued
in other computation periods, these hours shall be counted in the computation
period in which either payment is actually made or amounts payable to the
Employee become due; or (iv) Each hour for which an Employee is required to be
credited under any federal law; and (v) The crediting of any Hour of Service
shall be made under only one of the four preceding paragraphs.
In all cases, an "Hour of Service" shall be credited in accordance with
Department of Labor regulation 2530.200(b)-2.
(bb) Year of Service: A Year of Service shall mean a twelve consecutive month
period during which an Employee has at least 1,000 Hours of Service with the
Employer. For purposes of eligibility to participate, vesting, compensation and
accrual of benefits, the computation period for the determination of a Year of
Service shall be based upon the anniversary date of employment.
(cc) Break in Service: A Break in Service shall mean a twelve consecutive month
period commencing on the anniversary date of employment during which a
Participant completes 500 hours of service or less. In cases of absence for
maternity or paternity leave described in Section 5.6, the rules of Section 5.6
shall apply in determining whether a Break in Service has occurred.
(dd) Eligible Employee: An Employee who satisfies the requirements of Article
III, even if said Employee chooses not to participate in the Plan.
(ee) Highly Compensated Employee: The term highly compensated employee includes
highly compensated active Employees and highly compensated former Employees.
A Highly Compensated active Employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received compensation from the
7
<PAGE>
<PAGE>
Employer in excess of $75,0000 (as adjusted pursuant to section 415(d) of the
Code; (ii) received compensation from the Employer in excess of $50,000 (as
adjusted pursuant to section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Employer and
received compensation during such year that is greater than 50 percent of the
dollar limitation in effect under section 415(b) (1) (A) of the Code. The term
Highly Compensated Employee also includes (i) Employees who are both described
in the preceding sentence if the term "determination year" is substituted for
the term "look-back year" and the Employee is one of the 100 Employees who
received the most Compensation from the Employer during the determination year;
and (ii) Employees who are 5 percent owners at any time during the look-back
year or determination year.
If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or a look-back year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the employer during the
determination year, and was a highly compensated active Employee for either the
separation year or any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during the determination year or look-back year, a
family member of either a 5 percent owner who is an active or former Employee or
a highly compensated employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the family and the 5 percent owner or top-ten highly compensated
Employee shall be aggregated. In such case, the family member and the 5 percent
owner or top-ten highly compensated Employee shall be treated as a single
Employee receiving compensation and plan contributions or benefits equal to the
sum of such compensation and contributions or benefits to the family member and
5 percent owner
8
<PAGE>
<PAGE>
or top-ten highly compensated Employee. For purposes of this section, family
member includes the spouse, lineal ascendants and descendants of the Employee or
former Employee and the spouses of such lineal ascendants and descendants.
The determination of who is a highly compensated employee, including
the determination of the number and identity of employees in the top-paid group,
the top 100 employees, the number of employees treated as officers and the
compensation that is considered, will be made in accordance with section 414(q)
of the Code and the regulations thereunder.
(ff) Board of Directors: The Board of Directors of The Greater New York Savings
Bank, as constituted from time to time.
2.2 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words, "hereof", "herein", "hereunder" and other
similar compounds of the word "here" shall mean and refer to the entire Plan and
not to any particular provision or Section.
ARTICLE III.
PARTICIPATION
3.1 Active Participants on Effective Date: Any Employee who shall be a
Participant under the prior provisions of the Plan as it was constituted on the
Effective Date shall continue to participate in accordance with the provisions
of this amended and restated Plan.
3.2 New Participants: On or after the Effective Date, Employees shall
become eligible to participate in the Plan on the first day of the payroll
period immediately following the completion of one Year of Service.
3.3 Entry Into The Plan: An Employee who is eligible under Sections 3.1
or 3.2 of this Article, shall become a Participant on the first day of the
payroll period for which the contributions described in Section 4.2 are made to
this Plan. A Former Participant will become a Participant immediately upon
returning to the employ of the Employer, if such Former Participant had a
9
<PAGE>
<PAGE>
non-vested interest in all or any portion of the account balance derived from
Employer matching contributions made pursuant to Section 4.1 at the time of
termination of service and such non-vested interest, which was forfeited
pursuant to Section 5.4, is subject to restoration pursuant to Section 4.7.
3.4 Discontinuance of Contributions: If a Participant elects not to
have the Employer make contributions to the Plan pursuant to a salary reduction
agreement described in Section 4.2, his contribution accounts shall be placed on
inactive status and shall continue to share in fund performance as described in
Article VII. Except as otherwise provided by the provisions of this Plan, a
Participant may enter into a salary reduction agreement authorizing the Employer
to make contributions described in Section 4.2 at any time.
3.5 Exclusions: Notwithstanding anything to the contrary herein, no
leased employee who must be treated as an Employee under Section 414(n) of the
Code, shall be eligible for participation in this Plan. Additionally, no
Employee of any subsidiary or affiliated corporation of The Greater New York
Savings Bank shall be eligible for participation in this Plan, notwithstanding
the fact that such individual is an Employee of a corporation which is a member
of a controlled group of corporations (as defined in Section 414(b) of the Code
or an Employee of a trade or business (whether or not incorporated) which is
under common control (as defined in Section 414(c) of the Code) or an Employee
of a member of an affiliated service group (as defined in Section 414(m) of the
Code or an Employee of any other entity required to be aggregated with the
Employer under Section 414(o) of the Code, unless such subsidiary or affiliated
corporation or entity, with the approval of the Board of Directors and subject
to such conditions as the Board of Directors may impose, adopts this Plan.
3.6 Transfers:
(a) For the purposes of determining eligibility to participate in the Plan and
Years of Service for the purposes of vesting, a Participant shall receive credit
for all employment with any subsidiary or affiliated corporation which is a
member of the controlled group of corporations of which the Employer is a part,
as defined by ERISA and regulations issued thereunder provided all
10
<PAGE>
<PAGE>
such employment is determined in accordance with the reemployment provisions of
this Article III.
(b) If a Participant is transferred to employment with a member of the
controlled group of corporations of which the Employer is a part, which member
of the controlled group corporations has not been authorized by the Board of
Directors to adopt the Plan pursuant to Section 3.5, his participation under the
Plan shall be suspended, provided, however, that during the period of his
employment in such ineligible position: (i) Subject to the reemployment
provisions of Section 3.3, service for vesting purposes under Section 5.1 shall
continue to accrue, (ii) he shall cease to have any right to have elective
salary reduction contributions or matching contributions made on his behalf by
the Employer pursuant to Article IV, and (iii) the withdrawal privileges under
the provisions of Article VIII shall continue to apply.
ARTICLE IV.
CONTRIBUTIONS
4.1 Employer Contributions: Each month, the Employer shall
contribute an amount equal to the total amount of contributions ("Elective
Contributions") agreed to be made by it pursuant to salary reduction agreements
under Section 4.2 entered into between the Employer and Participants.
In addition, each month the Employer will make Employer
matching contributions ("Employer Matching Contributions") equal to 1) the
Participant's Elective Contributions to the Plan up to the Participant's first
6% of Compensation for each Participant for the time during which he
participated in the Plan. In no event, however, shall a) Employer Matching
Contributions be made in excess of 6% of any Participant's Compensation or b)
Employer Contributions for any Plan Year made pursuant to this Article IV exceed
the amount deductible for such Plan Year for income tax purposes as a
contribution to the Trust under applicable provisions of the Code.
The Employer shall also have the authority to make additional
contributions to Plan on behalf of Participants.
11
<PAGE>
<PAGE>
All contributions of the Employer shall be made out of current
net earnings, Undivided Profits and Surplus.
Employer Contributions will be credited to the respective
Participant's account and invested in accordance with the Participant's election
under Article VII of the Plan.
4.2 Elective Salary Reduction: A Participant may elect to enter into a
written salary reduction agreement with the Employer. The terms of the salary
reduction agreement shall provide that the Participant agrees to accept a
reduction in salary from the Employer equal to any whole percentage of his
Compensation on any applicable pay day, not to exceed the lesser of: (1) 9% of
such Compensation or (2) $7000.00 as indexed under Code Section 402(g)(5). In
consideration for such agreement, the Employer will make a salary reduction
contribution to the Employee's Elective Contribution Account on behalf of the
Participant for such month in an amount equal to the total amount by which the
Participant's Compensation from the Employer was reduced pursuant to the salary
reduction agreement. A Participant's Elective Contributions shall be made only
by payroll deductions authorized by written direction of the Participant filed
with the Plan Administrator on such form as may be prescribed by the Committee.
For purposes of this Section 4.2, the Employer shall have the right to increase
the Employee's compensation by the amount of any Employee salary deferrals under
Code Section 125, 129 and 401(k), or to use such alternate definition of
Compensation as the Internal Revenue Service may provide by regulation under
Section 414(s).
Amounts credited to a Participant's Elective Contribution Account shall
be 100 percent vested and non-forfeitable at all times. If a Participant enters
into a salary reduction agreement with the Employer for a given Plan Year, his
Compensation for such Plan Year for all other purposes of this Plan, shall be
equal to his Compensation after application of the salary reduction agreement.
(a) The Employer may revoke its salary reduction agreements with all
Participants or amend its salary reduction agreement with all Participants on a
uniform basis if it determines that it will not have sufficient current net
earnings, Undivided Profits or Surplus to make such contributions.
12
<PAGE>
<PAGE>
(b) The Employer may amend or revoke its salary reduction
agreement with any Participant at any time, if the Employer determines that such
revocation or amendment is necessary to insure that a Participant's Annual
Additions for any Plan Year will not exceed the limitations of Section 4.11 of
the Plan, Section 402(g) of the Code, or to insure that the discrimination tests
of Section 401(k) of the Internal Revenue Code are met for such Plan Year as
provided in Section 4.3 below.
(c)(i) If Elective Contributions are made by a Participant in
excess of the limits in this Section 4.2, then such excess Elective Contribution
(together with any earnings or loss thereon) shall be distributed, no later than
March 15, 1989 and each March 15 thereafter, to Participants to whose Accounts
such excess Elective Contributions were allocated for the preceding calendar
year and who claim such excess Elective Contribution, in accordance with
subsection 4.2(c)(iii), for such calendar year. With respect to any Plan Year, a
Participant's Elective Contributions are the sum of all Employer Contributions
made on behalf of such Participant pursuant to an election to defer under any
qualified Cash or Deferred Arrangement as described in Section 401(k) of the
Code.
(ii) The earnings or loss attributable to any excess Elective
Contributions described in subsection (c) of this Section 4.2 shall be
determined by the Plan Administrator. The Plan Administrator shall calculate
such earnings or loss as provided herein and may make any special allocations of
earnings or other amounts necessary to carry out such distribution. The earnings
or loss on such excess Elective Contributions is the sum of (1) the earnings or
loss allocable to the Participant's Elective Contribution Account for the Plan
Year multiplied by a fraction, the numerator of which is such excess Elective
Contributions on behalf of the Participant for the Plan Year and the denominator
of which is the account balance in the Participant's Elective Contribution
Account without regard to any income or loss occurring during such Plan Year;
and (2) ten percent of the amount determined under (1) multiplied by the number
of whole calendar months between the end of the Plan Year and the date of
distribution counting the month of distribution if the distribution occurs after
the 15th of such month.
13
<PAGE>
<PAGE>
(iii) A Participant may claim the excess Elective
Contributions for the preceding Calendar Year under subsection (c)(i) in
accordance with this subsection. The Participant's claim shall be in writing;
shall be submitted to the Plan Administrator not later than March 1; shall
specify the amount of such excess Elective Contributions for the preceding
calendar year; and shall be accompanied by the Participant's written statement
that if such amounts are not distributed, such excess Elective Contributions,
when added to amounts deferred under other plans or arrangements described in
section 401(k) of the Code, will exceed the limit imposed on the Participant by
section 402(g) of the Code for the Plan Year in which the deferral occurred.
4.3 Limitations: The Employer may limit, revoke or amend its agreement
to make tax-deferred Elective Contributions and its obligations to make Employer
Matching Contributions under Section 4.1 on behalf of any Participant,as well as
any Agreement to permit Employee Contributions, at any time, but only if it
determines that such limitation, revocation or amendment is necessary under one
of the following circumstances:
(a) The Actual Deferral Percentage (hereinafter "ADP") for Participants
who are Highly Compensated Employees for each Plan Year and the ADP for
Participants who are Non-highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
1. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
2. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-highly Compensated Employees for the same Plan Year
multiplied by 2.0 provided that the ADP for Participants who are Highly
Compensated Employees does not exceed the ADP for Participants who are
Non-highly Compensated Employees by more than two (2) percentage
points.
Special Rules
1. The ADP for any Participant who is a Highly
14
<PAGE>
<PAGE>
Compensated Employee for the Plan Year and who is eligible to
have Elective Contributions allocated to his or her accounts
under two or more arrangements described in Section 401(k) of
the Code, that are maintained by the Employer, shall be
determined as if such Elective Contribution were made under a
single arrangement. If a Highly Compensated Employee
participates in two or more cash of deferred arrangements
("CODA") that have different Plan Years, all CODAs ending with
or within the same calendar year shall be treated as a single
arrangement.
2. In the event that this Plan satisfies the requirements of
Section 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this section
shall be applied by determining the ADP of Employees as if
such plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy
Section 401(k) of the Code only if they have the same Plan
Year.
3. For the purposes of determining the ADP of a Participant
who is a 5-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Elective Contributions and
Compensation of such Participant shall include the Elective
Contributions and Compensation for the Plan Year of Family
Members (as defined in Section 414(q)(6) of the Code). Family
Members, with respect to such Highly Compensated Employees,
shall be disregarded as separate Employees in determining the
ADP both for Participants who are Non-highly Compensated
Employees and for Participants who are Highly Compensated
Employees.
4. For the purposes of determining the ADP test, Elective
Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to
which contributions relate.
5. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test.
15
<PAGE>
<PAGE>
6. The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
Definitions
1. "Actual Deferral Percentage" shall mean, for a specified
group of Participants for a Plan Year, the average of the
ratios (calculated separately for each Participant in such
group) of (1) the amount of Employer Contributions actually
paid over the trust on behalf of such Participant for the Plan
Year to (2) the Participant's Compensation for such Plan Year
(whether or not the Employee was a Participant for the entire
Plan Year). Employer Contributions on behalf of any
Participant shall include any Elective Contributions made
pursuant to the Participant's deferral election, including
Excess Elective Contributions (i.e., Elective Contributions
that are includable in a Participant's gross income under
Section 402(g) of the Code to the extent such Participant's
Elective Contributions for the Plan Year exceed the dollar
limitation under such Code section), but excluding Elective
Contributions that are taken into account in the Contribution
Percentage test (provided the ADP test is satisfied both with
and without exclusion of these Elective Deferrals). For
purposes of computing Actual Deferral Percentage, an Employee
who would be a Participant but for the failure to make
Elective Contributions shall be treated as a Participant on
whose behalf no Elective Contributions are made.
(b) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose accounts such Excess Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the Employer maintaining the Plan with respect to
such amounts. Such distributions shall be made to Highly Compensated Employees
on the basis of the respective portions of the Excess Contributions attributable
to each of such Employees. Excess Contributions shall be allocated to
Participants
16
<PAGE>
<PAGE>
who are subject to the family member aggregation rules of Section 414(q)(6) of
the Code in the manner prescribed by the regulation.
Excess Contributions shall be treated as annual additions under the
Plan.
Determination of Income or Loss: Excess Contributions shall be adjusted
for any income or loss up to the date of distribution. The income or loss
allocable to Excess Contributions is the sum of: (1) income or loss allocable to
the Participant's Elective Contribution Account for the Plan Year multiplied by
a fraction, the numerator of which is such Participant's Excess Contributions
for the year and the denominator is the Participant's account balance
attributable to Elective Contributions without regard to any income or loss
occurring during such Plan Year; and (2) ten percent of the amount determined
under (1) multiplied by the number of whole calendar months between the end of
the Plan Year and the date of distribution, counting the month of distribution
if distribution occurs after the 15th of such month.
Accounting for Excess Contributions: Excess Contributions shall be
distributed from the Participant's Elective Contribution Account in proportion
to the Participant's Elective Contributions for the Plan Year.
Definition
1. "Excess Contributions" shall mean, with respect to any
Plan Year, the excess of:
a. The aggregate amount of Employer Contributions
actually taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
b. The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the highest
of such percentages).
(c) The Average Contribution Percentage ("ACP") for Participants who
are Highly Compensated Employees for each Plan Year and the ACP for Participants
who are Non-highly Compensated
17
<PAGE>
<PAGE>
Employees for the same Plan Year must satisfy one of the following tests:
1. The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
1.25; or
2. The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
two (2), provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the ACP for Participants who are
Non-highly Compensated Employees by more than two (2) percentage
points.
Special Rules
1. Multiple Use: If one or more Highly Compensated Employees
participate in both a CODA and a Plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ACP of those
Highly Compensated Employees who also participate in a CODA
will be reduced (beginning with such Highly Compensated
Employee whose ACP is the highest) so that the limit is not
exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amounts is reduced shall be
treated as an Excess Aggregate Contribution. The ADP and ACP
of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple
use does not occur if both the ADP and ACP of the Highly
Compensated Employees does not exceed 1.25 multiplied by the
ADP and ACP of the Non-highly Compensated Employees.
2. For the purposes of this section, the Contribution
Percentage for any Participant who is a Highly Compensated
Employee and who is eligible to have Contribution Percentage
Amounts allocated to his or her account under two or more
plans described in Section 401(a) of the Code, or arrangements
described in Section
18
<PAGE>
<PAGE>
401(k) of the Code that are maintained by the Employer, shall
be determined as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
3. In the event that this Plan satisfies the requirements of
Section 401(m), 401(a) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this section
shall be applied by determining the Contribution Percentage of
Employees as if all such plans were a single plan. For Plan
Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only
if they have the same Plan Year.
4. For the purposes of determining the Contribution Percentage
of a Participant who is a five-percent owner or one of the ten
most highly-paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such
Participant shall include the Contribution Percentage Amounts
and Compensation for the Plan Year of Family Members (as
defined in Section 414(q)(6) of the Code). Family Members,
with respect to Highly Compensated Employees, shall be
disregarded as separate employees in determining the
Contribution Percentage both for Participants who are
Non-highly Compensated Employees and for Participants who are
Highly Compensated Employees.
5. For purposes of determining the Contribution Percentage
test, Employee Contributions are considered to have been made
in the Plan Year in which contributed to the trust. Matching
Contributions will be considered made for a Plan Year if made
no later than the end of the twelve-month period beginning on
the day after the close of the Plan Year.
19
<PAGE>
<PAGE>
6. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test.
7. The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
Definitions
1. "Aggregate Limit" shall mean the sum of (i) 125 percent of
the greater of the ADP of the Non-highly Compensated Employees
for the Plan Year or the ACP of Non-highly Compensated
Employees under the Plan subject to Code Section 401(m) for
the Plan Year beginning with or within the Plan Year of the
CODA and (ii) the lesser of 200% or two plus the lesser of
200% or two plus the lesser of such ADP or ACP.
2. "Average Contribution Percentage" shall mean the average of
the Contribution Percentages of the Eligible Participants in a
group.
3. "Contribution Percentage" shall mean the ratio (expressed
as a percentage) of the participant's Contribution Percentage
Amounts to the Participant's Compensation for the Plan Year
(whether or not the Employee was a Participant for the entire
Plan Year).
4. "Contribution Percentage Amounts" shall mean the sum of any
Employee Contributions and Matching Contributions made under
the Plan on behalf of the Participant for the Plan Year.
5. "Eligible Participant" shall mean any Employee who is
eligible to make an Employee Contribution or to receive a
Matching Contribution. If an Employee Contribution is required
as a condition of participation in the Plan, any Employee who
would be a Participant in the Plan if such Employee made a
contribution shall be treated as an eligible Participant on
behalf of whom no Employee Contributions are made.
20
<PAGE>
<PAGE>
6. "Employee Contribution" shall mean any contribution made to
the Plan by or on behalf of a Participant that is included in
the Participant's gross income in the year in which made and
that is maintained under a separate account to which earnings
and losses are allocated.
7. "Matching Contributions" shall mean an Employer
contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Employee
Contribution made by such Participant, or on account of a
Participant's Elective Deferral, under a Plan maintained by
the Employer.
(d) Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited, if forfeitable, or if not forfeitable, distributed no later than the
last day of each Plan Year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated to Participants who are subject to
the family member aggregation rules of Section 414(q)(6) of the Code in the
manner prescribed by the regulations. If such Excess Aggregate Contributions are
distributed more than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will be imposed on the
Employer maintaining the Plan with respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions under the Plan.
Determination of Income or Loss: Excess Aggregate
Contributions shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Aggregate Contributions is
the sum of (1) income or loss allocable to the Participant's Employee
Contribution Account and Matching Contribution Account of the Plan Year
multiplied by a fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator is the Participant's
account balance(s) attributable to Contribution Percentage Amounts without
regard to any income or loss occurring during such Plan Year; and (2) ten
percent of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of distribution,
counting the month
21
<PAGE>
<PAGE>
of distribution if distribution occurs after the 15th of such month.
Forfeitures of Excess Aggregate Contributions: Forfeitures of
Excess Aggregate Contributions will be applied to reduce Employer Contributions.
Accounting for Excess Aggregate Contributions: Excess
Aggregate Contributions shall be forfeited, if forfeitable or distributed on a
pro-rata basis from the Participant's Employee Contribution Account, and
Matching Contribution Account.
Definitions
1. "Excess Aggregate Contributions" shall mean, with respect to any
Plan Year, the excess of:
a. The aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
b. The maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Elective Contributions pursuant to Section 4.3(a) and then determining
Excess Contributions pursuant to Section 4.3(c) hereof.
4.4 Employee Contributions: Participants are not permitted
to make any contributions under this Plan.
4.5 Changes in Elective Contributions: The percentage of Elective
Contributions elected under Section 4.2 shall continue in effect as long as the
Participant continues to participate, however, and except as provided herein, a
Participant may increase or decrease the percentage rate of his Elective
Contributions to any of the permitted percentages described in Section 4.2 or
Section 4.4 or suspend his Elective Contributions without
22
<PAGE>
<PAGE>
withdrawing from participation in the Plan, by completing and filing with the
Plan Administrator by the 15th day of any month, a form prescribed by the Plan
Administrator for such purposes. Such change shall become effective on the first
day of the month following receipt of said form provided it is filed with the
Plan Administrator by the 15th day of the month. Otherwise, it will take effect
on the first day of the next succeeding month. A Participant who has not
withdrawn from the Plan, but who has suspended his Elective Contributions may
resume them by complying with the requirements set forth in this section for
increasing or decreasing the amount of Elective Contributions. Any such
increase, decrease, suspension or resumption of Elective Contributions except as
further herein provided, may only be made 60 days after the effective date of
the last change elected by the Participant.
4.6 Disposition of Forfeitures: Upon termination of employment before
full vesting, a Participant's Forfeiture, if any, shall be credited to the
Employer and utilized by the Employer to offset the cost of the Employer in
making Employer matching contributions in current and future Plan Years.
4.7 Restoration of Forfeitures: If a person returns to the service of
the Employer before 5 consecutive one year Breaks in Service have occurred, any
amounts forfeited by him under Section 5.4 because of his previous termination
of employment shall be restored to his account. If a person returns to the
service of the Employer after 5 consecutive one year Breaks in Service have
occurred, no amount forfeited by him under Section 5.4 shall be restored to his
account.
4.8 Expenses: The Employer will pay all the administrative expenses of
the Plan and compensation and reimbursable expenses of the Trustee to the extent
required, except that any expenses other than those associated with Fund F and
Fund G directly related to the Trust Fund, such as transfer taxes, broker's
commissions, and registration charges, shall be paid from the Trust Fund or from
Fund A, Fund B, Fund C, Fund D or Fund E, to which such expenses directly
relate. The Employer shall pay all expenses related to Fund F. Each Participant
shall pay all expenses related to his investment in Fund G.
23
<PAGE>
<PAGE>
4.9 Payment of Contributions to Trustee: As promptly as practicable
after the first day of each month, the Employer will transmit the aggregate
amount of the Employer Matching Contributions for such month and the Elective
Contributions the Participant elected to have contributed to the Plan during the
preceding month, minus such portion, if any, of the Elective Contributions of
any Highly Compensated Employee recharacterized as a cash payments in accordance
with Section 4.3, to the Trustee to be held in the Trust Fund for the benefit of
the Participant, and the Plan Administrator shall designate the amount of such
contributions to be invested as part of Fund A, Fund B, Fund C, Fund D, Fund E
and Fund F in accordance with the Participant's election made under Article VII
of this Plan.
4.10 Individual Accounts: The Plan Administrator shall create and
maintain adequate records to disclose the interest in the Trust of each
Participant, Former Participant and Beneficiary. Such records shall be in the
form of individual accounts and credits and charges shall be made to such
accounts in the manner herein described. When appropriate, a Participant shall
have three separate accounts, an Employer Contribution Account, Employee
Contribution Account and an Elective Contribution Account. The maintenance of
individual accounts is only for accounting purposes, and a segregation of the
assets of the Trust Fund to each account shall not be required. Distribution and
withdrawals made from an account shall be charged to the accounts as of the date
paid.
4.11 Maximum Additions: Notwithstanding anything contained herein to
the contrary, the total Annual Additions made to the Employer Contribution
Account, the Employee Contribution Account and the Elective Contribution Account
of a Participant and to any other defined Contribution Plan of the Employer for
any Plan Year shall not exceed an amount equal to the lesser of: (1) $30,000,
adjusted each year for any cost-of-living increase applicable for that year, as
provided under Code Section 415(d) or any successor provision; or (2) 25% of the
Participant's compensation, as defined in Section 1.415-2(d)(1)(i) of the Income
Tax Regulations, from the Employer for such year. If such Annual Additions
exceed the limitations, the contributions made by the Participant for the Plan
Year which causes the excess shall be returned to the Participant.
(a) Notwithstanding the foregoing, the otherwise permissible Annual
Additions for any Participant under this Plan may be further
24
<PAGE>
<PAGE>
reduced to the extent necessary, as determined by the Committee, to prevent
disqualification of the Plan under IRC Section 415, which imposes the following
additional limitations on the benefits payable to Participants who also may be
participating in another tax-qualified pension, profit-sharing, savings or stock
bonus plan maintained by the Employer or any of the members of the controlled
group of corporations of which the Employer is a part: In any case in which a
Participant is also a Participant in one or more defined benefit plans
maintained by the Employer, the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any one year shall not exceed 1.0. The
defined benefit plan fraction for any Plan Year is a fraction the numerator of
which is the projected annual benefit of the Participant under such plan,
determined as of the close of the Plan Year, and the denominator of which is the
lesser of (i) the product of 1.25, multiplied $90,000, (adjusted periodically
for permissible cost of living increases) or (ii) the product of 1.4, multiplied
by 100% of the Participant's average monthly compensation, as defined in Section
1.415-2(d)(1)(i) or the Income Tax Regulations, during the three consecutive
years when total compensation paid to him was highest. The defined contribution
fraction for any Plan Year is a fraction the numerator of which is the sum of
the Annual Additions to the Participant's account as of the close of the Plan
Year, and the denominator of which is the sum of the lesser of the following
amounts determined for such year and for each prior year of service with the
Employer: (i) the product of 1.25, multiplied by $30,000. (adjusted periodically
for permissible cost of living increases) or (ii) the product of 1.4, multiplied
by 25% of the Participant's Compensation for such plan year. The extent to which
Annual Additions under the Plan shall be reduced, as compared with the extent to
which annual benefits under any defined benefit plan or any other defined
contribution plan shall be reduced in order to achieve compliance with the
limitations of IRC Section 415, shall be determined by the Committee in such
manner as to maximize the aggregate benefits payable to such Participant from
all such plans. If such reduction is under this Plan, the Committee shall advise
affected Participants of any additional limitations on their Annual Additions
required by this paragraph.
(b) For purposes of this provision, Annual Additions shall mean, with
respect to each Plan Year, the sum of (1) Employer contributions, including both
Employer Matching Contributions and Elective Contributions, and (2) Employee
contributions, if any.
25
<PAGE>
<PAGE>
For purposes of this Section 4.11, Compensation shall mean Compensation as
defined in Article I, including amounts contributed to this Plan by the Employee
pursuant to a salary reduction agreement with the Employer, plus bonuses,
overtime pay and any other amounts paid to a Participant by the Employer for
personal services as reported on the Participant's Federal income Tax
Withholding Statement (Form W-2).
(c) The above limitations are intended to comply with the provisions of
Section 415 of the Internal Revenue Code as amended so that the maximum benefits
provided by Plans of the Employers shall be exactly equal to the maximum amounts
allowed under Section 415 of the Internal Revenue Code and regulations
thereunder. If there is any discrepancy between the provisions of this Section
and the provisions of Section 415 of the Internal Revenue Code and regulations
thereunder, such discrepancy shall be resolved in such a way as to give full
effect to the provisions of Section 415 of the Code.
4.12 TOP-HEAVY PROVISIONS:
(a) Determination of Top-Heavy: The Plan will be considered a Top-Heavy
Plan for the Plan Year if as of the last day of the preceding Plan Year, (1) the
value of the sum of the Employer Contribution Accounts, the Elective
Contribution Accounts and the Employee Contributions Accounts (including any
contributions actually made on or before that date and allocated pursuant to
Section 4.1) of Participants who are Key Employees (as defined in Section 416(i)
of the Internal Revenue Code) exceeds 60% of the value of the sum of the
Employer Contributions Accounts, the Elective Contribution Accounts and the
Employee Contribution Accounts (including any contributions actually made on or
before that date and allocated pursuant to Section 4.1) of all Participants (the
"60% Test") or (2) the Plan is part of a Required Aggregation Group and the
Required Aggregation Group is top-heavy. However, and notwithstanding the
results of the 60% Test, the Plan shall not be considered a Top-Heavy Plan for
any Plan Year in which the Plan is part of a Required or Permissive Aggregation
Group which is not top-heavy.
For the purposes of this Section 4.12, if any individual has not
performed services for the Employer maintaining this Plan at
26
<PAGE>
<PAGE>
any time during the 5-year period ending on the determination date, any accrued
benefit for such individual (and the account of such individual) shall not be
taken into account in computing the 60% test.
A "Required Aggregation Group" includes (1) each plan of the Employer
in which a Key Employee is a participant and (2) each other plan of the Employer
which enables any plan described in subclause (1) of this sentence to meet the
requirements of section 401(a)(4) or 410 of the Internal Revenue Code. A
"Permissive Aggregation Group" includes any plan not required to be included in
a "Required Aggregation Group", if such group would continue to meet the
requirements of section 401(a)(4) and 410 of the Internal Revenue Code with such
plan being taken into account.
(b) Minimum Allocations: Notwithstanding the provisions of Section 4.1,
for any Plan Year during which the Plan is deemed a Top-Heavy Plan, the Employer
shall make the following Employer contributions to the accounts of each non-Key
Employee Participant and each non-Key Employee (who is eligible but has elected
not to participate in this Plan):
An amount equal to the percentage at which Employer Contributions, are
made on behalf of the Key Employee for whom such percentage is highest
for the year, but in no event more than 3% of such Employee's
compensation, as provided in Section 416(c)(2) of the Code. The
Employer shall have no obligation, however, to make any additional
Employer Contribution on behalf of a non-Key Employee, if the Employer
has already made a contribution to that non-Key Employee's Employer
Contribution Account or to the non-Key Employee's Elective Contribution
Account, in an amount equal to or greater than 3% of such non-Key
Employee's Compensation. Moreover, the Employer shall have no
obligation to make a Top-Heavy minimum contribution under this Plan on
behalf of any non-Key Employee for whom it has made the requisite
Top-Heavy minimum contribution to a defined benefit plan with which
this Plan must be aggregated pursuant to Section 416(g) of the Internal
Revenue Code.
(c) Minimum Vesting: If a Participant's termination of employment
occurs while the Plan is a Top-Heavy Plan, such Participant's vested percentage
in his Employer Contribution
27
<PAGE>
<PAGE>
Account shall not be less than the percentage determined in accordance with the
following table:
Vested Forfeited
Years of Service Percentage Percentage
---------------- ---------- ----------
less than 2 0% 100%
2 but less than 3 20 80
3 but less than 4 40 60
4 but less than 5 60 40
5 but less than 6 80 20
6 or more 100 0
(d) Compensation Limitation: For any Plan Year in which the Plan is a
Top-Heavy Plan, the compensation limitation described in Section 416(d) of the
Internal Revenue Code shall apply, subject to future adjustments. For the
purposes of computing the minimum allocation under Section 4.12(b) hereof,
compensation shall mean compensation as defined in Section 2.1(p).
(e) Change in Top-Heavy Status: If the Plan becomes a Top-Heavy Plan
and subsequently ceases to be such, the vesting schedule in subsection (c) of
this section shall continue to apply in determining the vested percentage of any
Participant who had at least five Years of Service as of December 31 in the last
Plan Year of top-heaviness. For other Participants, said schedule shall apply
only to their Employer Contributions Account balance as of such December 31.
(f) Impact on Maximum Benefit: For any Plan Year in which the Plan is a
Top-Heavy Plan, Section 4.11 shall be read by substituting the number "1.00" for
the number "1.25" wherever it appears therein except such substitution shall not
have the effect of reducing any benefit accrued under a defined benefit plan
prior to the first day of the Year in which this provision becomes applicable.
4.13 No Employer Contributions: Notwithstanding anything to the
contrary herein, no Employer Contributions shall be made to the Plan pursuant to
Section 4.1, 4.2 or otherwise after March 10, 1989.
28
<PAGE>
<PAGE>
ARTICLE V.
VESTING
5.1 Method of Vesting: Elective Contributions, and any Employee
Contributions made under the prior provisions of the Plan, and all earnings,
appreciation or additions allocable thereto, less any depreciation, loss or
distributions allocable thereto, shall always be fully vested and
non-forfeitable at all times under the Plan. The remainder of a Participant's
Value of Account i.e. Employer Matching Contributions made on his behalf, and
all earnings, appreciations or additions allocable thereto, less any
depreciation, loss or distributions allocable thereto, shall become vested as
follows:
Years of Service Percentage
---------------- ----------
Vested
------
Less than 2 0
2 but less than 3 20
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
Notwithstanding anything to the contrary stated above, any Participant
who under the prior provisions of this Plan received past service credit for
purposes of vesting for Years of Service before the Effective Date of the prior
plan, shall not forfeit any such past service credits by operation of this
Section 5.1.
5.2 Retirement or Disability: If a Participant's employment with the
Employer is terminated at or after he attains age 65, or if his employment is
terminated at an earlier age because of Disability, he shall be entitled to
receive the entire amount then in each of his accounts in accordance with
Article VIII, Section 8.2.
5.3 Death: In the event that the termination of employment of a
Participant is caused by his death, the entire amount then in each of his
accounts shall be paid to his Beneficiary in accordance with Article VIII after
receipt by the Committee of acceptable proof of death.
29
<PAGE>
<PAGE>
5.4 Termination For Other Reasons: A Participant whose participation in
the Plan terminates for any reason other than death, Disability or retirement at
or after age 65, shall not be entitled to receive any portion of his Value of
Account attributable to Employer matching contributions, which shall not be
vested at the date of such termination and the unvested portion shall be
forfeited, subject to restoration pursuant to Section 4.7.
5.5 Vesting After 5 Consecutive One Year Breaks in Service:
(a) A Participant's Years of Service completed after 5 consecutive one
year Breaks in Service shall be disregarded for purposes of determining a
Participant's vested interest in his Account attributable to Employer matching
contributions made before such 5 consecutive one year Breaks in Service. For all
other purposes of this section 5.5, a person's Years of Service completed before
such 5 consecutive one year Breaks in Service shall be included in determining
his Years of Service.
(b) If a person incurs 5 consecutive one year Breaks in Service before
becoming 100% vested and subsequently recommences participation in the Plan, the
undistributed portion of his vested interest in his Account, if any, at the time
of the fifth consecutive one year Break in Service shall be held in a separate
account, and he shall always be 100% vested in the balance credited to such
separate account.
5.6 Maternity or Paternity Leave:
(a) For the purposes of this Plan, "maternity or paternity leave" means
termination of employment or absence from work for a period that commences on or
after January 1, 1985 due to the pregnancy of the Employee, the birth of a child
of the Employee, the placement of a child in connection with the adoption of the
child by an Employee, or the caring for an Employee's child during the period
immediately following the child's birth or placement for adoption. The Committee
shall determine, under rules of uniform application and based on information
provided to the Committee by the Employee, whether or not the Employee's
termination of employment from work is due to "maternity or paternity leave".
(b) Solely for purposes of determining whether a Break in Service, as
defined in Section 2.1(cc) has occurred, the Employee shall be credited for the
period of an absence described in Section
30
<PAGE>
<PAGE>
5.6(a) with the number of Hours of Service equal to the lesser of:
(i) (A) the number of Hours of Service that would have credited to the
Employee if he had continued working for the Employer during the period of such
absence, or (B) if the number of Hours of Service prescribed under Section
5.6(b)(i)(A) cannot be determined, 8 Hours of Service for each working day
during the period of absence; or
(ii) 501 Hours of Service.
Such credit shall be given during the 12 consecutive month period
ending on an anniversary date of employment of the Employee during which such
absence began, if necessary to prevent a one year Break in Service from
occurring during such 12 consecutive month period, and in all other cases, such
credit shall be given during the immediately following 12 consecutive month
period.
ARTICLE VI.
INVESTMENT FUNDS
6.1 Investment Elections: The Trust Fund shall consist of a Capital
Preservation Fund ("Fund A"), a Fixed Income Fund ("Fund B"), an Equity Fund
("Fund C"), an International Equity Fund ("Fund D"), an Income and Growth Fund
("Fund E"), a Bank Stock Fund ("Fund F") and a Loan Fund ("Fund G"), each of
which shall be administered and invested by the Trustee in accordance with the
provisions of the Plan and the Trust Agreement.
6.2 The Investment Funds: The Trust Agreement specifies the investment
which the Trustee is authorized to make in Fund A, Fund B, Fund C, Fund D, Fund
E, Fund F and Fund G to which reference should be made for a complete
description thereof. For identification purposes only, the seven funds will
consist primarily of:
(a) Fund A, the Capital Preservation Fund: a variety of fixed-income
investments that are viewed as stable, and cash or cash equivalents, which may
be managed by United States Trust Company of New York or one of its affiliates;
31
<PAGE>
<PAGE>
(b) Fund B, the Fixed Income Fund: bonds, notes, debentures, money
market instruments, repurchase agreements, obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, and preferred stocks;
(c) Fund C, the Equity Fund: common stocks, investments convertible
into common stocks, stock of regulated investment companies and no-load mutual
funds, which themselves invest primarily in common stocks and investment
convertible in common stocks;
(d) Fund D, the International Equity Fund: equity securities of foreign
issues, shares of open end investment companies, registered under the Investment
Company Act of 1940 (including those for which United States Trust Company of
New York or its affiliates serve as investment advisor), who will benefit from
the trends and promising technologies or products and specific country
opportunities resulting from changing geo-political economic or currency
relationships;
(e) Fund E, the Income and Growth Fund: common and capital stocks and
securities convertible into common and capital stock and in a common trust fund
and shares of open end investment companies and no-load mutual funds (including
any investment company for which United States Trust Company of New York or any
of its affiliates acts as investment advisor) which themselves invest primarily
in common and capital stocks and securities convertible into common or capital
stocks, and securities convertible into common or capital stocks; debt
obligations may be acquired to produce income and capital appreciation and may
include both convertible and non-convertible corporate and government bonds,
debentures, money market instruments, repurchase agreements collateralized by
U.S. Government obligations;
(f) Fund F, the Bank Stock Fund: common stock of The Greater New York
Savings Bank;
(g) Fund G, the Loan Fund: notes of indebtedness evidencing loans to
Participants from the Trustee pursuant to Section 8.7.
The Trustee is authorized to invest any amounts held or received by it
in Fund A, Fund B, Fund C, Fund D, Fund E or Fund F in short term U.S.
Government or agency or corporation obligations,
32
<PAGE>
<PAGE>
or to retain uninvested or sell investments to provide amounts of cash required
for the purposes of any such Fund. The Trustee is also authorized to temporarily
invest any amount received by it for investment in Fund F in any type of
investment authorized under Fund A.
ARTICLE VII.
INVESTMENT
7.1 Participant Elections: Upon first electing to participate in the
Plan, each Participant shall direct, in the form and manner prescribed by the
Committee, that his elective salary reduction contributions, Employer matching
contributions and Employee contributions, if any, shall be applied to the
purchase of Investment Units in any one or more of the Investment Funds, Fund A,
Fund B, Fund C, Fund D and Fund E or to purchase shares of Employer stock in
Fund F, but only in multiples of 10%. Any amounts to be applied at any time for
a Participant to the purchase of Investment Units or shares, as the case may be,
in any one of the six Funds listed in the preceding sentence shall be applied in
the same proportions for elective salary reduction contributions, Employee
contributions, if any, and Employer matching contributions. To the extent any
Participant shall fail to make an investment direction, applicable elective
salary reduction contributions, Employee contributions, if any, and Employer
matching contributions shall be, effective October 1, 1995 be applied to
purchase Investment Units of Fund A.
7.2 Change of Election: Upon the filing with the Plan Administrator
prior to the close of business on the last business day of the calendar month,
on a form provided by the Plan Administrator, a Participant may change his
investment election and direct that future elective salary reduction
contributions, Employer matching contributions and Employee contributions, if
any, (including contributions not yet converted into Investment Units), be
applied to the purchase of Investment Units or shares, as the case may be, in a
different Fund or Funds, but only in multiples of 10%. This change shall be
effective the first day of the next calendar month.
33
<PAGE>
<PAGE>
A Participant may redeem existing Investment Units or shares as the
case may be, credited to his account and direct that the proceeds of such
redemption be applied to purchase Investment Units or shares in a different Fund
or Funds by calling a voice response telephone number established in connection
with the administration of the Plan. The redemption of existing Investment Units
and shares and the purchase of Investment Units or shares in a different Fund or
Funds with the proceeds of such redemption need not be made in multiples of 10%.
No investment may be made in Fund G except in accordance with Section
7.6 and Section 8.7.
7.3 Valuation: After the Effective Date, the value of Units in Fund A,
Fund B, Fund C, Fund D or Fund E shall be determined as of each succeeding
Valuation Date by dividing the fair market value of all property in each such
Fund as of such Valuation Date, furnished by the Trustee in accordance with the
Trust Agreement, by the number of Units in such Fund, and such value shall
remain in effect until the next succeeding Valuation Date. The elective salary
reduction contribution, Employer matching contributions and Employee
contributions, if any, for the preceding month shall be applied by the Trustee
within 5 (five) days of its receipt of same to the purchase of Investment Units
or shares for each Participant using the value of such Units or shares as of the
date of purchase. Whenever a distribution is made to a Participant or his
Beneficiary, as provided in Article VIII, the appropriate number of Investment
Units credited to such Participant shall be reduced accordingly and each such
distribution shall be charged against the A Investment Units, B Investment
Units, C Investment Units, D Investment Units and E Investment Units, as may be
held by the Participant pro rata according to their respective values, unless
the Participant or his Beneficiary under this Plan shall otherwise direct in
writing on a form prescribed by the Plan Administrator. For purposes of valuing
a Participant's account in Plan G, any Note of Indebtedness given by the
Participant, together with any payments of principal or interest thereon and any
other items of gain, loss or expense attributable thereto shall be wholly
allocated to such Participant's account. For the purposes of valuing a
Participant's account in Fund F, the value of shares of Employer stock purchased
for Participants in Fund F shall be determined by multiplying the number of
shares by the market value of such shares of stock. Purchases and sales shall be
made at the
34
<PAGE>
<PAGE>
then current market value.
7.4 Fractional Investment Units: For the purposes of this Article VII,
fractions of Units computed to three decimal points as well as whole Units in
Fund A, Fund B, Fund C, Fund D, Fund E and Fund G may be purchased or redeemed
for the account of Participants. However, no new investment units may be
purchased in Fund G after the Effective Date.
7.5 Periodic Statements: Periodically, but in no event less frequently
than once each calendar year, there will be furnished by the Plan Administrator,
by mail or otherwise to each Participant or each other person who would then be
entitled to receive all or part of the Value of Account if the Plan were then
terminated, a statement showing the amount of such Participant's or other
person's interest in the Plan in addition to any tax statements required by the
Internal Revenue Service. The Participant or such other person shall be deemed
to have accepted such statements as correct unless the Plan Administrator
receives written notice to the contrary from such Participant or person within
30 days after the statements are mailed or furnished to the Participant or such
other person, and it shall then be binding on the Participant, any Beneficiary
of the Participant or such other person.
7.6 Investment In Fund G: No new investment may be made in Fund G after
the Effective Date. A Participant may only purchase Investment Units in Fund G
at the time a loan is made to him by the Trustee. At such time, and as a
condition to the Trustee making such loan, the Participant must redeem existing
Investment Units in Fund A, Fund B, Fund C, Fund D, Fund E and/or shares of
Employer Stock in Fund F and purchase Investment Units in Fund G having a dollar
value as of the date of the loan equal to the principal amount of said loan.
Redemptions of Investment Units from Fund A, Fund B, Fund C, Fund D, Fund E
and/or shares of Employer stock in Fund F will be made by the Trustee in
accordance with the Participant's specific written instructions, as provided on
a form prepared by the Plan Administrator. The redemption and purchase shall be
effective as of the date of the loan, based upon the value of said Funds on said
date.
35
<PAGE>
<PAGE>
ARTICLE VIII
BENEFITS AND WITHDRAWALS
8.1 General: A Participant's or Former Participant's vested interest in
his Value of Account shall be paid to the Participant or other persons entitled
thereto only at the times, to the extent, and in the manner herein provided.
8.2 Termination of Participation for Reasons of Death, Disability and
Retirement at or after age 65: Any previously unvested portion of the Value of
Account of a Participant shall become fully vested upon termination of such
Participant's Participation in the Plan on account of death, Disability, or
retirement at or after age 65.
8.3 Manner of Payment Upon Termination of Participation for Reason of
Retirement at or after age 65, Early Retirement, Death or Disability: If the
Participation of a Participant shall terminate by reason of retirement at or
after age 65, Early Retirement (defined herein as retirement before age 65 where
the sum of years of service and age, each computed to the nearest whole month
equals 75), death or Disability, the vested interest of a Participant in his
Value of Account shall be paid in cash under one of the following options
selected by the Participant in writing on a form provided by the Plan
Administrator:
(a) in a lump sum distribution within 60 days after the date on which
his Participation terminates and the amount thereof shall be based on the value
of A, B, C, D, E Investment Units vested in the Participant and the value of
shares in Fund F on the date such units and/or shares are sold; or
(b) in a lump sum distribution within 60 days after a subsequent
Valuation Date but no later than 13 months following termination of his
Participation, in which event the amount thereof shall be based on the value of
the A, B, C, D and E Investment Units vested in the Participant and the value of
shares in Fund F on the date such shares are sold; or
(c) in annual installments over a period not to exceed 10 years, within
60 days after such Valuation Date in each such Plan Year as may be requested by
such Participant and the amounts
36
<PAGE>
<PAGE>
thereof shall be based on the respective values of the Participant's A, B, C, D,
and E Investment Units and the value of shares in Fund F on the date such units
and/or shares are sold. Installment payments shall be effected through the
redemption of the Former Participant's A, B, C, D and E Investments Units and
shares in Fund F in proportion to their total value, or on written request of
the Participant, shall be paid from redemption of A, B, C, D and E Investment
Units and shares in Fund F in the order so requested. Any portion of such vested
interest of such Participant which shall not have been so paid shall continue to
be held for his benefit, or for the benefit of the person or persons who may be
or become entitled thereto. However, if periodic payments are made to a benefit
recipient other than a Participant or a Former Participant, such periodic
payments must be paid fully to the benefit recipient within five (5) years of
the Participant's or Former Participant's date of death.
If no election shall be made under this Section, the vested interest of
a Participant in his Value of Account shall be paid in cash under subsection (a)
of this Section.
If Participation is terminated by the Participant's termination of
employment with the Employer for reasons other than retirement at or after age
65, Early Retirement (as defined in this Article), death, or Disability, the
vested interest of a Participant in his Value of Account shall be paid in cash
under subsection (a) of this section.
(d) Notwithstanding the foregoing, payment of benefits under this Plan,
must commence by April 1st of the Plan Year after retirement, and payment of
benefits under this Plan to a Participant must commence by the April 1st after
the end of the Plan Year in which he reaches age 70 1/2 irrespective of whether
the Participant has retired. However, if the Participant has attained age 70 1/2
before January 1, 1988 and has not been a 5% owner at any time during the Plan
Year ending with or within the calendar year in which owner attains age 66 1/2
or any subsequent Plan Year, payment of benefits under this Plan to a
Participant must commence by April 1 of the calendar year following the later of
1) the calendar year in which the Participant attains age 70 1/2 or 2) the
calendar year in which the Participant retires. Furthermore, if a withdrawal is
made before he attains age 59 1/2, such Participant shall be advised by the
Committee that an additional income tax may be imposed equal
37
<PAGE>
<PAGE>
to 10% of the portion of the amount so received which is included in his gross
income for such taxable year and attributable to contributions paid on behalf of
such individual, unless such distribution is made on account of death or
Disability.
Notwithstanding anything to the contrary in this Section 8.3, any Participant
whose Participation is terminated by reason of the Participant's termination of
employment with the Employer by reasons other than retirement at or after age
65, death or Disability whose vested interest in his Value of Account exceeds
$3,500.00 shall have the right to have such vested interest of his Value of
Account remain in the Plan until such time as he attains age 65.
8.4 Designation of Beneficiary of Deceased Participants: (a) Subject to
Section 8.4(b) each Participant may from time to time designate any person or
persons (who may be designated contingently or successively and who may be an
entity other than a natural person) as his Beneficiary or Beneficiaries to whom
his Plan benefits are paid if he dies before receipt of all such benefits. Each
Beneficiary designation shall be in a form prescribed by the Plan Administrator
and will be effective only when filed with the Plan Administrator during the
Participant's lifetime. Each Beneficiary designation filed with the Plan
Administrator will cancel all Beneficiary designations previously filed with the
Plan Administrator. The revocation of a Beneficiary designation, no matter how
effected, shall not require the consent of any designated Beneficiary.
Upon the death of a Participant or former Participant, his Value of
Account shall become payable, as provided in Section 8.3, to such Beneficiary,
if any, designated by such Participant or former Participant as shall survive
him, or, if there is no Beneficiary designated, then to the estate.
In the event of death, if the Participant has made no prior election,
the Beneficiary designated herein may elect any of the methods of distribution
provided in Section 8.3.
(b) On the death of a Participant, the Participant's vested Value of
Account shall be paid to the Participant's surviving spouse, but if there is no
surviving spouse, or, if the surviving spouse has already consented to the
Participant's designated
38
<PAGE>
<PAGE>
Beneficiary, then to the Participant's designated Beneficiary. The surviving
spouse's consent to the designation of the Participant's Beneficiary shall be
ineffective unless it is in writing, it acknowledges the effect of said consent
and is witnessed by a plan representative or notary public in accordance with
Section 417(a) (2) (A) of the Internal Revenue Code. A "surviving spouse" for
the purposes of this section shall mean the person to whom the Participant is
married on the date of the Participant's death or any former spouse of the
Participant to the extent provided in any qualified domestic relations order as
described in Section 414(p) (5) of the Internal Revenue Code.
8.5 Voluntary Withdrawals Prior to Termination of Employment: The
Participant may receive a distribution from one or more Accounts, as described
below, from the Plan prior to termination of employment from the Employer if he
files written notice on a form prescribed by the Plan Administrator of his
election to surrender all or a portion of the Investment Units held on his
behalf in Fund A, Fund B, Fund C, Fund D, or Fund E or all or a portion of the
shares held on his behalf in Fund F, not more often than once during each
consecutive 6 month period. Inasmuch as Plan loans, which may be made to
Participants pursuant to Section 8.7 of the Plan must be adequately secured, no
withdrawals will be permitted hereunder if the adequacy of the security for a
Plan loan is jeopardized i.e. if the Participant's vested Value of Account in
the Plan after the withdrawal would be less than 200% of the outstanding
principal balance on the loan.
The following types of withdrawals are permitted:
(1) A Participant may withdraw all or any part of the Investment
Units or shares in his Employee Contribution Account
attributable to his Employee contributions made at least two
(2) years prior to the date of withdrawal.
(2) A Participant may withdraw all or any part of his vested
Investment Units or shares in his Employer Contribution
Account attributable to matching Employer contributions made
at least two (2) years prior to the date of withdrawal.
(3) A Participant age 59 1/2 or older may withdraw all or any
part of the Investment Units or shares in his Elective
39
<PAGE>
<PAGE>
Contribution Account attributable to elective salary reduction
contributions made at least two (2) years prior to the date of
withdrawal.
8.6 Prohibition of Assignment of Interest: Except with respect to
Federal income tax withholding, no interest, or right or claim in or on any
part of the Trust and Fund or any payment therefrom shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation,
commutation, anticipation, garnishment, attachment, execution or levy of any
kind, and the Trustee, Committee and Plan Administrator shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute or
anticipate the same, except to the extent required by law.
Notwithstanding the above, the Committee may direct the Trustee to
comply with a Qualified Domestic Relations Order.
A Qualified Domestic Relations Order is a judgment, decree or order
(including approval of a property settlement agreement) made pursuant to a state
domestic relation law (including community property law) that relates to the
provisions of child support, alimony payments or marital property rights to a
spouse, former spouse, child or other dependent of a Participant ("Alternate
Payee") and which:
(a) creates or recognized the existence of an Alternate
Payee's right to, or assigns to an Alternate Payee the right to,
receive all or a portion of the benefits payable to a Participant under
this Plan; and
(b) specifies (i) the name and last known mailing address (if
any) of the Participant and each Alternate Payee covered by the order,
(ii) the amount or percentage of the Participant's Plan benefits to be
paid to any Alternate Payee, or the manner in which such amount or
percentage is to be determined and (iii) the number of payments or the
period to which the order applies and each plan to which the order
relates; and
(c) does not require the Plan to
(i) provide any type or form of benefit or any option
not otherwise provided under the Plan, or
40
<PAGE>
<PAGE>
(ii) pay benefits to an Alternate Payee that are
required to be paid to another Alternate Payee under a prior
Qualified Domestic Relations Order.
Upon receipt of any judgment, decree or order (including approval of a
property settlement agreement) relating to the provision of payment by the Plan
to an Alternate Payee pursuant to a state domestic relations law, the Committee
shall promptly notify the affected Participant and any Alternate Payee of the
receipt of such judgment, decree or order and shall notify the affected
Participant and any Alternate Payee of the Committee's procedure for determining
whether or not the judgment, decree or order is a Qualified Domestic Relations
order.
The Committee shall establish a procedure to determine the status of a
judgment, decree or order as a Qualified Domestic Relations Order and to
administer Plan distributions in accordance with Qualified Domestic Relations
Orders. Such procedure shall be in writing, shall include a provision specifying
the notification requirements enumerated in the preceding paragraph, shall
permit an Alternate Payee to designate a representative for receipt of
communications from the Committee and shall include such other provisions as the
Committee shall determine, including provisions required under regulations
promulgated by the Secretary of the Treasury.
During any period in which the issue of whether a judgment, decree or
order is a Qualified Domestic Relations Order is being determined (by the
Committee, a court of competent jurisdiction or otherwise), the Committee shall
segregate in a separate account under the Plan the amount, if any, which would
have been payable to the Alternate Payee during such period if the judgment,
decree or order had been determined to be a Qualified Domestic Relations Order.
Such segregated account under the Plan shall be held as uninvested cash.
If the judgment, decree or order is determined to be a Qualified
Domestic Relations Order within the 18-month period following the receipt by the
Committee of the Qualified Domestic Relations Order, then payment from the
segregated account shall be paid to the appropriate Alternate Payee. If such a
determination is not made with the 18-month period, the segregated account shall
be returned to the general assets of the Trust Fund and shall be
41
<PAGE>
<PAGE>
paid at the time and in the manner provided under the Plan as if no order,
judgment or decree had been received by the Committee.
8.7 Loans to Participants: (a) A Participant may borrow from the Trust
Fund, to the extent permitted under and subject to the terms and conditions of
this section 8.7, an amount which when added to the balance of any other
outstanding loans the Participant may have, does not exceed the lesser of: (a)
$50,000.00 reduced to the extent of (i) the highest outstanding loan balance
of the Participant's loans outstanding during the immediately prior 12-month
period (ending the day before the new loan is granted) over (ii) the total
of all outstanding loans the day the new loan is granted; or (b) Fifty (50%)
percent of the present value of his non-forfeitable accrued benefit under the
Plan. For the purposes of this section, "present value of his non-forfeitable
accrued benefit" means the total dollar value of the Participant's Employee
Contribution Account, Elective Contribution Account and the vested portion
of the Participant's Employer Contribution Account, as determined under the
vesting schedule in Paragraph 5.1 of the Plan as of the Valuation Date
immediately preceding the date of the loan.
Notwithstanding the foregoing, all loans shall be made in multiples of
$500. The maximum loan permitted shall be $50,000, and the minimum loan
permitted shall be $1,000, unless the Plan Administrator shall establish a
lesser minimum amount in a particular case or as a matter of policy.
(b) All loans shall be made from the Loan Fund (Fund G) and shall be
for a term arrived at by mutual agreement between the Committee and the
Participant, but in no event shall such loan term exceed five (5) years.
(c) Each Loan shall have a fixed annual interest rate equal to the
Prime Rate published in the Wall Street Journal on the fifteenth (15th) day of
the month immediately preceding the date of the loan. If more than one Prime
Rate is published in the Wall Street Journal on said date, the average of the
Prime Rates shall be used to determine the interest on the loan. If the Wall
Street Journal is not published on said date, the interest rate on the loan
shall be based on the Prime Rate published in the Wall Street Journal as of the
last date of publication prior to the fifteenth (15th) day of the month. If the
Wall Street Journal ceases to
42
<PAGE>
<PAGE>
publish a Prime Rate, or if the Wall Street Journal ceases to be published, the
Committee shall select an appropriate alternative index upon which to base the
interest rate on loans. In all situations, the interest charged on plan loans
shall be a reasonable rate of interest for loans of such type. The Committee
shall not discriminate among Participants in the matter of interest rates, but
loans granted at different times may bear different rates of interest, if the
difference in rates is justified by a change in general economic conditions.
Loans shall be made available to Participants on a reasonably equivalent basis
and shall be evidenced by the Participant's promissory note. Loans will provide
for equal payments of principal and interest designed to amortize 100% of the
loan amount by the maturity of the loan; such payments of principal and interest
shall be payable on the first day of the month until the loan is repaid in full.
(d) All payments of interest by a Participant on a Note of Indebtedness
evidencing a loan from the Plan to said Participant shall initially be applied
to satisfy the accrued interest on the loan and shall then be applied to
purchase units in Investment Funds A, B, C, D, E and/or shares in Investment
Fund F in accordance with the election form concerning such loan payments on
file with the Plan Administrator as of the date of the payment. All principal
payments made by a Participant will be initially applied to Fund G, thereby
reducing the unpaid principal balance on the Participant's loan; said amount
will then be transferred by the Trustee to purchase units in Investment Funds A,
B, C, D, E or shares in Investment Fund F, as provided in the preceding
sentence. As a result of the foregoing, the valuation of Participant's
investments in Fund G shall always reflect the unpaid principal balance of his
loan(s).
(e) A request for a loan shall be filed in the form and manner
prescribed by the Plan Administrator on or before the fifteenth (15th) day of
any month; the loan shall be effected as of the first day of the succeeding
month, and the proceeds disbursed to the Participant as soon thereafter as
practicable.
(f) Upon default by a Participant in any of the terms of a loan under
this section 8.7, or if the employment of a Participant terminates when a loan
is outstanding to him under this section 8.7, the loan will, at the option of
the Plan Administrator, become immediately due and payable and the Plan
Administrator in such case
43
<PAGE>
<PAGE>
shall charge the unpaid balance of such loan, together with any interest accrued
and unpaid thereon, against the Participant's vested interest in his accounts,
through a redemption of all Investment Units in Fund G and, to the extent
necessary, through a redemption of Investment Units in any other Investment Fund
as of the first day of the month next following such event; provided, however,
that if the Participant is still employed, such amount shall not be charged
against his accounts and shall continue to accrue interest at the rate specified
in section 8.7(b), until the earlier of (i) such time as a withdrawal of such
amounts could have been made under section 8.5 or (ii) his employment
terminates. Whenever the unpaid balance of a loan (plus any interest accrued and
unpaid thereon) is charged against a participant's vested interest in his
accounts, it shall be charged in the following order against his: (A)
Contributions to his Employee Contribution Account, if such amounts are
available for distribution or withdrawal; (B) earnings, if any, on the Employee
Contribution Account; (C) the vested interest in his Employer Contribution
Account, if such amounts are available for distribution and withdrawal; and (D)
his Elective Contribution Account, if such amounts are available for
distribution and withdrawal.
(g) A Participant may prepay his loan on the first day of any month,
provided he pays the full amount of the loan plus all interest accrued and
unpaid thereon. Subject to such other terms and conditions as may be established
from time to time by the Plan Administrator, a Participant may make partial
prepayments of his loan on any anniversary date of his loan. The minimum
prepayment shall be $100, unless the Plan Administrator shall establish a lesser
amount in a particular case, or as a matter of policy. Such prepayments shall be
applied first to all accrued and unpaid interest on the outstanding balance of
the loan. After any prepayment, interest will only be charged on the outstanding
balance of the loan; the balance of the payment will be applied to principal.
8.8 Notwithstanding anything to the contrary herein, no new loans will
be permitted after the Effective Date.
8.9 Distributions from Fund F: Subject to such terms and conditions as
may be established from time to time by the Plan Administrator, the portion of
any withdrawal or distribution that is attributable to the interest of a
Participant, Former
44
<PAGE>
<PAGE>
Participant or Beneficiary in Fund F may, if the Participant, Former Participant
or Beneficiary so requests, be paid wholly or partially in the shares of common
stock of The Greater New York Savings Bank held by the Trustee for such
individual in Fund F.
8.10 Direct Rollovers Of Eligible Rollover Distributions:
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election hereunder, a distributee may elect, at the time
and in the manner prescribed by the Plan Administrator, to have any portion of
an eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
The following words and phrases, when used in this Section 8.10, unless
their context clearly indicates otherwise, shall have the following respective
meanings:
a) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributees' eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
45
<PAGE>
<PAGE>
c) Distributee: A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
d) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE IX
TRUST FUND
9.1 All contributions under this Plan shall be paid to the Trustee and
deposited in the Trust Fund. All assets of the Trust Fund including investment
income, shall be retained for the exclusive benefit of Participants, Former
Participants, and Beneficiaries and shall be used to pay benefits to such
persons or to pay administrative expenses of the Plan and Trust Fund to the
extent not paid by the Employer and shall not revert to or inure to the benefit
of the Employer.
Notwithstanding anything herein to the contrary, upon the Employer's
request, a contribution which was made by a mistake of fact, or conditioned upon
qualification of the Plan or any amendment thereof or upon the deductibility of
the contribution under IRC Section 404, as amended, shall be returned to the
Employer within one year after the payment of the contribution, the denial of
the qualification or the disallowance of the deduction (to the extent
disallowed), whichever is applicable.
ARTICLE X.
ADMINISTRATION
10.1 Allocation of Responsibility Among Fiduciaries For Plan and Trust
Administration: The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them as stipulated in
this Plan or the Trust Agreement. In general, the Employer shall have the sole
46
<PAGE>
<PAGE>
responsibility for making the contributions provided for under Sections 4.1 and
4.2, and shall have the sole authority to appoint and remove the members of the
Committee and to amend or terminate, in whole or in part, this Plan or the
Trust. The Committee through the Plan Administrator shall have the sole
responsibility for the administration of this Plan, which responsibility is
specifically described in this Plan and Trust Agreement. The Trustee shall have
the sole responsibility for the management of the assets held under the Trust,
all as specifically provided in the Trust Agreement. The Trustee shall also have
the sole power, discretion and responsibility to vote on any Employer stock held
in Fund F either in person or by proxy for any purpose. Each Fiduciary warrants
that any directions given, information furnished, or action taken by it shall be
in accordance with the provisions of the Plan or the Trust Agreement, as the
case may be, authorizing or providing for such direction, information or action.
Furthermore, each Fiduciary may rely upon any such direction, information or
action of another Fiduciary as being proper under this Plan or the Trust
Agreement. It is intended that each Fiduciary shall be responsible for the
proper exercise of its own powers, duties, responsibilities and obligations
under this Plan and the Trust Agreement. No Fiduciary guarantees the Trust Fund
in any manner against investment loss or depreciation in asset value.
10.2 Appointment of Committee: The Plan shall be administered by the
Benefits Committee (sometimes referred to herein as the Committee) consisting of
the Chairman and not less than three non-salaried members of the Board of
Directors of the Employer, who shall be appointed annually by the Board of
Directors of the Employer, upon recommendation by the Chairman. The Committee
members shall hold office until their successors have been duly appointed or
until death, resignation or removal. All usual and reasonable expenses of the
Committee may be paid in whole or in part by the Employer.
10.3 Plan Administrator: As of the Effective Date, a Plan Administrator
of the Plan shall be designated. The Plan Administrator shall be the senior
officer in charge of the Human Resources Department, and in his absence or
incapacity, the next senior officer in charge of the Human Resources Department
shall be the Plan Administrator.
47
<PAGE>
<PAGE>
The duties of the Plan Administrator are as follows: To act under the
direction of the Committee to establish a funding policy for the Employer's Plan
of participation and to serve as Plan Administrator with responsibilities that
shall include the establishment of a claims procedure; the filing with the
Secretary of Labor of all Plan descriptions and reports required by ERISA;
furnishing Plan Participants and Beneficiaries with Plan descriptions and
reports required by ERISA; providing the Committee with information that may be
reasonably required by it; and providing to Participants on a timely basis any
information or forms required by ERISA.
10.5 Claims Procedure: The Committee through the Plan Administrator
shall make all determinations as to the right of any person to a benefit. Any
denial by the Committee of the Claim for Benefits under the Plan by a
Participant or Beneficiary shall be stated in writing by the Committee and
delivered or mailed to the Participant or Beneficiary; and such notice shall set
forth the specific reasons for the denial, written, to the best of the
Committee's ability in a manner that may be understood without legal or
actuarial counsel. In addition, the Committee through the Plan Administrator
shall afford a reasonable opportunity to any Participant or Beneficiary whose
claim for benefits has been denied for a review of the decision denying this
claim.
10.6 Records and Reports: The Committee through the Plan Administrator
shall exercise such authority and responsibility as it deems appropriate in
order to comply with ERISA and governmental regulations issued thereunder
relating to records of Participant's service, account balances and the
percentage of such account balances which are nonforfeitable under the Plan;
notification to Participants; annual registration with the Internal Revenue
Service; and annual reports to the Department of Labor.
10.7 Other Powers and Duties of the Committee and Plan Administrator:
The Committee and Plan Administrator shall have such duties and powers as may be
necessary to discharge their duties hereunder, including, but not by way of
limitation, the following:
(a) to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any
benefits hereunder; provided that any such
48
<PAGE>
<PAGE>
decision shall be in compliance with ERISA, as amended from time to
time;
(b) to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for benefits;
(c) to prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) to receive from the Employer and from participants such information
as shall be necessary for the proper administration of the Plan;
(e) to furnish the Employer, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate;
(f) to receive, review and keep on file (as it deems convenient or
proper) reports of the financial condition, and of the receipts and
disbursements of the Trust Fund from the Trustee;
(g) to appoint or employ individuals to assist in the administration of
the Plan and any other agents it deems advisable, including legal
counsel, actuaries and auditors.
The Committee shall have no power to add to, subtract from or modify
any of the terms of the Plan, or to change or add to any benefits provided by
the Plan, or to waive or fail to apply any requirements of eligibility for a
benefit under the Plan, except as provided in Article XII and sanctioned by
ERISA.
10.8 Rules and Decisions: The Committee may adopt such rules as it
deems necessary, desirable or appropriate. All rules and decisions of the
Committee shall be uniformly and consistently applied to all Participants in
similar circumstances. When making a determination or calculation, the Committee
shall be entitled to rely upon information furnished by a Participant or
Beneficiary, the Employer, the legal counsel of the Employer, or the Trustee.
10.9 Committee Procedures: The Committee shall act pursuant to the
rules, regulations and by-laws of the Employer.
49
<PAGE>
<PAGE>
10.10 Authorization of Benefit Payments: The Committee through the Plan
Administrator, shall issue directions to the Trustee concerning all benefits
which are to be paid from the Trust Fund pursuant to the provisions of the Plan,
and warrants that all such directions are in accordance with this Plan.
10.11 Application and Forms for Benefits: The Committee through the
Plan Administrator shall require a Participant to complete and file with the
Committee an application for a benefit and all other forms approved by the
Committee and to furnish all pertinent information requested by the Committee.
The Committee shall rely upon all such information so furnished it, including
the Participant's current mailing address.
ARTICLE XI.
MISCELLANEOUS RULES AND REGULATIONS
11.1 Nonguarantee of Employment: Nothing contained in this Plan shall
be construed as a contract of employment between the Employer and any Employee,
or as a right of any Employee to be continued in the employment of the Employer,
or as a limitation of the right of the Employer to discharge any of its
Employees, with or without cause.
11.2 Rights to Trust Assets: No Employee or Beneficiary shall have any
right to or interest in any assets of the Trust Fund upon termination of his
employment or otherwise, except as provided from time to time under this Plan,
and then only to the extent of the benefits payable under the Plan to such
Employee out of the assets of the Trust Fund. All payments of benefits as
provided for in this Plan shall be made solely out of the assets of the Trust
Fund.
11.3 Nonalienation of Benefits: Benefits payable under this Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, including any such liability which is for
alimony or other payments for the support of a spouse for former spouse, or for
any other relative of the Employee, prior to actually being received by the
person entitled to the benefit under the terms of the Plan; and any attempt to
anticipate, alienate,
50
<PAGE>
<PAGE>
sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any
right to benefits payable hereunder, shall be void. The Trust Fund shall not in
any manner be liable for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person entitled to benefits hereunder.
11.4 Discontinuance of Employer Contributions: In the event of complete
discontinuance of contributions to the Plan by the Employer, the accounts of all
Participants shall, as of the date of such discontinuance become 100% vested and
nonforfeitable.
ARTICLE XII.
AMENDMENTS AND ACTION BY EMPLOYER
12.1 Amendments: The Employer reserves the right to make from time to
time any amendment or amendments to this Plan which do not cause any part of the
Trust Fund to be used for, or diverted to, any purpose other than the exclusive
benefit of Participants, former Participants or their Beneficiaries, provided,
however, that the Employer may make any amendment it determines necessary or
desirable, with or without retroactive effect, to comply with ERISA.
12.2 Action by Employer: Any action by the Employer under this Plan
shall be by resolution of its Board of Directors, or by any person or persons
duly authorized by resolution of said Board to take such action.
ARTICLE XIII
SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLANS
13.1 Successor Employer: In the event of the dissolution, merger,
consolidation or reorganization of the Employer, provision may be made by which
the Plan and Trust Agreement will be continued by the successor; and, in that
event, such successor shall be substituted for the Employer under the Plan. The
substitution of the successor shall constitute an assumption of the Plan
liabilities by the successor and the successor shall have all of the powers, and
responsibilities of the Employer under the Plan.
13.2 Plan Assets: In the event of any merger or
51
<PAGE>
<PAGE>
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the Trust Fund
applicable to such Participants shall be transferred to the other trust fund
only if:
(a) each Participant would (if either this Plan or the other plan then
terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this plan had then terminated);
(b) resolutions of the Board of Directors of the Employer under this
Plan, or of any new or successor Employer of the affected Participants,
shall authorize such transfer of assets; and, in the case of the new or
successor employer of the affected Participants, its resolutions shall
include an assumption of liabilities with respect to such Participants
inclusion in the new Employer's plan, and
(c) such other plan and trust are qualified under Sections 401(a) and
501(a).
ARTICLE XIV.
PLAN PARTICIPATION
14.1 Right to Terminate: In accordance with the procedures set forth in
this Article, the Employer may terminate the Plan at any time. In the event of
the dissolution, merger, consolidation or reorganization of the Employer, the
Plan shall terminate and the Trust Fund shall be liquidated unless the Plan is
continued by a successor to the Employer in accordance with Section 13.1.
14.2 Partial Termination: Upon termination of the Plan with respect to
a group of Participants which constitutes a partial termination of the Plan, the
Trustee shall, in accordance with the directions of the Committee, allocate and
segregate for the benefit of the Employees then or theretofore employed by the
Employer, with respect to which the Plan is being terminated the proportionate
52
<PAGE>
<PAGE>
interest of such Participants in the Trust Fund. The funds so allocated and
segregated shall be used by the Trustee to pay benefits to or on behalf of
Participants in accordance with Section 14.3.
14.3 Liquidation of the Trust Fund: Upon termination of the Plan, the
accounts of all Participants affected thereby shall become fully vested, and the
Committee shall direct the Trustee to distribute the assets remaining in the
Fund, after payment of any expenses properly chargeable thereto, to
Participants, Former Participants and Beneficiaries in proportion to their
respective account balance.
14.4 Manner of Distribution: To the extent that no discrimination in
value results, any distribution after termination of the Plan may be made, in
whole or in part, in cash, in securities or other assets in kind, as the
Committee (in its discretion) may determine. All non-cash distributions shall be
valued at fair market value at date of distribution.
53
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
NON-EMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
Article 1
Introduction
1.1 The Plan and Its Effective Date. The Greater New York Savings Bank
Non-Employee Directors' Deferred Compensation Plan (the "Plan") was adopted by
the Board of Directors of The Greater New York Savings Bank (the "Company") on
December 7, 1995, effective December 31, 1995.
1.2 Purpose. The purpose of the Plan is to permit each non-employee member
of the Board of Directors ("Participating Director") to elect deferral of any or
all of his annual retainer (the "Annual Retainer") or the fees received for
attendance at committee or board meetings (the "Meeting Fees") on a deferred,
unfunded basis.
Article 2
Benefits
2.1 Elected Deferred Benefits. Each Participating Director may elect in
accordance with Section 2.2 to defer all or any part of his Annual Retainer
and/or Meeting Fees ("Elected Deferred Benefits") into the Plan. A Participating
Director's rights to any other benefits provided by the Company based on his/her
Annual Retainer and/or Meeting Fees shall be determined in the same manner and
in the same amount as if the Participant had made no election under the Plan to
defer any of the Participating Director's Annual Retainer or Meeting Fees.
2.2 Deferral Elections. A Participating Director may elect to defer all or
any part of his Annual Retainer and/or Meeting Fees as follows:
(A) In the case of Participating Directors as of the Effective Date,
such Participating Director may elect by written notice delivered to
the Company within thirty (30) days after the Effective Date to be
credited with Elected Deferred Benefits as provided in Section 2.1 with
respect to the Meeting Fees earned and Annual Retainer payable after
such election.
(B) In the case of a person who becomes a Participating Director after
the Effective Date, such Participating Director may elect by written
notice delivered to the Company within thirty (30) days after becoming
a Participating Director to be credited with Elected Deferred Benefits
as provided in Section 2.1 with respect to the Meeting Fees earned and
Annual Retainer payable after such election.
<PAGE>
<PAGE>
(C) A Participating Director who was eligible to defer compensation
under the Plan in a previous calendar year, and who is currently not
electing to be credited with Elected Deferred Benefits, may elect by
written election filed with the Company prior to the first day of any
calendar year to be credited with Elected Deferred Benefits as provided
in Section 2.1 for such calendar year.
(D) Any election made by a Participating Director for a previous
calendar year under Sections 2.2(A), (B) or (C) shall remain in effect
for all future calendar years unless modified or revoked by such
Participating Director by submitting written notice of such
Participating Director's revocation or modification to the Company
prior to the first day of such calendar year.
(E) A Participating Director may revoke or change an election made
pursuant to Section 2.2(C) or 2.2(D) filed with the Company prior to
the first day of such calendar year by submitting written notice of
such Participating Director's revocation or modification to the
Company.
(F) As of the Participating Director's election under Section 2.2(A) or
(B) above, or the first day of the calendar year described in Section
2.2(C) or (D) above, any election filed with the Company shall become
irrevocable as to such calendar year.
2.3 Deferred Fee Account. Elected Deferred Benefits shall be credited to an
account ("Deferred Fee Account") of each Participating Director on the date such
Annual Retainer and/or Meeting Fees would have been paid in the absence of a
Deferral Election. The Participants Deferred Fee Account may consist of either
or both of two sub-accounts (i) the Deferred Stock Account (defined below) if
the Participant has made an election under Section 2.4(A) and/or (ii) the
Deferred Income Account (defined below) if the Participant has made an election
under Section 2.4(B). Amounts credited to a Director's Deferred Stock Account
and/or Deferred Income Account shall remain in such account until such accounts
are paid to the Participating Director or his/her beneficiary.
2.4 Rate of Return on Deferred Fee Account. Amounts credited to the
Deferred Fee Account of each Participating Director shall, at the written
election of the Participating Director, be expressed in whole or in part, in
either or in both methods described in Section 2.4(A) or (B). Any election made
by a Participating Director for a previous calendar year under this Section 2.4
shall remain in effect for all future calendar years unless modified or revoked
by such Participating Director by submitting written notice of such
Participating Director's revocation or modification to the Company prior to the
first day of such calendar year. As of the first day of any calendar year, any
election filed with the Company shall become irrevocable as to such calendar
year.
(A) Company Stock Rate of Return. A Participating Director may elect
that all or a portion of such Participating Director's Deferred Fee
Account be expressed in terms of
-2-
<PAGE>
<PAGE>
shares (including fractional shares) of common stock ("Stock") of the
Company (the "Deferred Stock Account"). Such number of shares of Stock
shall be determined by calculating the number of shares of Stock which
could have been purchased had such Elected Deferred Benefits been used
to purchase Stock on the day such amounts were credited to the
Participating Director's Deferred Stock Account. Furthermore, for each
dividend paid on Stock, each Participating Director's Deferred Stock
Account shall be credited with an additional amount, equal to the
number of shares of Stock (including fractional shares) which could be
purchased if the dividend paid on Stock were paid with respect to the
number of shares of Stock (including fractional shares) credited to the
Participating Director's Deferred Stock Account and were invested in
additional Stock on the date of payment of the dividends paid on Stock.
The market value of the Stock for purposes hereof on any date shall be
the closing price of the Stock on the NASDAQ National Market on such
date (or if quotations for the Stock are not reported on the NASDAQ
National Market on that date, the closing price of the Stock on the
NASDAQ National Market on the first day following such date on which
such quotations are so reported).
(B) Prime Rate of Return. A Participating Director may elect that all
or a portion of such Participating Director's Deferred Fee Account be
expressed in terms of cash, plus interest credited at the prime lending
rate announced from time to time by Citibank, N.A. ("Deferred Income
Account") until the date Elected Deferred Benefits are to be paid.
2.5 Form of Payment of Benefits.
(A) Normal Payment Form. Payment of Elected Deferred Benefits shall be
made in a cash lump sum payment. A Participating Director's Deferred
Fee Account shall be paid to the Participating Director within thirty
(30) days of the date such Participating Director ceases to be a
member, for any reason, of the Board of Directors, or, if earlier, the
date elected by the Participating Director. In the event of the
Participating Director's death, his Deferred Fee Account shall be paid
to the beneficiary(ies) designated by the Participating Director or, if
the Participating Director fails to designate a beneficiary(ies), or if
all such beneficiary(ies) predecease the Participating Director, to the
Participating Director's surviving spouse, and if there is no surviving
spouse, then to the Participating Director's estate promptly after the
date of the Participating Director's death.
(B) Optional Payment Form. If the Participating Director so elects,
payment of Elected Deferred Benefits payable as a result of the
Participating Director ceasing to be a director for any reason shall be
made in the same form and at the same time as the optional form of
payment validly elected by the Participating Director under the
Retirement Plan for The Greater New York Savings Bank for Non-Employee
Directors (the "Retirement Plan"). An optional form of payment may be
elected under the Retirement Plan by completing and filing with the
committee under the Retirement Plan an election form on or before the
earlier of (1) the last day of the calendar year
-3-
<PAGE>
<PAGE>
immediately preceding the month the Participating Directors pension
would commence to be paid in absence of the Participating Director's
election of an optional form of payment under the Retirement Plan (the
"Pension Date") or (2) six (6) months before the Pension Date.
2.6 Amount of Benefits. The amount of benefits to be paid in accordance
with Section 2.5 above shall be as follows:
(A) Company Stock Rate of Return. The amount of benefits to be paid to
a Participating Director whose Elected Deferred Benefits are held in a
Deferred Stock Account shall be an amount equal to the product of (a)
the total number of shares of Stock (including fractional shares)
credited to the Participating Director's Deferred Stock Account on the
date such amount is to be paid, multiplied by (b) the market value of
the Stock as determined under Section 2.4(A).
(B) Prime Rate of Return. The amount of benefits to be paid to a
Participating Director whose Elected Deferred Benefits are held in a
Deferred Income Account shall be an amount equal to the Deferred Income
Account, plus interest credited at the prime lending rate announced
from time to time by Citibank, N.A. through the date such account is
paid to the Participating Director.
2.7 Account Value. As of any date, the value of any Participating
Director's Deferred Fee Account shall be determined in accordance with Section
2.4(A) with respect to his/her Deferred Stock Account if the Participating
Director has made an election under Section 2.4(A), and in accordance with
Section 2.4(B) with respect to his/her Deferred Income Account if the
Participating Director has made an election under Section 2.4(B).
2.8 Statement of Accounts. As of each quarter (March 31, June 30, September
30 and December 31), the Company shall provide each Participating Director with
a statement showing the value, as of such date, of the Participating Director's
Deferred Fee Account, determined in accordance with Section 2.4.
2.9 Funding. Benefits payable under the Plan to any person shall be paid
directly by the Company. The Company shall not be required to fund, or otherwise
segregate assets to be used for payment of benefits under the Plan. The Company
may in its discretion form a trust for the payment of benefits under the Plan.
The assets of such trust, if any, will be subject to the claims of the Company's
general creditors in the event of the Company's inability to pay its debts as
they become due or in the event that the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code. To the extent
that benefits are paid by the trust, the Company shall have no further
obligation to pay such benefits.
-4-
<PAGE>
<PAGE>
Article 3
General Provisions
3.1 Plan Administration. The Plan shall be administered by the Board of
Directors. The Board shall have such powers as may be necessary to construe and
interpret the Plan, determine the eligibility of directors and to otherwise
discharge its duties hereunder, including but not limited to the power to
delegate the responsibility for the administration of the Plan to employees of
the Company or to third parties.
3.2 Rights to Retention. Establishment of the Plan shall not be construed
to give a Participating Director the right to be retained on the Board of
Directors or to any benefits not specifically provided by the Plan.
3.3 Interests Not Transferable. Except as to withholding of any tax
required under the laws of the United States or any state or locality and except
with respect to designation of a beneficiary to receive benefits in the event of
the death of a Participating Director, no benefit payable at any time under the
Plan shall be subject in any manner to alienation, sale, transfer, assignment,
pledge, attachment, or other legal process, or encumbrance of any kind until
otherwise payable under the Plan. Any attempt to alienate, sell, transfer,
assign, pledge or otherwise encumber any such benefits, whether currently or
thereafter payable, shall be void. No benefit shall, in any manner, be liable
for or subject to the debts or liabilities of any person entitled to such
benefits. If any person shall attempt to, or shall alienate, sell, transfer,
assign, pledge or otherwise encumber his benefits under the Plan, or if by any
reason of his bankruptcy or other event happening at any time, such benefits
would devolve upon any other person or would not be enjoyed by the person
entitled thereto under the Plan, then the Company, in its discretion, may
terminate the interest in any such benefits of the person entitled thereto under
the Plan and hold or apply them to or for the benefit of such person entitled
thereto under the Plan or his spouse, children or other dependents, or any of
them, in such manner as the Company may deem proper.
3.4 Amendment and Termination. The Company intends the Plan to be
permanent, but reserves the right at any time to modify, amend or terminate the
Plan, provided, however, that benefits earned as provided herein shall
constitute an irrevocable obligation of the Company.
3.5 Controlling Law. The law of New York, except its law with respect to
choice of law, shall be controlling in all matters relating to the Plan.
3.6 Gender and Number. Words in the masculine gender shall include the
feminine, and the plural shall include the singular and the singular shall
include the plural.
-5-
<PAGE>
<PAGE>
PLAN OF
PENSIONS AND RETIREMENT BENEFITS
OF
THE GREATER NEW YORK SAVINGS BANK
Adopted December 19, 1958
Effective as of October 1, 1958
As Amended October 9, 1969
Effective as of October 1, 1969
As Amended May 13, 1971, July 8, 1971 and
December 9, 1971
Effective as of May 1, 1971
As Amended December 10, 1975
Effective January 1, 1976
As Amended September 9, 1976
Effective October 1, 1976
As Amended December 8, 1977
Effective October 1, 1976
As Amended December 11, 1978
Effective December 31, 1978
As Amended March 25, 1982
Effective October 1, 1976, January 1, 1982
& April 1, 1982
As Amended December 2, 1982
Effective December 31, 1982
As Amended March 17, 1983
Effective May 1, 1983
As Amended September 29, 1983
Effective September 30, 1983,
October 1, 1983 & October 1, 1984
<PAGE>
<PAGE>
As Amended December 6, 1984
Effective September 29, 1984
& October 1, 1984
As Amended March 13, 1986
Effective January 1, 1982, August 23, 1984.
October 1, 1984 & October 1, 1985
As Amended December 23, 1986
Effective December 31, 1986
As Amended April 16, 1987
Effective March 13, 1986
As Amended April 14, 1988
Effective April 30, 1988
As Amended December 8, 1988
Effective October 1, 1988
As Amended July 20, 1989
Effective October 1, 1986, January 1, 1987,
October 1, 1987 October 1, 1988,
September 1, 1989 & October 1, 1989
As Amended December 7, 1989
Effective October 1, 1987 & October 1, 1988
As Amended November 8, 1990
Effective November 9, 1990
As Amended December 10, 1992
Effective April 1, 1992
As Amended March 24, 1993
Effective March 26, 1993
As Amended April 23, 1993
Effective April 23, 1993
As Amended July 28, 1993
Effective January 1, 1993
<PAGE>
<PAGE>
As Amended December 9, 1993
Effective January 1, 1992 and January 1, 1994
As Amended December 7, 1995
Effective November 30, 1995
<PAGE>
<PAGE>
INDEX
Preamble - ARTICLE I-----------------------------------------------------page 1
Definitions and Construction - ARTICLE II--------------------------------page 1
Participation and Service - ARTICLE III-----------------------------------page 8
Retirement - ARTICLE IV--------------------------------------------------page 15
Joint and Survivor Pension and Optional
Payments - ARTICLE V--------------------------------------------page 27
Plan Financing - ARTICLE VI----------------------------------------------page 37
Administration - ARTICLE VII---------------------------------------------page 41
Amendments - ARTICLE VIII------------------------------------------------page 45
Restrictions on Benefits Payable to Highly
Compensated Participants - ARTICLE IX---------------------------page 45
Termination - ARTICLE X--------------------------------------------------page 47
Successor Employer and Merger and
Consolidation - ARTICLE XI--------------------------------------page 51
Credited Service for Certain
Participants - ARTICLE XII--------------------------------------page 52
Service for Certain Participants - ARTICLE XIII--------------------------page 53
Participation, Service and Credited Service for Certain
Employees Who Were Participants in The RSSI Plan
on September 1, 1989 - ARTICLE XIV------------------------------page 53
Participation, Service and Credited Service for Certain
Employees - ARTICLE XV------------------------------------------page 54
<PAGE>
<PAGE>
PLAN OF PENSIONS AND RETIREMENT BENEFITS
OF
THE GREATER NEW YORK SAVINGS BANK
TABLE OF CONTENTS
PAGE
I. Preamble........................................................... 1
II. Definitions and Construction....................................... 1
2.1 Definitions............................................... 1
(a) Plan............................................. 1
(b) Trust or Trust Fund.............................. 1
(c) Employer......................................... 1
(d) Effective Date................................... 2
(e) Pensions and Retirement Benefit Committee........ 2
(f) Employee......................................... 2
(g) Eligible Spouse.................................. 3
(h) Participant...................................... 3
(i) Pension.......................................... 3
(j) Retirement....................................... 3
(k) Service.......................................... 3
(l) Credited Service................................. 4
(m) Authorized Leave of Absence...................... 4
(n) Compensation..................................... 4
(o) Average Highest Annual Compensation.............. 5
(p) Accrued Benefit.................................. 5
(q) Actuarial Equivalent............................. 5
(r) Actuary.......................................... 5
(s) Disability....................................... 5
(t) ERISA............................................ 6
(u) Fiduciaries...................................... 6
(v) Normal Retirement Date and Age................... 6
(w) PBGC............................................. 6
(x) Plan Year........................................ 6
(y) Plan Trustee..................................... 6
(z) Hours of Service................................. 6
(aa) Year of Service.................................. 7
(bb) Board of Directors............................... 7
(cc) Code............................................. 7
(dd) Effective Date of this Revised and Restated Plan. 7
(ee) RSSI Plan........................................ 7
2.2 Construction.............................................. 7
(i)
<PAGE>
<PAGE>
TABLE OF CONTENTS (Con't)
PAGE
III. Participation and Service.......................................... 8
3.1 (a) Participation for Employees Hired Prior to
April 1, 1982.................................... 8
(b) Participation for Employees Hired On or After
April 1, 1982.................................... 8
(c) Exclusions....................................... 9
(d) Participation for Employees Hired On or After the
First Day of the Calendar Month Coincident with or
Immediately Following his Sixtieth Birthday.... 9
3.2 Service................................................... 10
(a) Service Prior to the Effective Date of the Amended
and Restated Plan (October 1, 1976)............. 10
(b) Service From and After the Effective Date of the
Amended and Restated Plan (October 1, 1976)..... 10
3.3 Credited Service........................................... 10
(a) Credited Service Prior to the Effective Date of
the Amended and Restated Plan (October 1, 1976). 10
(b) Credited Service From and After the Effective
Date of the Amended and Restated Plan (October
1, 1976)....................................... 11
3.4 Break in Service.......................................... 12
(a) General.......................................... 12
(b) Maternity or Paternity Leave..................... 13
3.5 Military Leave of Absence................................. 13
3.6 Non-Military Leave of Absence............................. 13
3.7 Transfer.................................................. 14
3.8 Minimum Participation..................................... 15
IV. Retirement......................................................... 15
4.1 Normal Retirement......................................... 15
4.2 Disability Retirement Pension............................. 15
4.3 (a) Early Retirement Pension......................... 16
(b) Open Window Early Retirement Pension Option...... 17
4.4 Deferred Vested Pension................................... 17
4.5 Preservation of Benefits and Maximum Pensions............. 18
(a) Minimum Pension for Participants as of the
Effective Date................................. 18
(b) Maximum Benefit.................................. 18
4.6 Change in Pensions........................................ 22
4.7 Payment of Pension........................................ 23
4.8 Top-Heavy Provisions...................................... 24
(a) Determination of Top-Heavy....................... 24
(b) Minimum Benefit.................................. 25
(c) Minimum Vesting.................................. 25
(ii)
<PAGE>
<PAGE>
TABLE OF CONTENTS (Con't)
PAGE
(d) Change in Top-Heavy Status....................... 26
(e) Impact on Maximum Benefits....................... 26
(f) Key Employee..................................... 27
V. Joint and Survivor Pension and Optional Pension Payments........... 27
5.1 50% Joint and Survivor Pension............................ 27
5.2 Optional Pensions......................................... 28
(a) Continuation of Same Reduced Amount to Surviving
Eligible Spouse (100% Joint and Survivor Pension) 28
(b) Term Certain and Life............................ 29
5.3 Automatic Option.......................................... 30
5.4 Modified Automatic Option................................. 32
5.5 Election of Form of Pension............................... 33
5.6 Open Window Early Retirement Option Notice Retirement..... 34
5.7 Small Pensions............................................ 34
5.8 Direct Rollovers of Eligible Rollover Distributions....... 35
5.9 Reemployment and Continued Employment After Eligibility
for Normal Retirement Benefits.......................... 36
VI. Plan Financing..................................................... 37
6.1 Trust Fund................................................ 37
6.2 Contributions to the Fund................................. 37
6.3 Use of Funds.............................................. 38
6.4 Rights to Trust Assets.................................... 38
6.5 Nonalienation of Benefits................................. 38
VII. Administration..................................................... 41
7.1 Pensions and Retirement Benefits Committee................ 41
7.2 Duties of Pensions and Retirement Benefits Committee...... 41
7.3 Powers of Pensions and Retirement Benefits Committee...... 42
7.4 Plan Administrator........................................ 43
7.5 Claims Procedure.......................................... 43
7.6 Records and Reports....................................... 43
7.7 Rules and Decisions....................................... 44
7.8 Pension Applications and Forms for Pension................ 44
7.9 Authorization of Benefit Payments......................... 44
7.10 Allocation of Responsibility Among Fiduciaries for
Plan and Trust Administration........................... 44
VIII. Amendments and Action By Employer.................................. 45
IX. Restrictions on Benefits Payable to Highly Compensated
Participants....................................................... 45
(iii)
<PAGE>
<PAGE>
TABLE OF CONTENTS (Con't)
PAGE
X. Termination........................................................ 47
10.1 Right to Terminate........................................ 47
10.2 Partial Termination....................................... 47
10.3 Liquidation of Trust Fund................................. 48
(a) Certain Benefits Payable Three Years Prior To
Termination.................................... 48
(b) Other Benefits Eligible for Termination Insurance 49
(c) Other Vested Benefits............................ 49
(d) Other Benefits................................... 50
10.4 Manner of Distribution.................................... 51
10.5 Residual Amounts.......................................... 51
XI. Successor Employer and Merger and Consolidation of Plans........... 51
11.1 Successor Employer........................................ 51
11.2 Plan Assets............................................... 51
XII. Credited Service For Certain Participants.......................... 52
XIII. Service For Certain Participants................................... 53
XIV. Participation, Service and Credited Service For Certain
Employees Who Were Participants in the RRSI Plan on
September 1, 1989.................................................. 53
XV. Participation, Service and Credited Service For Certain
Employees.......................................................... 54
(iv)
<PAGE>
<PAGE>
ARTICLE I.
PREAMBLE
The Plan and Trust are intended to meet the requirements of Sections
401(a) and 501(a) of the Internal Revenue Code of 1954, as amended by the
Employee Retirement Income Security Act of 1974.
The Provisions of this Plan shall apply only to an Employee who
terminated employment on or after the Effective Date of this Revised and
Restated Plan. The rights and benefits, if any, of a former Employee shall be
determined in accordance with the prior provisions of the Plan in effect on the
date his employment terminated.
ARTICLE II.
DEFINITIONS AND CONSTRUCTION
2.1 Definitions: The following words and phrases, when used herein,
unless their context clearly indicates otherwise shall have the following
respective meanings:
(a) "Plan:" The Plan of Pensions and Retirement Benefits of The Greater
New York Savings Bank, the Plan set forth herein, as amended from time to time.
(b) "Trust (or Trust Fund):" The fund known as the Pensions and
Retirement Benefits of The Greater New York Savings Bank Trust, maintained in
accordance with the terms of the Trust Agreement, as from time to time amended,
which constitutes a part of this Plan.
(c) "Employer:" The Greater New York Savings Bank, a banking
corporation, organized and existing under the laws of the State of New York, its
successors and assigns, all corporations which are part of a controlled group of
corporations (as defined in Section 414(b) of the Internal Revenue Code), all
other trades or business (whether or not incorporated) which are under common
control (as defined in Section 414(c) of the Internal Revenue Code), and all
affiliated service groups (as defined in Section 414(m) of the Internal Revenue
Code); provided, however, that solely for purposes
1
<PAGE>
<PAGE>
of Section 4.5(b), the standard of control under Sections 414(b) and 414(c) of
the Internal Revenue Code shall be deemed to be "more than 50%" rather than "at
least 80%."
(d) "Effective Date:" October 1, 1976, the date on which the provisions
of this amended and restated Plan became effective.
(e) "Pensions and Retirement Benefits Committee:" The persons appointed
under Article VII to administer the plan.
(f) "Employee:" Any person who, on or after the Effective Date, is
receiving remuneration for personal services rendered to the Employer, or who
would be receiving such remuneration except for an Authorized Leave of Absence,
as defined herein, and including an Officer, including bank's Counsel, elected
or appointed by the Board of Directors and receiving fixed compensation and
whose duties as such require his regular and faithful attendance at the Savings
Bank, but excluding any member of the Board of Directors who is not an active
officer or who is not otherwise regularly employed by the Savings Bank.
In addition, any leased employee shall be treated as an Employee of the
Employer. However, contributions or benefits provided by the leasing
organization for any leased employee which are attributable to services
performed for the Employer shall be treated as provided by the Employer. The two
preceding sentences shall not apply to any leased employee if such Employee is
covered by a money purchase pension plan providing: (1) a nonintegrated employer
contributions rate of at least 10% of compensation, (2) immediate participation,
and (3) full and immediate vesting, including any leased employee otherwise
exempt by this provision, and (4) leased employees do not constitute more than
20% of the Employer's Non-highly Compensated Work Force. The term "Non-highly
Compensated Work Force" shall be defined by Code Section 414(n) and any
regulations issued by the Secretary of the Treasury pursuant thereto. For
purposes of this Plan, the term "leased employee" means any person who, on or
after the Effective Date, and pursuant to an agreement between the Employer and
any other person ("leasing organization") has performed services for the
Employer (or for the Employer and related persons determined in accordance with
Section 414(n)(6) of the Internal Revenue Code) on a substantially full time
basis for a period of at least one year and such services are
2
<PAGE>
<PAGE>
of a type historically performed by employees in the business field of the
Employer.
(g) "Eligible Spouse:" The husband or wife to whom the Participant had
been legally married throughout the six-month period ending on the earlier of 1)
the pension commencement date or 2) the date of the Participant's death.
(h) "Participant:" An Employee participating in the Plan in accordance
with the provisions of Article III or a former Employee entitled to receive a
Pension under this Plan.
(i) "Pension:" A series of monthly amounts which are payable to a
person who is entitled to receive benefits under the Plan.
(j) "Retirement:" Termination of employment for reason other than death
after a participant has fulfilled all requirements for a Normal, Early or
Disability Retirement Pension. Retirement shall be considered as commencing on
the day immediately following a Participant's last day of employment (or
authorized leave of absence, if later).
Additionally, a Participant will be deemed to be retired if after he
attains age 65 he continues to perform services for the Employer or receives
payment for vacation, holiday, illness, incapacity including disability, layoff,
jury duty, military duty or leave of absence for less than 40 hours of
employment in any calendar month or if he is reemployed after he has attained
age 65. A Participant who is deemed to be retired under the provisions of the
preceding sentence shall be considered to have commenced (or continued) his
Retirement on the first day of the calendar month in which such Participant
received remuneration for less than 40 hours of employment or was reemployed
after attainment of age 65.
Additionally, a Participant will be deemed retired, if not sooner, by
the April 1st after the end of the Plan Year in which he reaches age 70 1/2
provided that such rule shall only apply to 5% owners of the Employer prior to
January 1, 1989.
(k) "Service:" The period of a Participant's employment considered in
the determination of his eligibility for benefits under the plan in accordance
with Section 3.2 of Article III.
3
<PAGE>
<PAGE>
(l) "Credited Service:" The period of a Participant's employment
considered in determination of the amount of benefit payable to a Participant
under the Plan, in accordance with Section 3.3 of Article III.
(m) "Authorized Leave of Absence:" Any absence authorized by the
Employer as described in Sections 3.5 and 3.6 of Article III.
(n) "Compensation" means the amounts described below:
(i) Except as provided in (ii), Compensation means W-2
Compensation paid during the Plan Year to an Employee for services rendered to
the Employer increased by (a) such portion of wages or compensation which the
Participant elects to defer and have contributed to a profit sharing plan
meeting the requirements of Section 401(k) of the Internal Revenue Code, and (b)
compensation reduction contributions for medical, dental or dependent care or
other benefits under a cafeteria plan meeting the requirements of Section 125 of
the Internal Revenue Code;
(ii) For purposes of determining the limitations under Section
4.5(b), and for purposes of Section 4.8 (except for determining a Key Employee
under Section 4.8(f)), Compensation means W-2 Compensation paid during the Plan
Year to an Employee by an Employer, not increased by any amount by which the
Employee's Compensation is reduced by salary reduction or any similar
arrangement under any qualified defined contribution plan or qualified defined
benefit plan (as defined in Section 415(k) of the Internal Revenue Code) or any
cafeteria plan (as described in Section 125 of the Code) maintained by an
Employer;
(iii) Notwithstanding the preceding provisions of this Section 2.1
(n) to the contrary, except for purposes of determining the limitations under
Section 4.5(b), the amount of an Employee's Compensation taken into account
under the Plan for any Plan Year shall not exceed: (a) for Plan Years beginning
after December 31, 1988, $200,000, adjusted from time to time by the Secretary
of the Treasury at the same time and in the same manner as under Section 415(d)
of the Code; and (b) for Plan Years beginning after December 31, 1993, $150,000
as adjusted by the Commissioner of the Internal Revenue Service for increases in
the cost of living in accordance with Section 401(a)(17)(B) of the Code. In
determining the Compensation of an Employee for purposes of this limitation,
4
<PAGE>
<PAGE>
Compensation shall include any Compensation paid to a spouse or lineal
descendants of such Employee who has not attained age 19 before the end of the
Plan Year.
(o) "Average Highest Annual Compensation:" The result obtained by
dividing the total Compensation of a Participant during the sixty consecutive
months in which Compensation was highest by sixty.
(p) "Accrued Benefit:" The amount determined in accordance with Article
IV, Section 4.1 for Retirement at Normal Retirement; Article IV, Section 4.2 for
Retirement for Disability; and Article IV, Section 4.3 (a) for Early Retirement
and Section 4.3(b) Open Window Early Retirement.
(q) "Actuarial Equivalent:" Equality in value of the aggregate amounts
expected to be received under different forms of payment, based on actuarial
assumptions approved from time to time by the Committee. For years commencing
October 1, 1981, mortality assumptions will be based upon the Male Group Annuity
Table for 1971, and the 1965 Railroad Retirement Board Disabled Life mortality
for disabled pensioners, and the interest rate assumption shall be 6% per annum.
However, with respect to any lump sum payment that may be payable under this
Plan, the Actuarial Equivalent lump sum value for payments made in any Plan Year
shall be based on the "applicable interest rate" as defined in Code Section
411(a)(11)(B), which shall be the interest rate which would have been used by
the PBGC as of the first day of the Plan Year in which a distribution occurs for
the purposes of determining the present value of a lump sum distribution on plan
termination.
(r) "Actuary:" The individual actuary or firm of actuaries selected by
the Employer to provide actuarial services in connection with the administration
of the plan.
(s) "Disability:" A physical or mental condition which totally and
presumably permanently prevents a participant from engaging in any gainful
activity of a substantial nature as determined in accordance with the provisions
of Article IV, Section 4.2.
5
<PAGE>
<PAGE>
(t) "ERISA:" Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as may be amended from time to time.
(u) "Fiduciaries:" The Pensions and Retirement Benefits Committee of
the Board of Directors, the Trustee, and the Plan Administrator but only with
respect to the specific responsibilities of each for Plan and Trust
administration, all as described in Article VII.
(v) "Normal Retirement Date and Age:" A Participant's "Normal
Retirement Age" is the later of 1) the day on which the Participant attains age
65, or 2) if the Participant is hired after his sixtieth birthday, the earlier
of a) his completion of five Years of Credited Service (as provided in Section
3.3) or b) the fifth anniversary of the date on which the Participant commenced
participation in the Plan. A Participant's Normal Retirement Date is the first
day of the month coincident with or immediately following his Normal Retirement
Age.
(w) "PBGC:" Pension Benefit Guaranty Corporation established under the
provisions of Title IV of ERISA.
(x) "Plan Year:" The 12 month period commencing on October 1, and
ending on September 30.
(y) "Plan Trustee:" Fiduciary Trust Company of New York, its successors
or assigns, or such other individual(s) or organization appointed as Trustee by
the Committee.
(z) "Hours of Service:"
(i) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by the Employer for the performance of duties
during an applicable computation period. These hours shall be credited to the
Employee for the computation period or periods in which the duties were
performed;
(ii) Each hour for which back pay, irrespective of mitigation of
damages, has either been awarded or agreed to be paid by the Employer. These
hours shall be credited to the Employee for the computation period or periods to
which the award or agreement pertains, rather than for the computation period or
periods in which the awards, agreement or payment is made;
6
<PAGE>
<PAGE>
(iii) Each hour for which an Employee is directly or indirectly
paid or entitled to such payment by the Employer for reasons (such as vacation,
sickness or disability) other than for the performance of duties during an
applicable computation period. Irrespective of whether these have accrued in
other computation periods, these hours shall be counted in the computation
period in which either (a) payment is actually made or (b) amounts payable to
the Employee become due;
(iv) Each hour for which an Employee is required to be credited
under any federal law;
(v) The crediting of any Hour of Service shall be made under only
one of the four preceding paragraphs.
In all cases, an "Hour of Service" shall be credited in accordance
with Department of Labor regulation 2530.200(b)-2.
(aa) "Year of Service:" A Year of Service shall mean a twelve
consecutive month period during which an Employee has at least 1,000 hours of
Service with the Employer. For purposes of eligibility to participate and
vesting, the computation period for the determination of Year of Service shall
be based on the employment date or any anniversary thereof.
(bb) "Board of Directors:" The Board of Directors of The Greater New
York Savings Bank, as constituted from time to time.
(cc) "Code:" The Internal Revenue Code of 1986, as amended from time to
time.
(dd) "Effective Date of this Revised and Restated Plan:" September 1,
1989.
(ee) "RSSI Plan:" The Retirement Plan of The Greater New York Savings
Bank in the Retirement Plan for Savings Institutions prior to September 1, 1989,
the date of merger of said plan into this Plan. A copy of said RSSI Plan is
attached hereto and made a part hereof as Appendix A. Effective September 1,
1989, the RSSI Plan was merged into this Plan.
2.2 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the
7
<PAGE>
<PAGE>
singular may include the plural, unless the context clearly indicates to the
contrary. The words "hereof", "herein", "hereunder" and other similar compounds
of the word "here" shall mean and refer to the entire plan, not to any
particular provision or Section.
ARTICLE III.
PARTICIPATION AND SERVICE
3.1 (a) Participation for Employees Hired Prior to April 1, 1982:
Except for (i) any Employee whose employment commenced after the first day of
the calendar month coincident with or immediately following his 60th birthday,
or (ii) any Employee for whom the Employer pays contributions to provide
retirement benefits under the Retirement System for Savings Institutions but not
under Social Security or other like governmental programs or (iii) a member of
the Board of Directors who is not regularly employed by the Employer, or (iv)
any Employee who is not employed for 1,000 or more hours for a consecutive 12
month period, an Employee shall become a Participant in this Plan as follows:
(i) Any Employee included under the prior provisions of the Plan as of
the effective date shall continue to participate in accordance with the
provisions of this amended and restated Plan.
(ii) Any other Employee not included under the prior provisions of the
Plan as of the Effective Date, but who is eligible to participate under this
amended and restated Plan, shall become a Participant on October 1, 1976.
(iii) The participation of any other Employee who commences employment
on or after the Effective Date of this amended and restated Plan (namely October
1, 1976) but prior to April 1, 1982 shall be as of the "first day of the month
in which he has commenced Service", which shall mean the date he was first
credited with an Hour of Service.
After a Break in Service, the provisions of Section 3.4 shall be
applicable.
3.1(b) Participation for Employees Hired On or After April 1, 1982:
Except for (i) any Employee whose employment commenced after
8
<PAGE>
<PAGE>
the first day of the calendar month coincident with or immediately following his
60th birthday, or (ii) a member of the Board of Directors who is not regularly
employed by the Employer, or (iii) any Employee who is not employed for 1,000 or
more hours for a consecutive 12 month period, an Employee hired on or after
April 1, 1982 shall become a Participant in this plan as follows:
The Employee must complete at least 1,000 hours of service during a
consecutive 12 month period commencing with his first day of employment. The
Employee shall then become a Participant in the Plan on the first day of the
month immediately following the completion of the 12 month period during which
he had at least 1,000 hours of service.
If, after the completion of the 12 consecutive month period, the
Employee does not have 1,000 hours of service, he will not become a Plan
Participant until he completes 1,000 hours of service in a subsequent 12
consecutive month period. All subsequent 12 consecutive month periods shall
commence on the anniversary date of employment.
3.1(c) Exclusions: Notwithstanding anything to the contrary herein, no
leased employee who must be treated as an Employee under Section 414(n) of the
Internal Revenue Code, shall be eligible for participation in this Plan.
Additionally, no Employee of any subsidiary or affiliated corporation of The
Greater New York Savings Bank shall be eligible for participation in this Plan,
notwithstanding the fact that such individual is an Employee of a corporation
which is a member of a controlled group of corporations (as defined in Section
414(b) of the Internal Revenue Code) or an Employee of a trade or business
(whether or not incorporated) which is under common control (as defined in
Section 414(c) of the Internal Revenue Code) or an Employee of a member of an
affiliated service group (as defined in Section 414(m) of the Internal Revenue
Code), unless such subsidiary or affiliated corporation, with the approval of
the Board of Directors and subject to such conditions as the Board of Trustees
may impose, adopt this Plan.
3.1(d) Participation for Employees Hired on or After the First Day of
the Calendar Month Coincident with or Immediately Following His Sixtieth
Birthday: Notwithstanding anything to the contrary herein, any Employee whose
employment commenced prior to October 1, 1988 and after the first day of the
calendar month
9
<PAGE>
<PAGE>
coincident with or immediately following his 60th birthday shall become eligible
to participate in this Plan on October 1, 1988 provided he has completed a Year
of Service as of such date. If such Employee has not completed a Year of Service
as of October 1, 1988, or if an Employee is hired on or after October 1, 1988,
he shall become eligible to participate in the Plan upon his completion of a
Year of Service.
3.2 Service. A Participant's eligibility for benefits under the Plan
shall be determined by his period of Service in accordance with the following:
(a) Service Prior to the Effective Date of the Amended and Restated
Plan (October 1, 1976): For a Participant as of the Effective Date, who had been
covered under the prior provisions of the Plan, the Participant's last period of
continuous employment with the Employer prior to the Effective Date shall be
counted as Service, including such periods of Authorized Leave of Absence
credited as Service under the provisions of the Plan in effect prior to the
Effective Date.
(b) Service From and After the Effective Date of the Amended and
Restated Plan (October 1, 1976): Subject to the Break in Service provisions
contained in Section 3.4, a Participant shall accrue a Year of Service for each
consecutive 12 month period commencing on the anniversary date of his employment
in which he has 1,000 or more hours of employment. For Participants hired on or
after April 1, 1982, they shall accrue a Year of Service for the initial 12
consecutive month period commencing on the anniversary date of employment, in
which they complete 1,000 Hours of Service, which period is a condition
precedent for becoming a plan Participant.
3.3 Credited Service: The amount of the benefit payable to or on behalf
of a Participant shall be determined on the basis of his Credited Service, in
accordance with the following:
(a) Credited Service Prior to the Effective Date of the Amended and
Restated Plan (October 1, 1976): For a Participant, as of the Effective Date,
who had been covered under the prior provisions of the Plan, the Participant's
last period of continuous employment with the Employer prior to the Effective
date shall be
10
<PAGE>
<PAGE>
counted as Credited Service including fractions of a year computed to the next
whole month. In addition, such periods of Authorized Leave of Absence credited
under the provisions of the Plan in effect prior to the Effective Date, shall be
counted as Credited Service.
(b) Credited Service From and After the Effective Date of the Amended
and Restated Plan (October 1, 1976):
Subject to the Break in Service provisions contained in Section 3.4, a
Participant who is customarily employed on a full time basis shall accrue one
Year of Credited Service for each completed Year of Service, including Years of
Service after the Participant attains age 65, commencing on the anniversary date
of his employment; and 1/12 of one Year of Credited Service for each month for
less than a full Year of Service (commencing on the anniversary date of his
employment).
Subject to the Break in Service provisions contained in Section 3.4, a
Participant who is customarily employed for less than a full time basis, shall
accrue one Year of Credited Service for each completed Year of Service,
including Years of Service after the Participant attains age 65, commencing on
the anniversary date of his employment during which he completes 1,000 or more
Hours of Service, but shall accrue no periods of Credited Service for any such
year during which he completes less than 1,000 Hours of Service.
In the case of any Employee not included under the prior provisions of
the Plan as of the Effective Date, but who is eligible to participate under this
amended and restated Plan as of October 1, 1976, the anniversary date of
employment shall be deemed to be the Effective Date of this Plan for purposes of
Credited Service.
In the case of an Employee excluded from participation in the Plan
before October 1, 1988 by reason of having been hired after the first day of the
calendar month coincident with or immediately following his 60th birthday, but
who is eligible to participate in the Plan on or after October 1, 1988, the
anniversary date of his employment for the purposes of measuring Credited
Service shall be October 1, 1988. Such Employee shall receive no Credited
Service for periods of Service prior to October 1, 1988.
11
<PAGE>
<PAGE>
3.4 Break in Service: (a) For employees hired prior to April 1, 1982,
and after the Effective Date, a 12 consecutive month period commencing on the
anniversary date of employment during which a Participant completes 500 Hours of
Service or less shall constitute a Break in Service. For employees hired on or
after April 1, 1982, a 12 consecutive month period commencing on the date of
participation in the Plan (pursuant to Section 3.1(b)) during which a
Participant completes 500 Hours of Service or less shall constitute a Break in
Service. Hours of employment shall include the periods set forth in Section
3.2(b) for Service from and after the Effective Date. Upon incurring a Break in
Service, an Employee's rights and benefits under the Plan shall be determined in
accordance with his Credited Service, and Compensation at the time of the Break
in Service. For a Participant who, at the time of the Break in Service,
satisfied the requirements for vested benefits under Article IV, Section 4.4,
and who again is employed for at least 1,000 hours during a 12 consecutive month
period commencing with the anniversary date of reemployment, his pre-break
Service and Credited Service shall be restored in determining his rights and
benefits under the Plan and he shall reparticipate in the Plan as of the date he
again performs an Hour of Service. For a former Participant who, at the time of
a Break in Service had not fulfilled the requirements for vested benefits under
Article IV, Section 4.4, and who again is employed for at least 1,000 hours
during a 12 consecutive month period commencing with the anniversary date of
reemployment, years of pre-break Service and Credited Service shall be restored
only if at least one of the following is applicable:
(i) the number of his consecutive years of Break in Service was less
than 5, or
(ii) the number of his consecutive years of Break in Service was less
than the aggregate number of years of his pre-break Service (determined under
Section 3.2 without regard to whether participation in the Plan had commenced),
or
(iii) the Employee's Break in Service is due to a "maternity or a
paternity leave" and the number of his consecutive years of Break in Service was
less than 6 years, or
(iv) the Employee's Break in Service is due to a "maternity or
paternity leave" and the number of his consecutive years of
12
<PAGE>
<PAGE>
Break in Service was less than the aggregate number of years of his pre-break
Service plus one year (considering Service determined under Section 3.2 without
regard to whether participation in the Plan had commenced).
A Participant whose prior Service and Credited Service are restored
shall receive Service and Credited Service from the date of reemployment.
(b) Maternity or Paternity Leave: For the purposes of this Plan,
"maternity or paternity leave" means termination of employment or absence from
work for a period that commences on or after October 1, 1985, due to the
pregnancy of the Employee, the birth of a child of the Employee, the placement
of a child in connection with the adoption of the child by an Employee, or the
caring for an Employee's child during the period immediately following the
child's birth or placement for adoption. The Committee shall determine, under
rules of uniform application and based on information provided to the Committee
by the Employee, whether or not the Employee's termination of employment or
absence from work is due to "maternity or paternity leave."
3.5 Military Leave of Absence: An authorized Leave of Absence due to
service in the Armed Forces of the United States shall not constitute a Break in
Service and shall be considered as Credited Service under the Plan, provided
that the absence is caused by war or other emergency, or provided that the
Employee is required to serve under the laws of conscription in time of peace,
and further provided that the Employee returns to employment with the Employer
within the period of six months after his termination of duties.
3.6 Non-Military Leave of Absence: Employment shall be deemed
continuous and not terminated in the event of temporary absence from work for
any period not exceeding one year for which an Employee shall have been granted
Leave of Absence by the Employer provided that the Participant shall return to
work upon the expiration of the period of Leave of Absence. The period of
absence shall not count as Credited Service except for the term, if any, for
which the Employee receives full or partial wages from the Employer. Upon
expiration of a one year period of absence, the Leave of Absence may be extended
for such further periods as may be determined by the Employer. For the purpose
of this Plan, all
13
<PAGE>
<PAGE>
Employees in like circumstances shall be similarly treated in the granting of
such Leaves of Absence.
3.7 Transfer
In the case of an Employee's transfer to or from employment providing
eligibility for participation in this Plan, the following rules shall apply,
whether the transfer relates to employment by the Employer only, or to the
employment by the Employer and by subsidiary or affiliated companies of the
Employer:
a) The Employee's Service under Section 3.2 shall be determined as
though all considered periods (subject to the Break in Service
provisions) were employment by the Employer; and transfers shall be
considered not to have interrupted continuity of employment. This
provision shall apply to employment by any corporation which is a
Related Employer.
b) Upon Retirement or other termination of employment with the Employer
and all Related Employers, the Employee's pension shall be computed on
the basis of his Credited Service under this Plan only. However, if the
Employee's transfer was to or from employment providing inclusion in
another defined benefit pension plan qualified under Section 401(a) of
the Internal Revenue Code that is maintained by the Employer or a
Related Employer, the Committee shall arrange for the transfer of the
Employee's Credited Service to or from such other plan. No benefit
shall be provided under this Plan for a period of Credited Service (as
such term is defined in this Plan) used to determine the amount of an
employee's benefit under such other plan if a benefit actually becomes
payable under such other plan; and if an Employee's entire period of
Credited Service under this Plan has been transferred to such other
plan, no Pension shall be payable under this Plan. However, a
Participant's Credited Service under this Plan shall not be transferred
to another Plan if a decrease in his Accrued Benefit would result from
the transfer, and no benefit payable under this Plan shall be computed
on the basis of credited service from another plan if a reduction would
result in the Participant's Accrued Benefit under this Plan or such
other plan.
c) For the purposes of this Plan, Related Employer shall mean
14
<PAGE>
<PAGE>
(a) any corporation which is a member of the controlled group of
corporations of which the Employer is a part, (b) any trade or business
which is under common control with the Employer, and (c) any member of
an affiliated service group which includes the Employer, all as defined
by Section 414 of the Internal Revenue Code.
3.8 Minimum Participation: Effective October 1, 1989, this Plan shall
benefit, on each day of the Plan Year, the lesser of:
(a) 50 Employees of the Employer; or
(b) 40% or more of all Employees of the Employer.
The plan may exclude certain Employees as provided in Code Section 401
(a) (26) (B), and any regulations issued thereunder.
ARTICLE IV.
RETIREMENT
4.1 Normal Retirement: Upon the attainment of the Normal Retirement Age
all Participants shall become fully vested in a nonforfeitable annual Normal
Retirement Pension, payment of which is subject to Section 4.7 of this Plan,
equal to their Accrued Benefit. A Participant's Accrued Benefit shall, subject
to the limitations of Section 4.5, be the amount of 2% of his Average Highest
Annual Compensation as defined in this Plan multiplied by his number of Years of
Credited Service, as provided in Section 3.3.
4.2 Disability Retirement Pension: In the event that a Participant
shall retire or be retired from the Service of the Employer by reason of
Disability after he has completed 5 Years of Service, he shall be granted a
Disability Retirement Pension. The annual amount of the Disability Retirement
Pension shall be equal to his Accrued Benefit at the date of his retirement, as
determined under Section 4.1, without reduction for age.
For all purposes of the Plan, Disability shall mean physical or mental
impairment which totally incapacitates the Participant from performance of his
duties. The Committee shall abide by the determination of the Social Security
Administration for purposes of its determination of incapacity.
15
<PAGE>
<PAGE>
4.3 (a) Early Retirement Pension: A Participant who has not attained
the Normal Retirement Age may retire at any time after the later of 1) the sum
of his years of age plus his Years of Service (each computed to the nearest
whole month) equals or exceeds 75 or 2) the earlier of a) completion of five
Years of Credited Service or b) the fifth anniversary of the date on which the
Participant commenced participation in the Plan. In the event a Participant
shall retire hereunder, the annual amount of this Early Retirement Pension shall
be equal to his Accrued Benefit at the date of his Retirement, as determined
under Section 4.1, which amount shall be reduced as provided in the following
paragraph of this Section 4.3(a), if he elects to receive an immediate Early
Retirement Pension.
The reduced immediate Early Retirement Pension shall be a percentage of
the Participant's Accrued Benefit at the date of his early retirement as shown
in the following table according to his age taken to the nearest whole month at
the date of his retirement:
AGE AT PERCENTAGE FOR ADDITIONAL PERCENTAGE FOR
RETIREMENT EXACT AGE EACH ADDITIONAL MONTH
---------- -------------- -----------------------
40 28.0% .1%
41 29.2 .1
42 30.4 .1
43 31.6 .1
44 32.8 .1
45 34.0 .1
46 35.2 .1
47 36.4 .1
48 37.6 .2
49 40.0 .2
50 42.4 .2
51 44.8 .2
52 47.2 .2
53 49.6 .2
54 52.0 .3
55 55.6 .3
56 59.2 .3
57 62.8 .3
58 66.4 .4
59 71.2 .4
60 76.0 .4
61 80.8 .4
16
<PAGE>
<PAGE>
62 85.6 .4
63 90.4 .4
64 95.2 .4
65 100.0 .4
4.3 (b) Open Window Early Retirement Pension Option: During the period
commencing on January 1, 1984 and ending on March 31, 1984, a participant age 55
or older may retire if the sum of his age plus years of Service (each computed
to the nearest whole month) equals or exceeds 75. If an eligible Participant
elects to retire under this Section 4.3(b), he shall be entitled to a retirement
Pension, equal to his Accrued Benefit at the date of retirement, as determined
under section 4.1, without reduction for age.
4.4 Deferred Vested Pension: Except in the case of a Participant who
qualifies for an Early Retirement Pension, if the employment of a Participant
should terminate for reasons other than death, before the time he is entitled to
a Pension under Section 4.1 or 4.2 herein, but after the time he has completed 5
Years of Service, or if the employment of a Participant should terminate as a
result of his decision to accept employment with Ensign Bank F.S.B. in
connection with a certain Branch Purchase and Deposit Assumption Agreement
between The Greater New York Savings Bank and Ensign Bank F.S.B. dated as of
August 1, 1986, or in connection with an Assignment and Assumption Agreement
dated April 18, 1990, as amended by an Agreement for Extension of Time dated
October 15, 1990, between the Greater New York Savings Bank and Chemical Bank,
or in connection with a Purchase and Assumption Agreement dated as of January
15, 1993 between The Greater New York Savings Bank and Republic National Bank of
New York, he shall thereupon become entitled to a Pension, equal to his Accrued
Benefit at the date of his retirement, as determined under Section 4.1 to
commence at the Normal Retirement Age if he then be living.
A Participant may elect to have his Deferred Vested Pension commence
prior to his attainment of the Normal Retirement Age on the first day of any
calendar month next following the date he qualifies for an Early Retirement
Pension. However, in such case, his Deferred Vested Pension shall be reduced as
provided in the second paragraph of Section 4.3(a).
17
<PAGE>
<PAGE>
4.5 Preservation of Benefits and Maximum Pensions: Notwithstanding
anything to the contrary herein, any Pension computed under Article IV shall be
subject to the following:
(a) Minimum Pension for Participants as of the Effective Date: If a
Participant was included under the prior provisions of the Plan as of the
Effective Date of the Plan, and a Pension becomes payable under the Plan
resulting from termination of employment on or after the Effective Date, such
Pension shall not be less than the Pension that would have been payable had the
provisions of the Plan in effect immediately prior to the Effective Date
remained in effect until the Participant's termination of employment,
considering the Credited Service accumulated at termination of employment and
the rate of Compensation in effect on the Effective Date.
(b) Maximum Benefit: The maximum benefit permitted under all defined
benefit plans of the Employer, when expressed as an annual Pension, shall not
exceed the lesser of the following two amounts:
(i) 2% of the average annual Compensation for the three
consecutive years in which Compensation was highest
("Average High Three Year Compensation"), multiplied
by the number of years of Credited Service or 60% of
such Average High Three Year Compensation whichever
is less; or
(ii) $90,000 per annum ("Dollar Limitation") for a single
life Pension computed under Article IV;
The maximum benefit when expressed as an annual Pension, shall be
further subject to the following:
1. The maximum shall apply to the Pension payable to the Participant
either as a Joint and Survivor Pension described in Section 5.1 or 5.2
or pursuant to an option described in Section 5.2(b) where the
contingent annuitant is the Participant's spouse; but if the Pension is
payable in a form other than the foregoing and other than the
single-life Pension, the maximum shall apply to the single-life Pension
which is the Actuarial Equivalent of such Pension.
18
<PAGE>
<PAGE>
2. If the annual benefit of the Participant commences before the
Participant's Social Security Retirement Age (as defined in Code
Section 415(b)(8), but on or after age 62, the Dollar Limitation shall
be determined as follows:
(i) If a Participant's Social Security Retirement Age is 65, the
Dollar Limitation for benefits commencing on or after age 62 is
determined by reducing the Dollar Limitation by 5/9 of one percent
for each month by which benefits commence before the month in which
the Participant attains age 65.
(ii) If a Participant's Social Security Retirement Age is greater
than 65, the Dollar Limitation for benefits commencing on or after
age 62 is determined by reducing the Dollar Limitation by 5/9 of one
percent for each of the first 36 months and 5/12 of one percent for
each of the additional months (up to 24 months) by which benefits
commence before the month of the Participant's Social Security
Retirement Age.
(iii) If the annual benefit of a Participant commences prior to age
62, the Dollar Limitation shall be the Actuarial Equivalent of an
annual benefit beginning at age 62, as determined above, reduced for
each month by which benefits commence before the month in which the
Participant attains age 62.
3. If the annual benefit of a Participant begins after age 65, the
maximum Dollar Limitation shall be the Actuarial Equivalent of the
Dollar Limitation where the Dollar Limitation is deemed to be a Pension
commencing at Social Security Retirement Age. Solely for the purposes
of this subsection (3) and subsection (2) above, Actuarial Equivalent
shall have the same meaning as described in Section 2.1(q) except the
interest rate assumptions for the purposes of this subsection (3) and
subsection (2) above shall not be greater than the lesser of: A) the
rate set forth in Section 2.1(q) or B) 5%
4. If the Participant has fewer than 10 years of Plan participation,
the Dollar Limitation shall be multiplied by a
19
<PAGE>
<PAGE>
fraction, the numerator of which is the number of years (computed to
fractional parts of a year ) of participation in the Plan, and the
denominator of which is 10. If the Participant has fewer than 10 years
of Service, the Compensation Limitation shall be multiplied by a
fraction, the numerator being the Participant's years of Service
(computed to fractional parts of a year) divided by a denominator of
10.
5. Effective January 1, 1988, for all purposes of this Plan, the
maximum Dollar Limitation of $90,000.00 shall be automatically
increased as permitted by Treasury Department regulations issued
pursuant to Section 415(d) of the Code to reflect cost-of-living
adjustments. As a result of such an adjustment, a Pension which had
been limited by the provisions of this Section in a previous Plan Year
may be increased with respect to future payments to the lesser of the
adjusted Dollar Limitation amount or the amount of Pension which would
have been payable under this Plan without regard to the provisions of
this Section 4.5.
Notwithstanding the foregoing, the otherwise permissible annual
benefits for any Participant under this Plan may be further reduced to the
extent necessary, as determined by the Committee, to prevent disqualification of
the Plan under Section 415 of the Internal Revenue Code, which imposes the
following additional limitations on the benefits payable to Participants who
also may be participating in a tax qualified defined contribution plan of the
employer: If an individual is a Participant at any time in both a defined
benefit plan and a defined contribution plan maintained by the Employer, the sum
of the defined benefit plan fraction and the defined contribution plan fraction
for any Plan Year may not exceed 1.0. The defined benefit plan fraction for any
Plan Year is a fraction, the numerator of which is the Participant's projected
annual benefit under the Plan (determined at the close of the Plan Year) and the
denominator of which is the lesser of a (a) 1.25 multiplied by the larger of the
Dollar Limitation, as adjusted, or (b) 1.4 multiplied by 100% of the
Participant's average annual salary for the three consecutive years in which his
compensation was the highest ("Compensation Limitation"). The defined
contribution plan fraction for any Plan Year is a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's accounts in such
Plan Year and for all prior Plan Years and the denominator of which is the sum
of the applicable
20
<PAGE>
<PAGE>
maximum amounts of annual additions which could have been made under Section
415(c) of the Internal Revenue Code for such Plan year and for all prior years
of such Participant's employment (assuming for this purpose, that said Section
415(c) had been in effect during such prior years). The applicable maximum
amount for any Plan Year shall be equal to the lesser of 1.25 multiplied by the
Dollar Limitation in effect for such Plan Year under subsection 415(c)(1)(A) of
the Internal Revenue Code, or 1.4 multiplied by 25% of the Participant's total
annual Compensation for such Plan Year.
For purposes of this provision, Annual Additions for Plan Years
commencing on or after October 1, 1987 shall mean the sum of the following
amounts credited to a Participant's account or accounts during the Plan Year: 1)
Employer contributions, b) Employee Contributions, if any, c) all forfeitures,
and d) contributions attributable to medical benefits as described in Sections
415 (1)(i) and 419(A)(d)(2) of the Code. The Annual Additions for the Plan Years
commencing prior to October 1, 1987 shall be determined in accordance with the
provisions of the Plan as in effect on September 30, 1987.
For purposes of the above limitation, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan. The extent to
which the benefit payable under this Plan shall be reduced as compared with the
extent to which the annual benefit under any defined contribution plan shall be
reduced in order to achieve compliance with the limitations of Section 415 of
the Internal Revenue Code shall be determined by the Committee in such a manner
so as to maximize the aggregate benefits payable to such Participant. If such
reduction is under this Plan, the Committee shall advise affected Participants
of any additional limitation on their annual benefits required by this
paragraph.
The above limitations are intended to comply with the provisions of
Section 415 of the Internal Revenue Code, as amended, so that the maximum
benefits provided by plans of the Employers shall be exactly equal to the
maximum amounts allowed under Section 415 of the Internal Revenue Code and
regulations thereunder. If there is any discrepancy between the provisions of
this section 4.5 and the provisions of Section 415 of the Internal Revenue Code
and regulations thereunder, such discrepancy shall be resolved in such
21
<PAGE>
<PAGE>
a way as to give full effect to the provisions of Section 415 of the Internal
Revenue Code.
Notwithstanding the foregoing, the maximum benefit for a Participant in
this Plan on or before September 30, 1983, shall not be less than the
Participant's accrued benefit under the Plan as of September 30, 1983 and the
maximum benefit for a Participant in this Plan on or before September 30, 1989,
shall not be less than the Participant's accrued benefit under the Plan as of
September 30, 1989.
In addition to other limitations set forth in the Plan and
notwithstanding any other provisions of the Plan, the accrued benefit, including
the right to any optional benefit provided in the Plan (and all other defined
benefit plans required to be aggregated with this Plan under the provisions of
Section 415 of the Internal Revenue Code of 1954), shall not increase to an
amount in excess of the amount permitted under Section 415 of the Internal
Revenue Code as amended by the Tax Reform Act of 1986.
4.6 Change in Pensions:
(a) In the event that a Participant retired on a Disability Pension,
and recovers from his Disability, his Disability Pension shall cease. If he
should be reemployed by the Employer as an eligible Employee, his participation
and previous Credited Service shall be reinstated and he shall receive credit
for any additional Credited Service after reemployment.
If he should not be reemployed by the Employer as an eligible Employee,
he shall receive no further payments unless he had qualified for an Early
Retirement Pension or Deferred Vested Pension as of the time when his Disability
Pension was granted, in which case he shall thereafter receive the reduced Early
Retirement Pension or the Deferred Vested Pension, whichever is appropriate, to
which he would have been entitled as of his retirement date as if he had not
been Disabled.
(b) In the event that a Participant retired on a Pension other than for
Disability and, is reemployed by the Employer as an eligible Employee, his
Pension subject to Section 5.8 shall cease, and his participation and previous
Credited Service shall be reinstated, and he shall receive credit for any
additional Credited
22
<PAGE>
<PAGE>
Service after reemployment; provided, however, that if he shall have received an
Early Retirement Pension for more than one year, his Pension upon subsequent
retirement shall be equitably reduced on an actuarial basis on account of the
Pension previously received by him.
4.7 (a) Payment of Pension: Pensions shall be paid in monthly
installments, each installment equaling 1/12 of the annual Pension. For a
Pension under Sections 4.1 (Normal Retirement), 4.2 (Disability Retirement) and
4.3(b) (Open Window Early Retirement Option) of this Plan, the first installment
shall be paid to a retired Participant on the first day of the month next
following the month in which he actually retires and terminates his Service with
the Employer. For a Pension under Section 4.3 (a) (Early Retirement) of this
Plan, the first installment shall be paid to a retired Participant on the first
day of the month next following the month in which he attains age 65 (provided
he has actually retired and terminated his Service), unless the Participant
elects in writing to receive his installments at a reduced amount as provided
for in Section 4.3(a) of this Article, on the first day of the month next
following the month he actually retires and terminates his Service. For a
Pension under Section 4.4 (Deferred Vested Pension) of this Plan, the first
installment shall be paid to a retired Participant on the first day of the month
next following his 65th birthday, unless the Participant, at a time subsequent
to his termination date, at which time the sum of his age plus years of Service
(each computed to the nearest whole month), equals or exceeds 75, elects in
writing to receive his installments at the reduced amount as provided for in
Section 4.3 of this Article, in which case his first installment shall be paid
on the first day of the month in accordance with the Participant's request,
subject to the provisions of Section 5.5.
In no event shall any Pension be paid to a Participant prior to actual
termination of Service, except as provided in Sections 4.7(b) and 5.8.
Upon the death of a Participant or retired Participant all of his
interest in or right to Pension benefits shall cease except as set forth under
the provisions of Article V.
b) Subject to the following sentence, payment of any benefit provided
under this Plan shall commence no later than the 60th day
23
<PAGE>
<PAGE>
after the end of the Plan Year in which the Participant both has attained his
Normal Retirement Age and terminated his employment with the Employer.
Regardless of the foregoing, the payment of benefits under the Plan to a
Participant must commence by the April 1st after the end of the Plan Year in
which he reaches age 70 1/2, provided however, that such rule shall only apply
to a 5% owner of the Employer until January 1, 1989. Furthermore, effective as
of January 1, 1989, if a benefit payment under the Plan is made to such 5% owner
before he attains age 59 1/2 such participant shall be advised by the Committee
that an additional income tax may be imposed equal to 10% of the portion of the
amount so received which is included in his gross income for such taxable year
and attributable to contributions paid on behalf of such individual while he was
a 5% owner, unless such distribution is made on account of death or disability.
4.8 Top-Heavy Provisions: The following provisions shall become
effective in any Plan Year commencing after December 31, 1983 in which the Plan
is determined to be a Top-Heavy Plan.
(a) Determination of Top-Heavy: The Plan will be considered a
Top-Heavy Plan for the Plan Year if as of the last day of the preceding
Plan Year, (1) the present value of the Accrued Benefits of
Participants who are Key Employees (as defined below and in Section
416(i) of the Internal Revenue Code) exceeds 60% of the present value
of the Accrued Benefits of all Participants (the "60% Test") or (2) the
Plan is part of a Required Aggregation Group and the Required
Aggregation Group is top-heavy. However, and notwithstanding the
results of the 60% Test, the Plan shall not be considered a Top-Heavy
Plan for any Plan Year in which the Plan is a part of a Required or
Permissive Aggregation Group which is not top-heavy.
A "Required Aggregation Group" includes (1) each plan of the
Employer in which a Key Employee is a Participant and (2) each
other plan of the Employer which enables any plan described in
subclause (1) of this sentence to meet the requirements of section
401(a)(4) or 410 of the Internal Revenue Code. A "Permissive
Aggregation Group" includes any plan not required to be included
in a "Required Aggregation Group", if such group would continue to
meet the requirements of sections 401(a)(4)
24
<PAGE>
<PAGE>
and 410 of the Internal Revenue Code with such plan being taken
into account.
For the purposes of making the "60% Test" for any Plan Year,
Accrued Benefits shall be those amounts calculated as of the last day
of the preceding Plan Year and the present value of those amounts shall
be based on the actuarial assumptions used by the Actuary in the
actuarial valuation made as of the last day of such preceding Plan
Year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans maintained
by the Employer, or (b) if there is not such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of section 411 (b)(1)(C) of the Code.
(b) Minimum Benefit: The minimum Normal Retirement Pension for
each non-Key Employee Participant terminating employment at or after
age 65, and the minimum Accrued Benefit, payable at Normal Retirement
Date for each non-Key Employee Participant who terminates employment
prior thereto with entitlement to a Pension, shall be equal to the
product of (1) 2% of his average annual compensation, as defined in
Section 1.415-2(d) of the Income Tax Regulations during his five
highest-paid consecutive calendar years of Service (or during his
period of service if less than five years) multiplied by (2) each of
the first 10 years of his Credited Service after September 30, 1984 in
which the Plan is a Top-Heavy Plan.
(c) Minimum Vesting: Notwithstanding the provisions of Section
4.4, a Participant shall be eligible for a Deferred Vested Pension, if
while the Plan is a Top-Heavy Plan, his employment is terminated before
death or Retirement after he has completed at least 2 years of Service.
The amount of his Deferred Vested Pension on a single-life basis,
commencing as of his Normal Retirement Date shall be equal to his
vested percentage of his Accrued Benefits, determined in accordance
with the following table:
25
<PAGE>
<PAGE>
Years of Service Vested Percentage
---------------- -----------------
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
Upon the death of a Participant whose death occurs prior to the date
his Pension commences hereunder, who has completed less than 5 years of Service
at the date of his death, but who has earned a degree of vesting under the Plan
prior to his death pursuant to the provisions of this subsection (c), a Pension
shall be payable to his Eligible Spouse, if any.
The Pension payable to the Eligible Spouse of such a Participant shall be equal
to the amount the Eligible Spouse would have been entitled to receive had the
Participant commenced to receive a Deferred Vested Pension under the provisions
of this subsection (c) and under the 50% Joint and Survivor provisions of
Section 5.1 as of his Normal Retirement Date, based on his Service and Credited
Service immediately prior to the earlier of his death or termination of
employment, and then died immediately thereafter. The Pension payable to such an
Eligible Spouse shall commence as of the Participant's Normal Retirement Date
and shall continue until the beginning of the month in which the death of the
Eligible Spouse occurs.
(d) Change in Top-Heavy Status: If the Plan becomes a Top-Heavy
Plan and subsequently ceases to be such, the vesting schedule in
subsection (c) of this section shall continue to apply in determining
the Deferred Vested Pension of any Participant who had at least five
years of Service as of September 30 in the last Plan year of
top-heaviness. For other Participants, said schedule shall apply only
to their Accrued Benefits as of such September 30. If the Plan becomes
a Top-Heavy Plan and subsequently ceases to be such, the minimum
benefit accrued under subsection (b) of this Section while the Plan was
Top-Heavy, shall continue to apply.
(e) Impact on Maximum Benefits: For any Plan Year in which the
Plan is a Top-Heavy Plan, Section 4.5 shall be read by substituting the
number "1.00" for the number "1.25"
26
<PAGE>
<PAGE>
wherever it appears therein except such substitution shall not have the
effect of reducing any benefit accrued under a defined benefit plan
prior to the first day of the Plan Year in which this provision becomes
applicable.
(f) Key Employee: Any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual compensation exceeds 50 percent of the dollar
limitation under section 415(b)(1)(A) of the Code, an owner (or
considered an owner under section 318 of the Code) of one of the ten
largest interests in the employer if such individual's compensation
exceeds 100 percent of the dollar limitation under section 415(c)(1)(A)
of the Code, a 5-percent owner of the Employer, or a 1-percent owner of
the employer who has an annual compensation of more than $150,000.
Annual compensation means compensation as defined in section 415(c)(3)
of the Code, but including amounts contributed by the employer pursuant
to a salary reduction agreement which are excludible from the
employee's gross income under section 125, section 402(a)(8), section
402(h) or section 403(b) of the Code. The determination period is the
Plan Year containing the determination date and the 4 preceding Plan
Years. The determination of who is a Key Employee will be made in
accordance with section 416(i)(1) of the Code and the regulations
thereunder.
ARTICLE V.
JOINT AND SURVIVOR PENSION AND OPTIONAL PENSION PAYMENTS
5.1 50% Joint and Survivor Pension: If a Participant has an Eligible
Spouse on the date his Pension payments commence, his Pension shall be paid in
the form of a 50% Joint and Survivor Pension, unless he elects in writing, in
accordance with Section 5.5, and his Eligible Spouse consents to his election,
to receive the appropriate single life Pension described in Article IV or any
other Optional Pension described in Section 5.2.
Under a 50% Joint and Survivor Pension, a reduced amount shall be paid
to the Participant for life, and 50% of that reduced amount shall then be paid
to his Eligible Spouse, if surviving at the
27
<PAGE>
<PAGE>
Participant's death, for life. The reduced amount shall be a percentage of the
single life Pension to which the Participant would be otherwise entitled, and
the percentage shall be determined from the difference in years (rounded to the
nearest whole year) between the ages of the Participant and the Eligible Spouse
as follows:
(a) if there be no difference in the ages, the percentage shall be 86%,
or
(b) if the Participant be older than the Eligible Spouse, the
percentage shall be 86% less 3/4% for each year of difference in the ages, or
(c) if the Eligible Spouse be older than the Participant, then the
percentage should be 86% plus 3/4% for each year of difference in the ages, but
no more than 99%.
5.2 Optional Pensions: A Participant may elect, in accordance with
Section 5.5, to have his Pension paid under one of the following options:
(a) Continuation of Same Reduced Amount to Surviving Eligible Spouse
(100% Joint and Survivor Pension):
This optional form provides for a Pension in a reduced amount and the
continuation of the same reduced amount to the surviving Eligible Spouse. The
reduced amount shall be a percentage of the single life to which he would be
entitled if he had not elected the option, and the percentage shall be
determined from the difference in years (rounded to the nearest whole year)
between the ages of the Participant and the Eligible Spouse, as follows:
(i) if there be no difference in the ages, the percentage shall be
74%, or
(ii) if the Participant shall be older than the Eligible Spouse,
the percentage shall be 74% less 1% for each year of difference in the ages or
(iii) if the Eligible Spouse be older than the Participant, the
percentage shall be 74% plus 1% for each year of
28
<PAGE>
<PAGE>
difference in the ages, but no more than 99%.
(b) Term Certain and Life: Any Participant who is entitled to receive a
Normal or an Early Retirement Pension may elect a reduced Pension at a constant
monthly rate for a guaranteed period of 5, 10, 15 or 20 years to be selected by
the Participant but in no event shall the guaranteed period extend beyond the
life expectancy of the Participant. The amount of such reduced guaranteed
payments shall be the Actuarial Equivalent of a single life pension to which the
Participant would have been otherwise entitled. In the event of the death of the
Participant prior to the expiration of the term of the guaranteed period
selected, such constant monthly payments shall continue to be paid for the
balance of the guaranteed period to a beneficiary or beneficiaries to be
designated by the Participant or to their estates if they fail to survive the
guaranteed period. No benefits hereunder shall be paid in a lump sum. If the
Participant lives beyond the guaranteed period selected, the constant monthly
payments shall continue for such Participant's life. The beneficiary or
beneficiaries designated must be natural persons in being at the time of their
designation. During the lifetime of any Participant selecting this form of
Pension, the beneficiary designated may be changed at any time and from time to
time.
If the contingent annuitant under the option elected pursuant to
Section 5.2(b) is other than the Participant's Eligible Spouse, then the
Eligible Spouse must consent to the Participant's optional election and to the
specific contingent annuitant within the 90 day period preceding the date the
Participant's Pension commences hereunder.
An election made pursuant to this Section 5.2 shall become inoperative
if the Participant's employment terminates before he is eligible for either a
Normal or Early Retirement Pension, or if the Participant or his contingent
annuitant dies before Participant's Pension commencement date, or if the
Eligible Spouse does not consent to an optional election or a specific
contingent annuitant requiring his or her consent. If an option under this
Section become effective, it will be in place of any benefit otherwise payable
under this Plan, and the form made available by the Committee for election of
the option shall so specify. If the contingent annuitant is other than the
Participant's Eligible Spouse and if the value of the Participant's benefit
under any of
29
<PAGE>
<PAGE>
the above options will be less than 51% of the value of his single-life Pension,
the optional benefit shall be adjusted so that the value of the Participant's
benefit under the option will be equal to 51% of the value of the Participant's
single-life Pension.
5.3 Automatic Option:
(a) (1) If a Participant dies before Retirement while in the service of
the Employer after he has attained the Normal Retirement Age, or after the later
of the following: 1) the time when the sum of his years of age plus Years of
Service (each computed to the nearest whole month) is equal to 65 or 2) the
earlier of a) the completion of five Years of Credited Service or b) the fifth
anniversary of the date on which the Participant commenced participation in the
Plan and leaves surviving an Eligible Spouse, he shall automatically be deemed,
as of the date of his death, to have:
(i) been entitled to receive a Normal, or an immediate Early
Retirement Pension, (whichever is appropriate), and
(ii) to have retired.
The Pension shall be paid in the form of a 100% Joint and Survivor
Pension as described in Section 5.2(a) and his surviving Eligible Spouse or
minor child or children, as the case may be, shall thereupon become entitled to
receive a Pension thereunder. The monthly Pension benefit payable hereunder
shall commence on the first day of the calendar month coincident with or next
following the later of the Participant's death and the date on which the
Participant would have attained his Normal Retirement Age, if he had lived.
Notwithstanding the foregoing, a Participant's Eligible Spouse may elect to have
the monthly Pension benefits payable under this Section 5.3 on the first day of
the calendar month coincident with or next following the date of the
Participant's death and benefit shall be equal to the Normal Retirement Pension
or Early Retirement Pension calculated in accordance with Section 4.3(a) that
would have been provided under the Plan had the Participant retired on the date
of his death. In the event the Pension benefits hereunder are deferred until the
Participant would have attained his Normal Retirement Age, and the Eligible
Spouse dies prior to the commencement of the Pension benefits and there is
surviving a child or children of the Participant under the age of
30
<PAGE>
<PAGE>
twenty-one (21) at the time of the Surviving Spouse's death, a monthly Pension
benefit shall commence to be paid to said child or children under age twenty-one
(21) on the first day of the calendar month coincident with or next following
the Eligible Spouse's death and shall continue until the youngest child attains
age twenty-one (21).
(a) (2) If a Participant who is eligible for the Open Window Early
Retirement Option described in Section 4.3(b) dies on or before March 31, 1984
before retirement while in the service of the Employer, and leaves surviving an
eligible spouse, that is a spouse to whom he has been legally married six months
prior to the date of death, he shall automatically be deemed, as of the date of
his death, to have:
(i) been entitled to receive an Open Window Early Retirement
Allowance, and
(ii) to have retired.
The Pension shall be paid in the form of a 100% Joint and Survivor
Pension as described in Section 5.2(a) and his surviving spouse or minor child
or children, as the case may be, shall thereupon become entitled to receive a
retirement allowance thereunder.
(a)(3) In the event that there is no living Eligible Spouse to receive
the payments, or there is a living spouse but the spouse was not an Eligible
Spouse due to the fact that the spouse was not legally married to the
Participant six months prior to the date of death, but there is surviving a
child or children of the Participant under the age of 21 as of the date of
death, then, payments shall be made as follows:
An annual amount equal to that which would have been payable
annually to the Eligible Spouse, if living or if eligible, shall
be paid to the child, or in equal shares among the children under
the age of 21 years, until the child attains age 21, or the last
of the children attain age 21.
(a) (4) In the event that payments were made to an Eligible Spouse and
that Eligible Spouse subsequently dies, and there is
31
<PAGE>
<PAGE>
surviving a child or children of the Participant under the age of 21 as of the
date of death of the Eligible Spouse, then payments shall be made as follows:
An annual amount equal to that which had been paid to the Eligible
Spouse, shall continue to be paid to the child, or in equal shares
among the children under the age of 21 years, until the child
attains the age of 21, or the last of the children attain age 21.
For purposes of this Section 5.3 (a) (3) and (a) (4), child or children shall
include the legally adopted child or children of the Participant.
5.4 Modified Automatic Option: If a Participant dies before Retirement
while in the service of the Employer before he becomes eligible for an Automatic
Option Pension payable in accordance with Section 5.3, but after he becomes
eligible for a Deferred Vested Pension payable in accordance with Section 4.4, a
Pension in the form of a Modified Automatic Option Pension, shall be payable to
his Eligible Spouse, if any.
Such Modified Automatic Option Pension shall be a "50% Joint and
Survivor Annuity" with his Eligible Spouse as his designated beneficiary, and
shall be paid to and for the lifetime of his Eligible Spouse. Such Pension shall
be computed in accordance with Sections 4.3(a) and 5.1.
The Eligible Spouse of a Participant may elect to have the monthly
Modified Automatic Option Pension payment commence on the earliest date the
Participant would have been entitled to have his Deferred Vested Pension Benefit
commence had he terminated employment on the date of his death and survived to
such earliest date. Absent such election, the monthly Modified Automatic Option
Pension payment shall commence on the date that the Participant would have
attained his Normal Retirement Age.
(b) If a Participant who terminated employment subsequent to October 1,
1976 with entitlement to a Deferred Vested Pension on the date he terminated
employment dies before his Pension is scheduled to commence, a Pension in the
form of a Modified Automatic Option Pension shall be payable to his Eligible
Spouse,
32
<PAGE>
<PAGE>
if any. Such Modified Automatic Option Pension shall be a "50% Joint and
Survivor Annuity" with an Eligible Spouse as his designated beneficiary and
shall be paid to and for the lifetime of his Eligible Spouse. Such Pension shall
be computed in accordance with Sections 4.3(a) and 5.1.
The Eligible Spouse of a Participant may elect to have the monthly
Modified Automatic Option Pension Payment commence on the earliest date
following his death he would have been entitled to have his Deferred Vested
Pension commence. Absent such election the monthly Modified Automatic Option
Pension payment shall commence on the date that the Participant would have
attained his Normal Retirement Age.
5.5 Election of Form of Pension: In lieu of the 50% Joint and Survivor
Annuity Pension, a Participant may elect in writing, on a form provided by the
Committee, within the 90 day period prior to the date his Pension payments
commence, and only with the consent of his Eligible Spouse, to receive a monthly
amount in the form of a single-life Pension computed under Article IV. A
Participant entitled to receive a Normal or an Early Retirement Pension may also
elect instead a Term Certain and Life Pension under Section 5.2. However, if
such a Participant does elect a pension under Section 5.2 and if the contingent
annuitant under the option is not his Eligible Spouse, then his optional
election shall be cancelled and his Pension shall be paid in the form of a 50%
Joint and Survivor Pension unless, within the 90 day period preceding his
Pension commencement date, his Eligible Spouse consents to his optional
election.
A Participant may also revoke any election made under this Section 5.5
at any time during the 90 day period preceding the date the Participant's
Pension commences if the purposes of such revocation is to reinstate coverage
under the 50% Joint and Survivor Pension.
The Eligible Spouse's consent to any election made pursuant to this
Plan shall be in writing and shall acknowledge the effect of such consent. In
addition, the Eligible Spouse's signature on the written consent must be
witnessed by a notary public or a member of the Committee or the Plan
Administrator. The Eligible Spouse's consent need not be obtained if the
Committee is satisfied that
33
<PAGE>
<PAGE>
there is no Eligible Spouse, that the Eligible Spouse cannot be located or
because of any other circumstances which may be prescribed in regulations issued
by the Secretary of the Treasury. An Eligible Spouse's consent under this Plan
shall be valid only with respect to the specified alternate contingent annuitant
designated by the Participant. If such alternate contingent annuitant is
subsequently changed, a new consent by the Eligible Spouse will be required. The
Eligible Spouse's consent to any election made by a Participant pursuant to this
Plan, once made, may not be revoked by the Eligible Spouse.
Within a reasonable period of time preceding the date his Pension
commences, and subject to regulations issued by the Secretary of the Treasury, a
Participant shall be supplied with a written explanation of (a) the terms and
conditions of the 50% Joint and Survivor Pension, (b) the Participant's right,
if any, to elect a single life Pension or a Term Certain and Life Pension under
Section 5.2 in lieu of the 50% Joint and Survivor Pension and subject, in
certain cases, to his Eligible Spouse's consent and (c) the Participant's right
to reinstate coverage under the 50% Joint and Survivor Pension prior to his
Pension commencement date by revoking an election of a single life Pension or an
optional form of benefit under Section 5.2.
If a Participant does not have an Eligible Spouse on the date his
Pension payments commence, he shall receive the single life Pension computed
under Article IV, subject to his right, if any, to elect a Term Certain and Life
Pension under Section 5.2. The last payment of the single life Pension shall be
made as of the first day of the month in which the death of the Participant
occurs.
5.6 Open Window Early Retirement Option Notice Retirement: Participants
eligible to retire under Section 4.3(b) of this Plan shall not be required to
give the 150 day notification of intent to retire under former Section 5.4.
However, the Committee shall be required to furnish prior to October 1, 1983,
the benefit information described in (a) through (d) of former Section 5.4, to
all Participants eligible for such Open Window Early Retirement Pension.
5.7 Small Pensions: If the Actuarial Equivalent lump sum value of a
Pension payable under this Plan is less than $3,500, the Committee in its sole
discretion may direct that, in lieu of such
34
<PAGE>
<PAGE>
Pension, such lump sum shall be paid. A lump sum settlement of a small amount
may be made any time after the Participant's termination of employment, even
though the Participant and/or his Eligible Spouse is not otherwise entitled to
commencement of a Pension at such time under other provisions of the Plan.
If a lump sum settlement is made pursuant to the provisions of this
Section, the Committee shall provide each recipient receiving such settlement
with an official notice supplied by the Secretary of the Treasury which
specifies certain information regarding the federal income tax treatment of
certain Plan benefits.
5.8 Direct Rollovers Of Eligible Rollover Distributions: This Section
5.8 applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election hereunder, a distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
The following words and phrases, when used in this Section 5.8, unless
their context clearly indicates otherwise, shall have the following respective
meanings:
a) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the
35
<PAGE>
<PAGE>
Code, an individual retirement annuity described in section 408(b) of the Code,
an annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributees' eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
c) Distributee: A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
d) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
5.9 Reemployment and Continued Employment After Eligibility for Normal
Retirement Benefits: No Participant, regardless of his vesting status hereunder,
shall receive a Pension payment for any month including or following the month
in which he completes the requirements for a Normal Retirement Pension, if
during each such month he completes at least 40 hours of employment with the
Employer or receives payment for vacation, holiday, illness, incapacity
including disability, layoff, jury duty, military duty or leave of absence for
at least 40 hours in any calendar month.
If a Participant who continues to be employed by the Employer after he
completes the requirements for a Normal Retirement Pension receives remuneration
for less than 40 hours in any given calendar month, such Participant is
considered retired, according to the provisions of Section 2.1(j) and is
entitled to Pension payments hereunder.
If a former Participant who is entitled to receive a Pension hereunder
is reemployed on or after his Normal Retirement Date, he shall continue to be
deemed retired under the Plan and his Pension payments shall continue hereunder
only if such Participant receives remuneration for less than 40 hours in any
given calendar month. Such a Participant's period of reemployment after his
Normal Retirement Date shall be disregarded for all other purposes of this
36
<PAGE>
<PAGE>
Plan.
Upon the death of a Participant who continues his employment beyond his
Normal Retirement Date and who is not considered retired in accordance with the
foregoing provisions of this Section, the provisions of Section 5.1 or an
effective election under Section 5.5 shall be operative, and the survivorship
Pension to his Eligible Spouse, if any, shall commence as of the first day of
the month coincident with or next following the Participant's death in the
amount which would have been payable had the Participant retired immediately
prior to his death. However, if the death of the Eligible Spouse occurs while
the Participant is in such continued employment, his Pension shall not be
reduced for the Joint and Survivor Pension under Section 5.1 or an Optional
Pension under Section 5.2.
ARTICLE VI.
PLAN FINANCING
Section 6.l. Trust Fund: All contributions made by the Employer under
the provisions of the Plan and the Trust agreement shall be paid over to the
Trustee and deposited in the Trust Fund. Except as otherwise provided in the
plan termination provisions of ERISA all assets of the Trust Fund, including
investment income, shall be retained for the exclusive benefit of Participants
and their beneficiaries, shall be used to pay benefits to such persons or to pay
administrative expenses to the extent not paid by the Employer, and shall not
revert to or inure to the benefit of the Employer.
Notwithstanding anything herein to the contrary, upon the Employer's
request, a contribution which was made by a mistake of fact, or conditioned upon
the deductibility of the contribution under Section 404 of the Internal Revenue
Code of 1954, as amended by ERISA, shall be returned to the Employer within one
year after the payment of the contribution, or the disallowance of the deduction
(to the extent disallowed), whichever is applicable.
Section 6.2. Contributions to the Fund: All contributions to the Fund
to provide retirement allowances under the Plan shall be paid by the Employer
and no contributions shall be required of or
37
<PAGE>
<PAGE>
accepted from the Participants. The total contributions for each year shall
consist of:
(a) payments to fund the normal cost, that is, the actuarial cost
attributable to the Credited Service of Participants for that year, and
(b) payments from time to time to fund the past Service costs, that is,
the actuarial cost attributable to either the Credited Service of Participants
prior to the effective date of the Plan or amendments after the Effective Date.
The funding policy shall be consistent with Plan objectives and in
compliance with ERISA. Forfeitures arising under this Plan because of
termination of employment before a Participant becomes eligible for Accrued
Benefits or for any other reason, shall be applied to reduce the cost of the
Plan and not to increase the benefits otherwise payable to Participants.
Section 6.3. Use of Funds: All contributions to and assets of the Fund
shall be used in accordance with the Plan to provide retirement allowances and
pay the expenses of the Plan, and for no other purpose.
Section 6.4. Rights to Trust Assets: No Employee shall have any right
to, or interest in, any assets of the Trust Fund upon termination of his
employment except as provided from time to time under this Plan, and then only
to the extent of the benefits payable under the Plan to such employee out of the
assets of the Trust Fund. Except as otherwise may be provided under Title IV of
ERISA, all payments of benefits as provided for in this Plan shall be made
solely out of the assets of the Trust Fund.
Section 6.5. Nonalienation of Benefits: Except with respect to federal
income tax withholding, benefits payable under this Plan shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind, either
voluntary or involuntary, including any such liability which is for alimony or
other payments for the support of a spouse or former spouse or for any other
relative of the Employee, prior to actually being received by the person
entitled to the benefit under the terms of the Plan; and any attempt to
anticipate, alienate, sell, transfer,
38
<PAGE>
<PAGE>
assign, pledge, encumber, charge or otherwise dispose of any right to benefits
payable hereunder, shall be void. The Trust Fund shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements or
torts of any person entitled to benefits hereunder.
Notwithstanding the above, the Committee may direct the Trustee to
comply with a Qualified Domestic Relations Order.
A Qualified Domestic Relations Order is a judgment, decree or order
(including approval of a property settlement agreement) made pursuant to a state
domestic relations law (including community property law) that relates to the
provisions of child support, alimony payments or marital property rights to a
spouse, former spouse, child or other dependent of a Participant ("Alternate
Payee") and which:
(a) creates or recognizes the existence of an Alternate Payee's
right to, or assigns to an Alternate Payee the right to, receive all or
a portion of the benefits payable to a Participant under this Plan; and
(b) specifies (i) the name and last known mailing address (if any)
of the Participant and each Alternate Payee covered by the order, (ii)
the amount or percentage of the Participant's Plan benefits to be paid
to any Alternate Payee, or the manner in which such amount or
percentage is to be determined and (iii) the number of payments or the
period to which the order applies and each plan to which the order
relates; and
(c) does not require the Plan to
(i) provide any type or form of benefit or any option not
otherwise provided under the Plan,
(ii) pay any benefits to any Alternate Payee prior to the
earliest age that the affected Participant could have received a
Pension under the Plan (whether for reason of Disability or other
termination of employment), except that the fact that the
Participant may not have terminated his employment shall be
disregarded,
39
<PAGE>
<PAGE>
(iii) provide increased benefits, or
(iv) pay benefits to an Alternate Payee that are required to
be paid to another Alternate Payee under a prior Qualified
Domestic Relations Order.
For purposes of this Plan, an Alternate Payee who had been married to
the Participant for at least six months may be treated as an Eligible Spouse
with respect to the portion of the Participant's benefit in which such Alternate
Payee has an interest provided that the Qualified Domestic Relations Order
provides for such treatment. However, under no circumstances may the spouse of
any Alternate Payee (who is not a Participant hereunder) be treated as an
Eligible Spouse under the terms of the Plan.
Upon receipt of any judgment, decree or order (including approval of a
property settlement agreement) relating to the provision of payment by the Plan
to an Alternate Payee pursuant to a state domestic relations law, the Committee
shall promptly notify the affected Participant and any Alternate Payee of the
receipt of such judgment, decree or order and shall notify the affected
Participant and any Alternate Payee of the Committee's procedure for determining
whether or not the judgment, decree or order is a Qualified Domestic Relations
Order.
The Committee shall establish a procedure to determine the status of a
judgment, decree or order as a Qualified Domestic Relations Order and to
administer Plan distributions in accordance with Qualified Domestic Relations
Orders. Such procedure shall be in writing, shall include a provision specifying
the notification requirements enumerated in the preceding paragraph, shall
permit an Alternate Payee to designate a representative for receipt of
communications from the Committee and shall include such other provisions as the
Committee shall determine, including provisions required under regulations
promulgated by the Secretary of the Treasury.
During any period in which the issue of whether a judgment, decree or
order is a Qualified Domestic Relations Order is being determined (by the
Committee, a court of competent jurisdiction or otherwise), the Committee shall
segregate in a separate account under the Plan or in an escrow account, if
required by law or regulation, the amount, if any, which would have been payable
to
40
<PAGE>
<PAGE>
the Alternate Payee during such period if the judgment, decree or order had been
determined to be a Qualified Domestic Relations Order. Such segregated account
under the Plan shall be held as uninvested cash.
If the judgment, decree or order is determined to be a Qualified
Domestic Relations Order within the 18-month period following the receipt by the
Committee of the Qualified Domestic Relations Order, then payment from the
segregated account shall be paid to the appropriate Alternate Payee. If such a
determination is not made within the 18-month period, the segregated account
shall be returned to the general assets of the Trust Fund and shall be paid at
the time and in the manner provided under the Plan as if no order, judgment or
decree had been received by the Committee.
ARTICLE VII.
ADMINISTRATION
Section 7.l. Benefits Committee: The Plan shall be administered by a
Committee to be known as the Benefits Committee (sometimes hereinafter referred
to as the Committee). The Benefits Committee shall consist of the Chairman and
not less than three non-salaried members of the Board of Directors of the
Employer who shall be appointed annually by the Board of Directors of the
Employer, upon recommendation by the Chairman. The Committee members shall hold
office until their successors have been duly appointed or until death,
resignation or removal.
Section 7.2. Duties of Benefits Committee: The Benefits Committee shall
perform the required duties and it shall have the necessary powers of
administering the Plan and carrying out the provisions thereof. The Committee
shall supervise maintenance of proper records showing the age and service
history of each eligible officer and employee, his retirement allowance credits,
payments with respect to retired members, and also supervise maintenance of
accounts covering the fiscal transactions of the Plan and Trust Fund. The
Committee may make such administrative rules to hold meetings at such times as
it may deem proper. Except as otherwise provided herein, action by the Committee
shall be by majority vote, and minutes of any action taken shall be recorded.
The minutes, proceedings, and actions of the Committee shall be reported to the
41
<PAGE>
<PAGE>
Board of Directors at the regular meetings thereof.
Section 7.3. Powers of Benefits Committee: The powers of the Benefits
Committee shall be as follows:
(a) To determine any question arising in connection with the Plan, and
its decision or action in respect thereof shall be final, conclusive, and
binding upon the Employer, the Trustee and Participant or retired Participant,
provided that the resolution of any question shall be consistent with the
Employee Retirement Income Security Act of 1974, as may be amended from time to
time.
(b) To engage the services of counsel or attorney (who may be counsel
or attorney for the employer), and an actuary, and such other agents or
assistants as it deems advisable for the proper administration of the Plan. The
Committee may direct that such reasonable expenses as may be incurred in the
administration of the Plan shall be paid out of the funds of the Plan, unless
the Employer shall pay them;
(c) To prescribe procedures to be followed by Participants or their
beneficiaries for filing applications for benefits under the Plan;
(d) To require a Participant or retired Participant to submit proof of
his age, and if satisfactory proof is not submitted, the Committee may determine
the age for the purposes of the Plan, and its determination shall be conclusive
and binding upon the Participant or retired Participant.
(e) To receive from the Employer and from Participants such information
as shall be necessary for the proper administration of the Plan;
(f) To furnish the Employer, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and appropriate;
(g) To receive and review the periodic valuation of the Plan made by
the Actuary;
(h) To receive, review and keep on file (as it deems convenient or
proper) reports of the financial condition, and the
42
<PAGE>
<PAGE>
receipts and disbursements of the Trust Fund from the Trustee;
The Committee shall have no power to change or modify any of the terms
of the Plan, or to change or modify any benefits provided by the Plan, or to
waive or fail to apply any requirements of eligibility for a pension under the
Plan, except as provided under this Plan.
Section 7.4. Plan Administrator: The Committee shall designate as of
the Effective Date of this amended plan, a Plan Administrator of the Plan. He
shall be the senior officer in charge of the Human Resources Department, and in
his absence or incapacity, the next senior officer in charge of the Human
Resources Department shall be the Plan Administrator.
The duties of the Plan Administrator are as follows:
To act under the direction of the Committee to establish a funding
policy for the Employer's plan of participation and to serve as Plan
Administrator with responsibilities that shall include the establishment of a
claims procedure; the filing with the Secretary of Labor of all plan
descriptions and reports required by ERISA; furnishing Participants and
beneficiaries with plan description and reports required by ERISA; providing the
Committee with information which may be reasonably required by it; and providing
on a timely basis any information or forms required by ERISA.
Section 7.5. Claims Procedure: The Committee through the Plan
Administrator shall make all determinations as to the right of any person to a
benefit. Any denial by the Committee of the claim for benefits under the Plan by
a Participant or beneficiary shall be stated in writing by the Committee and
delivered or mailed to the Participant or beneficiary. Such notice shall set
forth the specific reasons for the denial, written to the best of the
Committee's ability in a manner that may be understood without legal or
actuarial counsel. In addition, the Committee shall afford a reasonable
opportunity through the Plan Administrator to any Participant or his beneficiary
whose claim for benefits has been denied for a review of the decision denying
the claim.
Section 7.6. Records and Reports: The Committee through the Plan
Administrator shall exercise such authority and responsibility
43
<PAGE>
<PAGE>
as it deems appropriate in order to comply with ERISA and governmental
regulations issued thereunder relating to the following: records of
Participant's service, Accrued Benefits and the percentage of such benefits
which are nonforfeitable under the Plan; notifications to Participants; annual
registration with the Internal Revenue Service; annual reports to the Department
of Labor; reports to the Pension Benefits Guaranty Corporation and Summary Plan
descriptions.
Section 7.7. Rules and Decisions: The Committee may adopt such rules
and actuarial tables within the sanctions of ERISA as it deems necessary,
desirable, or appropriate. All rules and decisions of the Committee shall be
uniformly and consistently applied to all Participants in similar circumstances.
When making a determination or calculation, the Committee shall be entitled to
rely upon information furnished by a Participant or his beneficiary under the
Plan, the Employer, legal counsel of the Employer, the Actuary or outside
auditor.
Section 7.8. Pension Applications and Forms for Pension: The Committee
shall require a Participant to complete and file with the Committee an
application for pension and all other forms approved by the Committee, and to
furnish all pertinent information requested by the Committee. The Committee may
rely upon all such information so furnished it, including the Participant's
current mailing address.
Section 7.9. Authorization of Benefit Payments: The Committee through
the Plan Administrator shall issue directions to the Trustee concerning all
benefits which are to be paid from the Trust Fund pursuant to the provisions of
the Plan, and warrants that all such directions are in accordance with this
Plan.
Section 7.10. Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration: The fiduciaries shall have only those specific powers,
duties, responsibilities and obligations as are specifically given them under
this Plan or the Trust Agreement. In general, the Employer shall have the sole
responsibility for making the contributions necessary to provide benefits under
the Plan and shall have the sole authority to appoint and remove the Trustee,
members of the Committee of the Board of Trustees, and any Investment Manager
which may be provided for under the Trust Agreement, and to amend or terminate,
in whole or in part, this
44
<PAGE>
<PAGE>
Plan or the Trust. The Committee shall have the sole responsibility for the
administration of this Plan, which responsibility is specifically described in
this Plan and the Trust Agreement. The Trustee shall have the sole
responsibility for the administration of the Trust Agreement and the management
of the assets held under the Trust, all as specifically provided in the Trust
Agreement. Each fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan or the Trust Agreement, as the case may be, authorizing or providing
for such direction, information or action. Furthermore, each fiduciary may rely
upon any such direction, information or action of another fiduciary as being
proper under this Plan or the Trust Agreement, and is not required under the
Plan or the Trust Agreement to inquire into the propriety of any such direction,
information or action. It is intended under this Plan and the Trust Agreement
that each fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations. No fiduciary guarantees the
Trust Fund in any manner against investment loss or depreciation in asset value.
ARTICLE VIII.
AMENDMENTS AND ACTION BY EMPLOYER
Section 8.1. Amendments: The Employer reserves the right to make from
time to time any amendment or amendments to this Plan which do not cause any
part of the Trust Fund to be used for, or diverted to, any purpose other than
the exclusive benefit of Participants or their beneficiaries; provided, however,
that the Employer may make any amendment it determines necessary or desirable,
with or without retroactive effect to comply with ERISA.
ARTICLE IX.
RESTRICTIONS ON BENEFITS PAYABLE TO HIGHLY
COMPENSATED PARTICIPANTS
This Article sets forth limitations required by the Internal Revenue
Service on the Pension benefits payable to certain Participants. It shall apply
to a Participant only if his anticipated annual pension exceeds $1,500 and the
Participant was among the 25 highest-paid Employees of the Employer on (a)
January
45
<PAGE>
<PAGE>
1, 1970, or (b) the date of the most recent amendment which substantially
increased Pension benefits (a "Substantive Amendment Date"). The limitations set
forth in this Section shall become applicable if:
(a) the Plan is terminated within ten years after January 1, 1970 (or a
Substantive Amendment Date, if applicable);
(b) the Pension of a Participant becomes payable within such ten-year
period, or
(c) the Pension of a Participant becomes payable after such ten-year
period and the full-current costs for the ten-year period have not been funded.
If subparagraph (b) above is applicable, the restrictions shall remain
in effect until the later of the expiration of the ten-year period or the date
on which the full current costs have been funded.
If subparagraph (c) above is applicable, the limitations shall continue
to apply until the full current costs have been funded.
If a Participant is subject to the provisions of this Article, the
pension payable to him shall not exceed the Pension which can be provided from
the greatest of the following:
(a) The Employer's contributions (or funds attributable thereto) which
would have been applied to provide benefits for the Participant if the Plan had
not been amended on the Substantive Amendment Date and had continued without
change;
(b) $20,000;
(c) The sum of (1) the Employer's contributions (or funds attributable
thereto) which would have been applied to provide benefits for the Participant
if the Plan had been terminated on the day before the Substantive Amendment Date
(if applicable) and (2) an amount computed by multiplying the number of years
for which the current costs of the Plan have been met after January 1, 1970 (or
the Substantive Amendment Date, if applicable) by 20% of the first $50,000 of
the Participant's average annual compensation during his last 5 years of
employment.
46
<PAGE>
<PAGE>
The limitations described above may be exceeded for the purpose of
making current benefit payments to retired Participants who would otherwise be
subject to such restrictions, provided that (a) the contributions which may be
used for any such retired Participant in accordance with the restrictions
heretofore indicated are applied to provide either a level amount of Pension in
the basic form of benefit provided for under the Plan for such Participant, or a
level amount of Pension in an optional form of benefit not greater in amount
than the level amount of Pension under the basic form of benefit, and (b) the
Pension thus provided is supplemented by monthly payments to the extent
necessary to provide the full Pension in the basic form called for by the Plan,
and (c) such supplemental payments are made only if the full current costs of
the Plan have been met or if the aggregate of such supplemental payments for all
such retired Participants does not exceed the aggregate Employer contributions
already made under the Plan in the year then current.
The limitations in this Article shall automatically become inoperative
and of no effect upon a ruling by the Internal Revenue Service that they are not
required.
ARTICLE X.
TERMINATION
Section 10.1. Right to Terminate: In accordance with the procedures set
forth in this Article, the Employer may terminate the Plan at any time. In the
event of the dissolution, merger, consolidation or reorganization of the
Employer, the Plan shall terminate and the Trust Fund shall be liquidated unless
the Plan is continued by a successor to the Employer in accordance with this
Plan. Subject to applicable requirements, if any, of ERISA governing termination
of "Employee Pension Benefit Plans," the Employer shall direct and require the
Trustee to liquidate the Trust Fund, or the applicable portion thereof, in
accordance with the provisions of this Article.
Section 10.2. Partial Termination: Upon termination of the Plan with
respect to a group of Participants which constitutes a partial termination of
the Plan, the Trustee shall allocate and segregate for the benefit of the
Employees, then or theretofore
47
<PAGE>
<PAGE>
employed by the Employer with respect to which the Plan is being terminated the
proportionate interest of such Participants in the Trust Fund. Such
proportionate interest shall be determined by the Actuary. The Actuary shall
make this determination on the basis of the contributions made by the Employer,
the provisions of this Article, and such other considerations as the Actuary
deems appropriate. The Fiduciaries shall have no responsibility with respect to
the determination of any such proportionate interest.
The funds so allocated and segregated shall be used by the Trustee to
pay benefits to or on behalf of Participants in accordance with Section 6.3.
Section 10.3. Liquidation of Trust Fund: Upon termination of the Plan,
or upon termination of employment of a group of Participants constituting a
partial termination of the Plan, each such Participant's Accrued Benefit, based
on his Service, Credited Service and Compensation prior to the date of
termination shall become fully vested and nonforfeitable to the extent funded or
guaranteed by the PBGC. The assets of the Trust Fund, or the portion thereof
segregated in accordance with Section 10.2 shall be liquidated (after provision
is made for the expenses of liquidation) by the payment or provision for the
payment of benefits in the following order of preference:
(a) Certain Benefits Payable Three Years Prior to Termination: The
available assets of the Trust Fund shall first be allocated to provide pensions
that became payable three or more years before the Effective Date of Plan
termination, or that could have become payable at the beginning of such
three-year period had the Participant not deferred the commencement of his
pension by failing to elect earlier commencement, or that could have become
payable had a Participant's retirement occurred immediately prior to the
beginning of such three-year period, provided that:
(i) the portion of the Pension payable to a Participant or the
beneficiary of a Participant (or that could have been payable) shall be based on
the provisions of the Plan in effect five years prior to the effective date of
Plan termination; and for this purpose, the first Plan Year in which an
amendment became effective, or was adopted, if later, shall constitute the first
year an amendment was in effect; and further provided that:
48
<PAGE>
<PAGE>
(ii) if the Pension payable under the Plan had been reduced,
either by amendment due to the form in which the Pension is being paid, during
the three-year period ending on the effective date of Plan termination, then the
lowest benefit in pay status during such three-year period shall be considered
the benefit in pay status for purpose of this category (a).
(b) Other Benefits Eligible for Termination Insurance: To the extent
that the amount of a Pension has not been provided in the foregoing category
(a), the remaining assets shall be allocated to provide any pension provided
under the Plan for a Participant whose employment terminated prior to the
effective date of Plan termination, or any immediate or deferred Pension that
would have been payable to or on behalf of a Participant had his employment
terminated for a reason other than death on the Effective Date of Plan
termination, provided that the amount of a Pension to be provided under this
category (b) shall be determined as follows:
(i) the portion of the Pension payable to a Participant or the
beneficiary of a Participant (or that could have been payable) based on the
provisions of the Plan in effect five years prior to the effective date of Plan
termination; and for this purpose, the first Plan Year in which an amendment was
in effect; plus
(ii) the portion of the Pension payable to a Participant or the
beneficiary of a Participant which would have been included in (i) above had the
Plan or a plan amendment been in effect five years prior to the effective date
of plan termination, determined as follows: 20% for each Plan Year (less than
five) that the Plan or an amendment thereto was in effect, multiplied by the
amount that would have been included under subparagraph (i) for such Participant
or beneficiary had the Plan or the amendment been in effect for five Plan Years
as of the effective date of Plan termination.
(c) Other Vested Benefits: To the extent that the amount of a Pension
has not been provided in the foregoing categories (a) and (b), the remaining
assets shall be allocated to provide the benefit payable under the Plan to or on
behalf of a Participant whose employment terminated prior to the effective date
of Plan termination, or that would have been payable to or on behalf of a
member had his employment terminated for a reason other than death
49
<PAGE>
<PAGE>
on the effective date of Plan termination, in the following order of preference:
(i) to any Participant who had retired prior to the effective date
of Plan termination in circumstances constituting a normal or disability
retirement under this Plan, or who was eligible to retire on the effective date
of Plan termination under such circumstances; or
(ii) to any Participant who had retired prior to the effective
date of Plan termination or, who was eligible to retire on the effective date of
Plan termination; or
(iii) to any Participant whose employment had terminated prior to
the effective date of Plan termination with entitlement to a Deferred Vested
Pension, or who would have been eligible for a Deferred Vested Pension had his
employment terminated on the effective date of Plan termination.
(d) Other Benefits: To the extent that the amount of a pension has not
been provided in the foregoing categories (a), (b) and (c), the remaining assets
shall be allocated to provide the benefit accrued under the Plan, without regard
to the satisfaction of the vesting requirements of this Plan, with respect to
each Participant whose employment had not terminated as of the effective date of
Plan termination, according to the respective actuarial value of each such
Participant's Accrued Benefit.
If the assets of the Trust Fund applicable to any of the above
categories are insufficient to provide full benefits for all persons in such
group, the benefits otherwise payable to such persons shall be reduced
proportionately. The Actuary shall calculate the allocation of the assets of the
Trust Fund in accordance with the above priority categories, and certify his
calculations to the fiduciaries. No liquidation of assets and payment of
benefits (or provision therefor) shall actually be made by the Trustee until
after it is advised by the Employer in writing that applicable requirements, if
any, of ERISA governing termination of "Employee Pension Benefit Plans" have
been, or are being, complied with or that appropriate authorizations, waivers,
exemptions or variances have been, or are being obtained.
50
<PAGE>
<PAGE>
Section 10.4. Manner of Distribution: Subject to the foregoing
provisions of this Article X, any distribution after termination of the Plan may
be made, in whole or in part, to the extent that no discrimination in value
results, in cash, in securities or other assets in kind, or in nontransferable
annuity contracts, as the Committee in its discretion shall determine.
Section 10.5. Residual Amounts: In no event shall the Employer receive
any amounts from the Trust Fund upon termination of the Plan, except that, and
notwithstanding any other provision of the Plan, the Employer shall receive such
amounts, if any, as may remain after the satisfaction of all liabilities of the
Plan and arising out of any variations between actual requirements and expected
actuarial requirements.
ARTICLE XI.
SUCCESSOR EMPLOYER AND MERGER AND
CONSOLIDATION OF PLANS
Section 11.1. Successor Employer: In the event of a dissolution,
merger, consolidation, or reorganization of the Employer, provision may be made
by which the Plan and Trust will be continued by the successor; and, in that
event, such successor shall be substituted for the Employer under the Plan. The
substitution of the successor shall constitute an assumption of Plan liabilities
by the successor, and the successor shall have all of the powers, duties and
responsibilities of the Employer under the Plan.
Section 11.2. Plan Assets: In the event of any merger or consolidation
of the Plan with, or transfer in whole or in part of the assets and liabilities
of the Trust Fund to another trust fund held under any other plan of deferred
compensation maintained or to be established for the benefit of all or some of
the Participants of this Plan, the assets of the Trust Fund applicable to such
Participants shall be transferred to the other trust fund if and only if:
(i) each Participant would (if either this Plan or the other Plan
then terminated) receive a benefit immediately after the
51
<PAGE>
<PAGE>
merger, consolidation or transfer, which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then been terminated); and
(ii) resolutions of the Board of Trustees of the Employer under
this Plan, and of any new or successor Employer of the affected Participants
shall authorize such transfer of assets; and in the case of the new or successor
Employer of the affected Participants; its resolution shall include an
assumption of liabilities with respect to such Participant's inclusion in the
new Employer's plan; and
(iii) such other plan and trust are qualified under Section 401(a)
and 501(a) of the Internal Revenue Code.
ARTICLE XII.
CREDITED SERVICE FOR CERTAIN PARTICIPANTS
Notwithstanding anything to the contrary herein contained, a
Participant of this Plan on May 1, 1971 who was a former employee of City
Savings Bank, and who became a Participant of this Plan on May 1, 1964 pursuant
to the merger of The Greater New York Savings Bank and City Savings Bank, shall
receive credited Service for his continuous employment by City Savings Bank
prior to May 1, 1964. There shall be deducted from any monthly benefit payable
to such Participant under this Plan either:
(a) The monthly amount of any benefits to which such
Participant shall be entitled from the Savings Banks
Retirement System for such prior service with City
Savings Bank, or
(b) The monthly amount of any equivalent benefits
attributable to the cash settlement received from the
Savings Banks Retirement System for such prior service
with City Savings Bank, with interest, on such cash
settlement, at the rate of 4 1/2% compounded annually
from May 1, 1964 to the date benefit payments commence
under this Plan.
52
<PAGE>
<PAGE>
and in either case the benefits deducted may be equitably determined on an
actuarial basis, or adjusted whenever appropriate to reflect the time of
commencement of payments or the election of optional forms of payment.
ARTICLE XIII.
SERVICE FOR CERTAIN PARTICIPANTS
Notwithstanding anything to the contrary herein contained, for hourly
compensated Employees who were employed by the Employer prior to October 1,
1976, the Effective Date of this Amended and Restated Plan, and who became Plan
Participants on October 1, 1976, the following rule shall apply:
Each consecutive twelve month period prior to October 1, 1976, but in
no event prior to October 1, 1958, in which the Employee has 1,000 or more hours
of employment shall be considered as service for purposes of determining
eligibility for benefits, subject to the break in service provisions as
contained in this Plan.
In no event shall Credited Service be granted for the period or periods
described in this Article XIII.
ARTICLE XIV
PARTICIPATION, SERVICE AND CREDITED SERVICE FOR
CERTAIN EMPLOYEES WHO WERE PARTICIPANTS IN
THE RSSI PLAN ON SEPTEMBER 1, 1989
Effective September 1, 1989, the RSSI Plan was merged into this Plan.
Any current Employee who was a Participant in the RSSI Plan on September 1, 1989
("Merger Date") shall become a Participant in this Plan as of said Merger Date.
Said Employees shall be credited with "Service" and "Credited Service," for the
purposes of this Plan, equal to their "Vested Service" and "Credited Service"
under the terms of the RSSI Plan as of the Merger Date, and such Employees shall
be entitled to receive a Pension benefit under the terms of this Plan. In no
event shall the Pension payable hereunder be less than the Retirement Benefit
payable under the RSSI Plan based on the accrued benefit of such Employees in
the RSSI Plan as of the Merger Date. Any former
53
<PAGE>
<PAGE>
Employee who retired with the right to a Retirement Benefit under the RSSI Plan
but who was not receiving a Retirement Benefit on the Merger Date, shall be
entitled to receive a Pension from this Plan equal to the Retirement Benefit
payable under the RSSI Plan based upon such former Employee's Accrued Benefit on
the date of his termination of service. All such Employees and former Employees
shall be entitled to all optional forms of benefits available to them under the
RSSI Plan with respect to their accrued benefit in the RSSI Plan as of the
Merger Date.
ARTICLE XV
PARTICIPATION, SERVICE AND CREDITED SERVICE FOR CERTAIN EMPLOYEES
Effective April 1, 1992, employees of the Law Office of Robert P.
Carlson ("Law Office Employees") became Employees of The Greater New York
Savings Bank. A former Law Office Employee who became an Employee of The Greater
New York Savings Bank on April 1, 1992, shall become a Participant in this Plan
on April 1, 1992. Any former Law Office Employee who is a Participant on April
1, 1992, shall be credited with Service and Credited Service for the purposes of
this Plan for all periods of employment with the Law Office of Robert P.
Carlson, or its predecessor, Ahearn, Damanti & Carlson, (together the "Law
Office") between May 18, 1987 and March 31, 1992. However, any former Law Office
Employee who is a Participant on April 1, 1992, and who is a Highly Compensated
Employee (as said term is defined in Section 414(q) of the Code), shall receive
Service and Credited Service for periods of employment with the Law Office
between May 18, 1987 and March 31, 1992, only if such Highly Compensated
Employee is a Participant in this Plan on December 31, 1992. Compensation
utilized to calculate the Pension and Accrued Benefit of Participants who were
former Law Office Employees shall include all Compensation paid to such
Participants during their employment with the Law Office that would qualify as
Compensation under the Plan.
54
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP PLAN
ADOPTED FEBRUARY 13, 1989
EFFECTIVE AS OF JANUARY 1, 1989
AS AMENDED JUNE 28, 1989
EFFECTIVE AS OF JANUARY 1, 1989
AS AMENDED DECEMBER 7, 1989
EFFECTIVE AS OF JANUARY 1, 1989
AS AMENDED NOVEMBER 8, 1990
EFFECTIVE AS OF NOVEMBER 9, 1990
AS AMENDED DECEMBER 10, 1992
EFFECTIVE AS OF APRIL 1, 1992
AS AMENDED MARCH 24, 1993
EFFECTIVE AS OF MARCH 26, 1993
AS AMENDED APRIL 23, 1993
EFFECTIVE AS OF APRIL 23, 1993
AS AMENDED JULY 28, 1993
EFFECTIVE AS OF JANUARY 1, 1993
AS AMENDED DECEMBER 9, 1993
EFFECTIVE AS OF JANUARY 1, 1992
AND JANUARY 1, 1994
AS AMENDED AUGUST 24, 1994
EFFECTIVE AS OF AUGUST 24, 1994
AS AMENDED DECEMBER 7, 1995
EFFECTIVE AS OF JANUARY 1, 1996
AS AMENDED DECEMBER 19, 1996
EFFECTIVE AS OF JANUARY 1, 1996
<PAGE>
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
I. DEFINITIONS..................................................... 1
II. ELIGIBILITY..................................................... 10
III. CONTRIBUTIONS................................................... 12
IV. ALLOCATION OF CONTRIBUTIONS..................................... 12
V. ACCOUNTS; VALUATION OF TRUST FUND............................... 17
VI. STOCK RIGHTS OF PARTICIPANTS.................................... 20
VII. VESTING......................................................... 22
VIII. PAYMENTS OF BENEFITS............................................ 23
IX. NONALIENABILITY................................................. 28
X. AMENDMENT OF THE PLAN........................................... 28
XI. TERMINATION OF THE PLAN......................................... 29
XII. ADMINISTRATION OF THE PLAN...................................... 30
XIII. CERTAIN TRUSTEE POWERS.......................................... 35
XIV. TOP-HEAVY PROVISIONS............................................ 36
XV. CHANGE IN CONTROL............................................... 42
XVI. PARTICIPATION, SERVICE AND CREDITED SERVICE
FOR CERTAIN EMPLOYEES........................................... 44
XVII. MISCELLANEOUS................................................... 44
<PAGE>
<PAGE>
WHEREAS, The Greater New York Savings Bank, a New York savings bank,
desires to establish an Employee Stock Ownership Plan (as defined in Section
4975(e)(7) of the Internal Revenue Code) for its employees and employees of
certain affiliated companies, which Plan is designed to invest primarily in
Stock (as defined herein) of The Greater New York Savings Bank; and
WHEREAS, the Board of Directors of The Greater New York Savings Bank
has, by resolution duly adopted at a meeting held on February 13, 1989
authorized its officers to enter into an agreement establishing an Employee
Stock Ownership Plan;
NOW, THEREFORE, in consideration of these premises, it is agreed as
follows:
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall have the following
meanings unless a different meaning is required by the context:
1.01 "ACCOUNT" shall mean the account or accounts to be established by
the Committee for each Participant, consisting of the Accounts described in
Section 5.01 and 5.02 and such other accounts as the Committee may determine.
1.02 "AFFILIATE" shall mean any corporation or unincorporated business
controlled by, or under common control with, the Company within the meaning of
Sections 414(b) and (c) of the Code; provided, however, that for purposes of the
limitations upon "Annual Additions" to a Participant's Account contained in
Section 4.05, "Affiliate" shall be determined in accordance with Section 415(h)
of the Code.
1.03 "AFFILIATED EMPLOYER" shall mean an Employer and any corporation
which is a member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Employer; any trade or business (whether
or not incorporated) which is under common control (as defined in Section 414(c)
of the Code)
1
<PAGE>
<PAGE>
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Section 414(m) of the Code)
which includes the Employer; and any other entity required to be aggregated with
the Employer pursuant to regulations under Section 414(o) of the Code.
1.04 "BENEFICIARY" shall mean such person or persons as may be entitled,
by effective designation of a Participant (in accordance with the provisions of
Section 2.03(b) or otherwise in accordance with the provisions of Section
2.03(c)), upon the death of such Participant to receive any benefits or payments
hereunder.
1.05 "BOARD OF DIRECTORS" or "BOARD" shall mean the Board of Directors
of the Company or any committee of the Board to which the Board delegates
responsibilities under the Plan.
1.06 "BREAK IN SERVICE" shall mean a Plan Year or Eligibility
Computation Period, as the case may be, during which an Employee (i) has been
credited with no more than five hundred (500) Hours or Service with an Employer
or an Affiliate and (ii) has incurred a Separation from Service."
1.07 "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
1.08 "COMMITTEE" shall mean the committee appointed by the Chairman of
the Board to administer the Plan in accordance with Section 12.01, as it may be
constituted from time to time, consisting of not less than three (3) officers of
the Company who shall be appointed annually by the Chairman of the Board.
1.09 "COMPANY" shall mean The Greater New York Savings Bank, a New York
State banking corporation, or any successor thereto.
1.10 "COMPENSATION" means the amounts described below:
(a) Except as provided in (c), Compensation means W-2 Compensation paid
during the Plan Year to an Employee for services rendered to the Employer
increased by (i) such portion of wages or compensation which the Participant
elects to defer and have contributed to a profit sharing plan meeting the
requirements of Section 401(k) of the Internal Revenue Code, and (ii)
compensation reduction contributions for medical, dental or dependent care or
2
<PAGE>
<PAGE>
other benefits under a cafeteria plan meeting the requirements of Section 125 of
the Internal Revenue Code;
(b) For purposes of Section 4.02 and 4.03, Compensation shall be
determined only for the portion of the Plan Year during which an Employee is a
Participant;
(c) For purposes of determining the limitations under Section 4.05, and
for purposes of Article XIV (except for determining a Key Employee under Section
14.03(a)), Compensation means W-2 Compensation paid during the Plan Year to an
Employee by an Employer and all Affiliates, not increased by any amount by which
the Employee's Compensation is reduced by salary reduction or any similar
arrangement under any qualified defined contribution plan or qualified defined
benefit plan (as defined in section 415(k) of the Internal Revenue Code) or any
cafeteria plan (as described in Section 125 of the Code) maintained by an
Employer or Affiliate;
(d) Notwithstanding the preceding provisions of this Section 1.10 to the
contrary, except for purposes of determining the limitations under Section 4.05,
the amount of an Employee's Compensation taken into account under the Plan for
any Plan Year shall not exceed: (i) for Plan Years ending on or before December
31, 1993, $200,000, adjusted from time to time by the Secretary of the Treasury
at the same time and in the same manner as under section 415(d) of the Code; and
(ii) for Plan Years beginning on or after January 1, 1994, $150,000 as adjusted
by the Commissioner of the Internal Revenue Service for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code. In determining the
Compensation of an Employee for purposes of this limitation, Compensation shall
include any Compensation paid to a spouse or lineal descendants of such Employee
who has not attained age 19 before the end of the Plan Year.
1.11 "DISABILITY" shall mean any mental or physical incapacity of an
Employee that, in the opinion of a licensed physician selected by the Company,
renders the Employee totally and permanently incapable of performing his
assigned duties with his Employer.
1.12 "EFFECTIVE DATE" shall mean January 1, 1989.
3
<PAGE>
<PAGE>
1.13 "ELIGIBILITY COMPUTATION PERIOD" with respect to an Employee shall
mean each consecutive twelve-month period commencing on the Employee's
employment commencement date and anniversaries thereof.
1.14 (a) "EMPLOYEE" shall mean, except as provided in Subsection (b)
hereof, any person on the payroll of an Employer or an Affiliate who receives
Compensation from an Employer or an Affiliate (other than a retirement benefit
or retainer). The term Employee shall include leased employees within the
meaning of Section 414(n)(2) of the Code. Notwithstanding the foregoing, if such
leased employees constitute less than twenty percent of the Employer's nonhighly
compensated work force within the meaning of Section 414(n)(1)(C)(ii) of the
Code, the term "Employee" shall not include those leased employees covered by a
plan described in Section 414(n)(5) of the Code unless otherwise provided by the
terms of the Plan.
(b) The term "Employee" shall not include
(i) any person who is a member of a collective bargaining unit
with respect to which retirement benefits were the subject of good
faith bargaining between the Employer or an Affiliate and the
representatives of such unit, except to the extent that the relevant
collective bargaining agreement, by its terms, provides for coverage
under the Plan; or
(ii) nonresident aliens who do not receive from an Employer or
an Affiliate any earned income that constitutes income from sources
within the United States.
(c) Notwithstanding any other provisions of the Plan, for purposes
of determining the number or identity of Highly Compensated Employees or for
purposes of the pension requirements of Section 414(n)(3) of the Code, the
employees of the Employer shall include leased employees who are individuals
defined as Employees in this Section 1.14.
1.15 "EMPLOYER" shall mean the Company and any Affiliate of the Company
that, with the approval of the Board of Directors, has adopted the Plan with
respect to the Employees of such Affiliate, and any successor to any such
Employer. The Committee shall maintain separate records reflecting the interest
in the Trust allocable to
4
<PAGE>
<PAGE>
contributions made by each such Employer.
1.16 "ENTRY DATE" shall mean the Effective Date and each January 1 and
July 1 thereafter.
1.17 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.18 "FAIR MARKET VALUE" shall mean (a) with respect to Common Stock,
the prevailing price per share on a national securities exchange or if not
listed on any such exchange a price not less favorable to the Plan than the
offering price for the Stock as established by the current bid and asked prices
quoted by persons independent of the issuer and any party in interest or (b) in
the case of Stock for which there is no generally recognized market, the fair
market value of the Stock as determined in good faith by the Trustee or other
named fiduciary under the provisions hereof and in accordance with regulations
under Section 3(18) of ERISA.
1.19 "FAMILY MEMBER" shall mean an individual described in Section
414(q)(6)(B) of the Code.
1.20 "HIGHLY COMPENSATED EMPLOYEE" shall have the meaning defined in
Section 414(q) of the Code.
1.21 (a) "HOUR OF SERVICE" shall mean each hour for which an Employee is
paid or entitled to payment by an Employer or an Affiliate--
(i) for the performance of duties;
(ii) on account of a period of time during which no duties are
performed (irrespective of whether the Employee has incurred a
Separation from Service) due to vacation, holiday, illness,
incapacity (including Disability), lay-off, jury duty, military
duty, or leave of absence; or
(iii) for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer or an
Affiliate;
provided, however, that no hour shall be credited as an Hour of Service under
more than one of the preceding clauses.
5
<PAGE>
<PAGE>
(b) Hours of Service determined in accordance with Subsection (a)(i)
hereof shall be credited for the Plan Year (or other applicable computation
period specified in the Plan) in which the duties were performed.
(c) Hours of Service determined in accordance with Subsection (a)(ii)
hereof shall be credited for the Plan Year (or other applicable computation
period specified in the Plan) during which the Employee is compensated for other
than the performance of duties. Notwithstanding anything to the contrary in the
preceding sentence--
(i) not more than five hundred one (501) Hours shall be
credited under Subsection (a)(ii) hereof to an Employee on account
of any single continuous period during which the Employee performs
no duties (whether or not such period occurs in a single Plan Year
or other applicable computation period under the Plan);
(ii) an hour for which an Employee is directly or indirectly
paid or entitled to payment, on account of a period during which no
duties are performed, shall not be credited to such Employee if such
payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation,
unemployment compensation, or disability insurance laws; and
(iii) Hours of Service shall not be credited for a payment that
solely reimburses the Employee for medical or medically related
expenses incurred by the Employee.
For purposes of Subsection (a)(ii) hereof, a payment shall be deemed to
be made by or due from an Employer or an Affiliate regardless of whether any
such payment is made by or due from an Employer or an Affiliate directly, or
indirectly through, among others, a trust fund or insurer to which an Employer
or Affiliate contributes or pays premiums, and regardless of whether
contributions made or due to any such trust fund or insurer (or other entity)
are for the benefit of a particular Employee or are on behalf of a group of
Employees in the aggregate.
(d) Hours of Service determined in accordance with Subsection (a)(iii)
hereof shall be credited for the Plan Year (or
6
<PAGE>
<PAGE>
other applicable computation period specified in the Plan) to which the
agreement or award pertains.
(e) Hours of Service credited under Subsection (a)(i) hereof shall be
determined from records maintained by the Employer; provided, however, that, in
the case of an Employee whose Compensation is not determined on the basis of
certain amounts for each hour worked and whose hours are not required to be
counted and recorded by any Federal law (such as the Fair Labor Standards Act),
such Employee's Hours of Service need not be determined from employment records,
and such Employee shall be credited with ten (10) Hours of Service for each day
in which he would be credited with any Hours of Service under the provisions of
this Section.
(f) Hours of Service credited under either Subsection (a)(ii) or
(a)(iii) hereof shall be uniformly credited on the basis of forty (40) Hours or
Service for each week or eight (8) Hours of Service for each day.
(g) In granting or withholding leaves of absence under Subsection
(a)(ii) hereof, each Employer shall apply uniform and nondiscriminatory rules to
all Employees in similar circumstances.
(h) Notwithstanding any provision of this Section 1.21 to the contrary,
Hours of Service shall be credited for a Maternity or Paternity Absence as
follows: solely for the purposes of determining whether a Break in Service has
occurred, an Employee shall be credited with those Hours of Service that
otherwise would normally have been credited to such Employee but for such
absence, except that (i) the total number of Hours of Service so credited shall
not exceed five hundred and one (501) and (ii) such Hours of Service shall be
credited as Hours of Service in the Plan Year in which the absence from work
commences if necessary to prevent the Employee from incurring a Break in Service
in such Plan Year, and shall otherwise be credited in the Plan Year immediately
following the Plan year in which the absence from work commences.
(i) Nothing in this Section 1.21 shall be construed to alter, amend,
modify, invalidate, impair or supersede any law of the United States or any rule
or regulation issued under any such law. Nothing contained herein shall be
construed as denying an Employee credit for an Hour or Service if credit is
required by Federal law, including Department of Labor Regulations 2530.200b-2;
and the extent
7
<PAGE>
<PAGE>
of any such credit shall be determined under such law.
1.22 "INACTIVE PARTICIPANT" in respect of a Plan Year shall mean an
Employee who was previously a Participant but who, during a given Plan Year,
neither completed a Year of Vesting Service nor incurred a Break in Service.
1.23 "LOAN" shall mean a loan described in Section 4975(d)(3) of the
Code and which otherwise satisfies the requirements of Section 13.01.
1.24 "MATERNITY OR PATERNITY ABSENCE" shall mean an absence from work
for any period by reason of (a) an Employee's pregnancy, (b) the birth of a
child of the Employee, (c) the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or (d) the caring
or a natural or adopted child for a period beginning immediately following such
birth or placement.
1.25 "NONHIGHLY COMPENSATED EMPLOYEE" shall mean an Employee of the
Employer who is neither a Highly Compensated Employee nor a Family Member.
1.26 "NONSTOCK ACCOUNT" shall mean the Account of the Participant to
which assets of the Trust Fund (other than Stock) are credited pursuant to
Article IV.
1.27 "PARTICIPANT" shall mean any Employee of an Employer who has
qualified for participation hereunder pursuant to Section 2.01. An Employee
shall cease to be a Participant on the first day of the Plan Year in which he
incurs a Break in Service.
1.28 "PLAN" shall mean THE GREATER NEW YORK SAVINGS BANK EMPLOYEE STOCK
OWNERSHIP PLAN as set forth herein, as from time to time amended.
1.29 "PLAN ADMINISTRATOR" shall be the person described in Section
12.03.
1.30 "PLAN YEAR" shall mean the twelve-month period commencing January 1
and ending December 31 of each year.
1.31 "RETIREMENT" shall mean Separation from Service on or after "Normal
Retirement Age." "Normal Retirement Age" shall mean
8
<PAGE>
<PAGE>
the date upon which a Participant attains the age of sixty-five (65) years or,
if later, the fifth (5th) anniversary of the first day of the first Plan Year in
which a Participant commenced participation in the Plan.
1.32 "SEPARATION FROM SERVICE" shall mean termination of employment of a
Participant with an Employer or an Affiliate for any reason. Separation from
Service shall not be deemed to occur upon a Participant's transfer from the
employment of one Employer or another Employer or to an Affiliate.
1.33 "SPOUSE" shall mean the person to whom the participant is married
on the date of the Participant's death or any former spouse of the Participant
to the extent provided in any qualified domestic relations order as defined in
Section 414(p)(5) of the Code.
1.34 "STOCK" shall mean (a) shares of common stock, par value $1.00 per
share, of the Company ("Common Stock") or (b) shares of noncallable convertible
preferred stock of the Company, par value $1.00 per share, that is convertible
at any time into such common stock of the Company as is described in clause (a)
hereof and which otherwise satisfies the requirements of Section 409(1)(3) of
the Code ("Convertible Stock"); provided, however, that such term shall include
only such shares as constitute both "employer securities," as defined in Section
409(1) of the Code, and "qualifying employer securities," as defined in Section
407(d)(5) of ERISA.
1.35 "STOCK ACCOUNT" shall mean the Account of a Participant to which
shares of Stock are credited pursuant to Article IV.
1.36 "TRUST AGREEMENT" shall mean the written agreement between the
Company and the Trustee with respect to the Plan.
1.37 "TRUSTEE" shall mean the Trustee designated in the Trust Agreement
and any additional or successor Trustee as shall be appointed by the Board from
time to time.
1.38 "TRUST FUND" or "TRUST" shall mean all of the assets that are held
by the Trustee pursuant to the Trust Agreement.
1.39 "VALUATION DATE" shall mean the last day of any Plan Year or such
interim period as the Committee, in its discretion, may prescribe.
9
<PAGE>
<PAGE>
1.40 "YEAR OF ELIGIBILITY SERVICE" with respect to an Employee shall
mean an Eligibility Computation Period during which such Employee is credited
with at least one thousand (1,000) Hours of Service. For purposes of determining
an Employee's Years of Eligibility Service, all periods of employment with an
Employer or an affiliate, including periods prior to the Effective Date and
periods as a non-Employee, shall be recognized.
1.41 "YEAR OF VESTING SERVICE" with respect to an Employee shall mean
each Plan Year during which such Employee is credited with at least one thousand
(1,000) Hours of Service. For purposes of determining an Employee's vested
interest in his Account, all periods of employment with an Employer, including
periods prior to the Effective Date and periods with an Employer as a
non-Employee, occurring on or after the Effective Date shall be recognized,
except as provided in Section 7.03.
ARTICLE II
ELIGIBILITY
2.01 Each Employee of an Employer who has been credited with one Year of
Eligibility Service as of the date of execution of the Plan by the Company shall
become a Participant as of the Effective Date. Each other Employee of an
Employer shall become a Participant as of any Entry Date coincident with or next
following his completion of one Year of Eligibility Service, provided that he is
still an Employee of an Employer on such Entry Date.
2.02 An Employee who is an Inactive Participant for any Plan Year shall
not be deemed a Participant in respect of such Plan Year for purposes of Article
III and IV, but shall be deemed a Participant for all other purposes of the
Plan.
2.03 (a) Upon receipt of notification from the Committee that he has
qualified for participation in the Plan, a Participant shall designate, on forms
provided for that purpose by the Committee, a Beneficiary and successor
Beneficiaries who shall be entitled to receive the death benefit provided under
the Plan. Except as provided in Subsection (b) hereof, a Participant may, from
time to time, change the Beneficiary without notice to such Beneficiary under
such rules and regulations as the Committee may from time to time
10
<PAGE>
<PAGE>
provide.
(b) The designation of a Beneficiary (i) shall not be effective for
any purpose unless and until it has been received by the Committee on the
prescribed form and (ii) shall not be effective, if the Participant is married
at the time of death, with respect to the designation of any person other than
the surviving spouse unless such spouse has consented to the designation in a
writing that acknowledges the effect of such consent and that is witnessed by a
Plan representative or a notary public, except that such consent shall not be
required if the consent cannot be obtained because (i) there is no spouse, (ii)
the spouse cannot be located or (iii) such other circumstances as the Secretary
of the Treasury may prescribe by regulations.
(c) If a Participant fails to designate a Beneficiary, or if any
such designation is ineffective under Subsection (b) hereof, or if a
Participant's designated Beneficiary has predeceased the Participant, then the
Spouse or if there is no Spouse to the legal representative of the Participant's
estate.
(d) For purposes of this Section 2.03, a former spouse shall be
treated as a spouse to the extent required under Section 414(p)(5) of the Code.
2.04 A Participant who has satisfied the eligibility requirements of
Section 2.01 and who thereafter incurs a Separation from Service shall commence
participation immediately upon reemployment with an Employer as an Employee.
2.05 An Employee who incurred a Separation from Service after satisfying
the requirements of Section 2.01 but prior to becoming a Participant and who did
not incur a Break in Service shall commence participation immediately upon
reemployment with an Employer as an Employee, but not before the first Entry
Date on which he is otherwise eligible pursuant to Section 2.01 hereof.
2.06 A leased employee within the meaning of Section 414(n)(2) of the
Code shall become a Participant in and accrue benefits under, the Plan based on
service as a leased employee only as provided in provisions of the Plan.
11
<PAGE>
<PAGE>
ARTICLE III
CONTRIBUTIONS
3.01 As of the Effective Date, the Employers shall contribute to the
Trust five shares of Convertible Stock in respect of each Participant in the
Plan as of such date. For each Plan Year ending after the Effective Date, the
Employer shall contribute to the Trust such amounts as the Board of Directors,
in its discretion, may determine; provided, however, that the Employers shall
contribute such amounts as may be required to repay the principal amount of and
interest on a Loan incurred for the purpose of acquiring shares of Stock; and
further provided, however, that the aggregate contribution for each Plan Year
shall not exceed the maximum deductible contribution for such Plan Year under
Section 404(a) of the Code.
3.02 Subject to the provisions of Section 3.01, each Employer may make
its contribution for any Plan Year at such time or times as it shall in its sole
discretion determine; provided, however, that the total amount of its
contribution for any Plan Year shall be made not later than the time prescribed
by law for filing its federal income tax return for its fiscal year ending with
or within such Plan Year, including extensions thereof.
3.03 Contributions made by an Employer for any Plan Year shall be made
in cash or in shares of Stock; provided, however, that amounts contributed for
the purpose of repaying a Loan shall be made in cash, except that cash dividends
paid with respect to Stock contributed by an Employer and any interest earned
thereon may also be used to repay such Loan. Contributions made by an Employer
shall be deemed made as of the last day of the applicable Plan Year.
3.04 No contributions by Participants shall be required or permitted
under the Plan.
ARTICLE IV
ALLOCATION OF CONTRIBUTIONS
4.01 The aggregate amount of the contributions made by the
12
<PAGE>
<PAGE>
Employers pursuant to Article III in respect of the Plan Year to which such
contributions relate (as well as shares of Stock released from the Suspense
Account, as described in Section 5.02, by reason of such contributions) shall be
allocated among the Participants who (a) were credited with a Year of Vesting
Service during the Plan Year with respect to which contributions are made and
(b) were Employees of an Employer on the last day of such Plan Year; provided,
however, that a Participant who terminates employment during the Plan Year by
reason of Retirement, death or Disability shall receive an allocation for such
Plan year without regard to the requirements of clauses (a) and (b) above.
Notwithstanding the foregoing, the contribution by the Employers of five (5)
shares of Convertible Stock on behalf of each Participant in the Plan as of the
Effective Date shall be immediately allocated to the respective Accounts of such
Participants as of the Effective Date.
4.02 For purposes of Section 4.01, a Participant's allocable share of
Employer contributions made in respect of a Plan Year shall be determined by
multiplying the aggregate of such contributions by a fraction, the numerator of
which is the Participant's total Compensation for such Plan Year and the
denominator of which is the aggregate Compensation of all Participants for such
Plan Year.
4.03 Any forfeiture arising under Section 4.08 in any Plan Year shall be
allocated in the manner specified in Sections 4.01 and 4.02 as though it were an
Employer contribution in respect of such Plan Year.
4.04 (a) In addition to the limitations set forth in Section 4.05, no
more than one-third (1/3) of Employer contributions for a Plan Year shall be
allocated to the group of Employees consisting of Highly Compensated Employees.
(b) Allocations for a Plan Year that would otherwise cause the
limitations of Subsection (a) hereof to be exceeded shall be reduced or
eliminated as necessary, in a manner prescribed by the Committee in accordance
with applicable laws and regulations.
4.05 (a) Notwithstanding anything to the contrary contained in Sections
4.01 through 4.03, the "Annual Additions" (as hereinafter defined) allocated to
a Participant under the Plan and any other "Defined Contribution Plan" (as
hereinafter defined) maintained by an Employer or an Affiliate in respect of any
Plan Year shall not
13
<PAGE>
<PAGE>
exceed in the aggregate the lesser of (i) twenty-five percent (25%) of such
Participant's total compensation (limited to a) the first $200,000 of such
compensation for calendar years beginning before January 1, 1994 and b) the
first $150,000 of such compensation for calendar years beginning on or after
January 1, 1994, or such greater amounts as permitted by law) for such calendar
year or (ii) the sum of (A) Thirty Thousand Dollars ($30,000), as adjusted in
accordance with the succeeding sentence, and (B) the lesser of (x) the amount
then in effect under clause (A) above and (y) the amount of Stock allocated to
the Participant as a result of Employer contributions. The dollar limitations
contained in the preceding sentence shall be adjusted for cost of living
increases for such Plan Year and to such extent as is authorized by the
Secretary of the Treasury under Section 415(d) of the Code.
In the event that the Annual Additions allocated to a Participant
under the Plan and all other Defined Contribution Plans maintained by an
Employer or an Affiliate in respect of any Plan Year shall exceed in the
aggregate the limitations set forth in the preceding sentence, the Employer
shall first reduce the Annual Additions to such other Defined Contribution Plans
to the extent necessary so that the aggregate Annual Additions to the Plan and
to such other Defined Contribution Plans do not exceed such limitations for that
Plan Year.
(b) Notwithstanding the provisions of Subsection (a) hereof, the
otherwise permissible Annual Additions allocable to a Participant's Account
under this Plan shall be further reduced in the case of any individual who is
also a participant in a Defined Benefit Plan maintained by an Employer or an
Affiliate, to the extent necessary (as determined by the Committee), so that the
overall limitations on benefits and contributions contained in Section 415(e) of
the Code will not be exceeded. For this purpose, the Committee shall compute the
"Defined Contribution Plan Fraction" (as hereinafter defined) and adjust the
"Defined Benefit Plan Fraction" (as hereinafter defined) so that the sum of
these fractions shall not exceed 1.0.
(c) Any amount that may not be added to a Participant's Account by
reason of the limitations contained in this Section 4.05 shall be reallocated to
the Accounts of other Participants pursuant to the provisions of this Article
IV. Any amount that cannot be reallocated to other Participants' Accounts by
reason of these
14
<PAGE>
<PAGE>
limitations shall be credited to a suspense account and reallocated as of the
end of the following Plan Year among the then Participants in accordance with
Sections 4.01 through 4.03, and no contributions shall be made in such Plan Year
prior to such reallocation.
(d) For purposes of this Section 4.05, the following definitions
shall apply:
(i) "Annual Addition" shall mean, in the case of this Plan and
any other Defined Contribution Plan maintained by an Employer or an
Affiliate, the sum of (A) the amount of Employer contributions and
forfeitures allocated to a Participant's Account during the Plan
Year (except as provided in the following sentence), (B) the
Employee's Contributions if any, and (C) amounts described in
Section 415(l)(1) and 419A(d)(2) of the Code. If the requirements
of Section 4.04(a) are met with respect to employer contributions
that are deductible under Section 404(a)(9) of the Code, then
forfeitures of Stock acquired with the proceeds of a Loan and
contributions that are deductible under Section 404(a)(9)(B) of the
Code and are charged against the Participant's Account shall be
disregarded for purposes of clause (A) of this paragraph.
(ii) "Defined Benefit Plan" shall mean any "Retirement Plan"
(as hereinafter defined) that does not meet the definition of a
Defined Contribution Plan.
(iii) "Defined Benefit Plan Fraction" shall mean a fraction,
the numerator of which is the aggregate of the projected annual
benefits (determined as of the last day of the Plan Year) of the
Participant under all Defined Benefit Plans maintained by an
Employer or an Affiliate, and the denominator of which is the
lesser of (A) the dollar limitation in effect under Section
415(b)(1)(A) of the Code for such year multiplied by 1.25 or (B)
the amount that may be taken into account under Section
415(b)(1)(B) of the Code with respect to the Participant under all
such Defined Benefit Plans for such year multiplied by 1.4.
(iv) "Defined Contribution Plan" shall mean a Retirement Plan
that provides for an individual account for each Participant and
for benefits based solely on the amount
15
<PAGE>
<PAGE>
contributed to the Participant's Account (and any income, expenses,
gains and losses attributable thereto) and any forfeitures of
accounts of other Participants that may be allocated to such
Participant's account. For this purpose, employee contributions
made pursuant to a Defined Benefit Plan maintained by an Employer
or an Affiliate shall be treated as a separate Defined Contribution
Plan.
(v) "Defined Contribution Plan Fraction" shall mean a fraction,
the numerator of which is the aggregate of the Annual Additions to
the Participant's Account under this Plan and any other Defined
Contribution Plan maintained by an Employer or an Affiliate for
such Plan Year and all prior Plan Years, and the denominator of
which is the lesser of the following amounts determined for such
Plan Year and each prior Year of Service with an Employer or
Affiliate: (A) the dollar limitation in effect under Section
415(c)(1)(A) of the Code for such year (determined without regard
to Section 415(c)(6) of the Code) multiplied by 1.25 or (B) the
amount that may be taken into account under Section 415(c)(1)(B) of
the Code with respect to the Participant under all such Defined
Contribution Plans for such year multiplied by 1.4.
(vi) "Retirement Plan" shall mean (A) any profit sharing,
pension or stock bonus plan described in Section 401(a) and 501(a)
of the Code, (B) any annuity plan or annuity contract described in
Section 403(a) or 403(b) of the Code, (C) any individual retirement
account or individual retirement annuity described in Sections
408(a) or 408(b) of the Code, or (D) a simplified employee pension
described in Section 408(k) of the Code.
(e) The limitations imposed by this Section 4.05 shall be
administered in accordance with such rulings and regulations as are issued by
the Secretary of the Treasury under Section 415 of the Code.
4.06 Each Employer shall on the last day of each Plan Year certify to
the Committee (a) a list of the Employees of such Employer who are entitled to
share in the contributions made pursuant to Section 3.01 for the fiscal year
ending with or within the Plan Year
16
<PAGE>
<PAGE>
and (b) the respective Compensation of such Employees for service with such
Employer for the portion of such year during which they are Participants; and
the Committee shall, after the receipt of this certification and the Employers'
contributions, credit to each Participant's Accounts the amount to be allocated
pursuant to Sections 4.01 and 4.02.
4.07 Neither the aforesaid allocation nor the crediting of any
Participant's Account shall vest in any Participant any right, title or interest
in or to any assets of the Trust except at the time or times and upon the terms
and conditions expressly set forth herein.
4.08 Subject to Section 8.02(b), the nonvested balance in a
Participant's Accounts shall be forfeited as of the last day of the Plan Year in
which occurs a Break in Service. Forfeitures shall reduce a Participant's
Accounts in the following order: first, his Non-stock Account; second, the
subaccount of his Stock Account that is maintained for Stock not acquired with
the proceeds of a Loan; and last, the remaining subaccount of his Stock Account.
ARTICLE V
ACCOUNTS; VALUATION OF TRUST FUND
5.01 Establishment of Participant Accounts. Individual Accounts of
Participants in the Plan shall be maintained under the direction of the
Committee. Such Accounts shall include a Nonstock Account for each Participant,
showing the value of his interest in the net assets of the Trust Fund (other
than Stock), a Stock Account for each Participant, showing the number of shares
of Stock in the Trust Fund standing to his credit, and such other Accounts as
the Committee may determine. Within each Stock Account, separate subaccounts
shall be maintained for Stock acquired with the proceeds of a Loan and for Stock
not so acquired.
5.02 (a) Establishment of Suspense Account. Any Stock that is acquired
with the proceeds of a Loan shall be carried in a Suspense Account and shall not
be allocated to the Stock Accounts of Participants until its release from such
Suspense Account.
(b) Release of Shares from Suspense Account. Subject to the
provisions of Subsection (c) hereof, upon the payment of each
17
<PAGE>
<PAGE>
installment of principal and interest on a Loan, the following number of shares
of Stock acquired with the proceeds of a Loan shall be released from the
Suspense Account: for each Plan Year during the duration of the relevant Loan,
the number of shares so acquired and held in the Suspense Account immediately
before release, multiplied by a fraction the numerator of which is the amount of
principal and interest to be paid in respect to the relevant Loan for the year
and the denominator of which is the principal and interest to be paid in respect
of the relevant Loan for the current and all future years. Cash dividends paid
during a Plan Year on Stock held in the Suspense Account ("Unallocated
Dividends") be applied in the following order (i) shall be used to satisfy any
cash requirements of the Trustee for purposes of making distributions to
Participants (or Beneficiaries) pursuant to Article VIII, (ii) shall be used to
release Stock from such Suspense Account, but only to the extent of any
installments of principal and interest due during such Plan Year on a Loan, and
(iii) shall be allocated among Participants' Nonstock Accounts as investment
earnings. Cash dividends paid with respect to Stock allocated to a Participant's
Stock Account ("Allocated Dividends") shall, at the discretion of the Committee,
be (i) allocated to the Participant's Nonstock Account as investment earnings,
(ii) used, to the extent practicable, for the purchase of Stock, which Stock
shall be credited to the Participant's Stock Account in an amount equal to the
Fair Market Value of dividends that would have been credited to the
Participant's Account, (iii) paid to the Participant at the same time and in the
same manner as such dividends are paid to other shareholders of Stock, (iv) paid
to the Trust and distributed therefrom to Participants within ninety (90) days
after the last day of the Plan Year in which so paid, (v) used to release Stock
from the Suspense Account, provided all applicable legal requirements are
satisfied, (vi) used to repay a Loan or (vii) any combination of (i)-(vi) above,
to the extent permitted by applicable law.
(i) If Unallocated Dividends are used to repay any Loans then
outstanding, then upon such repayment, shares of Stock shall be
released from the Suspense Account and transferred to Participants'
Stock Accounts in accordance with paragraph (iii) below. If
Allocated Dividends are used to repay a Loan, upon such repayment,
shares of Stock shall be released from the Suspense Account and
transferred to Participants' Stock Accounts in accordance with
paragraph (ii) below.
18
<PAGE>
<PAGE>
(ii) The number of released shares of Stock with respect to
Allocated Dividends shall be the total number of shares released on
account of the Loan amortization payment multiplied by a fraction.
The numerator of the fraction shall be the amount of the Allocated
Dividends used to make the loan amortization payment. The
denominator of the fraction shall be the fair market value,
determined as of the time that shares are released from the
Suspense Account, of the total number of shares released as a
result of the Loan amortization payment. The number of released
shares with respect to Allocated Dividends shall be allocated among
Participants' Accounts in the same proportion that each
Participant's Allocated Dividends used to make the Loan
amortization payment bears to the total amount of such Allocated
Dividends.
(iii) The number of released shares with respect to Unallocated
Dividends shall be the balance (after the application of the
preceding paragraph) of the shares released on account of the Loan
amortization payment, multiplied by a fraction. The numerator of
the fraction shall be the amount of Unallocated Dividends used to
make the Loan amortization payment. The denominator of the fraction
shall be the amount of the Loan amortization payment reduced by the
amount of the Allocated Dividends used to make the Loan
amortization payment, if any. The number of released shares with
respect to Unallocated Dividends shall be allocated among the
Participants' Accounts pursuant to Section 4.02.
(c) If a Loan provides for annual payments of principal and
interest at a cumulative rate that is not less rapid at any time than level
annual payment of such amounts for ten (10) years and satisfies such other
requirements as may be set forth in the Code and regulations thereunder, then in
lieu of the provisions of subsection (b) above, the following number of shares
of Stock acquired with the proceeds of such Loan shall be released from the
Suspense Account for each Plan Year during the duration of the relevant Loan:
the number of shares so acquired and held in the Suspense Account immediately
before release, multiplied by a fraction the numerator of which is the amount of
principal paid with respect to the relevant Loan for the current and all future
Plan Years. This subsection (c) shall not be applicable from the time that, by
reason of a renewal, extension,
19
<PAGE>
<PAGE>
or refinancing of the relevant Loan, the sum of the expired duration of the
exempt Loan, the renewal, the extension period, and the duration of a new exempt
Loan exceeds ten (10) years.
5.03 The Trustee shall, on and after the Effective Date, value the Trust
Fund as of each Valuation Date as herein provided to reflect each Participant's
interest in the Trust Fund. For purposes of the Plan, the value of Stock held by
the Trust shall be its Fair Market Value as determined in accordance with
Section 1.18.
5.04 A Participant who has attained age 55 and completed at least 10
years of participation in the Plan may elect within 90 days after the close of
each Plan Year in the Election Period (as hereinafter defined) to receive a
distribution of up to twenty-five percent (25%) of his Accounts less the amount
held in his Nonstock Account (less the amount of any prior distributions
pursuant to this Section), provided that in the case of the last Plan Year in
the Election Period, the Participant may elect a distribution of up to fifty
percent (50%) of his Accounts, less the amount held in his Nonstock Account
(less the amount of any prior distributions pursuant to this Section). For
purposes of this Section, "Election Period" means the period of six (6)
consecutive Plan Years beginning with the Plan Year in which the Participant
attains age fifty-five (55) or, if later, beginning with the Plan Year in which
the Participant has both attained the age of fifty-five (55) and completed at
least 10 years of participation in the Plan.
ARTICLE VI
STOCK RIGHTS OF PARTICIPANTS
6.01. Voting Rights. Each Participant (or, in the event of his death,
his Beneficiary) is, for purposes of this Section, hereby designated a "named
fiduciary", within the meaning of Section 403(a)(1) of ERISA, with respect to
the shares of stock allocated to his Account and to his proportionate share of
the shares of Stock held in the Suspense Account and shall have the right to
direct the Trustee as to the manner in which shares of Stock allocated to his
Account are to be voted on each matter brought before an annual or special
stockholders' meeting of the Company. Before each such meeting of stockholders,
the Committee shall cause to be furnished to each Participant (or Beneficiary) a
copy of the proxy solicitation material, together with a form requesting
confidential directions on
20
<PAGE>
<PAGE>
how such shares of Stock allocated to the Participant's Account shall be voted
on each such matter. Upon timely receipt of such directions the Trustee shall on
each such matter vote as directed the number of shares (including fractional
shares) of Stock allocated to such Participant's Account. The instructions
received by the Trustee from Participants shall be held by the Trustee in strict
confidence and shall not be divulged or released to any person, including
officers or employees of the Company or any Affiliate. The Trustee shall vote
both allocated shares for which it has not received direction, as well as
unallocated shares, in the same proportion as directed shares are voted.
6.02 Rights on Tender or Exchange Offer. Each Participant (or, in the
event of his death, his Beneficiary) is, for purposes of this Section, hereby
designated a "named fiduciary", within the meaning of Section 403(a)(1) of
ERISA, with respect to the shares of Stock allocated to his Account and to his
proportionate share of the shares of Stock held in the Suspense Account and
shall have the right, to the extent of the number of shares of Stock allocated
to his Account, to direct the Trustee in writing as to the manner in which to
respond to a tender or exchange offer with respect to shares of Stock. The
Committee shall use its best efforts to timely distribute or cause to be
distributed to each Participant (or Beneficiary) such information as will be
distributed to stockholders of the Company in connection with any such tender or
exchange offer. Upon timely receipt of such instructions, the Trustee shall
respond as instructed with respect to shares of such Stock. The instructions
received by the Trustee from Participants shall be held by the Trustee in strict
confidence and shall not be divulged or released to any person, including
officers or employees of the Company or any Affiliate. If the Trustee shall not
receive timely instruction from a Participant (or Beneficiary) as to the manner
in which to respond to such tender or exchange offer, the Trustee shall not
tender or exchange any shares of Stock with respect to which such Participant
has the right of direction. Unallocated shares of Stock shall be tendered or
exchanged by the Trustee in the same proportion as shares of Stock with respect
to which Participants (or Beneficiaries) have the right of direction are
tendered or exchanged.
6.03 Standards for Trustee's Powers. Notwithstanding any other
provisions of the Plan, the Trustee shall carry out its duties under the Plan in
accordance with (a) the Plan insofar as the Plan is consistent with the
provisions of Title I of ERISA and (b)
21
<PAGE>
<PAGE>
applicable requirements of law.
ARTICLE VII
VESTING
7.01 (a) A Participant shall be fully and nonforfeitably vested in the
balance in his Account upon his death, Disability or attainment of Normal
Retirement Age.
(b) A Participant who has not met the requirements of Section
7.01(a) at the time of his Separation from Service shall be vested in the
balance in his Account in accordance with the following schedule:
Number of Years Vested
of Vesting Service Percentage
------------------ ----------
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
7.02 For purposes of Section 7.01, the balance in a Participant's
Account shall be determined as of the last day of the Plan Year in which occurs
such Retirement or other Separation from Service.
7.03 (a) In the case of a Participant who has incurred five (5)
consecutive Breaks in Service, Years of Vesting Service completed by such
Participant after such Breaks in Service shall be disregarded for purposes of
determining his vested interest under Section 7.01 in the portion of the balance
in his accounts that accrued before such Breaks in Service.
(b) In the case of a nonvested Participant whose number of
consecutive Breaks in Service exceeds the greater of five (5) or the aggregate
number of Years of Vesting Service occurring prior to such Breaks in Service,
Years of Vesting Service completed by such
22
<PAGE>
<PAGE>
Participant before such Breaks in Service shall be disregarded for purposes of
determining his vested interest under Section 7.01 in the portion of the balance
in his Accounts have accrued subsequent to such Breaks in Service.
(c) In the case of a Participant who has incurred a Break in
Service, Years of Vesting Service completed by such Participant prior to such
Break in Service shall be disregarded for purposes of determining his vested
interest under Section 7.01 until such Participant shall have completed a Year
of Vesting Service during a Plan year after the Plan Year in which such Break in
Service was incurred.
7.04 Termination of Employment with Employer to Accept Employment with
Chemical Bank: Notwithstanding Section 7.01 hereof, if a Participant's
employment with the Employer is terminated by reason of his decision to accept
employment with Chemical Bank in connection with a certain Assignment and
Assumption Agreement between The Greater New York Savings Bank and Chemical Bank
dated April 18, 1990, as amended by an Agreement for Extension of Time dated
October 15, 1990, he shall become fully vested, as of the date of his
termination of service with the Employer, in the unvested portion of his
Account.
7.05 Termination of Employment with Employer to Accept Employment with
Republic National Bank of New York: Notwithstanding Section 7.01 hereof, if
Participant's employment with the Employer is terminated by reason of his
decision to accept employment with Republic National Bank of New York in
connection with a certain Purchase and Assumption Agreement between The Greater
New York Savings Bank and Republic National Bank of New York dated as of January
15, 1993, he shall become fully vested, as of the date of his termination of
service with the Employer, in the unvested portion of his Account.
ARTICLE VIII
PAYMENTS OF BENEFITS
8.01 Upon the Retirement, death or Disability of a Participant, the
entire balance of his Accounts shall commence to be distributed to the
Participant (or, in the event of his death, to his Beneficiary), as soon as
practicable following the end of the Plan
23
<PAGE>
<PAGE>
Year in which occurs such Retirement, death or Disability. Such distribution
shall be made (a) in whole shares of Stock plus cash in lieu of any fractional
shares or, at the election of the Participant (or Beneficiary) if his or her
Account is then credited with less than 100 shares of Stock, in cash, and (b) at
the election of the Participant, in a lump sum or in equal installments over a
period not to exceed five (5) years or, if less, the life expectancy of the
Participant (or the life expectancies of the Participant and a designated
beneficiary); in no event shall payment be made in the form of a life annuity. A
Participant receiving a distribution of Convertible Stock from his Account shall
have the right to direct the Trustee to either (a) sell to the Company the
shares of Convertible Stock then credited to his Account, or (b) convert such
shares into shares of Common Stock, whichever shall result in greater value to
the Participant. After making such direction, a Participant shall receive the
entire amount in his or her ESOP Account in the form of Common Stock or cash and
in a lump sum or periodic payments, as determined in the second sentence of this
Section 8.01. In any case where a Participant is required by the terms of the
Plan to receive a distribution from his Account (other than upon Plan
termination), and fails to direct the Trustee in the manner set forth above
within a 60-day period commencing on the date following the date of such
required distribution, the Convertible Stock shall remain in his Account until
the earlier of (i) the 61st day of the following Plan Year or (ii) the date on
which a distribution is required under Code Section 401(a)(9) or any other
provision of applicable law, at which time the Participant shall be deemed to
have directed the Trustee to either sell to the Company such Convertible Stock
for cash or, if it would result in a greater cash distribution, to convert the
Convertible Stock to Common Stock and then sell the Common Stock for cash;
provided, however, that the Trustee may not sell shares of Convertible Stock to
the Company if such sale would be determined by a bank regulatory authority or
under generally accepted accounting principles to be adverse to the capital
treatment of such Convertible Stock, in which case the Trustee will be required
to convert such Convertible Stock into Common Stock. The Participant shall
receive a cash distribution in an amount equal to the cash proceeds from his or
her deemed election. For purposes of this Section 8.01, the rights extended to
Participants hereunder shall also apply to any Beneficiary or alternate payee.
8.02 (a) Upon the Separation from Service of a Participant other than by
reason of Retirement, death or Disability, the vested
24
<PAGE>
<PAGE>
portion of his Accounts shall commence to be distributed in the manner otherwise
specified in Section 8.01 as soon as practicable following the end of the Plan
Year in which such Separation from Service occurs (subject to the provisions of
Section 8.03 and except as may otherwise be provided by law); provided, however,
that if the vested portion of a Participant's Accounts exceeds $3,500, no
distribution of any part thereof shall be made prior to the Participant's Normal
Retirement Age without the written consent of the Participant.
(b) If a Participant described in Subsection (a) hereof receives a
distribution of the vested portion of his Accounts pursuant to such Subsection
(a) and such Participant is not fully (100%) vested in his Accounts, the
nonvested portion of his Accounts shall be forfeited as of the last day of the
Plan Year in which such distribution is made and shall be allocated to the
Accounts of other Participants in accordance with Section 4.03. If the
Participant is reemployed prior to the occurrence of five (5) consecutive Breaks
in Service and if the Participant repays to the Plan the entire amount of such
distribution within five (5) years of his resumption of employment, then the
forfeited portion of his Accounts shall be restored, unadjusted by any gains or
losses experienced by the Trust subsequent to the date on which such portion of
his Accounts was forfeited.
8.03 (a) Notwithstanding anything to the contrary in this Article VIII,
and except as provided in Section 8.03(b), the balance of a Participant's
Account shall commence to be distributed no later than the sixtieth (60th) day
after the latest of the last day of the Plan Year in which (a) the Participant
attains the age of sixty-five (65) years, (b) occurs the fifth (5th) anniversary
of the year in which the Participant commenced participation in the Plan or (c)
the Participant incurs a Separation from Service; provided, however, that such
distribution shall commence no later than April 1 of the calendar year next
following the calendar year in which the Participant attains (or would have
attained, in the case of a deceased Participant) seventy and one-half (70 1/2)
years of age.
(b) The following provisions shall be applicable to distributions
under the Plan (except to the extent that earlier or more rapid distributions
are otherwise required by law), unless the Participant otherwise elects another
distribution option made
25
<PAGE>
<PAGE>
available to him under the Plan:
(i) The distribution of a Participant's Accounts shall commence
not later than one year after the last day of the Plan Year (A) in
which he incurs a Separation from Service after his Normal
Retirement Age or by reason of Disability or death; or (B) which is
the fifth Plan Year following the plan year in which he otherwise
incurs a Separation from Service (unless he is reemployed by the
Employer before such year); provided, however, that if the
Participant is reemployed by the Employer as of the last day of the
fifth Plan Year following the Plan Year of such Separation from
Service, distribution to the Participant prior to any subsequent
Separation from Service, shall be in accordance with terms of the
Plan other than this clause (B).
(ii) If a Participant shall elect to receive a distribution of
his Account in installments pursuant to Section 8.01, the
Participant's Account shall be distributed in substantially equal
periodic payments (at least annually) over a period not exceeding
the greater of (A) five years, or (B) if the Fair Market Value of a
Participant's Account attributable to Stock is in excess of
$500,000 as of the date distribution is required to begin under
this Article VIII, five years plus an additional one year (up to an
additional five years) for each $100,000 increment, or fraction of
such increment, by which the value of the Participant's Account
exceeds $500,000. In no event shall such distribution period exceed
the period permitted under Section 401(a)(9) of the Code. The
dollar amounts prescribed in this Subsection shall be adjusted for
increases in the cost of living as prescribed by the Secretary of
the Treasury.
(iii) For purposes of this Section 8.03(b), a Participant's
Accounts shall not include any Stock acquired with the proceeds of
a Loan described in Code Section 404(a)(9) until the last day of
the Plan Year in which such Loan has been repaid in full.
(c) If a Participant dies before the entire balance of his Accounts
have been distributed (whether or not such distribution
26
<PAGE>
<PAGE>
has commenced), the balance in his Accounts shall be distributed in a lump sum
to his Beneficiary (or, if there is no Beneficiary, to his Spouse or if there is
no Spouse to the legal representative of the Participant's estate) as soon as
practicable following the death of a Participant.
8.04. Direct Rollovers Of Eligible Rollover Distributions. This Section
8.04 applies to distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
distributee's election hereunder, a distributee may elect, at the time and in
the manner prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
The following words and phrases, when used in this Section 8.04, unless
their context clearly indicates otherwise, shall have the following respective
meanings:
a) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributees' eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
27
<PAGE>
<PAGE>
c) Distributee: A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
d) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE IX
NONALIENABILITY
9.01 Assignment and Alienation. Except to the extent provided by
Subsection (b) hereof and by applicable laws and regulations, benefits under the
Plan may not be anticipated, assigned (either at law or in equity), alienated,
or subjected to attachment, garnishment, levy, execution or other legal or
equitable process.
9.02 Qualified Domestic Relations Order. The creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a "qualified domestic relations order" (as such term is defined in
Section 414(p) of the Code) is not prohibited.
ARTICLE X
AMENDMENT OF THE PLAN
10.01 The Board of Directors shall have the right at any time, and from
time to time, to amend in whole or in part any of the provisions of this Plan.
Such amendment shall be binding upon the Participants and their Beneficiaries,
the Trustee, the Committee and all parties in interest. No such amendment shall,
however, authorize or permit any of the assets of the Trust Fund to be used for,
or directed to, purposes other than the exclusive benefit of the Participants or
their Beneficiaries; no amendment that materially increases the rights, duties
or responsibilities of the Trustee may be made without its written consent; and
no such amendment shall decrease (within the meaning of Section 411(d)(6) of the
Code) the accrued benefit of any Participant. Any such amendment shall become
28
<PAGE>
<PAGE>
effective as of the date specified therein upon (a) delivery of a written
instrument, executed by the Company, to the Trustee and (b) the endorsement by
the Trustee of its written consent thereof, if such consent is required.
10.02 Notwithstanding anything to the contrary contained in Section
10.01, no amendment may be made that shall retroactively deprive a Participant
of any benefit funded by a contribution made in respect of a Plan Year ending
prior to the Plan Year during which the amendment was executed, unless such
amendment is necessary to permit the Plan to qualify under Section 401(a) and
Section 4975(e)(7) of the Code. This Section 10.02 shall not be construed so as
to prevent the amendment of the Plan at any time to conform to any final
regulations issued by the Secretary of the Treasury following the date hereof.
ARTICLE XI
TERMINATION OF THE PLAN
11.01 The Board of Directors may, by appropriate notice to the Trustee,
terminate the Plan in its entirety. The Board of Directors may at any time
require any Employer to withdraw from the Plan, and any Employer may voluntarily
withdraw with the consent of the Board of Directors, and upon such withdrawal,
the Plan, in respect to such Employer, shall be terminated.
11.02 Upon termination of the Plan with respect to an Employer, the
Trustee shall allocate and segregate for the benefit of the Participants then or
theretofore employed by such Employer their proportionate interest in the Trust
Fund.
11.03 Any termination or partial termination shall be effective as of
the date specified in the resolution providing therefor, if any, and shall be
binding upon the Employers, the Trustee, the Committee, all Participants and all
parties in interest.
11.04 Upon a termination of the Plan in its entirety, each Participant
shall be fully (100%) vested in the balance in his Accounts, determined as of
the date of such termination, and such benefit shall be nonforfeitable.
29
<PAGE>
<PAGE>
11.05 In the event of a partial termination of the Plan, the rights of
all affected Participants to their Account balances, determined as of the date
of such partial termination, shall be fully (100%) vested.
11.06 Upon the termination of the Plan in its entirety, the Trustee
shall--
(a) pay any and all expenses chargeable against the Trust;
(b) determine, in accordance with the provisions of Article V, the
balance in each Participant's Accounts;
(c) repay the Loan, as the Trustee and the creditor shall agree
and in the case of sale of shares of Stock held in the Suspense Account,
allocate to each Participant that portion of the remaining balance of the
proceeds which is determined by multiplying such remaining balance by a
fraction, the numerator of which is the Participant's Account balance as of the
date of termination of the Plan, and the denominator of which is the aggregate
Account balances of all Participants in the Plan as of such date; and
(d) pay over to each Participant the balance in his Stock Account
in shares of Stock (and cash in lieu of any fractional shares), and the balance
in his Nonstock Account in cash; and
(e) continue to maintain the Trust and Plan to pay benefits in
accordance with the provisions of Article VIII, except that no Employee shall
become a Participant on or after the effective date of such termination.
11.07 For purposes of this Article XI, the term "termination" shall
include a complete discontinuance of contributions under the Plan.
ARTICLE XII
ADMINISTRATION OF THE PLAN
12.01 The Plan shall be administered by the ESOP Committee (sometimes
referred to herein as the Committee). The Committee shall
30
<PAGE>
<PAGE>
consist of not less than three (3) officers of the Company who shall be
appointed annually by the Chairman of the Board and shall hold office until
their successors have been duly appointed or until death, resignation or
removal. The Committee is hereby designated as the "named fiduciary" within the
meaning of Section 402(a) of ERISA (other than for purposes of Section 6.02
hereof).
12.02 The members of the Committee shall elect from their number a
chairman and a secretary, either or both of whom may be a Participant hereunder.
The Committee shall hold meetings upon such notice, at such place or places, and
at such time or times as they may determine. A majority of the members of the
Committee then serving shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Committee shall be by
vote of a majority of those present at a meeting of the Committee at which a
quorum shall be present or, if they act without a meeting, in a writing signed
by all the members of the Committee then serving. Any dissenting Committee
member who, within a reasonable time after he has knowledge of any action or
failure to act by the majority, registers his dissent in writing delivered to
the Board of Directors and other members of the Committee shall not, subject to
the provisions of ERISA, be responsible for any such action or failure to act.
12.03 As of the Effective Date, a Plan Administrator of the Plan shall
be designated by the Committee. The Plan Administrator shall be the senior
officer in charge of the Human Resources Department, and in his absence or
incapacity, the next senior officer in charge of the Human Resources Department
shall be the Plan Administrator.
The duties of the Plan Administrator are as follows: To serve as Plan
Administrator under the direction of the Committee with responsibilities that
shall include the establishment of a claims procedure; the filing with the
Secretary of Labor of all Plan descriptions and reports required by ERISA;
furnishing Participants and Beneficiaries with Plan descriptions and reports
required by ERISA; providing the Committee with information that may be
reasonably required by it; and providing to Participants on a timely basis any
information or forms required by ERISA.
12.04 The Committee, through the Plan Administrator, may appoint such
accountants, enrolled actuaries within the meaning of
31
<PAGE>
<PAGE>
Section 3042 of ERISA, legal counsel, investment advisors, specialists and other
persons as it deems necessary or desirable in connection with the discharge of
its responsibilities. The Committee and Plan Administrator shall be entitled to
rely conclusively upon, and shall be fully protected in any action taken by it
in good faith in relying upon, any opinions or reports that shall be furnished
to it by any such accountant, actuary, counsel or other specialist.
12.05 The Committee and the Plan Administrator shall serve without
compensation for services as such. All expenses of the Committee and the Plan
Administrator shall be paid out of the Trust Fund, unless paid by the Employers.
Such expenses shall include any expenses incident to the functioning of the
Committee and the Plan Administrator, including, but not limited to, fees of
accountants, actuaries, legal counsel, investment advisors, specialists and
other similar costs.
12.06 The Committee and the Plan Administrator shall discharge their
duties with respect to the Plan solely in the interests of the Participants and
their Beneficiaries and--
(a) for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and defraying reasonable expenses for
administering the Plan;
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man, acting in like capacity and
familiar with such matters, would use in the conduct of an enterprise of a like
character and with like aims; provided, however, that this requirement, to the
extent that it would require diversification of the investment of the Trust
Fund, shall not be deemed violated by the acquisition or holding of Stock; and
(c) in accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent with the
provisions of ERISA.
12.07 The Employers shall indemnify and hold harmless the Committee and
the Plan Administrator and each of their designees under Section 12.09(b) who is
an employee of any Employer against any and all claims, loss, damages or
expense, including legal fees and other expenses of litigation and liability
arising from any action or failure to act in carrying out duties with respect to
the Plan,
32
<PAGE>
<PAGE>
except when the same is judicially determined to be due to the gross negligence
or willful misconduct of the Committee or any such designee.
12.08 In carrying out their duties with respect to the general
administration of the Plan, the Committee, through the Plan Administrator, shall
have, but shall not be limited to, the following powers:
(a) to determine all questions relating to the eligibility of
employees to participate in the Plan;
(b) to compute the amount and kind of benefits payable to
Participants and their Beneficiaries;
(c) to authorize disbursements from the Trust in accordance with
the provisions of the Plan;
(d) to maintain all the necessary records for the administration
of the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for their regulation as are not inconsistent with the terms
hereof; and
(f) to change or to modify the method of accounting for the Plan
or Trust.
12.09 (a) The Committee, through the Plan Administrator, shall, except
as provided in Subsection (b) hereof, administer the Plan in accordance with its
terms and shall have all powers necessary to carry out the provisions of the
Plan. The Committee shall interpret the Plan in a nondiscriminatory manner and
shall determine all questions arising in the administration, interpretation and
application of the Plan. Any such determination by the Committee or the Plan
Administrator shall be conclusive and binding on all persons.
(b) The Committee may establish procedures for the designation of
persons other than named fiduciaries to carry out fiduciary responsibilities
(other than "trustee responsibilities," as such term is defined in Section
405(c)(3) of ERISA) under the Plan. If any fiduciary responsibility is allocated
or if any person
33
<PAGE>
<PAGE>
is designated to carry out any responsibility pursuant to the last preceding
sentence, the named fiduciary will not be liable for any act or omission of such
person in carrying out such responsibility, except as provided in Section
405(c)(2) of ERISA.
12.10 (a) A Participant or Beneficiary may file with the Committee,
through the Plan Administrator, a written claim for benefits under the Plan. The
Committee, through the Plan Administrator, shall, within a reasonable time not
to exceed ninety (90) days, unless special circumstances require an extension of
time of not more than an additional ninety (90) days (in which event a
Participant or Beneficiary shall be notified of the delay during the first
ninety (90)-day period), provide adequate notice in writing to any Participant
or Beneficiary whose claim for benefits shall have been denied, setting forth
the following matters in a manner calculated to be understood by the Participant
or Beneficiary:
(i) the specific reason or reasons for the denial;
(ii) specific reference to the provision or provisions of the
Plan on which the denial is based;
(iii) a description of any additional material or information
required to perfect the claim, and an explanation of why such
material or information is necessary; and
(iv) information as to the steps to be taken in order that the
denial of the claim may be reviewed.
(b) If written notice of the denial of a claim has not been
furnished to a Participant or Beneficiary, and such claim has not been granted
within the time prescribed in Subsection (a) hereof (including any applicable
extension), the claim for benefits shall be deemed denied.
(c) A Participant or Beneficiary whose claim for benefits shall
have been denied in whole or in part, may, within sixty (60) days from either
the receipt of the denial of the claim or from the time the claim is deemed
denied (unless the notice of denial grants a longer period within which to
respond), appeal such denial to the Committee through the Plan Administrator.
The Participant or Beneficiary may, upon request, at this time review
34
<PAGE>
<PAGE>
documents pertinent to his claim and may submit written issues and comments.
Failure to file such appeal within the applicable time period shall be a bar to
all future proceedings with respect to the claim.
(d) The Committee, through the Plan Administrator, shall notify a
Participant or Beneficiary of its decision within sixty (60) days after an
appeal is received, unless special circumstances require an extension of time of
not more than an additional sixty (60) days (in which event a Participant or
Beneficiary will be notified of the delay during the first sixty (60)-day
period). Such decision shall be given by the Plan Administrator in writing in a
manner calculated to be understood by the Participant or Beneficiary and shall
include (i) specific reasons for the decision and (ii) specific reference to the
provision or provisions of the Plan on which the decision is based.
12.11 The Committee and the Plan Administrator shall have no power to
add to, subtract from or modify any of the terms of the Plan, or to change or
add to any benefits provided by the Plan, or to waive or fail to apply any
requirements of eligibility for a benefit under the Plan.
ARTICLE XIII
CERTAIN TRUSTEE POWERS
13.01 The Trustee is specifically authorized to borrow funds (including
a borrowing from the Company or other Employer) to acquire Stock or repay a
prior loan incurred to acquire Stock, subject to the following conditions:
(a) any Loan to the Trust and acquisition of Stock with the
proceeds thereof shall be at the direction of the Trustee;
(b) the term of the Loan shall be for a definite period;
(c) the interest rate on the Loan may not exceed a reasonable rate
of interest;
(d) any collateral pledged to the creditor by the Trust shall
consist only of the Stock purchased with the borrowed funds or the Stock used as
collateral on a prior Loan under this Section that
35
<PAGE>
<PAGE>
is being repaid with the proceeds of the current Loan;
(e) under the terms of the Loan, the creditor shall have no
recourse against the Trust except with respect to such collateral, contributions
made hereunder (other than contributions of Stock) to meet obligations under the
Loan, and earnings attributable to such collateral and to the investment of such
contributions;
(f) the Loan shall be repaid only from amounts lent to the Trust
and the proceeds of the Loan, from amounts contributed hereunder (other than
contributions of Stock) to meet obligations under the Loan and earnings
attributable to the investment thereof, and from any earnings attributable to
collateral given for the Loan;
(g) upon the payment of any portion of the balance due on the
Loan, a pro rata portion, as determined pursuant to Section 5.02(b) and
regulations promulgated under ERISA and the Code, of the Stock originally
acquired with the proceeds of the Loan shall be released from encumbrance; and
(h) in the event of default under the Loan, the value of the
assets of the Trust transferred in satisfaction of the Loan may not exceed the
amount of the default.
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.01 Application. If in any Plan Year, the Plan is or becomes a
Top-Heavy Plan (as hereinafter defined), then the provisions of this Article
shall apply for such Plan Year and shall supersede any conflicting provisions of
the Plan. The date for determining the applicability of this Article (the
"Determination Date") is--
(a) for the first Plan Year of the Plan, the last day of such Plan
Year; and
(b) for any other Plan Year, the last day of the preceding Plan
Year.
36
<PAGE>
<PAGE>
14.02 Top-Heavy Plan. The Plan shall constitute a Top-Heavy Plan if, as
of the Determination Date, (a) the Plan is not part of an Aggregation Group (as
hereinafter defined) and the aggregate of the Accounts of Key Employees (as
hereinafter defined) under the Plan exceeds sixty percent (60%) of the aggregate
of the Accounts of all Employees under the Plan or (b) the Plan is included in
an Aggregation Group and such Group is a Top-Heavy Group (as hereinafter
defined). Solely for the purpose of determining if the Plan, or any other plan
included in an Aggregation Group of which this Plan is a part, is top-heavy
(within the meaning of Section 416(g) of the Code) the accrued benefit of an
Employee other than a Key Employee shall be determined under (a) the method, if
any, that uniformly applies for accrual purposes under all plans maintained by
the Affiliated Employers, or (b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under the
fractional accrual rate of Section 411(b)(1)(c) of the Code.
14.03 Definitions. For purposes of this Article, the following
definitions shall apply:
(a) The term "Key Employee" means an Employee who at any time
during the Plan Year or any of the four (4) preceding Plan Years is--
(i) an officer of the Company or an Affiliate having an annual
compensation greater than one hundred fifty percent (150%) of the
amount in effect under Section 415(c)(1)(A) of the Code for such
Plan Year; provided, however, that no more than the lesser of (A)
fifty (50) Employees or (B) the greater of three (3) Employees or
ten percent (10%) of all Employees are to be treated as officers;
(ii) of those Employees having annual compensation from the
Company or an Affiliate greater than the limitation in effect under
Section 415(c)(1)(A) of the Code and who are one-half percent (1/2%)
owners of the Company or an Affiliate, each of the ten (10) owning
the largest interests in the Company and its Affiliates;
(iii) a five percent (5%) owner of the Company or
37
<PAGE>
<PAGE>
an Affiliate; or
(iv) a one percent (1%) owner of the Company or an Affiliate
having an annual compensation from the Company and its Affiliates of
more than $150,000.
An Employee is considered to be a five percent (5%) owner of the Company or an
Affiliate if the Employee owns more than five percent (5%) of the outstanding
stock of the Company or any Affiliate or stock possessing more than five percent
(5%) of the total combined voting power of all of the stock of the Company or an
Affiliate. The same rules apply to determine whether an Employee is a one
percent (1%) owner or a one-half percent (1/2%) owner. For purposes of
paragraphs (ii), (iii), and (iv) of this Subsection (a), the constructive
ownership rules of Section 318 of the Code apply with the substitution of "five
percent (5%)" for "fifty percent (50%)" in paragraph (a)(2)(C)of such Section.
For purposes of paragraph (ii) of this Subsection (a), if two (2) Employees have
equal interests in the Company or an Affiliate, the Employee with the greater
annual compensation from the Company or an Affiliate has the larger interest.
For purposes of this Article XIV, the terms "Employee" and "Key Employee"
include the beneficiaries of such employees.
(b) (i) The term "Aggregation Group" means the group of plans
that includes any plan maintained by the Company or an Affiliate (A)
in which a Key Employee is a participant or (B) that enables a plan
in which a Key Employee is a participant to meet the requirements of
Section 401(a)(4) or 410 of the Code. Collectively bargained plans
that cover a Key Employee shall be included for this purpose.
(ii) In any Plan Year, in testing for top-heaviness under
Subsection (c) hereof, the Committee may in its discretion expand
the Aggregation Group to take into account any other plan maintained
by the Company or an Affiliate, but only if such expanded
Aggregation Group does not, as a result of such expansion, fail to
meet the requirements of Section 401(a)(4) and 410 of the Code.
Collectively bargained plans that do not cover a Key Employee may be
included for this purpose.
(c) The term "Top-Heavy Group" means an Aggregation Group as to
which, as of the Determination Date, the sum
38
<PAGE>
<PAGE>
of--
(i) the present value of the cumulative accrued benefits for
Key Employees under all defined benefit plans included in such
Group, and
(ii) the aggregate of the accounts of Key Employees under all
defined contribution plans included in such Group exceeds sixty
percent (60%) of the sum of such present values and accounts for
all employees under all such plans in such Group.
14.04 Present Value and Accounts. For purposes of Sections 14.02 and
14.03(c) of this Article XIV, the following rules shall apply in determining the
present value of the cumulative accrued benefit for any employee and the amount
of the account of any employee:
(a) the present value of accrued benefits and the value of
accounts shall be determined as of the most recent Valuation Date that falls
within, or on the last day of, the twelve (12)-month period ending on the
Determination Date;
(b) Company contributions and employee contributions, with the
exception of accumulated deductible employee contributions, shall be taken into
account;
(c) all amounts distributed to a Participant within the five
(5)-year period ending on the Determination Date shall be taken into account,
including any amount distributed from a terminated plan that would have been
required to be included in the Aggregation Group had it not been terminated;
(d) with respect to a transferee plan, any rollover contribution
or similar transfer initiated by an Employee and made after December 31, 1983,
shall be disregarded (except to the extent provided in regulations issued by the
Secretary of Treasury);
(e) if an Employee ceases to be a Key Employee, such Employee's
accrued benefit and account shall be disregarded (for purposes of determining
the present value of cumulative accrued benefits and the amount of the accounts
of both Key Employees and all Employees) for any Plan Year after the last Plan
Year for which he
39
<PAGE>
<PAGE>
was treated as a Key Employee; and
(f) the benefits and accounts of persons who have performed any
services for the Company or an Affiliate for the five (5)-year period ending on
the Determination Date shall be disregarded.
14.05 Vesting Requirements. If the Plan is determined to be a Top-Heavy
Plan in any Plan Year, then a Participant's right to his Account balance derived
from employer contributions, determined as of the end of such Plan Year, shall
vest in accordance with the following schedule, unless a more rapid vesting
schedule is in effect under the terms of the Plan:
Years of Vesting Service Vested Percentage
------------------------ -----------------
2 20%
3 40%
4 60%
5 80%
6 or more 100%
If the Plan ceases to be a Top-Heavy Plan in any Plan Year, then the vesting
schedule set forth in Article VII shall apply for such Plan Year with respect to
any portion of a Participant's Account balance that is forfeitable as of the
beginning of such Plan Year; provided, however, that a Participant with five (5)
or more Years of Vesting Service shall be given the option of remaining under
the vesting schedule set forth above.
14.06 Minimum Contribution. (a) If this Plan is determined to be a
Top-Heavy Plan in any Plan Year, then the employer contribution for such Plan
Year for each "participant" (as such term is defined for this purpose in
regulations issued by the Secretary of the Treasury) who is not a Key Employee
shall not be less than three percent (3%) of such participant's Compensation.
The employer contribution shall not, however, exceed the percentage of each
participant's Compensation that is equal to the highest percentage of
Compensation which contributions are made for the Plan Year for any Key Employee
(a) under the Plan or (b) if the Plan is part of an Aggregation Group, under any
defined contribution plan in such Group; provided, however, that this sentence
shall not apply if the Plan is required to be included in an Aggregation Group
and enables a defined
40
<PAGE>
<PAGE>
benefit plan to meet the requirements of Section 401(a)(4) or 410 of the Code.
For purposes of the preceding sentence, the percentage of Compensation at which
contributions are made for a Key Employee shall be computed without regard to
Compensation in excess of the ceiling on includable Compensation set forth in
Section 14.07. For purposes of this Section 14.06, employer contributions
attributable to a salary reduction or similar arrangement shall be taken into
account with respect to Key Employees, and contributions made pursuant to
Chapter 21 of Title II of the Social Security Act shall be disregarded.
(b) The minimum contribution described in Subsection (a) hereof
shall be made with respect to each Participant who is not a Key Employee without
regard to (i) the number of Hours of Service credited to the Participant for the
Plan Year in question, (ii) the Participant's level of Compensation for such
Plan Year or (iii) any failure by the Participant to make a mandatory
contribution for such Plan Year, but only if such Participant has not separated
from service as of the close of such Plan Year.
(c) The provisions of Subsections (a) and (b) hereof shall not
apply with respect to any Participant who, for the Plan Year in question,
receives the minimum contribution set forth in Subsection (a) hereof under
another Defined Contribution Plan (as defined in Section 4.05(d)(vi)) maintained
by the Employer or an Affiliate or receives the minimum benefit prescribed in
Section 416(c) of the Code under a Defined Benefit Plan (as defined in Section
4.05(d)(ii)) maintained by the Employer or an Affiliate.
14.07 Ceiling on Includable Compensation. If this Plan is determined to
be a Top-Heavy Plan in any Plan Year, then only the first $200,000 of a
Participant's Compensation shall be taken into account in determining the
allocation to the Account of such Participant for the Plan Year. The $200,000
limit shall automatically be adjusted for such Plan Years and to such extent as
is permitted by the Secretary of the Treasury.
14.08 Exception for Collectively Bargained Plans. Section 14.05 and
14.06 shall not apply to any employee who is included in a collective bargaining
unit if there is evidence that retirement benefits were the subject of good
faith bargaining between the representatives of such unit and the Company or an
Affiliate.
41
<PAGE>
<PAGE>
14.09 Combined Limit on Contributions and Benefits for Key Employees. If
the Plan is determined to be a Top-Heavy Plan in any Plan Year, then the
denominators of the defined benefit and defined contribution fractions for
purposes of paragraphs (2)(B) and (3)(B) of Section 415(e) of the Code for any
Key Employee who participates in both a defined benefit plan and a defined
contribution plan included in a Top-Heavy Group shall be the lesser of 1.0 (as
applied to the dollar limit) or 1.4 (as applied to the limit based on
compensation); provided, however, that this Section 14.09 shall not apply if all
of the following conditions are satisfied:
(a) With respect to Participants not included in any defined
benefit plan of an Employer or an Affiliate, the employer contribution for such
Plan Year for each Participant who is not a Key Employee is not less than four
percent (4%) of such Participant's Compensation;
(b) With respect to Participants included in a top-heavy defined
benefit plan of an Employer or an Affiliate, the employer contribution for such
Plan Year for each such Participant who is not a key employee is not less than
seven and one-half percent (7-1/2%) of such Participant's Compensation; and
(c) The Plan would not be a Top-Heavy Plan if "ninety percent
(90%)" were substituted for "sixty percent (60%)" in Sections 14.02 and 14.03(c)
of this Article XIV.
ARTICLE XV
CHANGE IN CONTROL
15.01 Limited Participation upon a Change in Control of the Company.
Upon the occurrence of a "change in control of the Company" (as defined in
Section 15.03 hereof), only those persons who either (i) are Employees of an
Employer immediately preceding the occurrence of a change in control of the
Company (whether or not any such person is then a Participant in the Plan) or
(ii) become Employees of an Employer on or following such a change in control of
the Company provided that during the one-year period prior to becoming Employees
they were not employed by an Affiliate or any affiliate (withing the meaning of
Section 414(b) and (c) of the Code) of any person (other than the Company and
its Subsidiaries) party to any transaction giving rise to such change in control
of the Company, shall be
42
<PAGE>
<PAGE>
eligible to be Participants in the Plan following such change in control of the
Company.
15.02 Immediate Vesting Upon a Change in Control of the Company.
Notwithstanding any provision of Article VII to the contrary, upon the
occurrence of a change in control of the Company, each Participant (and each
Employee who becomes a Participant thereafter) shall be fully and nonforfeitably
vested in the balance in his Account (including any amount credited to such
Account following such change in control of the Company).
15.03 Definition of Change in Control of the Company. For purposes of
this Agreement, a "change in control of the Company" shall be deemed to have
occurred if (A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities; or (B) during any period of two
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction described in
clauses (A) or (C) of this Subsection) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or (C) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least 80% of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
43
<PAGE>
<PAGE>
consolidation, or the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets.
ARTICLE XVI
PARTICIPATION, SERVICE AND CREDITED SERVICE FOR CERTAIN EMPLOYEES
Effective April 1, 1992, employees of the Law Office of Robert P.
Carlson ("Law Office Employees") became Employees of The Greater New York
Savings Bank. Notwithstanding anything to the contrary herein, a former Law
Office Employee who is an Employee of The Greater New York Savings Bank on April
1, 1992 shall become a Participant in this Plan on April 1, 1992 provided such
Employee has been credited with at least 1000 Hours of Service during the one
year period commencing on such Employee's employment commencement date (or
anniversary thereof) with the Law Office of Robert P. Carlson, or its
predecessor, Ahearn, Damanti & Carlson (together the "Law Office"), prior to
April 1, 1992. For purposes of determining the eligibility and the vested
interest of a former Law Office Employee who becomes a Participant in the Plan
on or after April 1, 1992, all periods of employment with the Law Office between
May 18, 1987 and March 31, 1992 shall be recognized.
ARTICLE XVII
MISCELLANEOUS
17.01 In case any provisions of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts of this Plan, but this Plan shall be construed and enforced as
if said illegal and invalid provisions had never been inserted herein.
17.02 This Plan shall be governed, construed, administered and regulated
in all respects under the laws of the state of New York, except insofar as they
shall have been superseded by the provisions
44
<PAGE>
<PAGE>
of ERISA.
17.03 Wherever any words are used herein in the masculine gender, they
shall be construed as though they were also used in the feminine gender in all
cases where they would so apply, and wherever any words are used herein in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
17.04 In the event of any merger or consolidation of the Plan with any
other Plan, or the transfer of its assets or liabilities to any other plan, each
Participant shall be entitled to receive a benefit (if the Plan then terminated)
immediately after such merger, consolidation or transfer that is equal to or
greater than the benefit he would have been entitled to receive immediately
before such merger, consolidation or transfer (if the Plan had then terminated).
17.05 (a) This Plan is based upon the condition precedent that it shall
be approved and qualified under Section 401(a) and 4975(e)(7) of the Code as an
employees' trust exempt from taxation under Section 501(a) of the Code. In the
event the Internal Revenue Service initially determines that the Plan does not
qualify under Sections 401(a) and 4975(e)(7) as aforesaid, all contributions
made by an Employer prior to such initial determination as to the qualification
of said Plan with respect to said Employer, may, at the discretion of said
Employer, revert to said Employer.
(b) Any contribution to the Plan made by an Employer by a mistake
in fact shall be returned to such Employer within one year after the date of the
contribution.
(c) Each contribution made hereunder pursuant to Article III is
conditioned upon its deductibility under Section 404 of the Code. To the extent
that the deductibility of any such contribution is disallowed, it shall be
returned to the Employer that made such contribution within one (1) year after
the date of disallowance of the deduction.
(d) This Plan is established for the exclusive benefit of the
Participants herein. Except as provided in the foregoing Subsections of this
Section, it shall be impossible for any assets of the Trust to revert to an
Employer.
45
<PAGE>
<PAGE>
(e) Anything herein to the contrary notwithstanding, neither the
establishment of the Plan, nor any modification hereof, nor the creation of the
Trust or any Account, nor the payment of any benefits shall be construed as
giving any Participant, Beneficiary or any other person whomsoever, any legal or
equitable right against the Company, an Employer, the Committee, or the Trustee,
unless such right shall be specifically provided for in the Plan; nor shall any
of the foregoing be construed as giving any Participant or any other employee of
the Employer the right to be retained in the service of the Employer of
Affiliate, and all Participants and other employees shall remain subject to
discharge to the same extent as if the Plan had never been adopted.
46
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
For The Years Ended December 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Primary
Net income ..................................... $18,498,916 $19,239,297 $12,951,303
Less: Dividends on Series A preferred stock,
net of tax benefits .................... (1,210,514) (1,710,237) (1,766,804)
Dividends on Series B preferred stock ... (6,000,000) (6,000,000) (5,550,000)
----------- ----------- -----------
Total preferred stock dividends ................ (7,210,514) (7,710,237) (7,316,804)
----------- ----------- -----------
Adjusted net income for primary earnings
per share computation ....................... $11,288,402 $11,529,060 $ 5,634,499
=========== =========== ===========
Weighted-average number of shares used to
compute primary earnings per share .......... 13,528,303 13,592,102 13,428,041
=========== =========== ===========
Primary earnings per share ..................... $ 0.83 $ 0.85 $ 0.42
=========== =========== ===========
Fully Diluted
Net income ..................................... $18,498,916 $19,239,297 $12,951,303
Less: Dividends on Series B preferred stock.. (6,000,000) (6,000,000) (5,550,000)
Adjustment to expenses due to proforma
conversion of Series A preferred stock
to common shares, net of taxes ........ (834,448) (1,020,000) (1,138,000)
----------- ----------- -----------
Adjusted net income for fully diluted earnings
per share computation ....................... $11,664,468 $12,219,297 $ 6,263,303
=========== =========== ===========
Weighted-average number of shares used to
compute fully diluted earnings per share .... 15,134,708 15,310,584 15,298,964
=========== =========== ===========
Fully diluted earnings per share ............... $ 0.77 $ 0.80 $ 0.41
=========== =========== ===========
</TABLE>
<PAGE>
<PAGE>
(Portions of 1996 Annual Report to Stockholders,
pages 23 to 76, and page 79)
- --------------------------------------------------------------------------------
The Greater New York Savings Bank
Selected Financial Data 23
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in thousands, except per share data)
At or for the years ended December 31, 1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Financial Total assets $ 2,541,888 $ 2,582,977 $ 2,572,631 $ 2,459,696 $ 2,702,849
Condition Data Loans receivable, net 951,340 1,071,175 1,191,323 1,285,061 1,427,428
Securities held to maturity, net 1,174,321 1,091,717 1,125,637 906,148 804,156
Securities available for sale, net 215,961 202,444 44,331 44,806 262,064
Deposits 1,666,674 1,715,340 1,732,453 1,811,311 2,195,850
Borrowed funds 640,384 641,242 622,356 438,024 333,763
Stockholders' equity 209,648 195,937 182,484 175,506 142,107
Nonperforming assets 45,561 55,769 123,674 186,092 245,835
Troubled debt restructurings 155,538 195,139 199,290 174,769 159,485
Net loan and real estate chargeoffs 8,771 48,826 30,124 53,751 50,258
Combined allowance for loan and
real estate losses 20,498 27,269 28,995 44,019 49,270
---------------------------------------------------------------------------------------------------
Operations Data Net interest and dividend income $ 72,357 $ 72,357 $ 77,841 $ 72,243 $ 74,172
Provisions for loan and real estate
losses 2,000 47,100 15,100 48,500 33,000
Net gain (loss) on sales of assets 766 84 (341) 1,801 22,662
Net gain on sale of branch - - - 5,191 -
Other noninterest income 10,031 10,335 6,140 8,920 9,951
Nonperforming loan and real estate
activities expense 3,457 8,398 11,470 15,597 10,485
Other noninterest expenses 48,151 47,539 47,119 49,466 48,804
----------------------------------------------------------
Income (loss) before taxes and
cumulative effect of accounting
change 29,546 (20,261) 9,951 (25,408) 14,496
Tax expense (benefit) 11,047 (39,500) (3,000) (3,750) 750
Cumulative effect of accounting
change(1) - - - 7,000 -
---------------------------------------------------------------------------------------------------
Net income (loss) $ 18,499 $ 19,239 $ 12,951 $ (14,658) $ 13,746
---------------------------------------------------------------------------------------------------
Preferred dividend requirements $ 7,211 $ 7,710 $ 7,317 $ 1,816 $ 1,848
Core earnings(2) 30,780 26,755 25,392 16,100 24,834
---------------------------------------------------------------------------------------------------
Per Common Primary earnings (loss) $ 0.83 $ 0.85 $ 0.42 $ (1.25) $ 0.92
Share Data Fully diluted earnings (loss) 0.77 0.80 0.41 (1.25) 0.79
Book value 11.31 10.55 9.71 9.36 10.65
Market value 13.63 12.00 8.75 7.25 3.69
Cash dividends declared 0.05 - - - -
---------------------------------------------------------------------------------------------------
Selected Earning asset yield 7.38% 7.51% 7.19% 7.09% 7.61%
Financial Cost of funds 4.60 4.74 4.07 4.14 5.01
Ratios Interest rate spread 2.78 2.77 3.12 2.95 2.60
Net interest margin 3.02 2.98 3.28 3.04 2.77
Efficiency ratio(3) 58.4 57.5 56.1 60.9 58.0
Stockholders' equity to total
assets 8.25 7.59 7.09 7.14 5.26
Nonperforming assets to total
assets 1.79 2.16 4.81 7.57 9.10
Negative one-year net gap to total
assets 0.2 5.7 8.5 9.5 8.7
---------------------------------------------------------------------------------------------------
Other Data Common shares outstanding 13,534,448 13,289,356 13,139,354 12,985,574 12,827,581
Number of branch offices 14 14 13 13 14
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The cumulative effect of accounting change
represents the adoption of SFAS No. 109, "Accounting for Income
Taxes."
(2) Core earnings is defined as income before:
taxes and cumulative effect of accounting change; net gain (loss) on
sales of assets; net gain on sale of branch; and provisions for
loan and real estate losses.
(3) The efficiency ratio is defined as other
noninterest expenses as a percentage of net interest and dividend
income plus other noninterest income.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 24
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
Overview of 1996 For 1996, The Greater New York Savings Bank and Subsidiaries
Results (the Bank) had net income of $18.5 million, or $.77 per
fully diluted common share, compared to $19.2 million, or
$.80 per share, in 1995. The 1996 results included $11.0
million of net tax expense, whereas net income for 1995
included $39.5 million of net tax benefits. The Bank became
taxable in 1996 for financial statement purposes due to the
recognition of a substantial amount of its deferred tax
asset in 1995.
Earnings before taxes rose to $29.5 million in 1996, from a
pre-tax loss of $20.3 million in 1995. The improvement was
primarily due to substantial reductions in the combined
provision for loan and real estate losses and expenses for
nonperforming loan and real estate activities. The Bank also
experienced increased fee income in 1996 from investment
product sales and banking services. In recognition of the
substantial improvements in the Bank's financial results and
condition over the last several years, in December 1996, the
Bank paid its first common dividend since 1990 of $.05 per
common share.
The combined provision for loan and real estate losses
declined to $2.0 million in 1996, from $47.1 million in
1995. The provision for 1995 included approximately $36
million related to the rapid disposition strategy initiated
in the fourth quarter, which was successful in reducing the
Bank's nonperforming assets by nearly $78 million since its
inception. Expenses for nonperforming loan and real estate
activities also fell sharply from $8.4 million in 1995, to
$3.5 million in 1996, or a 59% decline. Other noninterest
expenses aggregated $48.2 million in 1996, compared to $47.5
million in 1995, or an increase of 1%.
The Bank's net interest margin improved slightly to 3.02% in
1996, from 2.98% in 1995, while net interest and dividend
income amounted to $72.4 million in 1996, unchanged from
1995. The Bank's one-year interest rate sensitivity gap
improved from a negative 5.7% at December 31, 1995, to a
negative 0.2% at December 31, 1996. Noninterest income
amounted to $10.8 million in 1996, compared to $10.4 million
in 1995. Noninterest income for 1996 included gains
aggregating $2.3 million from the sale of mortgage servicing
rights and student loans, whereas the income for 1995
included $2.7 million realized from the prepayment of a
large commercial real estate loan. Fees from investment
product sales and other banking services increased in
aggregate by $1.1 million over 1995. Also, residential loan
originations nearly doubled to $128 million in 1996, from
$66 million last year.
Asset quality continued to improve as nonperforming assets
fell to $45.6 million, or 1.79% of total assets, at year-end
1996, from $55.8 million, or 2.16%, at December 31, 1995.
Loans categorized as troubled debt restructurings also
declined from $195.1 million at December 31, 1995, to $155.5
million at December 31, 1996. Net loan and real estate
chargeoffs for 1996 declined to $8.8 million, from $48.8
million in 1995. A substantial portion of the chargeoffs was
attributable to the rapid disposition strategy. Loans past
due for 30 days or more but less than 90 days also declined
to $30.6 million at year-end 1996, from $49.3 million at
December 31, 1995. Loans which became nonperforming during
the year and remained as such at year end amounted to $27.9
million and $25.1 million in 1996 and 1995, respectively. At
December 31, 1996, the combined allowance for loan and real
estate losses was $20.5 million, compared to $27.3 million
at December 31, 1995. The combined allowance (excluding
reserves attributable to real estate held for development)
represented 42% of nonperforming assets at December 31,
1996, compared to 46% at year-end 1995.
Return on average equity was 9.20% for 1996, compared to
10.18% for 1995, while the return on average assets was
0.72% for 1996, versus 0.74% for 1995. The lower returns
were a function of the Bank becoming taxable for financial
statement purposes in 1996. Stockholders' equity to total
assets improved to 8.25% at December 31, 1996, from 7.59% at
year-end 1995. At the same time, book value per common share
rose to $11.31 at December 31, 1996, from $10.55 a year ago.
The Bank's regulatory Tier 1 leverage and total risk-based
capital ratios increased to 7.06% and 14.62%, respectively,
at December 31, 1996, from 6.02% and 11.98% at December 31,
1995.
In January 1997, the Bank announced its intention to form a
holding company, which is subject to the required regulatory
and shareholder approvals. Under this proposal, Greater New
York Bancorp Inc. will become the holding company for the
Bank. All the outstanding common and preferred stock of the
Bank will be converted, on a one-for-one basis, into all of
the outstanding common and preferred stock of Greater New
York Bancorp Inc. After this reorganization, the Bank will
continue its existing business as a subsidiary of Greater
New York Bancorp Inc. The consolidated capitalization,
assets, liabilities, net income, stockholders' equity and
financial statements of Greater New York Bancorp Inc.
immediately following the reorganization will be the same as
those of the Bank prior to the reorganization. The holding
company is expected to provide the Bank with increased
flexibility in the pursuit of its strategic objectives.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 25
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
Comparison of At December 31, 1996, the Bank's total assets amounted to
Financial $2.54 billion, compared to $2.58 billion at December 31,
Condition at 1995. The slight decline was due to a lower level of loans
December 31, receivable, substantially offset by increases in securities
1996 and 1995 held to maturity and available for sale. Total liabilities
aggregated $2.33 billion at December 31, 1996, compared to
$2.39 billion at year-end 1995, reflecting a lower level of
deposits.
At year-end 1996, total assets consisted of: securities held
to maturity of $1.17 billion, or 46% of total assets; loans
receivable, net, of $951.3 million, or 37%; securities
available for sale of $216.0 million, or 9%; and all other
assets aggregating $200.3 million, or 8%. Deposits amounted
to $1.67 billion, or 66% of total assets; borrowed funds
totaled $640.4 million, or 25%; all other liabilities
aggregated $25.2 million, or 1%; and stockholders' equity
amounted to $209.6 million, or 8%. Except for loans,
securities, deposits and stockholders' equity, the
composition of the Bank's balance sheet remained relatively
unchanged from year-end 1995. The Bank anticipates that its
assets will grow modestly in 1997.
Securities
The Bank invests primarily in mortgage-backed and other
securities after satisfying its liquidity objectives and
lending commitments. To manage interest rate risk, the Bank
purchases adjustable-rate securities (most of which have
interest rates that adjust at intervals not in excess of 12
months), or fixed-rate securities that have expected average
lives of less than six years (even though the stated final
maturity may be in excess of six years). In general, the
Bank's investments in securities carry a significantly lower
credit risk than do its loans receivable. The Bank only
purchases securities that are issued by the U.S. government
or one of its agencies or sponsored enterprises, or
securities rated (at the time of purchase) in one of the
three highest investment grades as determined by nationally
recognized securities rating agencies. Over the last several
years, the Bank's portfolio of securities as a percentage of
total assets has increased, while loans receivable have
decreased. The reasons for this shift are discussed in the
section "Loans Receivable."
Securities available for sale amounted to $216.0 million at
December 31, 1996, compared to $202.4 million at year-end
1995. The increase was primarily due to purchases of $38.5
million of adjustable-rate, mortgage-backed securities,
partially offset by principal repayments. At December 31,
1996, securities available for sale consisted of $171.5
million of mortgage-backed securities and $44.5 million of
corporate notes. More than half of the securities in the
available-for-sale portfolio were adjustable rate. The
available-for-sale portfolio is carried at estimated fair
value, which approximated its amortized cost at December 31,
1996 and 1995. The Bank maintains the securities
available-for-sale account to provide flexibility in the
management of its asset and liability strategies.
Securities that the Bank has the intent and ability to hold
to maturity are classified as held to maturity and carried
at amortized cost. The estimated fair value of the
held-to-maturity portfolio was $1.16 billion, compared to
its carrying value of $1.17 billion at December 31, 1996. At
year-end 1995, the estimated fair value amounted to $1.08
billion, compared to a carrying value of $1.09 billion.
Mortgage-backed securities held to maturity totaled $1.04
billion at December 31, 1996, compared to $952.8 million at
December 31, 1995. The increase reflected purchases of
$276.8 million of adjustable-rate securities, partially
offset by principal repayments. At December 31, 1996, this
portfolio consisted of $750.2 million of adjustable-rate
securities and $292.7 million of fixed-rate securities, and
the entire portfolio had an expected weighted-average life
of approximately seven and one-half years. Changes in
interest rates can impact the average lives of
mortgage-backed securities. See the section "Interest Rate
Sensitivity" for a further discussion.
Other bonds and notes held to maturity amounted to $131.5
million at December 31, 1996, compared to $138.9 million at
December 31, 1995. The decrease reflected principal
repayments. At year-end 1996, the portfolio consisted
predominantly of adjustable-rate corporate notes and
fixed-rate revenue bonds issued by New York State and City
agencies that are insured by the Federal Housing
Administration. The revenue bonds were sold to investment
trust funds in previous transactions that are being
accounted for as collateralized financing arrangements for
financial statement purposes.
Due to a highly liquid market for mortgage-backed
securities, the Bank uses such securities as collateral in
various borrowing arrangements. At December 31, 1996,
mortgage-backed securities with a carrying value of $568.9
million were pledged as collateral in such arrangements. For
further information on assets sold or pledged in various
collateralized financing arrangements, see note 11 "Asset
and Dividend Restrictions" to the consolidated financial
statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 26
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
The credit quality and related carrying and estimated fair
values of the securities in the held-to-maturity and
available-for-sale portfolios at December 31, are summarized
in the aggregate as follows:
<TABLE>
<CAPTION>
1996 1995
------------------------------- -------------------------------
Carrying % of Estimated Carrying % of Estimated
($ in millions) Value Total Fair Value Value Total Fair Value
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. government/agencies $ 789.4 56.8% $ 784.2 $ 646.7 50.0% $ 643.4
States and municipals 57.1 4.1 56.9 60.6 4.7 60.8
AAA rated securities 329.9 23.7 326.3 333.4 25.7 331.4
AA rated securities 89.7 6.5 90.0 164.7 12.7 164.7
A rated securities 92.1 6.6 87.5 64.9 5.0 63.9
BBB rated securities 32.1 2.3 30.1 23.9 1.9 23.0
- ------------------------------------------------------------------------------------------------------------------------------
$1,390.3 100.0% $1,375.0 $1,294.2 100.0% $1,287.2
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
At December 31, 1996, securities which were rated BBB
consisted of $24.0 million of medium-term, adjustable-rate
corporate notes and $8.1 million of adjustable-rate,
nonagency mortgage-backed securities. Securities with such
ratings are subject to a higher degree of default of
interest and/or principal payments due to various factors,
including the financial condition of the issuer and
delinquency rates of the underlying loans collateralizing
mortgage-backed securities. Included in the Bank's
investment in mortgage-backed securities at December 31,
1996, was an additional $27.3 million of nonagency
securities with similar characteristics as those rated BBB
but with a higher credit rating. The Bank believes that the
unrealized losses in the security portfolios are temporary
and a function of fluctuations in the interest rate
environment as well as changes in credit risk factors.
However, no assurance can be given that any of the losses
will not be recognized in the future.
The Bank's investments in nonagency mortgage-backed
securities, which aggregated $440.8 million at December 31,
1996, represent senior class obligations which are
collateralized by pools of residential 1-4 family loans.
These mortgage loans typically do not qualify for agency
securitization or purchase programs. Nonagency
mortgage-backed securities are subject to certain
credit-related risks not normally associated with agency
mortgage-backed securities. To help protect investors from
credit risk, nonagency securities are structured to provide
for the timely payment of principal and interest which is
supported to certain levels by various forms of credit
enhancements that are in the form of financial guarantees
from insurers, letters of credit or subordination features.
The investment in the capital stock of the Federal Home Loan
Bank of New York (FHLB), which pays a dividend, is required
in order to borrow from the FHLB on a secured basis. The
amount of the investment, which equaled $23.6 million and
$27.9 million at December 31, 1996 and 1995, respectively,
fluctuates based on outstanding borrowings with the FHLB.
Loans Receivable
Over the last several years, the Bank's loan portfolio as a
percentage of total assets has decreased, while its
portfolio of securities to total assets has increased. This
shift is due to various factors. First, the low interest
rate environment caused a larger than normal amount of
prepayments of higher-yielding commercial real estate and
multi-family loans in 1995 and 1996. Second, in order to
reduce its exposure to commercial real estate loans, the
Bank has not made such loans since 1990 (other than those to
finance sales of foreclosed real estate or to convert
maturing construction advances to permanent financing). In
addition, only a modest amount of new multi-family loans
have been originated, primarily due to the reduced
profitability of such lending resulting from competitive
pricing practices. In determining whether to originate
loans, the Bank considers, among other things, whether the
new loan can earn a risk-adjusted return that is greater
than an alternative security investment. Third, despite a
substantially higher level of 1-4 family and cooperative
loan originations over the last two years, the low rate
environment caused a relatively large number of these
originations to be of the long-term, fixed-rate variety,
which the Bank normally sells into the secondary market.
Finally, a substantial portion of the student loan portfolio
was sold in 1996 due to reduced profitability resulting from
legislative changes that increased the servicing costs
associated with such loans.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 27
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
The lower level of loans receivable (particularly
higher-yielding commercial real estate and multi-family
loans) has adversely impacted the Bank's net interest
margin. However, such impact has been largely offset by
increases in the ratio of the Bank's interest-earning assets
to interest-bearing liabilities resulting from the
investment of funds generated from operations and sales of
nonperforming assets. The level and type of earning assets
directly impacts the related amounts of interest and fee
income to be recognized in future periods. The Bank expects
its residential loan originations, including its
multi-family lending, to increase in 1997 from 1996 levels.
In addition to profitability, competition and general
economic conditions, the volume and type of loans originated
by the Bank are affected by: management's perception of the
demand and credit risk of various types of real estate
financing; the availability of funds; the Bank's portfolio
needs and its ability to sell loans in the secondary market.
Over the last several years, the Bank has focused on
residential lending. This effort has included: the
introduction of new loan products; new mortgage centers;
additional loan representatives, processors and
underwriters; the use of mortgage brokers; and increased
advertising. To manage interest rate risk, adjustable-rate
and medium-term residential and cooperative loans are
originated for the Bank's portfolio, while longer-term,
fixed-rate loans are predominantly originated for sale into
the secondary market.
Loans originated and purchased for the years ended December
31, are summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------
For portfolio:
1-4 family originated $ 39,514 $ 13,184 $ 23,823
1-4 family purchased 517 482 61
Multi-family originated 4,565 8,048 7,630
Multi-family purchased - 12,700 -
Commercial real estate originated 3,070 11,760 14,832
Commercial real estate purchased - - 5,936
Cooperative originated 48,433 14,728 9,097
Student originated 7,820 8,722 11,676
Other consumer originated 10,882 9,848 8,652
For sale:
1-4 family originated 30,926 31,992 25,176
Cooperative originated 9,408 6,040 1,025
Student originated 2,642 - -
- ----------------------------------------------------------------------------------------------------------------------
$157,777 $117,504 $107,908
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 28
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
The loan portfolio at December 31, is summarized as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------------- ----------------------------
No. of % of No. of % of
($ in thousands) Loans Amount Total Loans Amount Total
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Residential 1-4 family:
Conventional adjustable rate 1,412 $164,708 17 % 1,390 $ 145,604 13 %
Conventional fixed rate 249 14,442 2 282 14,126 1
FHA and VA 4,860 21,027 2 6,331 30,935 3
- --------------------------------------------------------------------------------------------------------------------------
6,521 200,177 21 8,003 190,665 17
- --------------------------------------------------------------------------------------------------------------------------
Residential multi-family:
Conventional 163 216,348 22 185 263,792 24
FHA project 7 12,283 1 7 12,548 1
- --------------------------------------------------------------------------------------------------------------------------
170 228,631 23 192 276,340 25
- --------------------------------------------------------------------------------------------------------------------------
Commercial real estate 254 409,218 42 287 507,279 46
Cooperative 1,302 117,799 12 1,014 79,335 7
Student 2,058 6,673 1 10,352 37,819 4
Other consumer 1,994 8,604 1 1,908 8,393 1
Unearned discount and fees - (2,534) - - (4,663) -
- --------------------------------------------------------------------------------------------------------------------------
12,299 $968,568 100 % 21,756 $1,095,168 100 %
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
The loan portfolio declined by $126.6 million in 1996. The
decrease was primarily due to: prepayments, satisfactions
and normal amortization aggregating $173.4 million, sales of
$95.3 million and chargeoffs of $9.3 million, partially
offset by $157.8 million of loan originations and purchases.
The prepayments and satisfactions related to multi-family
and commercial real estate loans aggregated $103.8 million
in 1996.
The Bank's loan portfolio is concentrated in commercial real
estate and multi-family loans (most of which were originated
prior to 1991). Such loans aggregated $637.8 million,
representing 65% of the loan portfolio, at December 31,
1996. The remaining portfolio consisted predominantly of
$318.0 million, or 33%, of 1-4 family residential loans,
including cooperative loans and loans insured by the Federal
Housing Authority (FHA) or partially guaranteed by the
Veterans Administration (VA). As noted earlier, in 1996 the
Bank sold substantially all of its student loan portfolio,
which is discussed further in the section "Comparison of
Results of Operations for the Years Ended December 31, 1996
and 1995." The Bank continues to originate student loans
with the intention to sell them into the secondary market.
The repricing of the Bank's adjustable-rate 1-4 family and
cooperative loans is based predominantly on a fixed margin
mainly above an index of U.S. Treasury securities, for
either one-, three- or five-year terms. These loans
generally carry periodic and lifetime caps on changes in
interest rates. The Bank's mortgage loans on commercial real
estate and multi-family properties have original terms of no
more than ten years and interest rates that reset
predominantly at the end of five years or less, based on a
fixed margin mainly over the five-year FHLB cost of funds
rate.
At December 31, 1996, 86% of multi-family and commercial
real estate loans (also sometimes referred to collectively
as commercial real estate loans hereafter) and 88% of 1-4
family and cooperative loans were secured by properties
located in either New York, New Jersey or Connecticut.
Mortgage loans secured by properties outside this region
consisted of FHA and VA loans (including FHA project loans)
totaling $16.5 million, commercial real estate loans in
other northeast states aggregating $81.5 million and $33.0
million of 1-4 family loans in Florida (which were
originated before 1991).
Credit risk, which represents the possibility of the Bank
not recovering amounts due from its borrowers, associated
with the 1-4 family loan portfolio, including cooperative
loans, is directly related to local economic conditions as
well as the Bank's underwriting standards which are
generally consistent with the standards of the secondary
market. Economic conditions affect the income levels of
borrowers and the market value of the underlying collateral.
Commercial real estate loans typically bear higher interest
rates than 1-4 family and cooperative loans, and entail
certain risks not normally found in 1-4 family and
cooperative mortgage lending. Commercial real estate loans
usually involve larger loans to single borrowers. In
addition, satisfactory payment experience on loans secured
by income-producing properties (such as office
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 29
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
buildings, shopping centers and rental and cooperative
apartment buildings) is largely dependent on high levels of
occupancy. Thus, these loans are more sensitive to adverse
conditions in the real estate market and the economy or
specific conditions at or in the vicinity of the property's
location.
Loans Modified in Troubled Debt Restructurings and Impaired
Loans
At December 31, 1996, $155.5 million, or 26%, of the Bank's
performing multi-family and commercial real estate loans
were categorized as troubled debt restructurings under the
criteria of SFAS No. 15, "Accounting by Debtors and
Creditors for Troubled Debt Restructurings," compared to
$195.1 million, or 26%, at December 31, 1995. Troubled debt
restructurings (TDRs) are loans on which the Bank has
granted certain concessions in light of the borrowers'
financial difficulties. These concessions, which are
individually negotiated, generally provide for interest
rates that are lower than the original contractual rate and
may also relate to maturity dates and payment terms. The
objective of granting concessions is to maximize the
recovery of the Bank's investment. Loans categorized as TDRs
have a higher degree of credit risk than the remainder of
the performing portfolio.
Loans classified as troubled debt restructurings at December
31, are summarized as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------------------------- --------------------------------------
Current Original Current Original
($ in thousands) No. Amount Rate(1) Rate(1) No. Amount Rate(1) Rate(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multi-family 17 $ 37,892 8.13% 9.73% 27 $ 56,442 8.44% 9.73%
Commercial real estate 45 117,646 7.50 9.17 55 138,697 7.54 9.86
- --------------------------------------------------------------------------------------------------------------------------------
Total(2) 62 $155,538 7.66% 9.31% 82 $195,139 7.80% 9.82%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents weighted-average rate.
(2) Includes $83.0 million and $72.2 million of
loans at December 31, 1996 and 1995, respectively,
that are considered impaired under the criteria of
SFAS No. 114.
The reduction in TDRs in 1996 was primarily due to: $23.2
million of loans recategorized to a fully performing status;
$14.6 million of satisfactions and repayments; $7.4 million
of net transfers to a nonperforming status; and $1.6 million
of chargeoffs. The sum of these items was partially offset
by $7.1 million of new restructurings. A significant portion
of the reduction in the TDRs was part of the rapid
disposition strategy, which is discussed in the section
"Nonperforming Assets." At December 31, 1996, the ten
largest loans classified as TDRs aggregated $82.3 million
and had a current weighted-average interest rate of 7.10%,
compared to an original rate of 9.03%. At December 31, 1996,
the Bank had no commitments to lend additional funds to
borrowers with mortgages whose terms have been modified in a
TDR.
A nonperforming loan that is restructured is normally
accounted for as a cash basis restructured loan. After it
develops a satisfactory payment history, the loan is placed
on an accrual basis but remains classified as a TDR. At
December 31, 1996, one loan in the amount of $9.0 million
was classified as a TDR and maintained on a cash basis,
compared to two loans totaling $2.2 million at December 31,
1995. An accruing TDR that yields a market rate of interest
is considered for recategorization to a fully performing
status after it has performed for an appropriate period.
Loans that are recategorized are done so no earlier than the
year following the restructuring and are no longer
classified as TDRs and, if applicable, impaired loans.
During 1996, 1995 and 1994, $23.2 million, $3.8 million and
$43.5 million, respectively, of TDRs were reclassified to a
fully performing status.
Effective January 1, 1995, under the criteria of SFAS No.
114, "Accounting by Creditors for Impairment of a Loan," a
loan is normally deemed impaired when it is probable the
Bank will be unable to collect both principal and interest
due according to the contractual terms. Loans that were
restructured prior to January 1, 1995 and performing in
accordance with their restructured terms are not considered
impaired loans under SFAS No. 114. Loans restructured after
December 31, 1994 are considered impaired. A valuation
allowance is established (with a corresponding charge to the
provision for loan losses) when the fair value of the
property that collateralizes the impaired loan is less than
the recorded investment in the loan. However, the Bank
typically records a chargeoff for this difference which
results in little or no valuation allowance being
maintained. The valuation allowance, if any, is part of the
overall allowance for loan losses. The Bank's process of
identifying impaired loans is conducted in conjunction with
the review of the adequacy of the allowance for loan losses.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 30
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
Impaired loans at a minimum include all nonperforming loans
(including an insignificant amount of smaller-balance
residential loans) and loans restructured after December 31,
1994.
Information related to impaired loans is summarized as
follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Principal balance of impaired loans outstanding at December 31:
Nonperforming loans $ 31,821 $ 39,369
Troubled debt restructurings (post SFAS No. 114) 82,964 72,170
Other performing loans 878 13,195
- ----------------------------------------------------------------------------------------------------------------------
$115,663 $124,734
- ----------------------------------------------------------------------------------------------------------------------
Average balance of impaired loans for the year $124,109 $114,947
Chargeoffs of impaired loans for the year $ 8,214 $ 27,985
Valuation allowance for impaired loans at year end $ 1,650 $ 475
Principal balance of impaired loans with a valuation allowance $ 4,389 $ 3,161
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Forgone interest income on loans for the years ended December 31, is summarized
as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Interest that would have been accrued at original contract rates:
Nonperforming loans $ 5,339 $ 6,815 $ 8,410
Troubled debt restructurings (pre SFAS No. 114) 9,625 16,573 23,040
Troubled debt restructurings (post SFAS No. 114) 7,807 4,278 -
Other performing impaired loans 528 339 -
- ----------------------------------------------------------------------------------------------------------------------
23,299 28,005 31,450
- ----------------------------------------------------------------------------------------------------------------------
Amount recognized as interest income:
Nonperforming loans 394 647 1,248
Troubled debt restructurings (pre SFAS No. 114) 7,674 12,331 16,737
Troubled debt restructurings (post SFAS No. 114) 6,132 2,965 -
Other performing loans 528 339 -
- ----------------------------------------------------------------------------------------------------------------------
14,728 16,282 17,985
- ----------------------------------------------------------------------------------------------------------------------
Foregone interest income $ 8,571 $ 11,723 $ 13,465
- ----------------------------------------------------------------------------------------------------------------------
Cash basis interest income $ 789 $ 1,181 $ 1,536
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Many of the restructuring agreements call for a portion of
the foregone interest income to be paid to the Bank at a
later date. Since receipt of these payments is not assured,
income is not currently recognized. Many restructured loans
also provide for increases in the interest rate over the
life of the loan, although such increases are not assured.
(In any event, a portion of the foregone interest related to
TDRs may not have been realized by the Bank under normal
circumstances, based on the dramatic decline in market
interest rates since the loans were originated. The lower
rates have resulted in a significant amount of prepayments
in the Bank's commercial real estate and multi-family loan
portfolio.)
Nonperforming Assets
Nonperforming assets, which consist of nonperforming loans
and real estate acquired through foreclosure, declined to
$45.6 million, or 1.79% of total assets, at December 31,
1996, from $55.8 million, or 2.16%, at December 31, 1995.
Nonperforming loans are loans that are 90 days or more past
due and not accruing interest. The decline in nonperforming
assets primarily reflected sales and chargeoffs attributable
to the rapid disposition strategy, partially offset by a
higher than anticipated level of new nonperforming loans.
Such loans aggregated $48.3 million in 1996, of which $27.9
million remained on a nonperforming status at year end. A
significant portion of the $27.9 million was attributable to
one loan relationship that previously had been classified as
a TDR.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 31
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
In the fourth quarter of 1995, the Bank implemented a rapid
disposition strategy with respect to its nonperforming and
underperforming assets that consisted of several actions.
The main objective was to reduce the Bank's then-remaining
nonperforming assets of nearly $100 million, representing
3.8% of total assets, as quickly as possible. Management
determined that the future benefits of accelerating the sale
or disposition of these assets exceeded the costs and risks
of continuing to hold them. The strategy also called for a
reduction in loans categorized as troubled debt
restructurings. As discussed below, management believes the
overall goal of the strategy, to improve asset quality and
future core earnings, was achieved. The Bank recorded a
combined provision for loan and real estate losses of
approximately $36 million in the fourth quarter of 1995
related to the rapid disposition strategy, most of which was
used to provide for loan and real estate chargeoffs.
Consistent with the strategy, in December 1995, the Bank
completed a bulk sale of $21.8 million of nonperforming
assets for net proceeds of $12.5 million and simultaneously
increased the allowances for loan and real estate losses to
facilitate the rapid sale of the remaining nonperforming
assets of $76.6 million. Nonperforming assets of $43.6
million were anticipated to be disposed of in the near term
and were adjusted downward to an estimated liquidation value
of $29.2 million at December 31, 1995, based on indications
of value provided by the bulk sale process. The adjustments
resulted in $14.4 million of loan and real estate
chargeoffs. At year-end 1995, there were additional
nonperforming assets that were not immediately available for
disposition, due to the absence of legal title or other
obstacles, that had a carrying value of $26.6 million (after
chargeoffs of $6.4 million).
During 1996, $30.3 million of the aforementioned assets were
sold, satisfied or reinstated (proceeds from sales
approximated or slightly exceeded the assets' net carrying
values). As a result, nonperforming assets with a carrying
value of $22.3 million (after additional chargeoffs of $3.2
million in 1996) remained to be disposed of under the
strategy at year-end 1996. The Bank expects a significant
portion of such assets to be sold during 1997 for amounts
that will approximate their net carrying values. In summary,
the rapid disposition strategy has resulted in nearly $78
million of reductions in nonperforming assets since its
inception.
With respect to the disposition or resolution of various
loans categorized as TDRs, at the encouragement of the Bank
in 1996, $9.3 million of TDRs were satisfied by the
borrowers at a discount to carrying value. In addition,
$23.2 million of TDRs (that were performing in accordance
with their restructured terms for an extended period) were
reclassified to a fully performing status as a result of
improved credit risk profiles. (Such profiles take into
account loan-to-value and debt service coverage ratios and
internal credit risk evaluations.) These actions resulted in
$1.6 million of loan chargeoffs in 1996 relating to this
part of the strategy. Based primarily on economic
considerations, the Bank considers the part of the rapid
disposition strategy related to the reduction of TDRs to be
completed.
The change in nonperforming assets for the years ended
December 31, is summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Beginning balance $ 55,769 $123,674 $186,092
New nonperforming loans 48,306 30,834 33,130
Other additions - 84 1,072
Loans restructured (13,950) (6,601) (21,974)
Loans sold, satisfied or reinstated (25,865) (11,813) (9,760)
Chargeoffs (8,528) (44,181) (24,448)
Sales/dispositions of other real estate (9,656) (35,885) (39,703)
Other reductions (515) (343) (735)
- ----------------------------------------------------------------------------------------------------------------------
Ending balance $ 45,561 $ 55,769 $123,674
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 32
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
The composition of nonperforming assets at December
31, is summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
-------------- --------------- ---------------
($ in thousands) No. Amount No. Amount No. Amount
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nonperforming loans:
1-4 family, cooperative and other 21 $ 2,082 7 $ 403 69 $ 9,189
Multi-family 11 21,428 4 9,949 9 27,116
Commercial real estate 5 8,311 12 29,017 15 34,465
- --------------------------------------------------------------------------------------------------------------------------
37 31,821 23 39,369 93 70,770
- --------------------------------------------------------------------------------------------------------------------------
Other real estate:
1-4 family, cooperative and other 4 54 9 349 56 4,701
Multi-family 1 3,512 3 5,410 7 15,561
Commercial real estate 10 10,174 11 9,455 14 28,696
Construction - - 1 1,186 2 3,946
- --------------------------------------------------------------------------------------------------------------------------
15 13,740 24 16,400 79 52,904
- --------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets 52 $45,561 47 $55,769 172 $123,674
- --------------------------------------------------------------------------------------------------------------------------
Nonperforming assets as a percentage of total assets 1.79% 2.16% 4.81%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
In addition to the above, loans 90 days or more past due
upon which the Bank was accruing interest amounted to $2.1
million at December 31, 1996, $4.7 million at December 31,
1995 and $2.2 million at December 31, 1994. Such loans
continued to accrue interest since the obligations were
considered both well secured and in the process of
collection. Furthermore, these loans were government
guaranteed. Loans past due for 30 days or more but less than
90 days amounted to $30.6 million at December 31, 1996,
compared to $49.3 million at December 31, 1995 and $40.8
million at December 31, 1994. A large number of these
past-due loans were TDRs. The Bank does not have any
commitments to lend additional funds to borrowers with loans
on a nonperforming status at December 31, 1996.
Real Estate Held for Development and Acquired Through
Foreclosure
Real estate held for development and acquired through
foreclosure at December 31, is reported in other assets and
summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Real estate acquired through foreclosure $13,740 $16,400
Real estate held for development 23,174 22,952
----------------------------
36,914 39,352
Allowance for real estate losses (3,270) (3,276)
- ----------------------------------------------------------------------------------------------------------------------
$33,644 $36,076
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Real estate acquired through foreclosure declined by $2.7
million during 1996, primarily due to sales of $9.7 million
and chargeoffs of $1.0 million, partially offset by net
transfers of $8.5 million from nonperforming loans upon
foreclosure. See the section "Nonperforming Assets"
concerning the rapid disposition strategy adopted by the
Bank in the fourth quarter of 1995.
Real estate held for development at December 31, 1996, which
is carried at the lower of cost or estimated net realizable
value, consisted of equity investments in five joint venture
projects that were originated before 1990. These projects,
which predominantly involve the development of moderately
priced residential housing located on Long Island, New York,
are in various stages of completion, ranging from the latter
portion of the approval process to the final phase of the
disposition process. These projects have progressed much
more slowly than originally anticipated due to delays in the
subdivision approval process and the recession that occurred
in the local economy prior to 1994. The Bank has
restructured a number of its joint venture agreements with
the objective of facilitating the disposition of these
investments.
During 1996, the Bank invested $0.2 million into various
existing joint venture projects, primarily to satisfy
expenses such as real estate taxes and insurance and to
carry out specific disposition strategies. In addition,
other expenditures of
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 33
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
$0.2 million in 1996 and $0.1 million in 1995 associated
with the joint venture projects were included in
nonperforming loan and real estate activities expense in the
consolidated statements of income. At December 31, 1996 and
1995, a $1.4 million reserve for losses on joint ventures is
included in the allowance for real estate losses. The Bank
has unfunded commitments on its investments in joint
ventures totaling $0.4 million at December 31, 1996. See the
section "Stockholders' Equity and Regulatory Capital" for a
discussion regarding The Federal Deposit Insurance
Corporation Improvement Act of 1991, which restricts the
ability of the Bank to continue its real estate joint
venture activities.
Allowances for Loan and Real Estate Losses
The Bank monitors its loan and real estate portfolios to
determine the level of the related loss allowances based
upon various factors. In determining the allowances for loan
and real estate losses, management is required to make
estimates that are particularly susceptible to change. The
adequacy of the allowances is evaluated quarterly with
consideration given to: known and inherent risks in the
portfolios; the status of particular loans and properties
and estimates of fair value thereof; historical chargeoffs
and recoveries; adverse situations which may affect the
borrowers' ability to repay; the expected disposition period
and selling costs of foreclosed real estate; the net
realizable value of real estate held for development; and
management's perception of current and future local economic
and market conditions. In addition, the Bank's regulators,
as an integral part of their examination process,
periodically review the Bank's allowances for loan and real
estate losses. Accordingly, the Bank may be required to take
certain chargeoffs and/or recognize additions to the
allowances based on the regulators' judgments concerning
information available to them during their examination.
While management believes that the allowances for loan and
real estate losses are adequate, additions to the allowances
may be necessary in the event of future adverse changes in
economic conditions or other factors, such as those
described previously, that management cannot predict.
During 1989 to 1993, the Bank experienced a significant
increase in nonperforming and delinquent commercial real
estate loans which resulted in large provisions for loan and
real estate losses. In response thereto, the Bank
strengthened its controls over credit risk and related
management processes and implemented various strategies
designed to reduce the level of such assets as well as their
related costs. The strategies have included individual sales
and dispositions, a bulk sale, loan restructurings and
chargeoffs, all of which have significantly improved the
Bank's asset quality and substantially impacted the
allowances for loan and real estate losses. See the section
"Nonperforming Assets" for a discussion of the rapid
disposition strategy.
The allowance for loan losses amounted to $17.2 million at
December 31, 1996, compared to $24.0 million at December 31,
1995 and $23.3 million at December 31, 1994. The provision
for loan losses was $1.5 million in 1996, compared to $29.4
million in 1995 and $8.0 million in 1994. Net loan
chargeoffs totaled $8.3 million in 1996, $28.8 million in
1995 and $15.0 million in 1994. At December 31, 1996, the
ratio of the allowance for loan losses to nonperforming
loans was 54%, compared to 61% at December 31, 1995 and 33%
at December 31, 1994. The allowance for loan losses at each
year end predominantly related to commercial real estate and
multi-family loans.
The allowance for real estate losses amounted to $3.3
million at December 31, 1996 and 1995 and $5.6 million at
December 31, 1994. The provision for real estate losses was
$0.5 million in 1996, compared to $17.7 million in 1995 and
$7.1 million in 1994. Net real estate chargeoffs totaled
$0.5 million in 1996, $20.1 million in 1995 and $15.2
million in 1994. The ratio of the allowance for real estate
losses (exclusive of the reserve attributable to joint
ventures) to real estate acquired through foreclosure was
13% at December 31, 1996, compared to 11% at year-end 1995
and 9% at December 31, 1994. The portion of the allowance
attributable to joint ventures amounted to $1.4 million at
December 31, 1996 and 1995, and $0.9 million at December 31,
1994.
Deferred Tax Asset
At December 31, 1996, the Bank's net deferred tax asset,
after a valuation allowance, amounted to $45.4 million,
compared to $55.1 million at December 31, 1995. The
valuation allowance amounted to $9.2 million at December 31,
1996, compared to $12.0 million at December 31, 1995. The
asset represents the unrealized benefit related to unused
operating loss and tax credit carryforwards, and net
temporary differences between the financial statement
carrying amounts of existing assets and liabilities and
their respective tax bases that will result in future tax
deductions. The net temporary differences substantially
relate to credit losses and related expenses recognized in
prior years for financial
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 34
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
statement purposes but not yet deducted for tax purposes.
The Bank utilized a portion of these deductions in 1996
which reduced the net deferred tax asset. Deferred income
tax expense of $10.5 million was recorded in the
consolidated statement of income for 1996, compared to a
deferred tax benefit of $40.1 million in 1995 and $3.5
million in 1994.
The determination of the need for a valuation allowance is
based on whether the Bank can conclude that the asset is
more likely than not to be realized in the future in
accordance with the criteria of SFAS No. 109, "Accounting
for Income Taxes." This evaluation is predicated on whether
the Bank will have sufficient future taxable income to
realize the asset, and whether the net tax deductible items
represented by the asset will reverse in future periods in
which the Bank generates such income. Consistent with the
significant reductions of nonperforming assets and related
expenses over the past several years, the Bank believes that
the level and predictability of its future taxable income
has and will continue to increase. In addition, the Bank
believes the net deductible differences represented by the
asset will reverse during periods in which the Bank
generates taxable income. As a result, the Bank has
recognized a significant portion of its deferred tax asset
to date, primarily through adjustments to the valuation
allowance. The allowance declined by $2.8 million, $24.3
million and $3.5 million in 1996, 1995 and 1994,
respectively.
The valuation allowance at December 31, 1996 relates to that
portion of the asset which will result in tax deductions
beyond the timeframe in which the Bank can estimate, with a
high degree of predictability, a similar amount of taxable
income. The Bank will continue to evaluate whether the
maintenance or magnitude of its remaining valuation
allowance is appropriate in light of future facts and
circumstances. As a result, the allowance will be subject to
ongoing adjustments in connection with reassessments of
future levels of taxable income. The Bank will need to
generate approximately $99 million of future taxable income
to realize its net deferred tax asset of $45.4 million at
December 31, 1996. Federal and New York State legislation
was enacted in 1996 which impacts special bad debt reserve
methods used by savings banks for income tax purposes. For a
further discussion, see note 13 "Federal, State and Local
Income Taxes" to the consolidated financial statements.
Deposits
Deposit liabilities, which are the Bank's primary source of
funds, declined by $48.7 million to $1.67 billion at
December 31, 1996, while the mix of deposits remained
unchanged from year-end 1995. At December 31, 1996, the
Bank's total deposits consisted of $871.2 million, or 52%,
of certificates of deposit and $795.5 million, or 48%, of
savings and other low-cost accounts. This compared to $887.4
million, or 52%, and $828.0 million, or 48%, respectively,
at December 31, 1995. The weighted-average stated rate on
deposit liabilities declined to 3.89% at December 31, 1996,
from 4.02% at December 31, 1995.
Borrowed Funds
In addition to deposits, the Bank utilizes other sources of
funds in the form of advances from the FHLB and borrowings
in the form of collateralized repurchase agreements,
depending on terms available. In 1995 and 1996, the Bank
significantly expanded its utilization of collateralized
repurchase agreements, generally with maturities of (or with
rates that reset within) 90 days or less. At December 31,
1996, borrowed funds, which also included the Bank's ESOP
debt, aggregated $640.4 million, compared to $641.2 million
at December 31, 1995. At December 31, 1996, FHLB advances
totaled $155.0 million and repurchase agreements totaled
$409.5 million, compared to $195.0 million and $365.0
million, respectively, at December 31, 1995. At December 31,
1996 and 1995, borrowed funds represented 25% of total
assets.
Stockholders' Equity and Regulatory Capital
Stockholders' equity increased from $195.9 million at
December 31, 1995, to $209.6 million at December 31, 1996.
The increase was primarily due to net income of $18.5
million, partially offset by cash dividends declared on
preferred and common stock aggregating $7.9 million (net
of applicable tax benefits on the ESOP preferred stock).
To be considered adequately capitalized, the Bank is
currently required to maintain, for regulatory and reporting
purposes, regulatory defined minimum Tier 1 leverage, Tier 1
risk-based and total risk-based capital ratio levels of at
least 4%, 4% and 8%, respectively. At year-end 1996, the
Bank's Tier 1 leverage, Tier 1 risk-based and total
risk-based capital ratios were 7.06%, 12.99% and 14.62%,
respectively, compared to 6.02%, 10.42% and 11.98% at
December 31, 1995. The Bank is considered a
well-capitalized institution under applicable FDIC
regulations. In September 1996, a memorandum of
understanding between the Bank and the FDIC and N.Y.S.
Banking Department was terminated. The memorandum, among
other items,
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 35
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
previously required the Bank to maintain a minimum Tier 1
leverage capital ratio of 5.50%.
Information regarding stockholders' equity, regulatory
capital and related ratios at December 31, is summarized as
follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 Change
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Stockholders' equity:
Preferred equity $ 52,418 $ 51,735 $ 683
Common equity 157,230 144,202 13,028
- -----------------------------------------------------------------------------------------------------------------------
$ 209,648 $ 195,937 $ 13,711
- -----------------------------------------------------------------------------------------------------------------------
Tier 1 capital:
Common stockholders' equity $ 157,230 $ 144,202 $ 13,028
Net unrealized loss (gain) on securities available for sale, net of taxes 30 (36) 66
Excess deferred tax asset(1) (27,640) (37,550) 9,910
Qualifying preferred stock (Series B) 47,312 47,312 -
- -----------------------------------------------------------------------------------------------------------------------
176,932 153,928 23,004
- -----------------------------------------------------------------------------------------------------------------------
Tier 2 capital:
Allowable portion of the allowance for loan losses 17,027 18,529 (1,502)
Nonqualifying preferred stock (Series A) 5,106 4,423 683
- -----------------------------------------------------------------------------------------------------------------------
22,133 22,952 (819)
- -----------------------------------------------------------------------------------------------------------------------
Total risk-based capital $ 199,065 $ 176,880 $ 22,185
- -----------------------------------------------------------------------------------------------------------------------
Risk-adjusted assets $1,361,941 $1,476,890 $(114,949)
Average assets for regulatory purposes $2,506,503 $2,555,876 $ (49,373)
Tier 1 risk-based capital ratio 12.99% 10.42% 2.57%
Total risk-based capital ratio 14.62% 11.98% 2.64%
Tier 1 leverage capital ratio 7.06% 6.02% 1.04%
Stockholders' equity to total assets ratio 8.25% 7.59% 0.66%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the portion of the Bank's net deferred tax
asset which was not includable in regulatory capital.
The Federal Deposit Insurance Corporation Improvement Act of
1991 restricts the ability of state-chartered institutions
to engage in activities not permissible for national banks
or their subsidiaries. With regard to this restriction, the
FDIC has approved a phase-out plan which permits the Bank to
continue its real estate joint venture activities (as
described in the section "Real Estate Held for Development
and Acquired Through Foreclosure") through December 31,
2000, subject to certain conditions. The conditions include
a requirement that the Bank perform supplemental quarterly
capital adequacy calculations that deduct all such real
estate joint venture investments. The Bank has performed
these supplemental calculations and continues to be well
capitalized under applicable FDIC regulations. Solely for
purposes of these calculations, the Bank's Tier 1 leverage,
Tier 1 risk-based and total risk-based capital ratios (as
calculated by deducting the net carrying value of joint
venture investments, inclusive of commitments to invest)
would have been 6.23%, 11.56% and 13.19%, respectively, at
December 31, 1996. If the Bank's capital (calculated as
described above) falls below the level required for
well-capitalized institutions pursuant to FDIC regulations,
the Bank must submit a plan to restore its capital to such a
level. There can be no assurance, absent an extension by the
FDIC, that any of the Bank's joint ventures can be completed
or disposed of by December 31, 2000, without significant
loss to the Bank. For purposes of the FDIC's determination
of deposit insurance assessment rates and of prompt
corrective action in accordance with FDIC regulations, the
Bank's capital ratios are computed after deducting its joint
venture investments, as calculated above.
Comparison of Net income for 1996 amounted to $18.5 million, or $.77 per
Results of fully diluted common share, compared to $19.2 million, or
Operations for $.80 per share, for 1995. The 1996 results included $11.0
the Years Ended million of net tax expense, whereas net income for 1995
December 31, included $39.5 million of net tax benefits. Earnings before
1996 and 1995 taxes rose to $29.5 million in 1996, from a pre-tax loss of
$20.3 million in 1995. The improvement was substantially due
to a $45.1 million decline in the combined provision for
loan and real estate losses, and a $4.9 million reduction in
nonperforming loan and real estate activities expense.
Results for 1996 included gains totaling $2.3 million from
the sale of mortgage servicing rights and student loans,
whereas the 1995 results included
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 36
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
$2.7 million of income realized from the prepayment of a
large commercial real estate loan. The Bank also experienced
a $1.1 million increase in fee income from investment
product sales and other banking services in 1996.
Net Interest and Dividend Income
Net interest and dividend income is the Bank's primary
source of earnings and is influenced primarily by the
amount, distribution and repricing characteristics of the
Bank's interest-earning assets and interest-bearing
liabilities as well as by the relative levels and movements
of interest rates. The table that follows sets forth
information on: average assets, liabilities and
stockholders' equity; yields earned on interest-earning
assets; and rates paid on interest-bearing liabilities for
the periods indicated. The yields and rates shown are based
on interest income/expense for each period divided by
average interest-earning assets/interest-bearing liabilities
during each period. Certain yields and rates shown are
adjusted for related fee income or expense. Average balances
are derived from daily balances. Net interest margin is
computed by dividing net interest and dividend income by the
average of total interest-earning assets during each period.
<TABLE>
<CAPTION>
1996 1995
--------------------------------- ---------------------------------
($ in thousands) Average Interest Yield/ Average Interest Yield/
Years ended December 31, Balance Inc./Exp. Rate Balance Inc./Exp. Rate
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning assets:
Mortgage loans $ 908,438 $ 75,071 8.26% $1,044,309 $ 86,751 8.30%
Other loans 132,934 10,594 7.97 120,894 9,939 8.22
----------------------------------------------------------------------
Total loans(1) 1,041,372 85,665 8.22 1,165,203 96,690 8.29
Securities available for sale 192,593 13,071 6.79 68,444 4,886 7.15
Mortgage-backed securities 990,877 67,233 6.79 1,023,330 69,214 6.77
Other bonds and notes 135,900 8,657 6.37 135,544 9,026 6.66
Other interest-earning assets 37,377 2,308 6.17 36,369 2,535 6.97
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 2,398,119 $ 176,934 7.38% 2,428,890 $ 182,351 7.51%
- -------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets 158,129 155,807
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $2,556,248 $2,584,697
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Savings and other deposits $ 583,940 $ 14,735 2.52% $ 611,595 $ 15,423 2.52%
Money market deposits 104,226 2,632 2.52 120,559 3,038 2.52
Negotiable order of withdrawal deposits 58,500 733 1.25 60,873 766 1.26
Escrow deposits 13,275 109 0.82 14,683 114 0.77
Certificates of deposit 886,639 48,597 5.48 857,632 49,728 5.80
----------------------------------------------------------------------
Total deposit accounts 1,646,580 66,806 4.06 1,665,342 69,069 4.15
----------------------------------------------------------------------
Reverse repurchase agreements 382,790 22,299 5.83 265,823 16,862 6.34
FHLB advances 165,300 9,817 5.94 310,214 18,247 5.88
Other borrowed funds 79,177 5,655 7.14 81,342 5,816 7.15
----------------------------------------------------------------------
Total borrowed funds 627,267 37,771 6.02 657,379 40,925 6.22
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 2,273,847 $ 104,577 4.60% 2,322,721 $ 109,994 4.74%
- -------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing liabilities 81,238 73,066
Stockholders' equity 201,163 188,910
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $2,556,248 $2,584,697
- -------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread $ 72,357 2.78% $ 72,357 2.77%
- -------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin $ 124,272 3.02% $ 106,169 2.98%
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets to total
interest-bearing liabilities 1.05x 1.05x
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Average loan balances include average nonperforming loans
of $47.5 million and $66.3 million for 1996 and 1995,
respectively.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 37
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
Net interest and dividend income amounted to $72.4 million
in 1996, unchanged from 1995. During 1996, the Bank's
average balance sheet declined, the effects of which were
offset by an improvement in the Bank's net interest margin.
The shrinkage in the balance sheet reflected a higher than
normal level of loan prepayments which exceeded new
originations held for portfolio. The resulting excess cash
flow (as well as cash flow generated from earnings and sales
of nonperforming assets) was reinvested in securities, used
to satisfy deposit outflow and to paydown borrowed funds.
(Borrowed funds are normally the most expensive source of
funds for the Bank.) The improvement in the net interest
margin from 2.98% in 1995, to 3.02% in 1996 resulted from a
higher amount of average interest-earning assets as a
percentage of interest-bearing liabilities. This $18.1
million increase in net interest-earning assets arose from
the cash flow generated from earnings and sales of
nonperforming assets.
The Bank's interest rate spread was basically unchanged in
1996 at 2.78% due to the yield on interest-earning assets
and the cost of funds declining at a similar pace. The yield
on interest-earning assets declined by 13 basis points
mostly due to: the repayment of higher-yielding commercial
real estate loans; purchases of lower-yielding securities;
increased variable-rate residential loan originations with
low introductory interest rates; lower yields earned on
certain securities; and the sale of higher-yielding student
loans. These factors were partially offset by the impact of
a lower level of nonperforming loans. The decline in the
cost of funds of 14 basis points was due to lower rates paid
for time deposits, utilization of shorter-term reverse
repurchase agreements and a reduction in higher-cost FHLB
advances. These factors were partially offset by a shift in
a portion of the Bank's lower-cost savings deposits to
higher-cost time deposits.
The following table presents the dollar amount of changes in
interest and dividend income and interest expense
attributable to changes in volume and changes in rate for
the periods indicated. The changes in interest due to both
rate and volume have been allocated between such categories
in proportion to the absolute amounts of the change in each.
Nonperforming loans have been included in total loans for
this analysis.
<TABLE>
<CAPTION>
Increase or (Decrease)
Due to Change in
----------------------------
($ in thousands)
Year ended December 31, 1996 versus 1995 Volume Rate Total
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest and dividend income:
Mortgage loans $(11,264) $ (416) $(11,680)
Other loans 966 (311) 655
-------------------------------------------------
Total loans (10,298) (727) (11,025)
Securities available for sale 8,446 (261) 8,185
Mortgage-backed securities (2,185) 204 (1,981)
Other bonds and notes 24 (393) (369)
Other interest-earning assets 70 (297) (227)
- -----------------------------------------------------------------------------------------------------------------------
Change in interest and dividend income (3,943) (1,474) (5,417)
- -----------------------------------------------------------------------------------------------------------------------
Interest expense:
Savings and other deposits (688) - (688)
Money market deposits (406) - (406)
Negotiable order of withdrawal deposits (27) (6) (33)
Escrow deposits (12) 7 (5)
Certificates of deposit 1,671 (2,802) (1,131)
-----------------------------------------------
Total deposit accounts 538 (2,801) (2,263)
-----------------------------------------------
Reverse repurchase agreements 6,885 (1,448) 5,437
FHLB advances (8,614) 184 (8,430)
Other borrowed funds (153) (8) (161)
Total borrowed funds (1,882) (1,272) (3,154)
- -----------------------------------------------------------------------------------------------------------------------
Change in interest expense (1,344) (4,073) (5,417)
- -----------------------------------------------------------------------------------------------------------------------
Change in net interest and dividend income $ (2,599) $ 2,599 $ -
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 38
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
Provisions for Loan and Real Estate Losses
Provisions for loan and real estate losses are based on
management's ongoing assessment of the adequacy of the
allowances for loan and real estate losses which considers
the factors discussed in the section "Allowances for Loan
and Real Estate Losses." The combined provision for loan and
real estate losses declined to $2.0 million in 1996, from
$47.1 million in 1995. The provision for 1995 included
approximately $36 million recorded in connection with the
rapid disposition strategy that was initiated in the fourth
quarter of 1995. For a discussion of this strategy, see the
section "Nonperforming Assets."
Noninterest Income
Total noninterest income amounted to $10.8 million in 1996,
compared to $10.4 million in 1995. The increase was due to a
higher level of income from investment product sales and
customer service fees and a gain from the sale of student
loans, largely offset by a decline in income from mortgage
activities.
Income from mortgage activities aggregated $4.1 million in
1996, compared to $5.5 million in 1995. The income for 1996
included a gain of $1.5 million from the sale of mortgage
servicing rights, whereas the income for 1995 included $2.7
million realized from the prepayment of a $24 million
commercial real estate loan (a portion of which was
purchased by the Bank at a significant discount). In
September 1996, the Bank was able to benefit from favorable
market conditions by selling servicing rights on $185
million of residential loans serviced for investors (which
represented a substantial portion of this portfolio) for a
gain of $1.5 million. The sale included a majority of
servicing rights capitalized under SFAS No. 122, "Accounting
for Mortgage Servicing Rights," which had a net carrying
value of $0.6 million. At December 31, 1996, loans serviced
for investors aggregated $84.8 million, compared to $292.5
million at December 31, 1995. Currently, the Bank intends to
either sell its new loans originated for sale into the
secondary market on a servicing-released basis (rather than
on servicing-retained basis as was the case previously), or
periodically sell any retained servicing rights based on
market conditions. As a result, fee income from servicing
loans (which approximated $1.0 million in 1996, $1.1 million
in 1995 and $1.2 million in 1994) is expected to decrease in
the foreseeable future from prior levels. However, lower
expenses associated with the mortgage servicing operation
coupled with the investment of the proceeds from the sale of
the rights, as well as the benefits of the additional
capital, will substantially mitigate the loss of servicing
fees.
Customer service fees increased to $3.8 million in 1996,
from $3.4 million in 1995, due to the introduction of credit
cards and higher volumes of commercial checking accounts and
fee-based transactions. In September 1996, the Bank signed
an agreement with a third-party bank to offer credit cards
to the Bank's customers. The agreement provides for the
third-party bank to own the receivables and be responsible
for the issuance and servicing of the credit cards. The
Bank's only involvement is to provide customer lists to the
third-party bank and receive fee income based on various
factors. The Bank earned $0.2 million in 1996 from this
agreement and expects additional fee income to be generated
in the future.
Fees from investment product sales increased to $1.7 million
in 1996, from $1.0 million in 1995, due to a higher volume
of annuity and mutual fund sales as well as a higher
percentage of commissions earned on such sales. The growth
reflected various sales initiatives as well as increased
demand for such products.
In October 1996, the Bank sold $34.4 million of student
loans (representing substantially all of this portfolio) for
a net gain of $0.7 million (which is included in the other
category of noninterest income). Due to the legislative
changes, the costs of administering and servicing these
loans has increased. As a result, management concluded that
the benefits of a sale exceeded the future profitability
from continuing to hold student loans for portfolio. The
Bank continues to originate student loans with the intention
to sell them into the secondary market.
Noninterest Expenses
Noninterest expenses (excluding the provision for real
estate losses) declined to $51.6 million in 1996, from $55.9
million last year. The decline reflected primarily a
reduction in nonperforming loan and real estate activities
expense and lower FDIC insurance premiums, partially offset
by increases in compensation and benefits, advertising and
promotion and the "other" category of noninterest expenses.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 39
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
Compensation and benefits expense increased from $22.5
million in 1995, to $23.1 million in 1996, or 3.0%. The
increase was primarily due to: normal salary increases; the
opening of a new branch in November 1995; increased sales
commissions from higher volumes of investment product sales;
and higher ESOP benefit expense. These increases were
partially offset by cost-containment measures.
Advertising and promotion increased from $1.3 million in
1995, to $1.9 million in 1996, due to initiatives to
increase the community's awareness of the Bank and programs
to support banking operations (including the opening of the
new branch) and residential lending.
FDIC insurance premiums declined from $3.0 million in 1995,
to $0.5 million in 1996. The decline was almost entirely due
to the combination of two rate reductions (one on June 1,
1995 and the other on January 1, 1996) by the FDIC for all
banks insured by the Bank Insurance Fund and an improvement
in the Bank's risk-based assessment classification. Pursuant
to the Deposit Insurance Funds Act of 1996, FDIC deposit
insurance assessment rates will increase by an additional
1.3 basis points per $100 of deposits for all banks insured
by the Bank Insurance Fund, effective for assessment periods
beginning on January 1, 1997.
Nonperforming loan and real estate activities expense was
reduced to $3.5 million in 1996, from $8.4 million in 1995.
The decline reflected the reductions in nonperforming assets
primarily attributable to the rapid disposition strategy.
These expenditures consist primarily of real estate taxes,
insurance, utilities, maintenance, professional fees and
other charges required to protect the Bank's interest in its
foreclosed real estate, properties which collateralize
nonperforming loans and joint venture investments. The
remainder represents compensation expense attributable to
specific departments established within the Bank to resolve
problem assets. The Bank anticipates that nonperforming loan
and real estate activities expense will continue to decline
in 1997.
The other category of noninterest expenses increased to $8.7
million in 1996, from $7.4 million in 1995. The expenses for
1995 were reduced by the reversal of an accrual associated
with contingent expenses that did not occur. Additionally,
there were higher expenses in 1996 related to professional
services and correspondent bank fees. The increased expenses
for professional services were attributable to investor
relations, the establishment of a comprehensive risk
management system and the review of benefit and compensation
programs.
Taxes
Net tax expense amounted to $11.0 million in 1996,
representing a 37% effective tax rate, compared to a net tax
benefit of $39.5 million in 1995. The Bank's effective tax
rate (inclusive of state and local taxes) for 1996 was
affected by a reduction in the valuation allowance for
deferred tax assets. The Bank became taxable in 1996 for
financial statement purposes as a result of recognizing a
significant portion of its deferred tax asset in 1995,
primarily through a reduction in the valuation allowance.
The reductions were predicated on favorable assessments in
the level of the Bank's future taxable income. For a further
discussion of taxes as well as the rapid disposition
strategy, which significantly improved the outlook for
future taxable income, see the sections "Deferred Tax Asset"
and "Nonperforming Assets," and note 13 "Federal, State and
Local Income Taxes" to the consolidated financial
statements.
Comparison of Net income for 1995 amounted to $19.2 million, or $.80 per
Results of fully diluted common share, compared to $13.0 million, or
Operations for $.41 per share, for 1994. The improvement was primarily due
the Years Ended to: a $36.5 million increase in net deferred tax benefits
December 31, recognized; a $4.6 million increase in noninterest income;
1995 and 1994 and a $3.1 million decline in nonperforming loan and real
estate activities expense. These items were partially offset
by a $32.0 million increase in the combined provision for
loan and real estate losses and a $5.5 million decline in
net interest and dividend income.
Net Interest and Dividend Income
Net interest and dividend income, which is the Bank's
primary source of earnings, is influenced primarily by the
amount, distribution and repricing characteristics of the
Bank's interest-earning assets and interest-bearing
liabilities as well as by the relative levels and movements
of interest rates. The table that follows sets forth
information on: average assets, liabilities and
stockholders' equity; yields earned on interest-earning
assets; and rates paid on interest-bearing liabilities
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 40
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
for the periods indicated. The assumptions used in computing
the table are described in the section "Comparison of
Results of Operations for the Years Ended December 31, 1996
and 1995."
<TABLE>
<CAPTION>
1995 1994
--------------------------------- ---------------------------------
($ in thousands) Average Interest Yield/ Average Interest Yield/
Years ended December 31, Balance Inc./Exp. Rate Balance Inc./Exp. Rate
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning assets:
Mortgage loans $1,044,309 $ 86,751 8.30% $1,151,114 $ 92,968 8.08%
Other loans 120,894 9,939 8.22 113,878 8,522 7.48
----------------------------------------------------------------------
Total loans(1) 1,165,203 96,690 8.29 1,264,992 101,490 8.02
Securities available for sale 68,444 4,886 7.15 41,669 2,745 6.59
Mortgage-backed securities 1,023,330 69,214 6.77 940,155 58,090 6.18
Other bonds and notes 135,544 9,026 6.66 94,988 6,288 6.62
Other interest-earning assets 36,369 2,535 6.97 31,003 1,994 6.44
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 2,428,890 $ 182,351 7.51% 2,372,807 $ 170,607 7.19%
- -------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning assets 155,807 156,985
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $2,584,697 $2,529,792
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Savings and other deposits $ 611,595 $ 15,423 2.52% $ 756,521 $ 19,072 2.52%
Money market deposits 120,559 3,038 2.52 152,809 3,677 2.41
Negotiable order of withdrawal deposits 60,873 766 1.26 68,527 857 1.25
Escrow deposits 14,683 114 0.77 15,448 122 0.79
Certificates of deposit 857,632 49,728 5.80 734,037 37,538 5.11
----------------------------------------------------------------------
Total deposit accounts 1,665,342 69,069 4.15 1,727,342 61,266 3.55
----------------------------------------------------------------------
Reverse repurchase agreements 265,823 16,862 6.34 55,997 2,809 5.02
FHLB advances 310,214 18,247 5.88 409,403 22,389 5.47
Other borrowed funds 81,342 5,816 7.15 87,338 6,302 7.22
----------------------------------------------------------------------
Total borrowed funds 657,379 40,925 6.22 552,738 31,500 5.70
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 2,322,721 $ 109,994 4.74% 2,280,080 $ 92,766 4.07%
- -------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing liabilities 73,066 70,294
Stockholders' equity 188,910 179,418
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $2,584,697 $2,529,792
- -------------------------------------------------------------------------------------------------------------------------------
Net interest and dividend income/spread $ 72,357 2.77% $ 77,841 3.12%
- -------------------------------------------------------------------------------------------------------------------------------
Net interest-earning assets/margin $ 106,169 2.98% $ 92,727 3.28%
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of total interest-earning assets to total
interest-bearing liabilities 1.05x 1.04x
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Average loan balances include average nonperforming
loans of $66.3 million and $97.1 million for 1995
and 1994, respectively.
The decline in net interest and dividend income of $5.5
million in 1995 was a function of a contraction in the
Bank's interest rate spread, which more than offset the
growth in the Bank's total interest-earning assets. The
contraction in the interest rate spread was due to the
average cost of funds increasing faster than the average
yield on interest-earning assets as a result of several
factors. First, there was a gradual shift in the composition
of deposits from lower-cost savings deposits to higher-cost
time deposits, as well as a net outflow of deposits in 1995.
The outflow of deposits was replaced with higher-cost
borrowings, while competition to retain and attract deposits
resulted in higher rates paid for time deposits. Secondly,
there was a flattening of the Treasury yield curve in 1995,
which resulted in higher short-term rates (three to six
months) and lower intermediate- and long-term rates in
comparison to 1994. This flattening significantly increased
the average cost of short-term borrowings, while negatively
impacting the repricing of a portion of adjustable-
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 41
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
rate, interest-earning assets. Finally, the yield on
interest-earning assets was also negatively impacted by the
repayment of higher-yielding commercial real estate and
multi-family loans.
The contraction in the interest rate spread was partially
offset by growth in total interest-earning assets and an
improvement in the ratio of average interest-earning assets
to average interest-bearing liabilities. Excluding
nonperforming loans, average interest-earning assets grew by
$86.8 million. This increase was funded by borrowings, the
reinvestment of cash flow generated from operations and the
return of nonperforming assets to an interest-earning status
(largely through sales of foreclosed real estate). The
latter two sources of funds improved the Bank's ratio of
average interest-earning assets to average interest-bearing
liabilities (excluding nonperforming loans) from 1.00 in
1994, to 1.02 in 1995.
The following table presents the dollar amount of changes in
interest and dividend income and interest expense
attributable to changes in volume and changes in rate for
the periods indicated. The assumptions used in computing the
table are described in the section "Comparison of Results of
Operations for the Years Ended December 31, 1996 and 1995."
<TABLE>
<CAPTION>
Increase or (Decrease)
($ in thousands) Due to Change in
---------------------------------------
Year ended December 31, 1995 versus 1994 Volume Rate Total
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest and dividend income:
Mortgage loans $ (8,810) $ 2,593 $ (6,217)
Other loans 544 873 1,417
-------------------------------------
Total loans (8,266) 3,466 (4,800)
Securities available for sale 1,896 245 2,141
Mortgage-backed securities 5,376 5,748 11,124
Other bonds and notes 2,701 37 2,738
Other interest-earning assets 365 176 541
- -------------------------------------------------------------------------------------------------------
Change in interest and dividend income 2,072 9,672 11,744
- -------------------------------------------------------------------------------------------------------
Interest expense:
Savings and other deposits (3,649) - (3,649)
Money market deposits (806) 167 (639)
Negotiable order of withdrawal deposits (97) 6 (91)
Escrow deposits (6) (2) (8)
Certificates of deposit 6,789 5,401 12,190
-------------------------------------
Total deposit accounts 2,231 5,572 7,803
-------------------------------------
Reverse repurchase agreements 13,121 932 14,053
FHLB advances (5,737) 1,595 (4,142)
Other borrowed funds (429) (57) (486)
-------------------------------------
Total borrowed funds 6,955 2,470 9,425
- ------------------------------------------------------------------------------------------------------
Change in interest expense 9,186 8,042 17,228
- ------------------------------------------------------------------------------------------------------
Change in net interest and dividend income $ (7,114) $ 1,630 $ (5,484)
- ------------------------------------------------------------------------------------------------------
</TABLE>
Provisions for Loan and Real Estate Losses
Provisions for loan and real estate losses are based on
management's ongoing assessment of the adequacy of the
allowances for loan and real estate losses which considers
the factors discussed in the section "Allowances for Loan
and Real Estate Losses." The combined provision amounted to
$47.1 million in 1995, compared to $15.1 million in 1994.
The provision for 1995 included approximately $36 million
recorded in connection with the initiation of the rapid
disposition strategy, which is discussed in the section
"Nonperforming Assets."
Noninterest Income
Total noninterest income increased to $10.4 million in 1995,
from $5.8 million in 1994, primarily due to a higher level
of income from mortgage activities. Income from mortgage
activities increased from $1.2 million in 1994, to $5.5
million in
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 42
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
1995, primarily due to a $3.5 million increase in income
from the prepayment of commercial real estate loans
(including $2.7 million related to a $24 million loan, a
portion of which was purchased by the Bank at a significant
discount). In addition, there was a $0.9 million increase in
income from the origination of fixed-rate loans sold into
the secondary market on a servicing-retained basis. The Bank
adopted SFAS No. 122, "Accounting for Mortgage Servicing
Rights," and began capitalizing originated mortgage
servicing rights effective January 1, 1995. The amount
capitalized, net of amortization, totaled $0.3 million in
1995. Noninterest income for 1995 also included a net gain
of $0.1 million from sales of securities, compared to a $0.3
million net loss in 1994.
Noninterest Expenses
Total noninterest expenses, excluding the provision for real
estate losses, declined to $55.9 million in 1995, from $58.6
million in 1994. The decline was the result of lower
nonperforming loan and real estate activities expense and a
reduction in FDIC insurance premiums, partially offset by
increases in compensation and benefits expense and the
"other" category of noninterest expenses.
Compensation and benefits expense increased from $20.8
million in 1994, to $22.5 million in 1995, primarily due to
normal salary increases, the establishment of an
incentive-based compensation program, the opening of a new
branch in November 1995 and higher costs for medical
benefits.
FDIC insurance premiums declined from $5.2 million in 1994,
to $3.0 million in 1995. The decline was due to a
combination of a reduction in assessment rates (on June 1,
1995) for all banks insured by the Bank Insurance Fund and
an improvement in the Bank's risk-based assessment
classification.
Nonperforming loan and real estate activities expense fell
to $8.4 million in 1995, from $11.5 million in 1994. The
decline reflected reduced costs of carrying and managing
nonperforming assets due to lower levels of such assets. For
a description of these expenditures, see the section
"Comparison of Results of Operations for the Years Ended
December 31, 1996 and 1995."
The other category of noninterest expenses increased to $7.4
million in 1995, from $6.8 million in 1994. The increase was
primarily due to a benefit of $1.6 million in 1994 from the
recovery of expenses associated with the resolution of a
legal action. Excluding this recovery, other noninterest
expenses would have declined by $1.0 million in 1995,
primarily due to a lower level of expenses associated with
professional services.
Taxes
A net tax benefit of $39.5 million was recognized in 1995,
compared to $3.0 million in 1994. In 1995, the Bank
recognized most of its deferred tax asset in the fourth
quarter in conjunction with the initiation of the rapid
disposition strategy, which significantly improved the
outlook for future taxable income. For further discussions,
see the sections "Deferred Tax Asset" and "Nonperforming
Assets," and note 13 "Federal, State and Local Income Taxes"
to the consolidated financial statements.
Interest Rate The Bank manages interest rate risk through asset and
Sensitivity liability strategies that are designed to maintain
acceptable levels of interest rate risk exposure throughout
a range of interest rate environments. The Bank seeks to
maintain its interest rate risk within a range that it
believes is manageable and prudent, given its capital and
income generating capacity. Interest rate risk arises
primarily from mismatches between the term to maturity or
repricing of the Bank's interest-earning assets and
interest-bearing liabilities, which is often referred to as
duration gap. In addition, the Bank is also exposed to
interest rate risk resulting from changes in the shape of
the yield curve (i.e., flattening, steepening and inversion)
and to differing indices upon which the interest rates on
the Bank's assets and liabilities are based. Normally, the
repricing of certain of the Bank's assets may be limited by
annual and lifetime caps.
In an effort to minimize interest rate risk, the Bank
normally originates or purchases for portfolio,
variable-rate loans and securities, or short- to
intermediate-term fixed-rate loans and securities. Many of
the Bank's interest-earning assets, particularly those that
are mortgage related, permit prepayment. Generally, lower
interest rate environments tend to
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 43
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
accelerate prepayment rates, which both shorten the lives of
mortgage and mortgage-related assets, and accelerate the
amortization of any premiums paid in the acquisition of
these assets. The recognition of premiums over a shorter
than expected term causes yields on the underlying assets to
decline from anticipated levels. By contrast, generally, a
higher interest rate environment causes increased average
lives and slower amortization of premiums.
At December 31, 1996, the Bank's total investment in
mortgage-backed securities aggregated $1.21 billion, and
consisted of $372.8 million of fixed-rate and $841.6 million
of adjustable-rate securities. Considering the interest rate
environment at December 31, 1996, the estimated
weighted-average life of the fixed-rate securities was
approximately five and one-half years. The estimated
weighted-average life for the entire portfolio of
mortgage-backed securities was approximately seven and
one-half years. If interest rates were to immediately
increase by 300 basis points, the estimated weighted-average
lives would extend by approximately one year for fixed-rate
securities and two years for the entire portfolio of
mortgage-backed securities.
The Bank manages its interest rate risk primarily through
the use of "income-simulation analysis," complemented by
traditional gap analysis. Income-simulation analysis
attempts to capture not only the potential of assets and
liabilities to mature or reprice but also the probability
and potential magnitude of such changes. Moreover,
income-simulation analysis attends to the relative
sensitivities of balance sheet items and projects their
behavior over an extended period of time in a dynamic rather
than static fashion. Finally, income-simulation permits the
Bank to assess the probable effects on assets and
liabilities from not only changes in interest rates, but
also of proposed strategies for responding to changes in
interest rates.
Gap analysis measures the difference between the amounts of
assets and liabilities repricing or maturing within a given
time frame, typically a cumulative one-year period. The
one-year dollar gap is the amount of assets less the amount
of liabilities that mature or reprice within one year.
Generally, a positive gap indicates that an institution
would benefit from rising rates and would be negatively
affected by falling rates. A negative gap generally
indicates that an institution would benefit from falling
rates and would be negatively affected by rising rates.
While gap analysis is a general indicator of the potential
effect that changing interest rates may have on net interest
and dividend income, the gap itself does not present a
comprehensive view of interest rate risk. First, changes in
the general level of interest rates do not affect all
categories of assets and liabilities equally or
simultaneously. Second, assumptions must be made to develop
a gap table. For example, savings deposits, which have no
contractual maturity, are assigned to various repricing
intervals although the Bank can influence the actual
repricing of these deposits independent of the gap
assumption. Finally, the gap table represents a one-day
position and cannot incorporate a changing mix of assets and
liabilities over time as interest rates change.
From time-to-time, the Bank uses interest rate cap and floor
agreements to reduce its exposure to unfavorable
fluctuations in the repricing of certain liabilities and
assets (generally borrowed funds and securities). The
agreements limit the interest rate on such assets and
liabilities to a predetermined level, while still allowing
the Bank to benefit if rates decline in the case of
liabilities, or if rates increase in the case of assets. The
agreements provide for the payment of a specified sum to the
Bank when the underlying rate index (generally one-month
LIBOR) exceeds (in the case of caps) or falls below (in the
case of floors) the agreements' contractual rate. At
December 31, 1996, $60 million each (of contractual notional
principal) of interest rate cap and floor agreements were
outstanding. The agreements have weighted-average cap and
floor rates of 7.01% and 6.08%, respectively, and expire at
various times through February 2000. The amortization of the
premiums paid, net of contractual amounts received, for
interest rate cap and floor agreements resulted in net
interest and dividend income being reduced by $1.1 million
in 1996 and 1995 and $0.4 million in 1994.
Based on an analysis of various income-simulation models as
well as the gap table that follows, the Bank's interest rate
sensitivity has improved since 1995, primarily due to the
investment of funds generated from sales of nonperforming
assets and excess cash flows into adjustable-rate
securities. At this juncture, the Bank believes that, in the
normal course of events, its net interest and dividend
income would not be materially affected by changes in
interest rates. However, a rapidly rising interest rate
environment, as well as other factors, may have a
significant negative impact (particularly relating to the
Bank's assumptions concerning the predicted behavior of
depositors) on the Bank's level of net interest and dividend
income.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 44
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
The Bank's one-year gap was a negative 0.2% at December 31,
1996, compared to a negative 5.7% at December 31, 1995. The
following table is an analysis of the Bank's gap position at
December 31, 1996:
<TABLE>
<CAPTION>
Within Over 1-3 Over 3-5 Over
($ in thousands) One Year Years Years 5 Years Total
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest-earning assets:
Mortgage loans $ 282,185 $ 349,048 $ 129,231 $ 46,312 $ 806,776
Other loans 59,583 30,637 15,714 26,569 132,503
----------------------------------------------------------------------
Total loans 341,768 379,685 144,945 72,881 939,279
Securities available for sale 145,903 19,101 11,587 38,672 215,263
Mortgage-backed securities 729,526 85,422 47,398 172,752 1,035,098
Other bonds and notes 74,962 2,108 1,858 52,522 131,450
Other interest-earning assets 5,750 - -- 23,600 29,350
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets $ 1,297,909 $ 486,316 $ 205,788 $ 360,427 $ 2,350,440
- ------------------------------------------------------------------------------------------------------------------------------
Interest-bearing liabilities:
Savings and other deposits $ 252,204 $ 270,740 $ 45,603 $ - $ 568,547
Money market deposits 96,942 - - - 96,942
Negotiable order of withdrawal deposits - 18,746 37,491 - 56,237
Escrow deposits - - - 9,972 9,972
Certificates of deposit 561,744 181,595 127,881 - 871,220
-----------------------------------------------------------------------
Total deposit accounts 910,890 471,081 210,975 9,972 1,602,918
-----------------------------------------------------------------------
Reverse repurchase agreements 409,500 - - - 409,500
FHLB advances - 55,000 100,000 - 155,000
Other borrowed funds 2,696 6,319 6,448 60,421 75,884
-----------------------------------------------------------------------
Total borrowed funds 412,196 61,319 106,448 60,421 640,384
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities $ 1,323,086 $ 532,400 $ 317,423 $ 70,393 $ 2,243,302
- ------------------------------------------------------------------------------------------------------------------------------
Interest rate sensitivity gap (25,177) (46,084) (111,635) 290,034 107,138
- ------------------------------------------------------------------------------------------------------------------------------
Interest rate options-caps(1) 20,000 (20,000) - - -
- ------------------------------------------------------------------------------------------------------------------------------
Adjusted interest rate sensitivity gap $ (5,177) $ (66,084) $ (111,635) $ 290,034 $ 107,138
- ------------------------------------------------------------------------------------------------------------------------------
Cumulative ratio of gap to total assets -0.2% 4.2%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excluding the effect of interest rate caps with a
maturity of greater than one year, the one-year gap
would have been -1.0%.
The following assumptions are utilized in the table above:
(1) adjustable-rate loans and securities are included in the
period in which their interest rates are next scheduled to
reset; (2) fixed-rate loans and mortgage-backed securities
and certain other fixed-rate securities are amortized based
on historical and estimated prepayment experience; (3)
unamortized premiums and discounts on securities and loans
are excluded from the table; (4) savings deposit accounts
are amortized based on estimated decay factors and other
relevant internal analyses; (5) money market deposit
accounts (Greaterfund Savings) are assumed to reprice within
one month and negotiable order of withdrawal deposit
accounts (Greaterfund Checking) are assumed to reprice
ratably over a two- to five-year period; (6) nonperforming
assets are excluded from the table; and (7) most other
categories reprice according to their actual maturities or
interest rate reset dates.
Liquidity and The Bank manages its liquidity position on a daily basis to
Capital Resources assure that funds are available to meet operations, deposit
withdrawals, the repayment of borrowings and loan and
investment funding commitments. The Bank's primary sources
of funds consist of: retail deposits obtained through its
branch offices; borrowings; amortization, satisfactions and
repayments of loans; maturities and repayments of
securities; sales of assets available for sale and cash
provided by operating activities. For additional information
about cash flows from the Bank's operating, investing and
financing activities, see the consolidated statements of
cash flows included in the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 45
Management's Discussion and Analysis
- --------------------------------------------------------------------------------
At December 31, 1996, the Bank's total commitment to lend
and invest aggregated approximately $30 million. The Bank
did not have any significant commitments for capital
expenditures at December 31, 1996. However, the Bank
anticipates capital expenditures in connection with the
opening of new branches in 1997. Based on its cash flow
projections, the Bank believes that it can fund all of its
outstanding commitments and future capital expenditures from
the aforementioned sources of funds. At December 31, 1996,
certificates of deposit maturing within one year aggregated
$562 million. Based on its previous experience, the Bank
believes that a substantial portion of its maturing
certificates of deposit will be redeposited with the Bank.
In addition, based on the Bank's available collateral, the
Bank's total borrowing capability with the FHLB and
broker-dealers was estimated to be approximately $800
million at December 31, 1996.
Accounting Effective January 1, 1996, the Bank adopted SFAS No. 121,
Developments "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," and SFAS No. 123,
"Accounting for Stock-Based Compensation." SFAS No. 121
established accounting standards for the impairment of
long-lived assets, certain identifiable intangibles and
goodwill related to those assets to be held and used and
those to be disposed of. SFAS No. 123, among other things,
established a fair value-based method of accounting for
stock-based compensation arrangements (except for employee
stock ownership plans), but permits the use of the
intrinsic-value-based method prescribed by Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees," in accounting for such arrangements.
The Bank elected to continue utilizing APB Opinion No. 25 in
accounting for its stock option plans. Since adoption, these
accounting standards have not impacted the Bank's financial
statements. For further discussions of these accounting
standards, see note 1 "Description of Business and Summary
of Significant Accounting Policies (Premises and
Equipment)," note 12 "Benefit and Incentive Plans (Stock
Option Plans)" and note 14 "Earnings Per Share" to the
consolidated financial statements.
In June 1996, the Financial Accounting Standards Board
issued SFAS No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities,"
which, among other things, establishes accounting and
reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities based on a
consistent application of a financial components approach
that focuses on control. Under this approach, subsequent to
a transfer of financial assets, a company must recognize the
financial and servicing assets it controls and liabilities
it has incurred, derecognize financial assets when control
has been surrendered, and derecognize liabilities when they
have been extinguished. Standards for distinguishing
transfers of financial assets that are sales from those that
are secured borrowings are provided in the statement. A
transfer not meeting the criteria for a sale must be
accounted for as a secured borrowing with a pledge of
collateral.
SFAS No. 125 also amends SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," to
prohibit the classification of a debt security as held to
maturity if it can be prepaid or otherwise settled in such a
way whereby the holder of the security would not recover
substantially all of its recorded investment. It further
requires that loans and other assets that can be similarly
prepaid or settled, be subsequently measured like debt
securities classified as available for sale or trading under
SFAS No. 115, as amended. SFAS No. 125 also amends and
extends to all servicing assets and liabilities the
accounting standards for mortgage servicing rights now in
SFAS No. 65, "Accounting for Certain Mortgage Banking
Activities," and supersedes SFAS No. 122, "Accounting for
Mortgage Servicing Rights." SFAS No. 125, as amended by SFAS
No. 127, "Deferral of the Effective Date of Certain
Provisions of SFAS No. 125," is effective for applicable
transactions occurring after December 31, 1996 or December
31, 1997 and is to be applied prospectively. The adoption of
this standard is not expected to have a material impact on
the Bank's financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 46
Consolidated Statements of Financial Condition
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in thousands, except par value)
December 31, 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets Cash and due from banks (note 11) $ 22,396 $ 26,502
Federal funds sold 5,750 -
Securities available for sale, net,
at estimated fair value
(notes 2 and 11) 215,961 202,444
Securities held to maturity, net
(notes 2 and 11):
Mortgage-backed securities, net
(estimated fair value
of $1,027,922 and $946,786,
respectively) 1,042,843 952,846
Other bonds and notes, net
(estimated fair value of $131,117
and $137,993, respectively) 131,478 138,871
Federal Home Loan Bank of NY stock,
at cost (note 11) 23,600 27,850
Loans receivable, net
(notes 3, 4 and 11):
Mortgage loans on real estate 835,600 969,976
Other loans 132,968 125,192
-----------------------------
Loans receivable 968,568 1,095,168
Allowance for loan losses (17,228) (23,993)
-----------------------------
Loans receivable, net 951,340 1,071,175
Accrued interest receivable 15,343 16,575
Premises and equipment, net (note 5) 28,273 26,965
Deferred tax asset, net (note 13) 45,365 55,070
Other assets (notes 6 and 12) 59,539 64,679
-----------------------------------------------------------------------------
Total assets $ 2,541,888 $ 2,582,977
-----------------------------------------------------------------------------
Liabilities Deposits (note 8) $ 1,666,674 $ 1,715,340
Borrowed funds, including securities
sold under agreements to repurchase
of $409,500 and $365,000, respectively
(notes 9, 11 and 12) 640,384 641,242
Accrued expenses and other liabilities
(notes 9 and 12) 25,182 30,458
-----------------------------------------------------------------------------
Total liabilities 2,332,240 2,387,040
-----------------------------------------------------------------------------
Stockholders' Preferred stock, 8.25%,
Equity (Notes 10, cumulative, ESOP convertible Series A
11, 12, and 16) ($1.00 par value,
1,800,000 shares authorized, 1,536,391 and
1,594,627 shares issued and
outstanding, respectively) 1,537 1,595
Preferred stock, 12%, noncumulative,
perpetual Series B ($1.00 par value,
2,000,000 shares authorized,
issued and outstanding) 2,000 2,000
Additional paid-in-capital preferred 63,111 63,810
ESOP debt guarantee (14,230) (15,670)
Common stock ($1.00 par value,
45,000,000 shares authorized,
13,534,448 and 13,289,356 shares
issued and outstanding, respectively) 13,534 13,289
Additional paid-in-capital common 102,883 100,648
Surplus fund 22,998 22,998
Undivided profits 17,845 7,231
Net unrealized (loss) gain on securities
available for sale, net of taxes (30) 36
-----------------------------------------------------------------------------
Total stockholders' equity 209,648 195,937
-----------------------------------------------------------------------------
Commitments and contingencies
(notes 3, 5 and 15)
-----------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 2,541,888 $ 2,582,977
-------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 47
Consolidated Statements of Income
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in thousands, except per share data)
Years ended December 31, 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest and Mortgage loans on real estate $ 75,071 $ 86,751 $ 92,968
Dividend Income Other loans 10,594 9,939 8,522
--------------------------------------------------------------------------------------------
Total interest on loans 85,665 96,690 101,490
--------------------------------------------------------------------------------------------
Securities available for sale 13,071 4,886 2,745
Securities held to maturity:
Mortgage-backed securities 67,233 69,214 58,090
Other bonds and notes 8,657 9,026 6,288
Other 2,308 2,535 1,994
-------------------------------------------------------------------------------------------
Total interest and dividend income 176,934 182,351 170,607
-------------------------------------------------------------------------------------------
Interest Expense Deposits (note 8) 66,806 69,069 61,266
Securities sold under agreements to repurchase 22,299 16,862 2,809
Other borrowed funds 15,472 24,063 28,691
-------------------------------------------------------------------------------------------
Total interest expense 104,577 109,994 92,766
-------------------------------------------------------------------------------------------
Net interest and dividend income 72,357 72,357 77,841
Provision for loan losses (note 4) 1,500 29,400 7,990
-------------------------------------------------------------------------------------------
Net interest and dividend income
after provision for loan losses 70,857 42,957 69,851
-------------------------------------------------------------------------------------------
Noninterest Income from mortgage activities (notes 3 and 7) 4,135 5,498 1,234
Income Customer service fees 3,800 3,354 3,230
Fees from sales of investment products 1,650 992 989
Net gain (loss) on sales of securities (note 2) 20 84 (341)
Other (note 3) 1,192 491 687
-------------------------------------------------------------------------------------------
Total noninterest income 10,797 10,419 5,799
-------------------------------------------------------------------------------------------
Noninterest Compensation and benefits (note 12) 23,143 22,468 20,768
Expenses Occupancy, net (note 5) 7,891 7,658 7,771
Equipment and data processing services 5,940 5,728 5,407
Advertising and promotion 1,923 1,298 1,111
Federal deposit insurance premiums 510 3,004 5,229
Provision for real estate losses (note 6) 500 17,700 7,110
Nonperforming loan and real estate activities 3,457 8,398 11,470
Other 8,744 7,383 6,833
-------------------------------------------------------------------------------------------
Total noninterest expenses 52,108 73,637 65,699
-------------------------------------------------------------------------------------------
Income (loss) before taxes 29,546 (20,261) 9,951
Taxes Tax expense (benefit) (note 13) 11,047 (39,500) (3,000)
-------------------------------------------------------------------------------------------
Net Income Net income $ 18,499 $ 19,239 $ 12,951
-------------------------------------------------------------------------------------------
Earnings Primary earnings per share (note 14) $ 0.83 $ 0.85 $ 0.42
Per Share Fully diluted earnings per share (note 14) 0.77 0.80 0.41
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 48
Consolidated Statements of Changes in Stockholders' Equity
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in thousands)
Years ended December 31, 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred Stock Balance at beginning of year $ 1,595 $ 1,647 $ 1,694
Series A Conversion of 58,236 shares in 1996, 52,741
shares in 1995 and 46,480 shares in 1994 to
common stock (note 12) (58) (52) (47)
----------------------------------------------------------------------------------------------------
Balance at end of year 1,537 1,595 1,647
----------------------------------------------------------------------------------------------------
Preferred Stock
Series B Balance at beginning and end of year 2,000 2,000 2,000
----------------------------------------------------------------------------------------------------
Additional Paid-In- Balance at beginning of year 63,810 64,443 65,000
Capital Preferred Conversion of 58,236 shares in 1996,
52,741 shares in 1995 and 46,480 shares in 1994
to common stock (note 12) (699) (633) (557)
----------------------------------------------------------------------------------------------------
Balance at end of year 63,111 63,810 64,443
----------------------------------------------------------------------------------------------------
ESOP Debt Balance at beginning of year (15,670) (16,996) (18,216)
Guarantee Payment of principal on ESOP debt 1,440 1,326 1,220
----------------------------------------------------------------------------------------------------
Balance at end of year (14,230) (15,670) (16,996)
----------------------------------------------------------------------------------------------------
Common Stock Balance at beginning of year 13,289 13,140 12,986
Issuance of 245,092 shares in 1996, 150,002 shares
in 1995 and 153,780 shares in 1994 (note 12) 245 149 154
----------------------------------------------------------------------------------------------------
Balance at end of year 13,534 13,289 13,140
----------------------------------------------------------------------------------------------------
Additional Paid-In- Balance at beginning of year 100,648 99,943 98,976
Capital Common Issuance of 245,092 shares in 1996, 150,002 shares in 1995
and 153,780 shares in 1994, including tax benefit (note 12) 2,235 705 967
----------------------------------------------------------------------------------------------------
Balance at end of year 102,883 100,648 99,943
----------------------------------------------------------------------------------------------------
Surplus Fund Balance at beginning and end of year 22,998 22,998 22,998
----------------------------------------------------------------------------------------------------
Undivided Profits Balance at beginning of year 7,231 (4,298) (9,932)
(Deficit) Net income 18,499 19,239 12,951
Dividends declared on preferred stock, net of tax benefit (7,211) (7,710) (7,317)
Dividends declared on common stock (674) - -
----------------------------------------------------------------------------------------------------
Balance at end of year 17,845 7,231 (4,298)
----------------------------------------------------------------------------------------------------
Net Unrealized (Loss) Balance at beginning of year 36 (393) -
Gain on Securities Change in net unrealized (loss) gain, net of taxes (66) 429 (393)
Available for Sale ----------------------------------------------------------------------------------------------------
Balance at end of year (30) 36 (393)
----------------------------------------------------------------------------------------------------
Total stockholders' equity at end of year $ 209,648 $ 195,937 $ 182,484
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 49
Consolidated Statements of Cash Flows
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in thousands)
Years ended December 31, 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Net income $ 18,499 $ 19,239 $ 12,951
Activities Items to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,282 2,228 2,350
Provisions for loan and real estate losses 2,000 47,100 15,100
Deferred tax expense (benefit) 10,497 (40,050) (3,550)
Decrease in net deferred fees (909) (818) (218)
Amortization of premiums and accretion of (discounts), net 1,933 (1,347) 1,413
Net (gain) loss on sales of assets and loans originated for sale (2,438) (255) 889
Originations and sales of loans originated for sale, net (413) (1,989) 3,758
Decrease (increase) in accrued interest receivable
and other assets 3,828 828 (3,289)
(Decrease) increase in accrued expenses and liabilities (5,246) (4,852) 508
--------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 30,033 20,084 29,912
--------------------------------------------------------------------------------------------------------
Investing Principal repayments of securities available for sale 24,754 5,457 19,304
Activities Sales of securities available for sale 4,982 - 29,644
Purchases of securities available for sale (43,523) (29,396) (14,948)
Principal repayments of mortgage-backed securities 183,812 169,828 212,341
Purchases of mortgage-backed securities (276,781) (248,947) (443,691)
Principal repayments of other bonds and notes 7,381 4,400 28,328
Purchases of other bonds and notes - (27,086) (54,014)
Principal repayments and sales of loans receivable 224,092 152,394 122,549
Originations and purchases of loans receivable (110,795) (58,696) (55,814)
Sale of mortgage servicing rights 2,085 - -
Sales of other real estate 10,179 18,226 22,852
Redemptions (purchases) of FHLB stock, net 4,250 (4,400) (5,067)
Purchases of premises and equipment, net (3,590) (4,667) (1,069)
(Investment in) return of capital from joint ventures, net (222) (2,814) 1,864
--------------------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities 26,624 (25,701) (137,721)
--------------------------------------------------------------------------------------------------------
Financing Decrease in deposits (48,666) (17,113) (78,858)
Activities Proceeds from securities sold under agreements to repurchase
maturing in 90 days or less, net 239,500 120,695 10,000
Proceeds from borrowed funds 15,000 906,805 735,000
Repayment of borrowed funds (253,918) (1,007,598) (559,448)
Dividends paid on preferred stock (7,678) (7,738) (7,342)
Dividends paid on common stock (674) - -
Proceeds from issuance of common stock 1,423 169 517
--------------------------------------------------------------------------------------------------------
Net cash (used) provided by financing activities (55,013) (4,780) 99,869
--------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 1,644 (10,397) (7,940)
--------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year 26,502 36,899 44,839
--------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 28,146 $ 26,502 $ 36,899
--------------------------------------------------------------------------------------------------------
Supplemental Cash paid during the year for:
Disclosures Interest $ 106,027 $ 110,123 $ 89,743
Income taxes, net 464 553 676
Noncash investing activities:
Loans to finance sales of real estate 4,006 18,276 18,682
Loans transferred to real estate acquired through
foreclosure, net 8,494 19,881 24,903
Securities reclassified from held to maturity to
available for sale - 133,386 34,750
Noncash financing activities:
Conversion of preferred stock to common stock 757 685 604
Reduction in ESOP debt guarantee 1,440 1,326 1,220
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 50
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
1. Description of a. Description of Business
Business and
Summary of The Greater New York Savings Bank and Subsidiaries (the
Significant Bank) is a New York State-chartered, stock savings bank
Accounting whose principal business consists of attracting retail
Policies deposits from the general public through its 14 branches and
investing those deposits, together with funds from
borrowings, in mortgage loans and securities. The Bank also
earns noninterest income, such as customer service charges,
fees from originating and servicing loans and fees from the
sale of third-party investment products. At December 31,
1996, the Bank's deposits per branch averaged approximately
$119,000,000 and 80% of its total deposits were derived from
its nine branches located in Brooklyn, New York.
b. Principles of Consolidation, Basis of Presentation and
Use of Estimates
The accompanying consolidated financial statements include
the accounts of The Greater New York Savings Bank and its
wholly-owned subsidiaries. Significant intercompany
transactions and balances are eliminated in consolidation.
Other entities in which the Bank has at least a 20%
ownership interest are accounted for using the equity
method. Certain reclassifications have been made to prior
year amounts to conform to the current year's presentation.
In preparing the consolidated financial statements,
management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities
at the date of the financial statements and revenues and
expenses during the reporting periods. Actual results could
differ from those estimates. Material estimates that are
particularly susceptible to change in the near term relate
to the determination of the allowances for loan and real
estate losses and the valuation allowance for deferred tax
assets.
c. Cash and Cash Equivalents
For purposes of the statements of cash flows, cash and cash
equivalents include cash and due from banks and federal
funds sold. Generally, federal funds are sold for one-day
periods.
d. Securities
Securities which the Bank may sell at some time in the
future based on current or foreseeable conditions are
classified as securities available for sale and are carried
at estimated fair value. Such securities include those that
may be sold in response to asset/liability management
strategies. Unrealized gains and losses are reported as a
separate component of stockholders' equity, net of related
taxes. Realized gains and losses from sales are determined
using the specific identification method.
Securities which the Bank has the positive intent and
ability to hold until maturity are classified as securities
held to maturity and are carried at cost, adjusted for
accretion of discounts and amortization of premiums.
Discounts are accreted and premiums are amortized to
interest income using the interest method over the period to
contractual maturity, adjusted for actual prepayments.
e. Loans Receivable
Loans held for portfolio are carried at amortized cost.
Discounts are accreted to interest income over the
contractual life of the loans using the interest method.
Loans held for sale are carried at the lower of cost or
estimated fair value in the aggregate. Net unrealized losses
are provided for in a valuation allowance created through a
charge to operations. Realized gains and losses are
determined using the specific identification method. Loan
origination and commitment fees, net of certain costs, are
deferred and amortized to interest income as an adjustment
to the yield of the related loans over the contractual life
of the loans using the interest method. When a loan is paid
off or sold, or if a commitment expires unexercised, any
unamortized net deferred amount is credited or charged to
income as appropriate. Amortization of net deferred fees is
discontinued for loans placed on nonaccrual status.
f. Nonaccrual Loans, Troubled Debt Restructurings and
Impaired Loans
Loans are placed on nonaccrual status (nonperforming loans)
when principal or interest becomes 90 days or more past due
unless the obligation is both well secured and in the
process of collection. Accrued interest receivable
previously
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 51
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
recognized is reversed when a loan is placed on nonaccrual
status. Interest payments received on nonperforming loans
are recognized as income on a cash basis unless future
collections of principal are doubtful, in which case the
payments received are applied as a reduction of principal.
Loans generally remain on nonaccrual status until principal
and interest payments are current.
Effective January 1, 1995, Statement of Financial Accounting
Standards (SFAS) No. 114, "Accounting by Creditors for
Impairment of a Loan," as amended by SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures," requires all loans that are
restructured in a troubled debt restructuring subsequent to
December 31, 1994, be measured in accordance with the
criteria of SFAS No. 114 (which is described under
"Allowances for Loan and Real Estate Losses"). A loan is
normally deemed impaired when, based upon current
information and events, it is probable the Bank will be
unable to collect both principal and interest due according
to the contractual terms of the loan agreement. Loans which
were restructured prior to December 31, 1994 and are
performing in accordance with their restructured terms are
not considered impaired loans and continue to be accounted
for under SFAS No. 15, "Accounting by Debtors and Creditors
for Troubled Debt Restructurings." Impaired loans normally
consist of nonperforming loans and loans that are
restructured in a troubled debt restructuring subsequent to
December 31, 1994. Interest income on impaired loans is
recognized in accordance with the Bank's policy relating to
nonperforming loans and troubled debt restructurings.
A loan is considered a troubled debt restructuring when
changes (such as a reduction in interest rates or deferral
of interest or principal payments) are made to contractual
terms due to a borrower's weakened financial condition. A
nonperforming loan that is restructured is normally
accounted for as a cash basis troubled debt restructure.
After the restructured loan develops a satisfactory payment
history, the loan is maintained on an accrual basis but
remains classified as a troubled debt restructure. An
accruing troubled debt restructure that yields a market rate
of interest is considered for recategorization to a fully
performing status after it has performed for an appropriate
period. Loans which are recategorized are done so no earlier
than the year following the restructuring and are no longer
included in the Bank's troubled debt restructuring or
impaired loan statistics, if applicable.
g. Real Estate Held for Development and Acquired Through
Foreclosure
Real estate held for development and acquired through
foreclosure is reported in other assets. Upon foreclosure, a
loan is normally transferred from the loan portfolio to real
estate acquired through foreclosure at the lower of the
loan's carrying value at the date of transfer, or estimated
fair value of the collateral property less estimated selling
costs. Adjustments made to the carrying value at the time of
transfer are charged to the allowance for loan losses.
Thereafter, an allowance for real estate losses is
established if the carrying value of the property exceeds
its current fair value less estimated selling costs. Under
SFAS No. 114, a loan is classified as an in-substance
foreclosure only when the Bank has taken possession of the
collateral property regardless of whether formal foreclosure
proceedings have taken place. Real estate held for
development (joint ventures) is carried at the lower of cost
or estimated net realizable value (the estimated selling
price less estimated costs of completion, holding and
disposal). Adjustments to carrying value are recorded in the
allowance for real estate losses.
h. Allowances for Loan and Real Estate Losses
The allowances for loan and real estate losses are increased
by provisions charged to operations and decreased by
chargeoffs (net of recoveries). The allowance for loan
losses is netted against loans receivable and the allowance
for real estate losses is netted against real estate held
for development and acquired through foreclosure. The
adequacy of the allowances is evaluated quarterly with
consideration given to: known and inherent risks in the
portfolios; status of particular loans and properties and
estimates of fair value thereof; historical chargeoffs and
recoveries; adverse situations which may affect the
borrowers' ability to repay; expected disposition period and
estimated selling costs of foreclosed real estate; net
realizable value of real estate held for development; and
management's perception of the current and future real
estate markets and economic conditions in the Bank's lending
region.
In addition, SFAS No. 114 specifies the manner in which the
portion of the allowance for loan losses related to impaired
commercial real estate and multi-family loans is computed.
Impairment for commercial real estate and multi-family loans
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 52
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
is measured based on the estimated fair value of the
properties collateralizing such loans, since payment of the
principal and interest is dependent upon cash flow generated
from the property's operations. However, if the repayment of
the loan is expected solely from the sale of the property,
estimated fair value is adjusted for estimated selling
costs. When the fair value of the property is less than the
recorded investment in the loan, this deficiency is
recognized as a valuation allowance within the overall
allowance for loan losses and a charge through the provision
for loan losses. The Bank normally records a chargeoff for
this difference which results in little or no valuation
allowance being maintained. Changes in the estimated fair
value of the collateral property or selling costs are
recorded as increases or decreases to the valuation
allowance. The net carrying amount of an impaired loan does
not at any time exceed the recorded investment in the loan.
Lastly, the Bank's regulators, as an integral part of their
examination process, periodically review the Bank's
allowances for loan and real estate losses. Accordingly, the
Bank may be required to take certain chargeoffs and/or
recognize additions to the allowances based on the
regulators' judgment concerning information available to
them during their examination.
i. Premises and Equipment
Land is carried at cost. Buildings, leasehold improvements
and furniture, fixtures and equipment are carried at cost,
less accumulated depreciation and amortization. Depreciation
is computed using the straight-line method over the
estimated useful life of the asset. Leasehold improvements
are amortized using the straight-line method over the terms
of the related leases, or the useful life of the asset,
whichever is shorter. Maintenance, repairs and minor
improvements are charged to expense as incurred, while major
improvements are capitalized.
On January 1, 1996, the Bank adopted SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." The statement
requires, among other things, that long-lived assets and
certain identifiable intangibles to be held and used by a
company be reviewed for impairment whenever events or
changes in circumstances indicate the carrying amount of the
asset may not be recoverable. In performing the review for
recoverability, companies are required to estimate the
future cash flows expected to result from the use of the
asset and its eventual disposition. Under SFAS No. 121, an
impairment is recognized if the sum of the undiscounted
future cash flows is less than the carrying amount of the
asset. The Bank does not have any recorded identifiable
intangible assets or goodwill, other than originated
mortgage loan servicing rights. Since adoption, SFAS No. 121
has not had any impact on the Bank's financial statements.
j. Mortgage Loan Servicing Rights
The Bank adopted SFAS No. 122, "Accounting for Mortgage
Servicing Rights," effective January 1, 1995. SFAS No. 122
requires the recognition of rights to service mortgage loans
for others that are acquired through loan origination
activities as a separate asset. The initial capitalization
of originated mortgage servicing rights (MSR) is based on an
allocation of the total cost of the related mortgage loans
to the MSR and the loans (without MSR) based on their
relative fair values. Capitalized MSR are amortized in
proportion to and over the period of estimated net servicing
income. In addition, MSR are assessed for impairment based
on their estimated fair value. For purposes of determining
impairment, MSR are stratified based on one or more of the
predominant risk characteristics of the underlying loans.
Impairment, if any, is recognized through a valuation
allowance for each impaired stratum with a corresponding
charge to operations. The Bank's policy for stratifying MSR
for impairment evaluation considers the interest rates and
terms of the underlying loans. The estimated fair value of
each MSR stratum is determined through a discounted cash
flow analysis of estimated net future servicing income,
utilizing current market interest rates.
k. Reverse Repurchase Agreements
Reverse repurchase agreements are accounted for as
collateralized financing transactions. Accordingly, the
underlying securities continue to be carried as an asset and
a liability is established for the transaction proceeds.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 53
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
l. Employee Stock Ownership Plan (ESOP)
The ESOP is accounted for in accordance with the provisions
of Statement of Position 76-3, "Accounting Practices for
Certain Employee Stock Ownership Plans." The borrowing
related to the ESOP is included as a liability on the Bank's
consolidated statements of financial condition. The offset
to this liability (ESOP debt guarantee) is reported as a
reduction of stockholders' equity. The liability and the
ESOP debt guarantee are reduced as the borrowing is repaid.
As principal and interest on the borrowing are repaid,
Series A preferred stock is allocated annually to ESOP
participants ratably over the term of the plan.
m. Income from Mortgage Activities
Income from mortgage activities includes: revenue from
originating loans for sale (including related fees and gains
and losses on sales or revaluations of such loans); revenue
from servicing loans; amortization of mortgage servicing
rights; and gains and losses from sales of mortgage
servicing rights.
n. Advertising Costs
Advertising costs are expensed as incurred, except for
direct-response advertising. Direct-response advertising
consists primarily of magazine and newspaper advertisements
promoting the opening of a new branch. These costs are
capitalized and amortized over the expected period of future
benefit (which is generally over the average life of the
branch's deposit accounts). At December 31, 1996 and 1995,
capitalized advertising cost was not significant.
o. Stock Option Plans
The Bank maintains several plans that provide for grants of
stock options, stock appreciation rights and performance
units to employees, and stock options to nonemployee
directors. The Bank follows Accounting Principles Board
(APB) Opinion No. 25, "Accounting for Stock Issued to
Employees," in accounting for its plans.
p. Hedging Activities
Periodically, the Bank may purchase interest rate cap and
floor agreements as part of its asset/liability management
of interest rate risk. The agreements provide for the
payment of a specified sum to the Bank under certain
conditions. The Bank pays a premium at the inception of the
agreements and no future payments to the third parties are
required. The agreements are designated and accounted for as
hedges. Accordingly, such premiums are recorded as other
assets and are amortized over the contractual terms of the
agreements (net of contractual payments received) as a
component of interest expense or income from the related
hedged items.
q. Income Taxes
Under SFAS No. 109, "Accounting for Income Taxes," deferred
tax assets and liabilities are recognized for the estimated
future tax consequences attributable to temporary
differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured
using currently enacted tax rates expected to apply to
taxable income in the year in which those temporary
differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in
tax law or rates is recognized in income in the period that
includes the enactment date of change. A valuation allowance
is recorded if it is more likely than not that some portion
or all of the deferred tax assets will not be realized based
on a review of available evidence. The allowance is subject
to ongoing adjustments based on changes in circumstances
that affect management's assessment of the realizability of
the deferred tax assets. Adjustments to the valuation
allowance are recorded as a component of income taxes.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 54
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
2. Securities Securities Available for Sale
The carrying values (estimated fair values) of securities
available for sale at December 31, are summarized as
follows:
<TABLE>
<CAPTION>
Pass-Through Securities
---------------------------------- CMOs Corporate
($ in thousands) GNMA FHLMC FNMA and REMICs Notes Total
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1996
Fixed rate $ 18,012 $ 15,683 $ 46,635 $ - $ - $ 80,330
Variable rate 32,036 27,280 16,810 15,000 44,559 135,685
-----------------------------------------------------------------------------------------------------
Amortized cost 50,048 42,963 63,445 15,000 44,559 216,015
-----------------------------------------------------------------------------------------------------
Gross unrealized gains 588 304 979 7 7 1,885
Gross unrealized losses (1,020) (186) (165) (430) (138) (1,939)
-----------------------------------------------------------------------------------------------------
Carrying value $ 49,616 $ 43,081 $ 64,259 $ 14,577 $ 44,428 $ 215,961
-----------------------------------------------------------------------------------------------------
Yield 6.76% 6.74% 7.45% 5.85% 6.09% 6.76%
-----------------------------------------------------------------------------------------------------
1995
Fixed rate $ 18,579 $ 18,744 $ 58,186 $ - $ - $ 95,509
Variable rate 36,977 5,058 8,135 12,271 44,428 106,869
-----------------------------------------------------------------------------------------------------
Amortized cost 55,556 23,802 66,321 12,271 44,428 202,378
-----------------------------------------------------------------------------------------------------
Gross unrealized gains 334 376 1,328 - - 2,038
Gross unrealized losses (819) (85) (83) (371) (614) (1,972)
-----------------------------------------------------------------------------------------------------
Carrying value $ 55,071 $ 24,093 $ 67,566 $ 11,900 $ 43,814 $ 202,444
-----------------------------------------------------------------------------------------------------
Yield 6.10% 7.49% 7.51% 5.44% 5.78% 6.62%
-----------------------------------------------------------------------------------------------------
</TABLE>
The estimated weighted-average lives of fixed- and
variable-rate, mortgage-backed securities available for sale
at December 31, 1996 were approximately five and six years,
respectively (based upon anticipated cash flows, assuming no
change in the interest rate environment). The carrying value
and yield by contractual maturity of the corporate notes
available for sale at December 31, 1996 was as follows:
$4,986,000 at 5.90% maturing in 1998; $19,602,000 at 6.17%
maturing in 1999; and $19,840,000 at 6.06% maturing in 2001.
Proceeds from sales of securities available for sale in 1996
and 1994 were $4,982,000 and $29,644,000, respectively.
Gross gains of $20,000 were realized in 1996 and gross
losses of $341,000 were realized in 1994. There were no
significant sales of securities in 1995. On December 31,
1995, the Bank transferred from its held-to-maturity
portfolio mortgage-backed securities with a net carrying
value of $133,386,000 (which approximated fair value) to the
securities available-for-sale portfolio. The transfer was
made in conjunction with a one-time opportunity granted by
the Financial Accounting Standards Board, which allowed
entities to conduct a reassessment of the classifications of
their securities portfolios and to make reclassifications
between categories.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 55
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Mortgage-Backed Securities Held to Maturity
The carrying and estimated fair values of mortgage-backed
securities held to maturity at December 31, are summarized
as follows:
<TABLE>
<CAPTION>
Pass-Through Securities
--------------------------------------------- CMOs
($ in thousands) GNMA FNMA FHLMC Other and REMICs Total
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1996
Fixed rate $ 66,270 $ 20,827 $ 43,376 $ 1,072 $ 161,103 $ 292,648
Variable rate - 60,646 55,934 - 633,615 750,195
---------------------------------------------------------------------------------------------------------
Carrying value 66,270 81,473 99,310 1,072 794,718 1,042,843
---------------------------------------------------------------------------------------------------------
Gross unrealized gains - 1,068 1,225 7 3,107 5,407
Gross unrealized losses (2,126) - (11) - (18,191) (20,328)
---------------------------------------------------------------------------------------------------------
Estimated fair value $ 64,144 $ 82,541 $ 100,524 $ 1,079 $ 779,634 $1,027,922
---------------------------------------------------------------------------------------------------------
Yield 7.36% 7.03% 7.15% 8.30% 6.62% 6.75%
---------------------------------------------------------------------------------------------------------
1995
Fixed rate $ 72,843 $ 26,082 $ 54,694 $ 1,603 $ 188,103 $ 343,325
Variable rate - 38,394 59,269 - 511,858 609,521
---------------------------------------------------------------------------------------------------------
Carrying value 72,843 64,476 113,963 1,603 699,961 952,846
---------------------------------------------------------------------------------------------------------
Gross unrealized gains 493 995 1,437 - 2,146 5,071
Gross unrealized losses (1,400) - (52) (21) (9,658) (11,131)
---------------------------------------------------------------------------------------------------------
Estimated fair value $ 71,936 $ 65,471 $ 115,348 $ 1,582 $ 692,449 $ 946,786
---------------------------------------------------------------------------------------------------------
Yield 7.37% 7.16% 7.10% 7.91% 6.69% 6.82%
---------------------------------------------------------------------------------------------------------
</TABLE>
The estimated weighted-average lives of fixed- and
variable-rate, mortgage-backed securities held to maturity
at December 31, 1996 were approximately five and one-half
and eight and one-half years, respectively (based upon
anticipated cash flows, assuming no change in the interest
rate environment).
Mortgage-backed securities, exclusive of collateralized
mortgage obligations, represent participating interests in
pools of long-term, first-mortgage loans. Collateralized
mortgage obligations are multi-class, mortgage-backed
securities that are secured by mortgage loans or other
mortgage-backed securities. The Bank's investments in GNMA,
FNMA and FHLMC securities are either issued by U.S.
government agencies or one of its sponsored enterprises and
are guaranteed by the issuing agency. The Bank's investments
in CMOs and other pass-through securities are primarily
rated AAA by one or more of the nationally recognized rating
agencies. Additionally, the Bank's investments in CMOs and
REMICs are either agency-backed or of a senior class.
The Bank's investments in nonagency mortgage-backed
securities, which aggregated $440,771,000 at December 31,
1996, represent senior class obligations which are
collateralized by pools of residential 1-4 family mortgage
loans. These mortgage loans typically do not qualify for
agency securitization or purchase programs. Nonagency
mortgage-backed securities are subject to certain
credit-related risks not normally associated with agency
mortgage-backed securities. To help protect investors from
credit risk, nonagency securities are structured to provide
for the timely payment of principal and interest, which is
supported to certain levels by various forms of credit
enhancements. These enhancements are in the form of
financial guarantees from insurers, letters of credit or
subordination features.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 56
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Other Bonds and Notes Held to Maturity
The carrying and estimated fair values of other bonds and
notes held to maturity at December 31, are summarized as
follows:
<TABLE>
<CAPTION>
United States Government States and Corporate
($ in thousands) and Guaranteed Agencies Municipals Notes Total
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996
Fixed rate $ 49 $ 57,278 $ - $ 57,327
Variable rate 15,884 - 58,267 74,151
-------------------------------------------------------------------------------------------
Carrying value 15,933 57,278 58,267 131,478
-------------------------------------------------------------------------------------------
Gross unrealized gains 117 93 56 266
Gross unrealized losses (2) (232) (393) (627)
-------------------------------------------------------------------------------------------
Estimated fair value $ 16,048 $ 57,139 $ 57,930 $ 131,117
-------------------------------------------------------------------------------------------
Yield 6.75% 6.58% 6.06% 6.37%
-------------------------------------------------------------------------------------------
1995
Fixed rate $ 48 $ 61,119 $ - $ 61,167
Variable rate 18,742 - 58,962 77,704
-------------------------------------------------------------------------------------------
Carrying value 18,790 61,119 58,962 138,871
-------------------------------------------------------------------------------------------
Gross unrealized gains 126 480 34 640
Gross unrealized losses - (122) (1,396) (1,518)
-------------------------------------------------------------------------------------------
Estimated fair value $ 18,916 $ 61,477 $ 57,600 $ 137,993
-------------------------------------------------------------------------------------------
Yield 7.25% 6.60% 5.72% 6.31%
-------------------------------------------------------------------------------------------
</TABLE>
The carrying and estimated fair values of other
bonds and notes held to maturity at December 31,
1996, by remaining term to contractual maturity is
summarized as follows:
<TABLE>
<CAPTION>
United States Government States and Corporate Estimated
($ in thousands) and Guaranteed Agencies Municipals Notes Total Fair Value Yield
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Over 1 year to 5 years $ 119 $ 194 $ 54,007 $ 54,320 $ 53,933 5.99%
Over 10 years 15,814 57,084 4,260 77,158 77,184 6.64
----------------------------------------------------------------------------------------------------------------
$ 15,933 $ 57,278 $ 58,267 $131,478 $ 131,117 6.37%
----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 57
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
3.Loans Receivable Loans receivable at December 31, are summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mortgage Loans on Real Estate
Residential 1-4 family:
Conventional adjustable-rate loans $ 164,708 $ 145,604
Conventional fixed-rate loans 14,442 14,126
FHA loans 13,567 20,053
VA loans 7,460 10,882
-------------------------------
200,177 190,665
Residential multi-family
Conventional loans 216,348 263,792
FHA project loans 12,283 12,548
-------------------------------
228,631 276,340
Commercial real estate loans 409,218 507,279
-------------------------------
838,026 974,284
Unearned discount and fees (2,426) (4,308)
--------------------------------------------------------------------------------------------
835,600 969,976
--------------------------------------------------------------------------------------------
Other Loans
Cooperative loans 117,799 79,335
Student loans 6,673 37,819
Other consumer loans 8,604 8,393
-------------------------------
133,076 125,547
Unearned discount and fees (108) (355)
--------------------------------------------------------------------------------------------
132,968 125,192
--------------------------------------------------------------------------------------------
Loans receivable 968,568 1,095,168
--------------------------------------------------------------------------------------------
Allowance for loan losses (17,228) (23,993)
--------------------------------------------------------------------------------------------
Loans receivable, net $ 951,340 $ 1,071,175
--------------------------------------------------------------------------------------------
</TABLE>
The geographic distribution of the Bank's mortgage loan
portfolio at December 31, is summarized as follows:
<TABLE>
<CAPTION>
Multi-Family and
1-4 Family and Cooperative Commercial Real Estate
--------------------------- ----------------------
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York City 52.7% 42.7% 34.4% 33.5%
Long Island, New York 24.9 28.4 29.8 29.1
Westchester, New York 6.1 6.0 1.5 1.3
Other New York 0.9 0.7 2.3 2.4
New Jersey 2.6 3.3 13.3 15.3
Connecticut 0.3 0.5 4.3 3.6
----------------------------------------------
87.5 81.6 85.6 85.2
Pennsylvania 0.1 0.1 10.0 10.4
Florida 10.4 14.5 - -
Other states 2.0 3.8 4.4 4.4
----------------------------------------------
100.0% 100.0% 100.0% 100.0%
----------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 58
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Loans of $31,821,000, $39,369,000 and $70,770,000 were
nonperforming at December 31, 1996, 1995 and 1994,
respectively, and consisted predominantly of commercial real
estate and multi-family loans. In addition, the Bank had
loans of $2,125,000, $4,652,000 and $2,198,000 at December
31, 1996, 1995 and 1994, respectively, which were 90 days or
more past due but on an accrual status. These loans
continued to accrue interest since they were both well
secured and in the process of collection. At December 31,
1996, the Bank was not committed to lend additional funds to
borrowers with loans on a nonaccrual status.
Commercial real estate and multi-family loans categorized as
troubled debt restructurings totaled $155,538,000,
$195,139,000 and $199,290,000 at December 31, 1996, 1995 and
1994, respectively. Restructured loans at December 31, 1996,
1995 and 1994 had a weighted-average interest rate of 7.66%,
7.80% and 7.26%, compared to an original weighted-average
interest rate of 9.31%, 9.82% and 9.93%, respectively. At
December 31, 1996, the Bank had no commitments to lend
additional funds to borrowers with mortgages whose terms
were modified in a troubled debt restructuring. Troubled
debt restructurings were maintained on the accrual basis of
accounting with the exception of $9,001,000, $2,177,000 and
$6,654,000 at December 31, 1996, 1995 and 1994,
respectively, which were maintained on a cash basis of
accounting. In 1996, 1995 and 1994, $23,182,000, $3,837,000
and $43,509,000, respectively, of accruing troubled debt
restructurings were reclassified to a fully performing
status.
At December 31, 1996 and 1995, loans that were considered
impaired under the criteria of SFAS No. 114 aggregated
$115,663,000 and $124,734,000, respectively. Such amounts
consisted of nonperforming loans of $31,821,000 in 1996 and
$39,369,000 in 1995, loans restructured in a troubled debt
restructuring after December 31, 1994 of $82,964,000 in 1996
and $72,170,000 in 1995 and certain performing commercial
real estate and multi-family loans totaling $878,000 in 1996
and $13,195,000 in 1995. The average balance of impaired
loans for 1996 and 1995 was $124,109,000 and $114,947,000,
respectively. Chargeoffs of impaired loans amounted to
$8,214,000 in 1996 and $27,985,000 in 1995. At December 31,
1996, a valuation allowance of $1,650,000 was included in
the allowance for loan losses relating to impaired loans
with a principal balance aggregating $4,389,000. At December
31, 1995, a valuation allowance of $475,000 was maintained
relating to impaired loans with a principal balance
aggregating $3,161,000.
Total interest income recognized on nonperforming loans,
troubled debt restructurings and impaired loans in 1996,
1995 and 1994 amounted to $14,728,000, $16,282,000 and
$17,985,000, respectively. This compares to $23,299,000,
$28,005,000 and $31,450,000, respectively, of income that
would have been recognized under the loans' original
contractual terms. Cash basis income amounted to $789,000 in
1996, $1,181,000 in 1995 and $1,536,000 in 1994.
At December 31, 1996, the Bank had outstanding commitments
to originate fixed- and variable-rate 1-4 family mortgage,
cooperative and other consumer loans totaling $24,652,000,
versus $11,601,000 at December 31, 1995. Commitments
outstanding included $7,189,000 and $6,713,000 for 1996 and
1995, respectively, that were for fixed-rate mortgage loans,
which the Bank normally originates for sale into the
secondary market. At December 31, 1996 and 1995, fixed-rate
mortgage loans with a net carrying value of $498,000 and
$2,690,000 were held for sale and included in loans
receivable. In addition, $2,642,000 of student loans
originated and held for sale were included in loans
receivable at December 31, 1996. Outstanding commitments to
originate multi-family loans totaled $5,322,000 at December
31, 1996 and $1,250,000 at December 31, 1995.
Proceeds from sales of fixed-rate mortgage loans originated
for sale in 1996, 1995 and 1994 were $42,573,000,
$35,979,000 and $29,963,000, respectively. Net gains of
$178,000 and $107,000 were realized in 1996 and 1995,
respectively, and a net loss of $544,000 was realized in
1994. Proceeds from the sale of student loans in 1996
amounted to $35,157,000. This resulted in a gain of $746,000
which was included in other noninterest income.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 59
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
4. Allowance for Activity in the allowance for loan losses for the year
Loan Losses ended December 31, is summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $ 23,993 $ 23,346 $ 30,322
Provision charged to operations 1,500 29,400 7,990
Chargeoffs:
Residential 1-4 family (229) (3,233) (868)
Residential multi-family (635) (9,269) (4,622)
Commercial real estate (8,425) (16,437) (9,583)
Construction and land development -- -- (214)
All other -- (1) (66)
-----------------------------------
Total chargeoffs (9,289) (28,940) (15,353)
Recoveries 1,024 187 387
- ----------------------------------------------------------------------------------------------------
Balance at end of year $ 17,228 $ 23,993 $ 23,346
- ----------------------------------------------------------------------------------------------------
</TABLE>
The 1995 provision for loan losses included approximately
$22,000,000 recorded in conjunction with a rapid disposition
strategy adopted in the fourth quarter of 1995. The main
objective of the strategy was to reduce the Bank's then
current level of nonperforming assets as quickly as
possible. Chargeoffs of $4,032,000 and $15,744,000 were
recorded in 1996 and 1995, respectively, to effectuate this
strategy. The allowance for loan losses at December 31,
1996, 1995 and 1994 predominantly related to commercial real
estate and multi-family loans.
5. Premises and Premises and equipment at December 31, are summarized as
Equipment, follows:
Lease
Commitments
and Rental
Expense
<TABLE>
<CAPTION>
($ in thousands) 1996 1995
- ---------------------------------------------------------------------------------
<S> <C> <C>
Land $ 4,223 $ 4,223
Buildings 21,556 19,197
Leasehold improvements 14,693 14,699
Computer equipment 9,318 8,520
Furniture, fixtures and other equipment 13,686 13,213
-------------------
63,476 59,852
Accumulated depreciation and amortization (35,203) (32,887)
- ---------------------------------------------------------------------------------
$ 28,273 $ 26,965
- ---------------------------------------------------------------------------------
</TABLE>
The Bank has obligations under various long-term,
noncancelable operating leases which have various terms up
to the year 2043. Minimum annual rentals under these leases,
exclusive of taxes and escalation payments, at December 31,
1996 were $4,135,000 in 1997, $3,018,000 in 1998, $2,933,000
in 1999, $2,963,000 in 2000, $3,002,000 in 2001 and
$41,666,000 thereafter. Sublease rentals amounted to
$1,125,000 for the year 1997, $1,132,000 in 1998, $1,138,000
in 1999, $1,146,000 in 2000, $329,000 in 2001 and $4,373,000
thereafter. Rental expense amounted to $4,140,000,
$4,113,000 and $4,149,000 for the years ended December 31,
1996, 1995 and 1994, respectively. Sublease rental income
aggregated $1,090,000, $1,124,000 and $1,107,000 for the
years ended December 31, 1996, 1995 and 1994, respectively.
6. Real Estate Real estate held for development and acquired through
Held for foreclosure at December 31, which is reported in other
Development assets, is summarized as follows:
and Acquired
through
Foreclosure
<TABLE>
<CAPTION>
($ in thousands) 1996 1995
- ----------------------------------------------------------------------------------
<S> <C> <C>
Other real estate $ 13,740 $ 16,400
Joint ventures 23,174 22,952
- ----------------------------------------------------------------------------------
36,914 39,352
Allowance for real estate losses (3,270) (3,276)
- ----------------------------------------------------------------------------------
$ 33,644 $ 36,076
- ----------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 60
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
The FDIC Improvement Act of 1991 restricts the ability of
the Bank to continue its real estate joint venture
activities. For a further discussion, see note 16 -
Regulatory Matters.
Activity in the allowance for real estate losses for the
years ended December 31, is summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $ 3,276 $ 5,649 $ 13,697
Provision charged to operations 500 17,700 7,110
Chargeoffs:
Residential 1-4 family (1) (2,471) (570)
Residential multi-family - (4,164) (4,022)
Commercial real estate (830) (12,951) (8,941)
Construction and land development (120) (560) (1,640)
Joint ventures - (300) (630)
- ---------------------------------------------------------------------------------------------
Total chargeoffs (951) (20,446) (15,803)
Recoveries 445 373 645
- ---------------------------------------------------------------------------------------------
Balance at end of year $ 3,270 $ 3,276 $ 5,649
- ---------------------------------------------------------------------------------------------
</TABLE>
The 1995 provision for real estate losses included
approximately $13,600,000 recorded in conjunction with the
rapid disposition strategy adopted in the fourth quarter of
1995. Chargeoffs of $638,000 and $14,785,000 were recorded
in 1996 and 1995, respectively, to effectuate this strategy.
For additional discussion, see note 4 - Allowance for Loan
Losses.
7. Mortgage The Bank services mortgage loans for investors that are
Servicing appropriately not included in the accompanying consolidated
statements of financial condition. The unpaid principal
balances of such loans were $84,777,000 and $292,478,000 at
December 31, 1996 and 1995, respectively, of which
$17,488,000 and $45,333,000, respectively, represented
participation loans serviced for others. In 1996, the Bank
sold servicing rights on $185,000,000 of residential
mortgage loans serviced for investors at a net gain of
$1,504,000, which included servicing rights capitalized
under SFAS No. 122 with a net carrying value of $581,000.
Mortgage servicing rights capitalized in 1996 and 1995
amounted to $464,000 and $371,000, respectively. The
amortization of capitalized mortgage servicing rights
amounted to $60,000 in 1996 and $28,000 in 1995. At December
31, 1996 and 1995, the net carrying value of originated
mortgage servicing rights was not material and approximated
fair value. The Bank did not maintain a valuation allowance
during 1996 and 1995 with respect to mortgage servicing
rights.
8. Deposits Deposits at December 31, are summarized as follows:
<TABLE>
<CAPTION>
1996 1995
----------------------- -------------------------
Weighted-Average Weighted-Average
($ in thousands) Amount Stated Rate Amount Stated Rate
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Savings and other accounts $ 568,547 2.52% $ 591,216 2.52%
Money market deposit accounts 96,942 2.52 109,791 2.52
Negotiable order of withdrawal accounts 56,237 1.25 61,206 1.25
Noninterest-bearing checking accounts 63,756 - 55,109 -
Escrow deposit accounts 9,972 1.37 10,641 1.01
- --------------------------------------------------------------------------------------------------------------------------
795,454 2.21 827,963 2.24
Certificate of deposit accounts 871,220 5.42 887,377 5.69
- --------------------------------------------------------------------------------------------------------------------------
$1,666,674 3.89% $1,715,340 4.02%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 61
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Scheduled maturities of certificate of deposit accounts at
December 31, are summarized as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------- -----------------------
Weighted-Average Weighted-Average
($ in thousands) Amount Stated Rate Amount Stated Rate
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Within six months $384,628 4.99% $412,584 5.35%
Six months to one year 177,116 5.35 179,669 5.77
Over one to two years 116,909 5.52 94,443 5.85
Over two to three years 64,686 6.16 53,055 5.65
Over three to four years 89,676 6.65 58,031 6.23
Over four to five years 38,205 5.69 89,595 6.64
- -----------------------------------------------------------------------------------------------------
$871,220 5.42% $887,377 5.69%
- -----------------------------------------------------------------------------------------------------
</TABLE>
Certificate of deposit accounts of $100,000 or more totaled
$72,765,000 and $64,795,000 at December 31, 1996 and 1995,
respectively. At December 31, 1996, certificate of deposit
accounts of $100,000 or more by remaining maturity were as
follows: within six months $12,490,000; six months to one
year $14,046,000; and over one year $46,229,000.
Interest expense on deposits for the years ended December
31, is summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Savings and other accounts $14,735 $15,423 $19,072
Money market deposit accounts 2,632 3,038 3,677
Negotiable order of withdrawal accounts 733 766 857
Escrow deposit accounts 109 114 122
- -----------------------------------------------------------------------------------------------------
18,209 19,341 23,728
Certificate of deposit accounts 48,597 49,728 37,538
- -----------------------------------------------------------------------------------------------------
$66,806 $69,069 $61,266
- -----------------------------------------------------------------------------------------------------
</TABLE>
9. Borrowed Funds Borrowed funds at December 31, consist of the following:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Securities sold under agreements to repurchase $409,500 $365,000
Funds borrowed under Municipal Investment Trust
Fund repurchase agreements 61,344 65,262
Advances from FHLB 155,000 195,000
Employee Stock Ownership Plan debt (see note 12) 14,230 15,670
Other 310 310
- -------------------------------------------------------------------------------------------------------
$640,384 $641,242
- -------------------------------------------------------------------------------------------------------
</TABLE>
The Bank sells securities to broker-dealers and the Federal
Home Loan Bank (FHLB) under agreements to repurchase the
same securities within a predetermined period of time that
are accounted for as collateralized financing arrangements
(and referred to as reverse repurchase agreements). The
agreements involve the delivery of the securities to
broker-dealers or the FHLB who arrange the transactions. The
securities remain in their custody and are returned to the
Bank upon the maturities of the agreements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 62
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Reverse repurchase agreements at December 31, 1996 are
summarized in the following table by scheduled maturity:
<TABLE>
<CAPTION>
Weighted-Average
($ in thousands) Amount Interest Rate
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Within 30 days $ 80,000 5.46%
30 to 90 days 264,500 5.48
Over 90 days(1) 65,000 5.26
- ------------------------------------------------------------------------------------------------------------
$ 409,500 5.44%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The agreements mature in December 1998; rates reset
quarterly.
Additional data concerning reverse repurchase agreements
during the years ended December 31, is summarized as
follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average balance $382,790 $ 265,823 $ 55,997
Maximum month-end outstanding balance for the year $409,500 $ 365,000 $116,258
Accrued interest payable at year end $ 2,533 $ 3,793 $ 765
Weighted-average rate for the year 5.83% 6.34% 5.02%
Weighted-average rate at year end 5.44% 5.75% 5.89%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Information regarding securities sold under reverse
repurchase agreements with individual counterparties in
which the amount at risk exceeded 10% of the Bank's
stockholders' equity at December 31, 1996, is summarized in
the table that follows. (The amount at risk represents the
excess of the higher of the carrying value or estimated fair
value of the securities minus the carrying value of the
repurchase obligation.)
<TABLE>
<CAPTION>
Securities Sold
Repurchase -----------------------------
($ in thousands) Weighted--Average Obligation Estimated Amount
Counterparty Remaining Maturity Carrying Value Carrying Value Fair Value at Risk
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FHLB 46 days $250,000 $271,215 $268,550 $21,215
Broker-dealers 318 days $159,500 $170,191 $169,493 $10,691
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Bank sold tax-exempt bonds and two FHA project loans in
previous transactions to unit investment trust funds and the
proceeds approximated par value. The trust funds have put
options that require the Bank to repurchase the securities
or loans at par value under certain specified circumstances.
The Bank has accounted for these transactions as
collateralized financing arrangements for financial
statement purposes. The weighted-average cost of these
borrowings was 6.82% for 1996 and 6.81% for 1995 and 1994.
The securities and loans had a weighted-average remaining
maturity of 21 years at December 31, 1996.
FHLB advances at December 31, 1996 were comprised of:
$5,000,000 with a rate of 6.30% maturing in January 1998;
$50,000,000 at 5.46% maturing in March 1998; and
$100,000,000 at 6.20% maturing in June 2000. Additional data
concerning FHLB advances during the years ended December 31,
is summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average balance $165,300 $310,214 $409,403
Maximum month-end outstanding balance for the year $175,000 $444,000 $484,000
Weighted-average rate for the year 5.94% 5.88% 5.47%
Weighted-average rate at year end 5.96% 5.85% 5.62%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Based on the Bank's available collateral, its total
additional borrowing capability with the FHLB and
broker-dealers was estimated to be approximately
$800,000,000 at December 31, 1996. For additional
information on assets that have been pledged as collateral
to secure various borrowing arrangements, see note 11 -
Asset and Dividend Restrictions.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 63
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
10. Preferred The Board of Directors is authorized, subject to the consent
Stock of the Bank's regulators, to approve the issuance of up to
10,000,000 shares of preferred stock ($1.00 par value)
without stockholder approval. The powers, preferences and
rights, and the qualifications, limitations, and
restrictions thereof on each series of preferred stock
issued are determined by the Board of Directors and approved
as required by the New York State Banking Law.
In 1989, the Bank issued 1,764,313 shares of preferred
stock, designated as Series A 8.25% ESOP Cumulative
Convertible Preferred Stock, in connection with the
establishment of the Bank's Employee Stock Ownership Plan.
The preferred stock pays semiannual cumulative dividends at
an annual rate of 8.25%. The preferred stock is convertible
into common stock at the option of the holder at a
conversion rate of .9448 shares of common stock for each
share of convertible preferred. This conversion rate is
subject to normal anti-dilutive adjustments. The preferred
stock is redeemable, in whole or in part, at the option of
the Bank for common stock or cash at $13.30 per share as of
December 31, 1996 and at declining prices thereafter to
$13.00 per share after July 1, 1999, or under other limited
circumstances.
In 1993, the Bank issued 2,000,000 shares of preferred
stock, designated as Series B 12% Noncumulative Perpetual
Preferred Stock (the Series B Preferred Stock), in a private
placement at $25.00 per share (equal to the liquidation
preference per share). The net proceeds of the stock sale
were $47,312,000. The Series B Preferred Stock may be
redeemed at the option of the Bank, in whole or in part, on
or after October 1, 2003, at an initial price of $27.25 per
share and declining ratably to $25.00 per share on October
1, 2013. Dividends on the Series B Preferred Stock are not
cumulative but, if declared by the Bank, are payable
quarterly.
In 1990, the Bank adopted a Shareholder Rights Plan pursuant
to which rights were distributed to shareholders and are
deemed to be attached to the shares of common stock of the
Bank. If and when the rights become exercisable, each right
would initially entitle the holder thereof to purchase one
one-hundredth of a share (a unit) of junior participating
preferred stock at a purchase price of $24.00 (both the
number of units and the purchase price are subject to
adjustment). The rights become exercisable if certain events
relating to the acquisition or proposed acquisition of
common stock of the Bank occur. Each of the rights (with
some exceptions) becomes a right to acquire for $24.00
common stock having a value equal to $48.00 (based on the
lowest closing price during the one-year period prior to
such circumstance). The rights are nonvoting and, unless
they become exercisable, have no dilutive effect on the
earnings or book value per share of the Bank's common stock.
The rights will expire on June 25, 2000, unless earlier
redeemed by the Bank for $.01 per right. At December 31,
1996 and 1995, 150,000 shares of junior participating
preferred stock were authorized; none were outstanding.
11. Asset and The Bank is required under Federal Reserve Board regulations
Dividend to maintain reserves, generally consisting of cash or non-
Restrictions interest-earning accounts, against its transaction accounts.
At December 31, 1996 and 1995, balances maintained as
reserves were $1,003,000 and $9,232,000, respectively. The
average balance of reserves was $7,897,000 in 1996 and
$8,148,000 in 1995. As a member of the Federal Home Loan
Bank System, the Bank borrows from the FHLB on a secured
basis and is required to maintain an investment in the
capital stock of the FHLB, the amount of which fluctuates
based on outstanding borrowings. At December 31, 1996 and
1995, such investment amounted to $23,600,000 and
$27,850,000, respectively.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 64
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
Information at December 31, 1996 regarding assets that have
been sold or pledged in various collateralized financing
arrangements is summarized as follows
<TABLE>
<CAPTION>
Estimated Carrying
($ in thousands) Assets Carrying Value Fair Value Amount
Financing Arrangement Sold or Pledged of Assets of Assets of Liability
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Securities sold under agreements to repurchase mortgage-backed securities $441,406 $438,043 $409,500
Funds borrowed under Municipal Investment mortgage-backed and
Trust Fund repurchase agreements municipal securities and mortgage loans 165,265 162,986 61,344
Advances from FHLB mortgage loans 201,020 198,245 155,000
Employee Stock Ownership Plan debt mortgage-backed securities 23,463 23,638 14,230
- -------------------------------------------------------------------------------------------------------------------------
$831,154 $822,912 $640,074
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The payment of dividends by the Bank on its common and
preferred stock is subject to various restrictions.
According to section 112 of the New York State Banking Law,
dividends may be declared and paid only out of the net
profits of the Bank. The approval of the Superintendent of
Banks of the State of New York (the Superintendent) is
required if the total of all dividends declared in any
calendar year will exceed net profits for that year plus the
retained net profits of the preceding two years less any
required transfer to surplus or a fund for the retirement of
any preferred stock. In this regard, the Bank can declare
dividends in 1997 without regulatory approval of $22,143,000
from its retained earnings at December 31, 1996, plus an
additional amount equal to the net profits, as defined, for
1997 up to the date of any such dividend declaration.
Dividends cannot be declared or paid on the Bank's common
stock for any period other than a period for which dividends
are declared or paid on the Bank's preferred stock. The Bank
paid a common stock dividend of $.05 per share on December
2, 1996, which represented the first common dividend since
the fourth quarter of 1990.
The Bank has permission from the Superintendent to declare
and pay dividends on its preferred stock, even if the Bank
does not have net profits as described above, as long as the
Bank's Tier 1 leverage capital ratio does not fall below
5.50% and the Bank would be in compliance with all other
regulatory capital requirements after any such dividend
payment. During the past three years, the Bank has declared
and paid the preferred dividends in accordance with the
terms of the related stock. The payment of dividends in the
future on the Bank's common and preferred stock will be
determined by the Board of Directors in light of conditions
then existing, including the Bank's earnings and financial
condition.
12. Benefit and Pension Plans
Incentive Plans
The Bank maintains a tax-qualified, noncontributory defined
benefit pension plan covering all employees who qualify as
to age and length of service. The Bank's policy of funding
the plan is consistent with the requirements of Federal law
and regulations. Contributions are intended to provide not
only for benefits attributed to service to date but also for
those expected to be earned in the future. A supplemental
plan for the Bank's executive officers provides benefits
that normally would be paid under the pension plan but are
precluded from being paid due to limitations imposed by the
Internal Revenue Code. The Bank also maintains a defined
benefit pension plan covering nonemployee members of the
Board of Directors.
The plans provide for defined benefits based upon various
factors such as an employee's or executive officer's
compensation, director's annual retainer, age at retirement
and years of service. Assets held by the plans consist
primarily of common stock, government securities and
corporate bonds and debentures. Total contributions of
approximately $253,000, $202,000 and $200,000 were made to
the plans in 1996, 1995 and 1994, respectively.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 65
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
The funded status of the pension plans and amounts
recognized in the Bank's consolidated financial statements
at December 31, is summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Actuarial Present Value of Benefit Obligation
Vested benefit obligation $(25,183) $(22,906) $(17,998)
Nonvested benefit obligation (882) (729) (889)
-------------------------------
Accumulated benefit obligation (26,065) (23,635) (18,887)
Effect of future compensation levels (7,408) (8,792) (4,518)
-------------------------------
Projected benefit obligations for service rendered to date (33,473) (32,427) (23,405)
Plan assets at fair value 46,085 40,843 34,261
-------------------------------
Plan assets in excess of projected benefit obligation 12,612 8,416 10,856
Unrecognized net (gain) loss from past experience different from
that assumed and effects of changes in assumptions (1,142) 3,197 1,303
Unrecognized prior service cost 2,237 1,769 842
Unrecognized net asset at transition being recognized primarily
over seventeen years (2,045) (2,406) (2,768)
----------------------------------------------------------------------------------------------------
Prepaid pension expense included in other assets $ 11,662 $ 10,976 $ 10,233
----------------------------------------------------------------------------------------------------
Components of Net Pension Income (Expense)
Service cost-benefits earned during the period $ (1,274) $ (1,033) $ (1,167)
Interest cost on projected benefit obligation (2,245) (2,091) (1,880)
Actual return (loss) on plan assets 6,370 7,653 (667)
Net amortization and deferral (2,419) (3,988) 4,206
----------------------------------------------------------------------------------------------------
Net pension income included in compensation and benefits $ 432 $ 541 $ 492
----------------------------------------------------------------------------------------------------
</TABLE>
For the plans, the weighted-average discount rate used in
determining the actuarial present value of the projected
benefit obligation as of December 31, 1996, 1995 and 1994
was 8.00%, 7.50% and 8.75%, respectively. The
weighted-average rate of increase in future compensation
levels was estimated to be 4% for 1996 and 5% for 1995 and
1994. The expected weighted-average, long-term rate of
return on plan assets was 10% for 1996, 1995 and 1994.
Postretirement Benefits Other Than Pensions
The Bank provides certain health care and life insurance
benefits to its retired employees and their dependents. The
liability for these postretirement benefits is unfunded.
Health care benefits are provided free of charge to
employees who retired prior to 1985, while a significant
portion of the cost of such benefits for employees who
retired on or after January 1, 1985 is subsidized by the
Bank. The Bank's contributions for health care benefits are
linked to years of service for post-1992 retirees and are
subject to a cap per claimant for all retirees.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 66
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
The unfunded status of the postretirement plans and amounts
recognized in the Bank's consolidated financial statements
at December 31, is summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Accumulated Postretirement Benefit Obligation
Retirees $(4,524) $(4,345) $(3,544)
Fully eligible active plan participants (999) (1,198) (1,331)
Other active plan participants (1,310) (1,159) (1,294)
------------------------------
Accumulated benefit obligation (6,833) (6,702) (6,169)
Unrecognized net gain from past experience different from
that assumed and effects of changes in assumptions (597) (613) (1,085)
Unrecognized transition obligation being recognized over
twenty years 5,319 5,652 5,984
---------------------------------------------------------------------------------------------------
Accrued postretirement benefit expense included in other
liabilities $(2,111) $(1,663) $(1,270)
---------------------------------------------------------------------------------------------------
Components of Postretirement Benefit Expense
Service cost - benefits earned during the period $ 153 $ 113 $ 183
Interest cost on accumulated postretirement benefit obligation 510 493 486
Net amortization 312 214 332
---------------------------------------------------------------------------------------------------
Postretirement benefit expense included in compensation and
benefits $ 975 $ 820 $ 1,001
---------------------------------------------------------------------------------------------------
</TABLE>
For measurement purposes, the annual rate of increase in the
per capita cost of covered health care benefits assumed for
1996 was 9.3%. The rate was assumed to decrease gradually to
1.7% by the year 2006. For all later years, no increase was
assumed since per claimant caps are expected to be reached
in the year 2006. The weighted-average discount rate used in
determining the accumulated postretirement benefit
obligation as of December 31, 1996, 1995 and 1994 was 8.00%,
7.50% and 8.75%, respectively. The weighted-average rate of
increase in future compensation levels for life insurance
benefits was 4% for 1996 and 5% for 1995 and 1994. The
effect of a 1% increase each year in the assumed health care
cost trend rate would not significantly affect the amount of
the accumulated postretirement benefit obligation or the
aggregate of the service and interest cost components of
postretirement benefit expense reported.
Employee Stock Ownership Plan
The Bank established an Employee Stock Ownership Plan (ESOP)
in 1989. The ESOP is a tax-qualified, noncontributory
defined contribution benefit plan, which covers
substantially all of the Bank's employees. In connection
with establishing the ESOP, the Bank issued to the ESOP
1,764,313 shares of Series A 8.25% ESOP Cumulative
Convertible Preferred Stock (the Preferred Stock). Employees
who have completed one year of service are eligible to
receive allocations of the Preferred Stock on the basis of
compensation, as defined. Amounts allocated to participants
generally become vested over a six-year period, with 20%
vested after two years of credited service and an additional
20% vested for each year thereafter. Participants may become
100% vested sooner upon retirement, or other circumstances.
Participants who leave the Bank forfeit the unvested portion
of their accounts and such amounts are reallocated to the
remaining participants' accounts.
The ESOP purchased substantially all of the Preferred Stock
with the proceeds of $22,900,000 of senior collateralized
ESOP notes. The notes carry an interest rate of 8.45% and
mature on December 31, 2003, which resulted in total
principal and interest payments of $2,734,000 in 1996, 1995
and 1994. The ESOP borrowing is being repaid from dividends
paid on unallocated shares and other contributions by the
Bank over the amortization period of the notes. The Bank has
also guaranteed such borrowing and secured that guarantee by
a pledge of FNMA and FHLMC mortgage-backed securities (see
note 11 - Asset and Dividend Restrictions). As the ESOP
borrowing and debt guarantee (which is reported as a
reduction of stockholders' equity) are reduced, the
Preferred Stock is allocated annually to ESOP participants
ratably over the term of the plan.
In 1996, 1995 and 1994, 58,236, 52,741 and 46,480 shares of
the Preferred Stock were converted into the equivalent of
74,134, 77,477 and 77,467 shares of common stock,
respectively. As of December 31, 1996, a total of 227,922
shares of the Preferred Stock, which were allocated to
employees who subsequently left the Bank, have been either
liquidated or
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 67
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
converted to common stock. Thus, the remaining 1,536,391
shares represent all of the Preferred Stock that was
outstanding at December 31, 1996, of which 707,359 shares
were allocated to employees. The Bank recognized $1,787,000,
$1,656,000 and $1,566,000 in 1996, 1995 and 1994,
respectively, of expense related to the ESOP plan (of which
$493,000, $248,000 and $52,000, respectively, was included
in compensation and benefits). The remainder for each year
was reported as interest expense on the ESOP borrowing. The
Preferred Stock dividends on unallocated shares amounted to
$953,000 in 1996, $1,080,000 in 1995 and $1,207,000 in 1994.
The dividends on allocated shares of $695,000, $630,000 and
$560,000 in 1996, 1995 and 1994, respectively, are
reinvested for the participants in the common stock of the
Bank. In connection therewith, during 1996 and 1994, the
ESOP purchased 29,723 and 35,562 shares of common stock
directly from the Bank.
Stock Option Plans
The Bank maintains a Long-Term Incentive Program (the
Program) and the 1996 Equity Incentive Plan (the Plan, which
was approved by shareholders in April 1996) that provide for
1,031,235 and 1,000,000 shares of authorized common stock,
respectively, to be reserved for future issuance to eligible
employees until expiration on June 30, 1997 for the Program
and April 26, 2006 for the Plan. Awards under both include
incentive and nonqualified stock options, stock appreciation
rights and performance units with a cash value based on the
Bank's performance in relation to certain predetermined
criteria. Each outstanding option is exercisable, commencing
one year from the date of grant to the extent vested, into
one share of common stock at a price that equals the market
price of the common stock on the date the options are
granted. The options have a term of 10 years from the date
of issuance and normally vest over a period of five years as
determined by the Compensation Committee of the Board of
Directors.
In April 1996, shareholders approved the 1996 Nonemployee
Directors Stock Option Plan, reserving 200,000 shares of
authorized common stock for issuance to eligible directors,
until expiration on April 26, 2006. Grants of nonqualified
stock options will be made on the date of every Annual
Meeting of Shareholders (which began with the 1996 meeting)
to each eligible director to purchase 4,000 shares of the
Bank's common stock at an exercise price equal to the fair
value of the common stock as of the date of the grant. The
options have a term of 10 years and are exercisable and
fully vested on the first anniversary of the grant date or
earlier under certain circumstances.
Data concerning stock options is summarized as follows:
<TABLE>
<CAPTION>
Exercise Price
--------------------------------------------------------------- Total Weighted-Average
$1.531 $3.75-$3.813 $5.75 $8.75-$10.375 $11.125-$11.50 Options Exercise Price
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding, Jan 1, 1994 225,000 178,500 184,000 288,500 - 876,000 $ 5.39
Forfeited - (12,800) (5,913) (11,000) - (29,713) $ 6.15
Exercised (10,000) (1,200) (10,600) (5,000) - (26,800) $ 4.65
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding, Dec 31, 1994 215,000 164,500 167,487 272,500 - 819,487 $ 5.39
Granted - - - 168,000 - 168,000 $ 9.88
Forfeited - (4,600) (3,612) (14,750) - (22,962) $ 7.46
Exercised (50,000) (18,400) (4,125) - - (72,525) $ 2.34
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding, Dec 31, 1995 165,000 141,500 159,750 425,750 - 892,000 $ 6.43
Granted - - - - 420,000 420,000 $11.16
Forfeited - (1,800) - - (3,000) (4,800) $ 8.38
Exercised (6,000) (16,000) (17,700) (101,535) - (141,235) $ 7.83
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding, Dec 31, 1996 159,000 123,700 142,050 324,215 417,000 1,165,965 $ 7.95
- -----------------------------------------------------------------------------------------------------------------------------------
Remaining weighted-average term (years) 5.0 5.9 3.6 5.1 9.5 6.6
- ------------------------------------------------------------------------------------------------------------------
Weighted-average exercise price $1.531 $3.771 $5.75 $9.544 $11.157 $7.95
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Options that were exercisable at December 31,1996, 1995 and
1994 amounted to 617,000, 669,000 and 706,000, respectively.
The related weighted-average exercise prices were $5.69,
$5.78 and $5.58, respectively. At December 31, 1996, there
were 23,095, 619,000 and 164,000 shares available for future
grant under the Program, the Plan and the 1996 Nonemployee
Directors Stock Option Plan, respectively. See note 14
Earnings Per Share, for a discussion of SFAS No. 123,
"Accounting for Stock-Based Compensation."
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 68
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
13. Federal, State The Bank files a consolidated Federal income tax return on a
and Local calendar-year basis. Prior to 1996, the Bank was allowed a
Income Taxes special bad debt deduction under section 593 of the Internal
Revenue Code of 1986 (as amended) in determining its taxable
income, if certain definitional tests or other conditions
were met. The deduction was based either on specified
experience formulas or a percentage of taxable income after
utilization of available net operating loss carryforwards.
The Bank used the experience method in 1994 and 1995.
Federal legislation was signed into law in 1996 which, among
other things, repealed section 593, as it relates to bad
debt deductions. As a result, a large thrift such as the
Bank must use the specific chargeoff method in computing its
bad debt deduction beginning with its 1996 Federal tax
return. However, for state purposes, New York State enacted
legislation in 1996, which among other things, decoupled the
Federal and New York State tax laws regarding thrift bad
debt deductions and permits the continued use of the bad
debt reserve method under section 593 described above. As of
December 31, 1996, New York City had not yet changed its law
in this respect.
The Bank files combined New York State franchise and New
York City financial corporation tax returns on a
calendar-year basis with all but one of its subsidiaries.
The Bank's current provisions for New York State and City
taxes for the years ended December 31, 1996, 1995 and 1994
are based upon the "combined taxable asset" method. New York
State and City do not allow for the utilization of net
operating loss carrybacks or carryforwards for banks, except
for the subsidiaries which file a separate tax return.
The Bank's bad debt reserve on qualifying real property
loans for its base year for Federal, New York State and New
York City income tax purposes was $36,900,000. Any charges
to this reserve for other than a bad debt on a qualified
real property loan may create income for tax purposes, which
would be subject to the corporate income tax rates in effect
at that time. However, it is not contemplated that any such
charges will be made to this reserve in a manner that would
create income tax liabilities. In addition, if qualifying
assets, as defined for tax purposes, fall below 60%, the
Bank may be required to recapture essentially all of the bad
debt reserve into taxable income for New York State tax
purposes only. At December 31, 1996, 1995 and 1994, the
Bank's qualifying assets exceeded 60% of total assets.
At December 31, 1996, the Bank had an alternative minimum
tax credit carryforward of $1,504,000 (which may be carried
forward indefinitely) and a net operating loss carryforward
of $22,553,000 (which will expire between the years 2006
through 2011) available to reduce future Federal income
taxes.
At December 31, 1996 and 1995, the Bank had a net deferred
tax asset (before a valuation allowance) of $54,555,000 and
$67,034,000, respectively. The asset relates to the
unrealized benefit for net temporary differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases that will result
in future tax deductions, and unused operating loss and tax
credit carryforwards. The valuation allowance for deferred
tax assets amounted to $11,964,000 and $36,238,000 at
January 1, 1996 and 1995, respectively. The net change in
the allowance for the years ended December 31, 1996, 1995
and 1994 was a decrease of $2,774,000, $24,274,000 and
$3,500,000, respectively.
In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that
some portion or all of the deferred tax assets will not be
realized. The ultimate realization of such assets is
dependent upon the generation of sufficient taxable income
during the periods in which those temporary differences
become deductible. Consistent with the significant
reductions of nonperforming assets and related expenses over
the past several years, the Bank believes that the level and
predictability of its future taxable income has and will
continue to increase. In addition, the Bank believes the net
deductible temporary differences represented by the deferred
tax asset will reverse during periods in which the Bank
generates taxable income. As a result, the Bank has
recognized a significant portion of its deferred tax asset
through December 31, 1996, primarily through periodic
adjustments to the valuation allowance. In order to fully
realize the net deferred tax asset of $45,365,000 at
December 31, 1996, the Bank will need to generate future
taxable income of approximately $99,000,000. Based upon
projections of future taxable income over the periods in
which the deferred tax assets become deductible, management
believes it is more likely than not the Bank will realize
the benefits of such assets, net of the existing valuation
allowance at December 31, 1996.
The valuation allowance relates to that portion of the asset
which will result in tax deductions beyond the timeframe in
which it is possible to estimate, with a high degree of
predictability, a similar amount of taxable income. The Bank
will continue to evaluate whether the maintenance or
magnitude of such allowance is appropriate in light of
future facts and circumstances. As a result, the allowance
will be subject to ongoing adjustments in connection with
reassessments of future levels of taxable income.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 69
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
The components of tax expense (benefit) for the
years ended December 31, are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------------------------- ----------------------------- ------------------------------
($ in thousands) Current Deferred Total Current Deferred Total Current Deferred Total
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal $ - $8,212 $8,212 $ - $(29,728) $(29,728) $ - $(2,682) $(2,682)
State and local 550 2,285 2,835 550 (10,322) (9,772) 550 (868) (318)
--------------------------------------------------------------------------------------------------------------
$550 $10,497 $11,047 $ 550 $(40,050) $(39,500) $550 $(3,550) $(3,000)
--------------------------------------------------------------------------------------------------------------
</TABLE>
The significant components of deferred tax expense (benefit)
for the years ended December 31, are summarized as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Book credit loss provision, past due interest and book chargeoffs
(in excess of) less than tax chargeoffs $16,334 $(15,562) $ 480
Capitalized cost of acquisition, other real estate 223 1,107 619
Net operating loss carryforward (3,626) (980) (756)
Depreciation 284 (507) (241)
Other, net 56 166 (152)
Decrease in the valuation allowance for the deferred tax asset (2,774) (24,274) (3,500)
---------------------------------------------------------------------------------------------------
Tax expense (benefit) allocated to operations(1) $10,497 $(40,050) $(3,550)
---------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes tax expense (benefit) allocated directly to
stockholders' equity of $(792) in 1996, $363 in 1995 and
$(333) in 1994.
The tax effects of the temporary differences that give rise
to the net deferred tax asset at December 31, are summarized
as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995
-------------------------------------------------------------------------------------
<S> <C> <C>
Deferred Tax Asset
Book credit loss provision, past due interest and book chargeoffs
in excess of tax chargeoffs $43,843 $60,177
Capitalized cost of acquisition, other real estate 1,706 1,929
Net operating loss carryforward 7,893 3,530
Unrealized loss (gain) on securities available for sale 25 (30)
Other 3,121 3,100
-------------------
Total gross deferred tax asset 56,588 68,706
Valuation allowance (9,190) (11,964)
-------------------------------------------------------------------------------------
Deferred tax asset, net of valuation allowance 47,398 56,742
-------------------------------------------------------------------------------------
Deferred Tax Liability
Tax over book depreciation 1,956 1,672
Other 77 -
-------------------------------------------------------------------------------------
Total deferred tax liability 2,033 1,672
-------------------------------------------------------------------------------------
Net deferred tax asset $45,365 $55,070
-------------------------------------------------------------------------------------
</TABLE>
The reconciliation between the statutory Federal income tax
rate and the Bank's effective tax rate (including state and
local taxes) for the years ended December 31, is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory Federal income tax rate 35.0% (35.0)% 35.0%
Impact of change in valuation allowance, net (7.3) (149.3) (73.5)
Tax effects of:
State and local income taxes, net of Federal tax benefit 10.7 (8.8) 12.6
Other (1.0) (1.9) (4.2)
---------------------------------------------------------------------------------------------------
Effective tax rate 37.4% (195.0)% (30.1)%
---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 70
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
14. Earnings Primary earnings per share is calculated by dividing net
Per Share income less preferred stock dividend requirements by the
weighted-average number of shares of common stock and
dilutive common stock equivalents outstanding. Common stock
equivalents consist of options to purchase common stock.
Fully diluted earnings per share is calculated by dividing
net income less preferred stock dividend requirements and
certain adjustments by the weighted-average number of shares
of common stock, dilutive common stock equivalents and other
potentially dilutive securities outstanding. The adjustments
to net income represent the elimination of ESOP dividends
and the addition of incremental expense, which would arise
as a result of a hypothetical conversion into common stock
of the ESOP preferred shares. Other potentially dilutive
securities represent the shares of common stock that would
arise from such a conversion.
Preferred dividend requirements, adjusted net income
applicable to common stock and the average number of shares
used for primary and fully diluted earnings per share
computations for the years ended December 31, are summarized
as follows:
<TABLE>
<CAPTION>
($ in thousands) 1996 1995 1994
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred dividend requirements $7,211 $ 7,710 $7,317
Adjusted net income applicable to:
Primary earnings per share $11,288 $11,529 $5,634
Fully diluted earnings per share $11,664 $12,219 $6,263
Average number of common shares outstanding 13,387,581 13,260,743 13,095,660
Average number of common and dilutive common
equivalent shares outstanding for:
Primary earnings per share 13,528,303 13,592,102 13,428,041
Fully diluted earnings per share 15,134,708 15,310,584 15,298,964
--------------------------------------------------------------------------------------------
</TABLE>
On January 1, 1996, the Bank adopted SFAS No. 123,
"Accounting for Stock-Based Compensation." The statement
encourages, but does not require, companies to use a fair
value-based method of accounting for stock-based employee
compensation plans, including stock options and stock
appreciation rights. (The statement does not apply to the
Bank's Employee Stock Ownership Plan.) Under this method,
compensation expense is measured as of the date the awards
are granted based on the estimated fair value of the awards,
and the expense is generally recognized over the vesting
period. If a company elects to continue using the intrinsic
value-based method under APB Opinion No. 25, pro forma
disclosures of net income and net income per share are
required as if the fair value-based method had been applied.
Under the intrinsic method, compensation expense is the
excess, if any, of the market price of the stock as of the
grant date over the amount employees must pay to acquire the
stock or over the price established for determining
appreciation. Under the Bank's current compensation
policies, there is no such excess on the date of grant and
therefore, no compensation expense is recorded.
Pursuant to the provisions of SFAS No. 123, the per share
weighted-average estimated fair value of stock options
granted in 1996 and 1995 was approximately $3.35 and $3.00,
respectively, on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average
assumptions for 1996 and 1995, respectively: annual expected
dividend yields of 2.3% and 2.1%; expected volatility of
23.4% for both years; risk-free interest rates of 6.7% and
6.0%; and expected lives of 5.7 and 6.0 years.
The Bank has elected to continue to apply APB Opinion No. 25
and related interpretations in accounting for its stock
option plans. Accordingly, no compensation expense has been
recognized in the consolidated statements of income related
to the stock option plans. Had compensation expense been
determined based on the estimated fair value of the awards
at the grant dates, the Bank's pro forma net income and
earnings per share would have been approximately the same as
the amounts which were reported.
In computing pro forma net income, only options granted in
1996 and 1995 are considered. Additionally, the full impact
of calculating compensation expense for stock options under
SFAS No. 123 is not reflected in pro forma net income, since
such expense is apportioned over the vesting period of those
options which are expected to vest. Compensation expense for
options granted prior to 1995 is also not considered.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 71
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
15. Contingencies As a result of transactions conducted in the ordinary course
of business, the Bank is a defendant in various legal
actions. Management, after consultation with legal counsel,
believes that the ultimate liability, if any, arising from
such legal actions will not materially affect the Bank's
financial condition or results of operations.
16. Regulatory The Bank is subject to regulation, examination and
Matters supervision by the New York State Banking Department and the
Federal Deposit Insurance Corporation (the Regulators). The
Bank is also governed by numerous Federal and State laws and
regulations, including the FDIC Improvement Act of 1991
(FDICIA). Among other matters, FDICIA established five
capital categories ranging from well capitalized to
critically undercapitalized. Such classifications are used
by the FDIC to determine various matters, including prompt
corrective action and each institution's semi-annual FDIC
deposit insurance premium assessments.
In order to be considered adequately capitalized at December
31, 1996, the Bank is required to maintain regulatory
defined minimum Tier 1 leverage, Tier 1 risk-based and total
risk-based capital amounts and ratio levels of $100,260,000
and 4%, $54,478,000 and 4%, and $108,955,000 and 8%,
respectively. At December 31, 1996, the Bank's Tier 1
leverage, Tier 1 risk-based and total risk-based capital
amounts and ratios were $176,932,000 and 7.06%, $176,932,000
and 12.99%, and $199,065,000 and 14.62%, respectively. At
December 31, 1995, the Bank's Tier 1 leverage, Tier 1
risk-based and total risk-based capital amounts and ratios
were $153,928,000 and 6.02%, $153,928,000 and 10.42%, and
$176,880,000 and 11.98%, respectively. The Bank is a
well-capitalized institution under the criteria of FDICIA,
which requires minimum Tier 1 leverage, Tier 1 risk-based
and total risk-based ratios of 5%, 6% and 10%, respectively.
Management believes that there are no current conditions or
events outstanding which would change the Bank's designation
as a well-capitalized institution. The Bank's capital
amounts are subject to qualitative judgments by the
Regulators regarding components, risk weightings and other
factors. In September 1996, the Regulators terminated a
Memorandum of Understanding with the Bank that was in effect
since June 1994. The memorandum, among other things,
previously required the Bank to maintain a minimum Tier 1
leverage capital ratio of 5.50%.
FDICIA restricts the ability of state-chartered institutions
to engage in activities not permissible for national banks
or their subsidiaries. With regard to this restriction, the
FDIC approved a phase-out plan which allows the Bank to
continue its real estate joint venture activities through
December 31, 2000, subject to certain conditions. The
conditions include a requirement that supplemental quarterly
capital adequacy calculations are performed which deduct all
such real estate joint venture investments. The Bank
performs these supplemental calculations and continues to be
well capitalized under applicable FDIC regulations.
Solely for purposes of these calculations, the Bank's Tier 1
leverage, Tier 1 risk-based and total risk-based capital
ratios (as calculated by deducting the net carrying value of
joint venture investments, inclusive of commitments to
invest) would have been 6.23%, 11.56% and 13.19%,
respectively, at December 31, 1996 and 5.19%, 9.05% and
10.61%, respectively, at December 31, 1995. If the Bank's
capital (calculated as described above) falls below the
level required for well-capitalized institutions pursuant to
FDIC regulations, it must submit a plan to restore its
capital to such a level. There can be no assurance, absent
an extension by the FDIC, that any of the Bank's joint
ventures can be completed or disposed of by December 31,
2000, without significant loss to the Bank. For purposes of
the FDIC's assignment of the Bank to the capital categories
described previously to determine prompt corrective action
and the Bank's deposit insurance assessment rates, the
Bank's capital ratios are computed after deducting the real
estate joint venture investments, as previously defined.
17. Fair Value of Fair value estimates are made at a specific point in time
Financial based on available information about each financial
Instruments instrument. Where available, quoted market prices are used.
However, a significant portion of the Bank's financial
instruments, such as commercial real estate loans, do not
have an active marketplace in which they can be readily sold
or purchased to determine fair value. Consequently, fair
value estimates for such instruments are based on
assumptions made by management that include the financial
instrument's credit risk characteristics, prevailing
interest rates, future estimated cash flows and expected
loss experience, as well as current and future economic
conditions and other factors that affect estimated fair
value. As a result, these fair value estimates are
subjective in nature, involve uncertainties and matters of
significant judgment and therefore, cannot be determined
with precision. Accordingly, changes in management's
assumptions could cause the fair value estimates to deviate
substantially. Further, the fair value estimates do not
reflect any additional premium or discount that could result
from offering for sale, at one time, the Bank's entire
holdings of a
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 72
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
particular financial instrument, nor estimated transaction
costs. Lastly, the tax ramifications related to the
realization of unrealized gains and losses can have a
significant effect and have not been considered in the fair
value estimates.
Fair value estimates do not attempt to estimate the value of
anticipated future business, the Bank's customer
relationships, branch banking network, and the value of
assets and liabilities that are not considered financial
instruments. Significant assets of the Bank that are not
considered financial instruments include core deposit
intangibles, deferred tax assets and premises and equipment.
The carrying and estimated fair values of the Bank's
on-balance sheet financial instruments at December 31, are
summarized as follows:
<TABLE>
<CAPTION>
1996 1995
--------------------------------------------------------------
Estimated Estimated
($ in millions) Carrying Value Fair Value Carrying Value Fair Value
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial Assets
Cash and due from banks $ 22.4 $ 22.4 $ 26.5 $ 26.5
Federal funds sold 5.8 5.8 - -
Securities available for sale, net 216.0 216.0 202.4 202.4
Securities held to maturity, net 1,174.3 1,159.0 1,091.7 1,084.8
Federal Home Loan Bank of NY stock 23.6 23.6 27.9 27.9
Loans receivable, net 951.3 974.3 1,071.2 1,102.0
Interest receivable 15.3 15.3 16.6 16.6
Financial Liabilities
Deposits 1,666.7 1,671.9 1,715.3 1,723.9
Borrowed funds 640.4 639.7 641.2 644.3
Interest payable 3.6 3.6 5.0 5.0
-----------------------------------------------------------------------------------------------
</TABLE>
The following methods and assumptions were used to estimate
the fair value of each class of financial instruments:
Securities
The estimated fair value of securities available for sale
and held to maturity was based on independent dealer
quotations or published market price bid quotes. The
carrying value of the FHLB stock approximated fair value
since these securities do not present credit concerns and
are redeemable at cost, with the FHLB.
Loans
For valuation purposes, loans receivable, net of the
allowance for loan losses, was segregated into various
components with similar financial characteristics, such as
residential mortgage and commercial real estate loans. Each
loan category was further segmented into fixed- and
adjustable-rate interest terms and into performing and
nonperforming categories. The fair value of 1-4 family
residential loans (including cooperative, FHA and VA loans)
was estimated by comparison to mortgage-backed securities,
adjusted judgmentally for differences in loan
characteristics. The fair value of other consumer loans
approximated carrying value.
The fair value of multi-family and commercial real estate
loans was estimated based on their expected future cash
flows and estimated credit risk. Estimated fair value was
calculated using a discounted cash flow analysis, which
utilized a discount rate that was derived from comparisons
to corporate debt securities that have characteristics
perceived to be similar to the loans. Future cash flows from
nonperforming loans were estimated based on available
information as to the loans' expected method and period of
disposition. A majority of the properties collateralizing
nonperforming loans may be acquired through foreclosure with
an eventual sale, or the loans may be restructured and
returned to an interest-earning status.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 73
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
The credit risk component of the computation of estimated
fair value was derived from management's assessment of
general and specific credit risks associated with each
segment of the loan portfolio. The resulting credit
assessments were then compared to corporate debt securities
which, in management's judgment, have a similar credit risk
profile. Management believes corporate bond yields serve as
a reasonable proxy in determining a market yield for loans
with equivalent levels of credit risk. However, management
can make no assurance that its perception and quantification
of credit risk would be viewed in the same manner as that of
a potential investor. Therefore, realization of estimated
fair value is not assured since changes in any of
management's assumptions could cause the fair value
estimates of loans to deviate substantially.
Deposits
The estimated fair value of deposits with no stated
maturity, such as escrow, savings, money market, checking
and noninterest-bearing demand deposit accounts approximated
carrying value. The estimated fair value of certificates of
deposit was based on the discounted value of their
contractual cash flows. The discount rate used in the
present value computation was estimated by comparison to
interest rates offered by the Bank for certificates of
deposit with similar remaining maturities. The estimated
fair value of deposit liabilities does not include the
benefit that results from low-cost funding. That component,
commonly referred to as a core deposit intangible, is based
on the comparison between the low-cost funding of the Bank's
existing deposit base, inclusive of all costs associated
with maintaining that deposit base, to the cost of borrowing
funds in the market through brokered certificates of
deposit.
Borrowings
The estimated fair value of securities sold under short-term
(within 90 days) repurchase agreements and variable-rate
FHLB advances, which reset frequently to market interest
rates, approximated carrying value. The fair value of funds
borrowed under municipal investment trust fund repurchase
agreements was estimated by comparison to the estimated fair
value of the securities sold under those financing
arrangements. The estimated fair value of other longer-term,
fixed-rate borrowings was estimated based on the discounted
value of their contractual cash flows. The discount rate
used in the present value computation was estimated by
comparison to the Bank's incremental borrowing rates for
similar arrangements.
Other Financial Assets and Liabilities
The carrying value of cash and due from banks, federal funds
sold and accrued interest receivable and payable
approximated fair value since these instruments are payable
on demand or have short-term maturities.
Off-Balance Sheet Financial Instruments
The Bank has certain off-balance sheet financial instruments
in the form of fixed- and variable-rate lending commitments
and purchased interest rate cap and floor agreements. Such
financial instruments involve, to varying degrees, elements
of credit and interest rate risk in excess of the amounts
recognized in the consolidated statements of financial
condition. The interest rate agreements are used by the Bank
as part of its asset/liability management of interest rate
risk.
Commitments to lend, which aggregated $29,974,000 at
December 31,1996 and $12,851,000 at December 31, 1995,
generally have fixed expiration dates or termination clauses
and generally require payment of a fee to the Bank. Since
certain of the commitments are expected to expire without
being drawn upon, the total commitments may not represent
future cash requirements. The Bank evaluates the
creditworthiness of these transactions through its lending
policies. The carrying amounts (deferred fees) of
commitments to lend in the consolidated statements of
financial condition at December 31, 1996 and 1995 were not
significant and not materially different from their
estimated fair value.
At December 31, 1996, $60,000,000 of interest rate cap and
$60,000,000 of interest rate floor agreements (contractual
notional principal) were outstanding, compared to
$218,000,000 and $60,000,000, respectively, at December 31,
1995. The agreements at year-end 1996 had a weighted-average
cap and floor rate of 7.01% and 6.08%, respectively, and
expire at various times through December 1998 for caps and
February 2000 for floors. The carrying amounts (unamortized
premium) of interest rate cap and floor agreements in the
consolidated statements of financial condition at December
31, 1996 and 1995 aggregated $516,000 and $2,103,000,
respectively. The estimated fair value of these instruments
at
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 74
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
December 31, 1996 and 1995 aggregated $1,017,000 and
$2,813,000, respectively. Estimated fair value represents
the approximate amount that the Bank would receive upon
termination of the agreements at December 31, considering
the then current levels of interest rates. The amortization
of premiums paid for the agreements, net of contractual
amounts received, reduced net interest and dividend income
by $1,119,000 in 1996, $1,095,000 in 1995 and $362,000 in
1994.
18. Quarterly The following is a summary of the consolidated statements of
Financial income by quarter for the years ended December 31, 1996 and
Data 1995:
Unaudited
<TABLE>
<CAPTION>
($ in thousands, except per share data) First Second Third Fourth
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996
Total interest and dividend income $44,712 $44,142 $44,065 $44,015
Total interest expense 26,732 26,185 26,124 25,536
----------------------------------------
Net interest and dividend income 17,980 17,957 17,941 18,479
Provisions for loan and real estate losses 500 500 500 500
Net gain on sales of securities - 20 - -
Other noninterest income 1,993 2,565 3,605 2,614
Nonperforming loan and real estate activities expense 843 996 591 1,027
Other noninterest expenses 11,976 12,101 12,189 11,885
----------------------------------------
Income before tax expense 6,654 6,945 8,266 7,681
Tax expense 2,442 2,693 3,284 2,628
--------------------------------------------------------------------------------------------------------
Net income $ 4,212 $ 4,252 $ 4,982 $ 5,053
--------------------------------------------------------------------------------------------------------
Primary earnings per share $ 0.18 $ 0.18 $ 0.23 $ 0.24
Fully diluted earnings per share 0.17 0.17 0.22 0.22
--------------------------------------------------------------------------------------------------------
1995
Total interest and dividend income $45,026 $46,229 $46,005 $45,091
Total interest expense 26,326 28,183 28,111 27,374
----------------------------------------
Net interest and dividend income 18,700 18,046 17,894 17,717
Provisions for loan and real estate losses (see notes 4 and 6) 2,700 3,700 2,700 38,000
Net (loss) gain on sales of securities (74) 158 - -
Other noninterest income 1,656 4,068 2,509 2,102
Nonperforming loan and real estate activities expense 1,909 2,680 1,608 2,201
Other noninterest expenses 12,427 12,053 11,709 11,350
----------------------------------------
Income (loss) before tax benefit 3,246 3,839 4,386 (31,732)
Tax benefit (813) (1,012) (1,262) (36,413)
--------------------------------------------------------------------------------------------------------
Net income $ 4,059 $ 4,851 $ 5,648 $ 4,681
--------------------------------------------------------------------------------------------------------
Primary earnings per share $ 0.16 $ 0.22 $ 0.27 $ 0.20
Fully diluted earnings per share 0.15 0.20 0.25 0.19
--------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 75
Report of Management on Responsibility for Financial Reporting
- --------------------------------------------------------------------------------
The management of The Greater New York Savings Bank and
Subsidiaries (the Bank) has prepared and is responsible for
the consolidated financial statements and related financial
information in this annual report. The consolidated
financial statements were prepared in accordance with
generally accepted accounting principles and necessarily
included amounts that are based on best estimates and
judgments with appropriate consideration to materiality.
Financial information included elsewhere in this annual
report is consistent with the consolidated financial
statements.
Management has established and maintains a system of
internal controls to provide reasonable assurance as to the
integrity and reliability of the financial statements, and
that assets are safeguarded and the books and records
reflect only authorized transactions of the Bank.
Limitations exist in any system of internal control based
upon recognition that the cost of the system should not
exceed benefits derived. The Bank believes that its system
of internal controls, augmented by its internal auditing
function, appropriately balances this cost/benefit
relationship. In addition, the Bank's Code of Ethics and
Guidelines for Business Conduct, communicated to all
employees, requires adherence to high ethical standards in
the conduct of the Bank's business.
The Bank's independent auditors, KPMG Peat Marwick LLP, have
audited the consolidated financial statements. Their audits
were conducted in accordance with generally accepted
auditing standards, which included the consideration of the
Bank's internal controls to the extent necessary to form an
independent opinion on the consolidated financial statements
prepared by management.
The Board of Directors oversees its responsibility for
reported financial information and the safeguarding of
assets through its Audit Committee, composed of five
directors who are not employees. The Audit Committee meets
with management and internal and independent auditors to
assure that they are carrying out their responsibilities and
to discuss auditing, internal control and financial
reporting matters. Both internal and independent auditors
meet with and have free access to the Audit Committee at any
time.
We believe that, as of December 31, 1996, these policies and
procedures and the system of internal controls provide
reasonable assurance that our operations are conducted with
a high standard of business conduct and that the
consolidated financial statements present fairly, in all
material respects, the financial condition, results of
operations and cash flows of the Bank.
GERARD C. KEEGAN
Gerard C. Keegan
Chairman, President and Chief Executive Officer
PHILIP T. SPIES
Philip T. Spies
Senior Vice President and Controller
January 23, 1997
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 76
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Board of Directors
The Greater New York Savings Bank
We have audited the accompanying consolidated statements of
financial condition of The Greater New York Savings Bank and
Subsidiaries (the Bank) as of December 31, 1996 and 1995,
and the related consolidated statements of income, changes
in stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1996.
These consolidated financial statements are the
responsibility of the Bank's management. Our responsibility
is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects,
the financial position of The Greater New York Savings Bank
and Subsidiaries as of December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1996,
in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
New York, New York
January 23, 1997
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Greater New York Savings Bank 79
Investor Information
- --------------------------------------------------------------------------------
Market for the Bank's Common Stock
The common stock of The Greater New York Savings Bank is
traded over the counter on the National Association of
Securities Dealers Automated Quotation (NASDAQ) National
Market System under the symbol GRTR. The following table
sets forth the book value, the high and low trade prices and
dividend per share of the common stock of The Greater New
York Savings Bank by calendar quarter for 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
----------------------------------------- -----------------------------------------
Trade Price Trade Price
Book ------------------- Dividend Book ------------------- Dividend
Value High Low Declared Value High Low Declared
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter $10.71 $12 1/8 $11 1/8 $ - $ 9.91 $ 9 1/8 $ 7 7/8 $ -
Second Quarter 10.88 12 1/4 10 1/2 - 10.13 10 1/8 8 1/4 -
Third Quarter 11.15 13 3/8 9 7/8 - 10.44 12 3/4 9 1/4 -
Fourth Quarter 11.31 15 11 7/8 .05 10.55 13 1/2 11 3/8 -
----------------------------------------------------------------------------------------------------------
The Bank had 2,109 stockholders at December 31, 1996. This
does not reflect the number of persons or entities who hold
their stock in nominee form or "street name" through various
brokerage firms.
The Bank is not permitted, without prior regulatory
approval, to declare or pay dividends (whether in cash,
stock or otherwise) on its common stock unless it is in
compliance with section 112 of the New York State Banking
Law. Furthermore, dividends cannot be declared or paid on
the Bank's common stock for any period other than a period
for which dividends are declared or paid on the Bank's
preferred stock. During the past three years, the Bank
declared and paid preferred dividends in accordance with the
terms of the related stock. The Bank also paid a common
stock dividend of $.05 per share on December 2, 1996, which
represented the first common dividend since the fourth
quarter of 1990.
The payment of dividends in the future on the Bank's common
and preferred stock will be determined by the Board of
Directors in light of conditions then existing, including
the Bank's earnings and financial condition.
Annual Report on Form F-2
The Bank is required to file an Annual Report on Form F-2
for its year ended December 31, 1996 with the Federal
Deposit Insurance Corporation. Stockholders may obtain, free
of charge, a copy of such annual report (excluding exhibits)
by writing to:
Fraser P. Seitel, Senior Counselor,
Investor Relations,
The Greater New York Savings Bank, One Penn Plaza, New York,
NY 10119
Telephone (212) 613-4073, Fax (212) 613-4186
Transfer Agent and Registrar Independent Auditors
ChaseMellon Shareholder KPMG Peat Marwick LLP
Services, L.L.C. 345 Park Avenue
Overpeck Center New York, NY 10154
85 Challenger Road
Ridgefield Park, NJ 07660
Annual Shareholders' Meeting
The annual shareholders' meeting of The Greater New
York Savings Bank will be held at 10:00 a.m.,
Friday, April 25, 1997, at The Grand Prospect Hall,
263 Prospect Avenue, Brooklyn, NY 11215.
<PAGE>
<PAGE>
THE GREATER NEW YORK SAVINGS BANK
FINANCIAL DATA SCHEDULE
This schedule contains a summary of financial information extracted from
the Bank's 1996 Consolidated Statements of Financial Condition and Income and is
qualified in its entirety by reference to such financial statements.
($ in thousands, except per share data)
Description Amount
- ----------- ------
Cash and due from banks ............................................ $ 22,396
Federal funds sold ................................................. 5,750
Securities available for sale, net (at market value) ............... 215,961
Securities held to maturity, net (market value of $1,159,039) ...... 1,174,321
Loans receivable ................................................... 968,568
Allowance for loan losses .......................................... 17,228
Other assets ....................................................... 172,120
Total assets ....................................................... 2,541,888
Deposits ........................................................... 1,666,674
Securities sold under agreements to repurchase ..................... 409,500
FHLB advances ...................................................... 155,000
Other borrowed funds ............................................... 75,884
Other liabilities .................................................. 25,182
Preferred equity ................................................... 52,418
Common Equity ...................................................... 157,230
Total liabilities and stockholders' equity ......................... 2,541,888
Interest on loans .................................................. 85,665
Interest on securities available for sale .......................... 13,071
Interest on securities held to maturity ............................ 75,890
Other interest and dividend income ................................. 2,308
Total interest and dividend income ................................. 176,934
Interest on deposits ............................................... 66,806
Interest on borrowed funds ......................................... 37,771
Total interest expense ............................................. 104,577
Net interest and dividend income ................................... 72,357
Provision for loan and real estate losses .......................... 2,000
Gain on sales of securities ........................................ 20
Other noninterest income ........................................... 10,777
Other noninterest expenses ......................................... 51,608
Income before taxes ................................................ 29,546
Tax expense ........................................................ 11,047
Net income ......................................................... 18,499
Primary earnings per share ......................................... 0.83
Fully diluted earnings per share ................................... 0.77
</TABLE>
