<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 20, 1997.
REGISTRATION NO. 33-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
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]
------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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
Series A ESOP Convertible Preferred
Stock, par value $1.00 per share.... 1,536,391 shs.(2) $13.00(4) $ 19,973,083(4) $ 6,052.45
</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.
<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
------------------------------------------------------------------------
<C> <S>
1. Forepart of Registration Statement and Outside Front Cover Page of
Prospectus............................................................
2. Inside Front and Outside Back Cover Pages of Prospectus.................
3. Risk Factors, Ratio of Earnings to Fixed Charges and Other
Information...........................................................
4. Terms of the Transaction................................................
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...........................................................
10. Information with Respect to S-3 Registrants.............................
11. Incorporation of Certain Information 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.............................................................
19. Information if Proxies, Consents or Authorizations are not to be
Solicited or in an Exchange Offer.....................................
<CAPTION>
LOCATION IN PROSPECTUS
--------------------------------------------------------
<C> <C>
1. Facing Page of Registration Statement; Outside Front
Cover Page of Proxy Statement/Prospectus
2. Available Information; Incorporation of Certain
Documents by Reference; Table of Contents
3. Summary of Certain Information
4. Summary of Certain Information; Plan of Reorganization;
Reasons for Reorganization; Description of
Reorganization; Description of Bancorp Capital Stock;
Bancorp Rights Plan
5. *
6. *
7. *
8. *
9. Not Required in Prospectus
10. Available Information; Incorporation of Certain
Documents by Reference
11. Available Information; Incorporation of Certain
Documents by Reference
12. *
13. *
14. *
15. *
16. *
17. *
18. 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. *
</TABLE>
- - ------------
* Indicates that Item is not applicable or answer is in the negative.
<PAGE>
<PAGE>
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. 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,
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
<PAGE>
<PAGE>
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., 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,
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.
The date of this Proxy Statement/Prospectus is March 14, 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).
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 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............................................................................................... 11
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS................................................................... 12
Information Regarding the Bank's Board of Directors........................................................ 14
Meetings and Committees............................................................................... 14
Audit Committee....................................................................................... 14
Supervising Agency Reports Committee.................................................................. 15
Real Estate Committee................................................................................. 15
Investment Committee.................................................................................. 15
Search Committee...................................................................................... 15
Benefits Committee.................................................................................... 15
Compensation Committee................................................................................ 15
Other Committees...................................................................................... 15
Attendance at Board and Committee Meetings................................................................. 16
Beneficial Ownership of the Bank's Voting Stock............................................................ 16
By Directors and Executive Officers................................................................... 16
By Others............................................................................................. 18
Director Compensation...................................................................................... 19
Report on Executive Compensation of the Compensation Committee............................................. 21
Compensation Committee Interlocks and Insider Participation................................................ 23
Performance Graph.......................................................................................... 24
Executive Compensation..................................................................................... 25
Stock Option/SAR Grants in 1996............................................................................ 26
Aggregated Stock Option/SAR Exercises in 1996 and 1996 Year-end Option/SAR Values.......................... 27
Employment Agreements................................................................................. 27
'Change in Control' Severance Agreements.............................................................. 27
Employee Benefit Plans................................................................................ 28
Certain Transactions.................................................................................. 31
PROPOSAL NUMBER 2: APPROVAL OF THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION........................... 31
Plan of Reorganization................................................................................ 31
Reasons for Reorganization............................................................................ 32
Description of Reorganization......................................................................... 33
Treatment of the Bank Stock Certificates............................................................ 33
Resale of Shares...................................................................................... 33
Market for Bancorp Common Stock....................................................................... 34
Conditions to the Reorganization...................................................................... 34
Effective Date........................................................................................ 34
Amendment of Plan of Reorganization................................................................... 34
Effect of Reorganization on Benefit Plans............................................................. 35
Accounting Treatment of Reorganization................................................................ 35
Tax Consequences of Reorganization.................................................................... 35
Payment of Dividends; Holding Company Structure....................................................... 36
Certain Differences in Stockholder Rights............................................................. 36
Description of Bancorp Capital Stock.................................................................. 39
Bancorp Rights Plan................................................................................... 51
Management of Bancorp................................................................................. 52
</TABLE>
4
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Regulation of Bancorp................................................................................. 53
Rights of Dissenting Stockholders in the Reorganization............................................... 55
PROPOSAL NUMBER 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS..................................... 56
Other Matters.............................................................................................. 56
Stockholder Proposals...................................................................................... 56
Annual Report.............................................................................................. 57
Appendix A Agreement and Plan of Reorganization
Exhibit 1 Bancorp 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 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 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 [ ] 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 [ ] shares of Bank Common Stock, beneficially
own, but do not have the right to vote [ ] shares of Bank Common
Stock held in the Bank Incentive Savings Plan and have a beneficial
interest in, and the right to
</TABLE>
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<TABLE>
<S> <C>
direct the voting of, [ ] 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 [ ]% 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') or the Board of Governors of the Federal Reserve System (the
'Federal Reserve'), 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>
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<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.
Certain Differences in Stockholder
Rights................................. The Bank is a New York State-chartered capital stock form 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 restated certificate of
incorporation (the 'Bancorp 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
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
</TABLE>
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<TABLE>
<S> <C>
Bancorp Series B Preferred Stock under the Bancorp 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............................. Prior to the consummation of the Reorganization, the Bank Rights Plan
will be amended to exclude the Reorganization and the Bank
Rights issued pursuant to the Bank Rights Plan will be redeemed in
compliance with the terms of the Bank Rights Plan. Bancorp has adopted 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. The
consideration for such redemption is expected to be $.01 in cash
payable on each share of Bank Common Stock 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.
</TABLE>
BANCORP RATIO OF INCOME TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
For the fiscal years ended December 31, 1996, 1995, 1994, 1993 and 1992,
Bancorp's consolidated ratios of income to fixed charges and preferred stock
dividends, 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>
Income to Fixed Charges and Preferred Stock Dividends:
Excluding Interest on Deposits...................................
Including Interest on Deposits...................................
</TABLE>
For purposes of computing the consolidated ratio of income to fixed charges
and preferred stock dividends, income represents net income, before
extraordinary items and cumulative effects of accounting changes, plus income
taxes and fixed charges. Fixed charges, excluding interest on deposits,
represent interest expense (except interest paid on deposits) and the interest
factor included in rents. Fixed charges, including interest on deposits,
represent all interest expense and the interest factor included in rents.
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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 [ ] shares of
Bank Common Stock and [ ] 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 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 Plan of Reorganization, 'FOR' the ratification of the
appointment of KPMG Peat Marwick LLP as
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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
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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.
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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, prior to her retirement, 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 seven 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 and a Compensation 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.
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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, as well as the purchases,
leases or other acquisitions of real estate for the Bank's use and proposals for
improvements thereof. 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,
heads of departments and Auditor. 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 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.
OTHER COMMITTEES
The Ad Hoc CRA Committee met 3 times during 1996 in connection with the
Bank's olbigations under the Community Reinvestment Act.
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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 *
William F. de Neergaard............... Director 59,000 * 0 0
James G. Peel......................... Director 16,400(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 (6) * 0 0
Peter C. Haeffner, Jr................. Director 17,000 * 0 0
Gwendolyn Calvert Baker............... Director (6) * 0 0
Michael J. Henchy..................... Executive Vice
President and Chief
Administration
Officer * *
Daniel J. Harris...................... Executive Vice
President and Chief
Lending Officer * *
Philip T. Spies....................... Senior Vice President
and Controller * *
Philip A. Cimino...................... Senior Vice President
and Chief Investment
Officer * *
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......................
*
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 T. Spies.......................
*
Philip A. Cimino......................
*
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. Spies (4,714), Mr. Cimino (11,931) 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 trustee of the Savings Plan in its sole
discretion. The total number of shares includes shares
(footnotes continued on next page)
16
<PAGE>
<PAGE>
(footnotes continued from previous page)
beneficially owned by Mr. Keegan ( ), Mr. Henchy ( ), Mr. Harris
( ), Mr. Spies ( ), Mr. Cimino ( ) and by the other
executive officers who are not directors ( ) 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 (231,250), Mr. Henchy (74,430), Mr. Harris (50,375), Mr. Spies
(42,875), Mr. Cimino (53,875) 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 [ ] shares of Bank
Series A Preferred Stock which have been allocated to their respective
accounts under the ESOP. Of these shares, [ ] have been allocated to
the Bank's executive officers which is [ %] 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 phantom stock units held 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.
17
<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>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
TITLE OF CLASS NAME AND ADDRESS OWNERSHIP(1) OF CLASS
- - ------------------------ --------------------------------------- ---------------------------- --------
<S> <C> <C> <C>
[Bank Common Stock...... Merrill Lynch 1,000,000 shares (sole %(2)
Asset Management, L.P. voting and/or dispositive
800 Scudders Mill Road power)
Plainsboro, New Jersey 08536
Bank Common Stock....... Dimensional Fund Advisors Inc. 787,00 shares (sole voting %(3)
1299 Ocean Ave., 11th Floor and/or dispositive power)
Santa Monica, California 90401
Bank Series A Preferred United States Trust Company of New [ ] shares (shares 100.0%(4)]
Stock................. York, solely as Trustee under The voted by ESOP participants)
Greater New York 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 Securities Exchange
Act of 1934, as amended (the 'Exchange Act').
(2) [ ]
(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 [ ]% of the
voting power of the Bank's voting securities. The Bank Series A Preferred
Stock is presently convertible into approximately [ ] shares of
Bank Common Stock, which would represent [ ]% of the Bank Common Stock
after giving effect to such conversion. See 'Employee Stock Ownership Plan'
below.
18
<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.
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 [$ ].
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.
19
<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.
20
<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
21
<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 institutions within the Bank's peer group and
market conditions. Executive salaries are reviewed annually. Salary levels are
designed to be competitive with the 75th percentile within The Greater's peer
group.
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 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'
on page 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
22
<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 Compansation 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.
23
<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 $1,368
Nasdaq U.S. Public Companies Index................... 100 116 134 131 185 227
Nasdaq Banking Index................................. 100 146 166 165 246 326
</TABLE>
- - ------------
* All returns reflect reinvestment of dividends.
24
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to the Bank for the fiscal years ended December 31,
1996, 1995 and 1994 of those persons who were at December 31, 1996 (i) the Chief
Executive Officer of the Bank and (ii) the other four most highly compensated
executive officers of the Bank (collectively with the Chief Executive Officer,
the 'named executive officers').
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
AWARDS
ANNUAL COMPENSATION ---------------------
---------------------------------- RESTRICTED SECURITIES PAYOUTS
OTHER ANNUAL STOCK UNDERLYING ---------- ALL OTHER
BONUS COMPENSATION AWARD(S) OPTIONS/ LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) ($)(3) SARS(#) PAYOUTS($) ($)(4)
- - --------------------------------- ---- --------- ------- ------------ -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerard C. Keegan ................ 1996 512,500 165,000 -- -- 100,000 -- 58,157
Chairman, President and Chief 1995 420,000 213,750 -- -- 50,000 -- 48,013
Executive Officer 1994 365,000 300,000 -- -- -- --
Michael J. Henchy ............... 1996 222,500 47,000 -- -- 20,000 -- 26,991
Executive Vice President and 1995 195,000 63,000 -- -- 20,000 -- 23,678
Chief Administrative Officer 1994 180,000 150,000 -- -- -- --
Daniel J. Harris ................ 1996 222,500 47,000 -- -- 20,000 -- 26,991
Executive Vice President and 1995 195,000 63,000 -- -- 20,000 -- 19,876
Chief Lending Officer 1994 150,000 60,000 -- -- -- --
Philip T. Spies ................. 1996 157,000 20,930 -- -- 15,000 -- 20,419
Senior Vice President and 1995 147,750 30,600 -- -- 10,000 -- 18,882
Controller 1994 142,500 50,000 -- -- -- --
Philip A. Cimino ................ 1996 157,500 21,450 -- -- 15,000 -- 19,680
Senior Vice President and Chief 1995 142,500 30,000 -- -- 10,000 -- 17,884
Investment Officer 1994 135,000 90,000 -- -- -- --
</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
$50,000 or 10% of the individual's total salary and bonus for the year, (ii)
payments of above-market or preferential earnings on deferred compensation,
(iii) payments of earnings with respect to long-term incentive plans prior
to settlement or maturation, (iv) tax payment reimbursements, or (v)
preferential discounts on stock.
(3) No restricted common stock was granted to any of the named executive
officers in 1996, 1995 or 1994.
(4) Includes value of allocations (including forfeitures) of cash, Bank Common
Stock and Bank Series A Preferred Stock to the ESOP during 1996, 1995 and
1994, respectively, for Messrs. Keegan: [$ ], $20,758 and $19,876;
Henchy: [$ ], $20,758 and $19,876; Harris: [$ ], $20,758 and
$19,876; Spies: [$ ], $20,419 and $18,882; and Cimino: [$ ],
$19,680 and $17,884. Also includes allocations to the Bank's Supplemental
Executive Retirement Plan for contributions that could not be made to the
ESOP due to the limitations of the Internal Revenue Code during 1996, 1995
and 1994, respectively, for Messrs. Keegan: [$ ], $37,399 and
$28,282; Henchy: [$ ], $6,233 and $3,946; and Harris: [$ ],
$6,233 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.
25
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<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) (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 T. Spies........................ 15,000 3.91 11.125 June 26, 2006 51,600
Philip A. Cimino....................... 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.
26
<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 Equity Incentive 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 T. Spies............... 12,465 33,063 38,782 23,250 349,108 82,219
Philip A. Cimino.............. 6,000 17,250 45,250 23,250 370,119 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 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
27
<PAGE>
<PAGE>
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 and tax benefits, 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 and tax benefits ('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 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
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<PAGE>
<PAGE>
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
</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 T. Spies.................................................. 11 7
Philip A. Cimino................................................. 24 3
</TABLE>
Savings Plan. The Bank maintains The Greater New York Savings Bank
Incentive Savings Plan (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.
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
29
<PAGE>
<PAGE>
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 Greater New
York Savings Bank Employee Stock Ownership Plan (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.
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.
30
<PAGE>
<PAGE>
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 [$ ].
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.
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 as its
wholly-owned subsidiary an interim New York State-chartered capital stock
savings bank, The Greater Interim Savings Bank ('Interim Bank'). If the Plan
31
<PAGE>
<PAGE>
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 up to
approximately [ %] of the aggregate repurchase price to the Bank's taxable
income and thereby result in a Federal tax liability to the Bank of
approximately [ ]% 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 savings association subsidiary) and as such generally will not be
restricted in the types of businesses in which it may engage. While the Bank, as
a New York State-chartered capital stock 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
32
<PAGE>
<PAGE>
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.'
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 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
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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 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.
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 or the
Federal Reserve, 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 Board to be
materially adverse to either the holders of Bank Common Stock or Bank Series A
Preferred Stock.
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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 Executive
Retirement Plan, Employee Stock Ownership Plan, Incentive Savings Plan, 1987
Plan. 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 of options to 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 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.
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.
Taxation of Rights Redemption. Receipt of a cash payment in redemption of a
Right should be treated as a dividend taxable as ordinary income if the Bank
has sufficient earnings and profits as
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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 stockholder's 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 a provision of the Bancorp Restated Certificate of
Incorporation 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 quarterly 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 paid on the Bancorp Series A Preferred Stock
and the Bancorp Series B Preferred Stock would be $7.6 million.
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
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as stockholders will be determined by the Bancorp Restated Certificate of
Incorporation, the Bancorp Bylaws and the DGCL. The privileges and rights of the
holders of Bancorp Common Stock under the Bancorp 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 Restated
Certificate of Incorporation and Bancorp ByLaws are 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 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 Restated Certificate of Incorporation and the
Bancorp Bylaws. The Bancorp 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 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.
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, 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 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
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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.
Bank. The NYBL has no comparable statute which is applicable to the Bank.
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 Restated Certificate of Incorporation contains a
provision directing the Bancorp Board of Directors to consider the effect on
constituencies other than the stockholders of Bancorp in deciding whether or not
to approve a potential change of control transaction. The DGCL does not contain
such a provision.
Bank. The Bank Restated Organization Certificate contains a constituency
provision analogous to the constituency provision in the Bancorp Restated
Certificate of Incorporation. In addition, Section 7015 of the NYBL contains a
provision specifically permitting the Board of Directors to consider 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 fullest 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
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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 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 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 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.
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 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) directing 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
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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, directing
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 theoretically 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 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
Bancorp Inc. Employee Stock Ownership Plan (the 'Bancorp 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.
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.
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 begin to accrue on outstanding shares of the
Bancorp Series A Preferred Stock from the date of issuance of such shares.
Preferred dividends will accrue on a daily basis whether or not Bancorp shall
have earnings or surplus at the time, but preferred dividends accrued after the
first January 1 or July 1 occurring after the date of the Holding Company
Formation for any period less than a full semi-annual period between Series A
Dividend Payment Dates will 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 will accrue
for the period from the date of issuance until the first January 1 or July 1
occurring after the date of the Holding Company Formation. 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.
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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 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
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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 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, if it has received an opinion of
counsel or advice of the staff of the OTS or the Federal Reserve to the effect
that the exercise of such election will not impair the treatment of the Bancorp
Series A Preferred Stock as permanent stockholders' equity for purposes of the
capital regulations.
'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
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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 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
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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 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
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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 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 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 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.
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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 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 Restated Certificate of
Incorporation authorizes Bancorp to issue up to 2,000,000 shares of 12%
Noncumulative Perpetual Preferred Stock, Series B, par value $1.00 per share
(the '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 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 date of initial
issuance of the Bancorp Series B Preferred Stock and shall end on May 31, 1997.
A full dividend shall be paid for the Initial Dividend Period. Thereafter,
quarterly dividend periods (each, a 'Dividend Period') shall commence on and
include June 1, September 1, December 1 and March 1 of each year (each such
date, a 'Dividend Period Commencement Date') and shall end on and include the
date next preceding the
46
<PAGE>
<PAGE>
Dividend Period Commencement Date of the following Dividend Period. The Bancorp
Series B Preferred Stock will not participate in dividends with Bancorp Common
Stock. The amount of dividends payable for any Dividend Period (other than the
Initial Dividend Period) which is less than a full three 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 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 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 'Certain Differences in Stockholder Rights -- 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 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
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<PAGE>
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 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
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,
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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 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
49
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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 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 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 Restated Certificate of
Incorporation. The Bancorp 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 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 Restated Certificate of Incorporation,
including, without limitation, the election of directors as set 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 Restated
Certificate of Incorporation or as otherwise required by law.
Bancorp Junior Preferred Stock. The Bancorp 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, and 100 times the aggregate per share amount
of all non-cash dividends or other distributions 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 have no special voting rights
and their consent is not required for taking any corporate action except during
a default period ('Default Period') during which holders of Bancorp preferred
stock, including Bancorp Junior Preferred, voting as a class, may elect two
directors to the Board who will continue in office until their successors shall
have been elected by such holders or until the expiration of the Default Period.
A Default Period begins at any time dividends on any Bancorp Junior Preferred
Stock are in arrears in an amount equal to six quarterly dividends thereon, and
will continue until such time as all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly dividend
period on all shares of Bancorp Junior Preferred Stock then outstanding shall
have been declared and paid or set apart for payment.
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.
50
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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 a
stockholder rights plan (the 'Bank Rights Plan') and declared a dividend
distribution of one right (each a '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. Prior to the consummation of the
Reorganization, the Bank Rights Plan will be amended to exclude the
Reorganization from the provisions of the Bancorp Rights Plan and the Bank
Rights will be redeemed in compliance with the terms of the Bank Rights Plan.
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 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. 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.
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 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 April 1, 2007,
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, Bancorp
Common Stock (or, in certain circumstances, cash, property or other securities
of Bancorp) having a value equal to two times the exercise price of the Bancorp
Right. 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.
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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 Administration 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.
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.
52
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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
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. As a
result, 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
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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
'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.
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
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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 separate '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.
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 New York Banking Law, 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
New York Banking Law, 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.
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Upon filing a Notice of Election to Dissent, the Bank Common 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 New York Banking Law. 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 will 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
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 will 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.
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.
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.
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If the proposed Agreement and 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.
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,
ROBERT P. CARLSON
Secretary
New York, New York
March 14, 1997
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (THIS 'AGREEMENT'), DATED AS
OF , 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;
(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.
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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 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 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 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 I 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.
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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, except as provided in
Section 2.1.5, 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, except as
provided in Section 2.1.5, 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, is eligible under, and 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 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
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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 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 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
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 be deemed to be a reference to Bancorp Common Stock
and Bancorp Series A Preferred Stock, respectively, and 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 Shareholder Rights Plan. The 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 , 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
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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:
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1. The formation of Interim Bank and its merger with and into the
Bank, with the Bank as the surviving corporation, will be disregarded for
Federal income tax purposes, and the transaction will be treated as a
transfer by the Bank Stockholders of their the Bank 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 the Bank upon the exchange of their the Bank Common Stock
solely for Bancorp Common Stock.
4. No gain or loss will be recognized by the Stockholders of the Bank
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 the Bank
upon the exchange of their the Bank Series B Preferred Stock solely for
Bancorp Series B Preferred Stock.
6. No gain or loss will be recognized by the Bank, Bancorp or Interim
Bank as a result of the Reorganization.
7. The aggregate basis of the Bancorp Common Stock received by each
stockholder of the Bank in the Reorganization will be the same as the
aggregate basis of the Bank Common Stock exchanged therefor.
8. The aggregate basis of the Bancorp Series A Preferred Stock
received by each stockholder of the Bank in the Reorganization will be the
same as the aggregate basis of the Bank Series A Preferred Stock exchanged
therefor.
9. The aggregate basis of the Bancorp Series B Preferred Stock
received by each stockholder of the Bank in the Reorganization will be the
same as the aggregate basis of the Bank Series B Preferred Stock exchanged
therefor.
10. The holding period of the Bancorp Common Stock received by each
stockholder of the Bank in the Reorganization will include the holding
period of the Bank Common Stock exchanged therefor, provided that such
stockholder held such the Bank 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 the Bank in the Reorganization will include
the holding period of the Bank Series A Preferred Stock exchanged therefor,
provided that such stockholder held such the Bank 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 the Bank in the Reorganization will include
the holding period of the Bank Series B Preferred Stock exchanged therefor,
provided that such stockholder held such the Bank 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
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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.
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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: .................................
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
GREATER NEW YORK BANCORP INC.
By: .................................
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
THE GREATER INTERIM SAVINGS BANK
By: .................................
Gerard C. Keegan
Chairman, President and
Chief Executive Officer
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EXHIBIT 1 TO APPENDIX A
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;
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(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;
(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 one hundred fifty thousand (150,000) 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 thereafter, the
initial term of office of the second class of such directors to expire at the
second annual meeting of stockholders thereafter and the initial term of office
of the third class of such directors to expire at the third annual meeting of
stockholders thereafter, with each class of directors to hold office until their
successors have been duly elected and qualified. 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 direc-tors
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.
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SIXTH. Elections of directors need not be by written ballot except and to
the extent provided in the by-laws of the Corporation.
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 (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders; (ii) for acts or ommissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) for unlawful payments of dividends or unlawful stock purchases or
redemptions; or (iv) 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. 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 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. 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.
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 Robert P. Carlson, Senior Vice President, Counsel
and Secretary, on the th day of February, 1997.
GREATER NEW YORK BANCORP INC.
By ..................................
Robert P. Carlson
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EXHIBIT A TO THE 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 issuance of such shares of Series A
Preferred Stock by 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 accrued after the [first January 1
or July 1] occurring after the date of the Holding Company Formation 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. Notwithstanding the foregoing, a full semi-annual
dividend payment of $0.53625 per share shall accrue for the period from the date
of issuance until the first [January 1 or July 1] occurring after the date of
the Holding Company Formation. 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
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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 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 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,
liquidation or winding-up of the affairs of the Corporation for purposes of this
Section 4, but the
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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, 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 .94476 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 declared and shall be payable to holders of shares of
Series A Preferred Stock on a Dividend Payment
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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
conversion rights may be exercised, and the Conversion Price and number of
shares of Common Stock
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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 Bancorp Inc. Employee Stock Ownership Plan (formerly known as
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
Bancorp Inc. 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, 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.
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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).
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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 the that 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
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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.
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(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 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
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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.
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<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' 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
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<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 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.
12
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<PAGE>
EXHIBIT B TO 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 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.
<PAGE>
<PAGE>
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 [July/October] 15, 1997. 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
[May/August] 31, 1997. A full dividend will be paid for the Initial Dividend
Period. 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 any Dividend
Period (other than the Initial 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 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 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
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<PAGE>
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
(1[c]).
(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 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
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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 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
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<PAGE>
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 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 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
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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 Restated Certificate of Incorporation. If the 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 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 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, 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).
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(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
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 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
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 permitted for such notice under the terms of the 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
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(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 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.
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EXHIBIT C TO 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 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 , 1997 (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.
(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 that 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
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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 thirty
(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 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 quarterly dividends thereon, voting as a
class, irrespective of series, shall have the right to elect two 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 (10)
percent 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 (10) percent 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 twenty
(20) days and not later than sixty (60) days after such order or request or in
default of the calling of such meeting within sixty (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 (10) percent 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 sixty (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 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
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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 bylaws). 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 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.
(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
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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 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.
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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 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.
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EXHIBIT 2 TO APPENDIX A
THE BY-LAWS
OF
GREATER NEW YORK BANCORP INC.
<PAGE>
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TABLE OF CONTENTS
<TABLE>
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ARTICLE I
OFFICES................................................................................... 1
ARTICLE II
STOCKHOLDERS.............................................................................. 1
SECTION 1. Annual Meetings........................................................................... 1
SECTION 2. Special Meetings.......................................................................... 1
SECTION 3. Notice of Meetings........................................................................ 1
SECTION 4. Waiver of Notice.......................................................................... 1
SECTION 5. Fixing of Record Date..................................................................... 1
SECTION 6. Quorum.................................................................................... 2
SECTION 7. Conduct of Meetings....................................................................... 2
SECTION 8. Voting.................................................................................... 2
SECTION 9. Proxies................................................................................... 2
SECTION 10. Inspectors of Election.................................................................... 2
SECTION 11. Nominating Committee; Nominating Procedure................................................ 2
SECTION 12. New Business.............................................................................. 3
ARTICLE III
CAPITAL STOCK............................................................................. 4
SECTION 1. Certificates of Stock..................................................................... 4
SECTION 2. Transfer Agent............................................................................ 4
SECTION 3. Registration and Transfer of Shares....................................................... 4
SECTION 4. Lost, Destroyed and Mutilated Certificates................................................ 4
SECTION 5. Holder of Record.......................................................................... 4
ARTICLE IV
BOARD OF DIRECTORS........................................................................ 5
SECTION 1. Responsibilities; Number of Directors..................................................... 5
SECTION 2. Classification of Board................................................................... 5
SECTION 3. Qualifications............................................................................ 5
SECTION 4. Mandatory Retirement...................................................................... 5
SECTION 5. Regular and Annual Meetings............................................................... 5
SECTION 6. Special Meetings.......................................................................... 5
SECTION 7. Notice of Special Meetings; Waiver of Notice.............................................. 5
SECTION 8. Presence at Meetings by Conference Telephone.............................................. 5
SECTION 9. Quorum and Voting Requirements............................................................ 6
SECTION 10. Compensation.............................................................................. 6
SECTION 11. Removal................................................................................... 6
SECTION 12. Vacancies................................................................................. 6
SECTION 13. Amendments Concerning Classification of the Board......................................... 6
ARTICLE V
COMMITTEES................................................................................ 6
SECTION 1. Standing Committees....................................................................... 7
SECTION 2. Investment Committee...................................................................... 7
SECTION 3. Audit Committee........................................................................... 7
SECTION 4. Compensation Committee.................................................................... 7
SECTION 5. Supervising Agency Reports Committee...................................................... 7
SECTION 6. Benefits Committee........................................................................ 7
SECTION 7. Search Committee.......................................................................... 7
SECTION 8. Employment of Assistants for Certain Committees........................................... 7
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SECTION 9. Ad Hoc Committees......................................................................... 7
SECTION 10. Meetings of Committees; Quorum............................................................ 7
SECTION 11. Removal................................................................................... 8
ARTICLE VI
OFFICERS.................................................................................. 8
SECTION 1. Number.................................................................................... 8
SECTION 2. Term; Removal............................................................................. 8
SECTION 3. Chairman and Chief Executive Officer...................................................... 8
SECTION 4. President................................................................................. 8
SECTION 5. Group Presidents, Vice President and Other Officers....................................... 8
SECTION 6. Secretary................................................................................. 9
SECTION 7. Counsel................................................................................... 9
SECTION 8. Auditor................................................................................... 9
ARTICLE VII
DIVIDENDS................................................................................. 9
ARTICLE VIII
INDEMNIFICATION........................................................................... 9
ARTICLE IX
MISCELLANEOUS............................................................................. 10
SECTION 1. Corporate Seal............................................................................ 10
SECTION 2. Securities................................................................................ 10
SECTION 3. Corporation Accounts and Checks........................................................... 10
SECTION 4. Bonds of Officers, Clerks and Employees................................................... 10
SECTION 5. Officers' Authority....................................................................... 10
ARTICLE X
EMERGENCY MANAGEMENT...................................................................... 10
ARTICLE XI
AMENDMENTS................................................................................ 10
</TABLE>
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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 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 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.
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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. 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 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 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 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
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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 November 30, 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 Corporation'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, (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 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 Corporation'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 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.
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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.
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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 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 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 by telegram. Notice of a
special meeting need not be given to any director who submits a signed waiver
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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 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,
(b) Executive Officers of the Corporation.
SECTION 12. Removal. Notwithstanding any other provision of the Certificate
of Incorporation or these By-Laws, a director may be removed for cause at any
time 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.
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. 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 Audit Committee, the Investments 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
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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. Investment Committee. The Investment Committee reviews security
transactions, the current and prospective liquidity and interest rate
sensitivity positions of the Corporation, and changes to the composition of the
investment portfolio. Additionally, the Investment Committee reviews and
approves the Corporation's investment policy and strategy. The Committee
includes the Chairman and at least five other directors. This Committee meets
monthly.
SECTION 3. 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 consists of at least five directors, none of
whom is an officer or a salaried employee of the Corporation. The Committee may
employ independent counsel. The Committee elects its own Chairman, and meets at
least quarterly at his call.
SECTION 4. 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
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 consists of
at least three directors, none of whom is an officer or a salaried employee of
the Corporation. The Committee elects its own Chairman.
SECTION 5. Supervising Agency Reports Committee. The Chairman refers to the
Supervising Agency Records Committee the reports, accompanying texts and
official communications of the Securities and Exchange Commission, the Office of
Thrift Supervision, and any other supervising agency with respect to any
examination of the Corporation. The Supervising Agency Reports Committee
examines and reviews such reports and makes such studies and investigations of
the assets, affairs and management of the Corporation 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 Corporation's Chairman, and at least four other
directors.
SECTION 6. 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 consists of the Corporation's Chairman and at least three
other non-salaried directors.
SECTION 7. Search Committee. The Search Committee recruits, interviews and
recommends to the Board candidates for directors, Chairman, President, heads of
departments and the Auditor. The Committee consists of the Chairman and at least
four other directors.
SECTION 8. Employment of Assistants for Certain Committees. The Supervising
Agency Reports, Compensation and Long Term Incentive Program, 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 9. 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 10. 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 Department
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
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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 11. 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.
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 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 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.
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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 to 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.
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
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. 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
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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 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.
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.
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 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.
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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
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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
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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.
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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 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
kind, domestic or foreign,
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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 -- 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. (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 -- Rights Agreement
5 -- Opinion of Sullivan & Cromwell as to validity of securities.
8 -- Opinion of Sullivan & Cromwell as to tax matters.
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.
99.1 -- Form of Proxy Card and reminder letter.
99.2 -- Annual Report on Form F-2 for 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) 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.
(2) 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.
(3) 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.
(4) To remove from registration by means of a post-effective amendment
any shares of Bancorp common or preferred stock which are not issued in the
share exchange.
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
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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.
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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 th day of February, 1997.
GREATER NEW YORK BANCORP INC.
By:
.................................
NAME: GERARD C. KEEGAN
TITLE: DIRECTOR, CHIEF OFFICER
EXECUTIVE 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 February , 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- - ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
Principal Executive Officer and Sole Director:
Director, Chief Executive Officer and President
.........................................
(GERARD C. KEEGAN)
Controller:
Senior Vice President and Controller
.........................................
(PHILIP T. SPIES)
</TABLE>
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION LOCATION
- - ----------- --------------------------------------------------------- ---------------------------------------------
<S> <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 -- Restated Certificate of Incorporation of Greater New Incorporated by reference to Exhibit 1 to
York Bancorp Inc. ..................................... 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 Restated Certificate of Incorporation and
holders ............................................... 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 -- Rights Agreement...................................... To be filed by amendment.
5 -- Opinion of Sullivan & Cromwell as to validity of To be filed by amendment.
securities. ...........................................
8 -- Opinion of Sullivan & Cromwell as to tax matters. .... To be filed by amendment.
21 -- Subsidiaries of Greater New York Bancorp Inc. ........ To be filed by amendment.
23.1 -- Consent of Sullivan & Cromwell (included in Exhibits 5 To be filed by amendment.
and 8). ...............................................
23.2 -- Consents of KPMG Peat Marwick. ....................... To be filed by amendment.
99.1 -- Form of Proxy Card and reminder letter. .............. To be filed by amendment.
99.2 -- Annual Report on Form F-2 for The Greater New York To be filed by amendment.
Savings Bank for the fiscal year ended December 31,
1997...................................................
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STATEMENT OF DIFFERENCES
The section symbol shall be expressed as.....'SS'
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