SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Staten Island Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
[Staten Island Bancorp, Inc. Letterhead]
March 29, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Staten Island Bancorp, Inc. The meeting will be held at the Excelsior Grand,
located at 2380 Hylan Boulevard, Staten Island, New York, on Thursday, April 29,
1999 at 10:00 a.m., Eastern Time. The matters to be considered by stockholders
at the Annual Meeting are described in the accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. We urge you to mark, sign, and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
For the reasons set forth in the accompanying proxy statement, the
Board unanimously recommends that you vote "FOR" each matter to be considered.
Your continued support of and interest in Staten Island Bancorp, Inc.
is sincerely appreciated.
Sincerely,
/s/Harry P. Doherty
-------------------
Chairman of the Board
and Chief Executive Officer
<PAGE>
STATEN ISLAND BANCORP, INC.
15 Beach Street
Staten Island, New York 10304
(718) 447-7900
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 29, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Staten Island Bancorp, Inc. (the "Company") will be held at the
Excelsior Grand, located at 2380 Hylan Boulevard, Staten Island, New York, on
Thursday, April 29, 1999 at 10:00 a.m., Eastern Time, for the following
purposes, all of which are more completely set forth in the accompanying proxy
statement ("Proxy Statement"):
(1) To elect three (3) directors for a three-year term or until their
successors are elected and qualified;
(2) To amend the Company's 1998 Stock Option Plan and the Company's
1998 Recognition and Retention Plan and Trust to revise the
provisions relating to the vesting of options and awards;
(3) To ratify the appointment by the Board of Directors of Arthur
Andersen L.L.P. as the Company's independent auditors for the
fiscal year ending December 31, 1999; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof. Management is not aware of
any other such business.
The Board of Directors has fixed March 19, 1999 as the voting record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Patricia J. Villani
----------------------
Patricia J. Villani
Corporate Secretary
Staten Island, New York
March 29, 1999
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YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING
OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
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<PAGE>
STATEN ISLAND BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
April 29, 1999
This Proxy Statement is furnished to holders of common stock, $.01 par
value per share ("Common Stock"), of Staten Island Bancorp, Inc. (the
"Company"), the Delaware-chartered thrift holding company for Staten Island
Savings Bank (the "Savings Bank"). The Company acquired all of the Savings
Bank's common stock issued in connection with the conversion of the Savings Bank
from mutual to stock form in December 1997 (the "Conversion"). Proxies are being
solicited on behalf of the Board of Directors of the Company to be used at the
Annual Meeting of Stockholders ("Annual Meeting") to be held at the Excelsior
Grand, located at 2380 Hylan Boulevard, Staten Island, New York, on Thursday,
April 29, 1999 at 10:00 a.m., Eastern Time, for the purposes set forth in the
Notice of Annual Meeting of Stockholders. This Proxy Statement is first being
mailed to stockholders on or about March 29, 1999.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted FOR the matters described below and upon the
transaction of such other business as may properly come before the meeting in
accordance with the best judgment of the persons appointed as proxies. Any
stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing with the Secretary of the Company written notice thereof
(Patricia J. Villani, Corporate Secretary, Staten Island Bancorp, Inc., 15 Beach
Street, Staten Island, New York 10304); (ii) submitting a duly-executed proxy
bearing a later date; or (iii) appearing at the Annual Meeting and giving the
Secretary notice of his or her intention to vote in person. Proxies solicited
hereby may be exercised only at the Annual Meeting and any adjournment thereof
and will not be used for any other meeting.
VOTING
Only stockholders of record at the close of business on March 19, 1999
("Voting Record Date") will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 42,683,705 shares of Common Stock outstanding and
the Company had no other class of equity securities outstanding. Each share of
Common Stock is entitled to one vote at the Annual Meeting on all matters
properly presented at the meeting. Directors are elected by a plurality of the
votes cast with a quorum present. The three persons who receive the greatest
number of votes of the holders of Common Stock represented in person or by proxy
at the Annual Meeting will be elected directors of the Company. Abstentions are
considered in determining the presence of a quorum and will not affect the vote
required for the election of directors. The affirmative vote of the holders of a
majority of the total votes present in person or by proxy at the meeting and
entitled to vote is required to amend the stock benefit plans and to ratify the
appointment of the independent auditors. Abstentions will be counted as present
and entitled to vote and will have the effect of a vote against the proposals.
Under rules of the New York Stock Exchange ("NYSE"), all of the proposals for
consideration at the Annual Meeting are considered "discretionary" items upon
which brokerage firms may vote in their discretion on behalf of their clients if
such clients have not furnished voting instructions. Thus, there are no
proposals to be considered at the Annual Meeting which are considered
"non-discretionary" and for which there will be "broker non-votes."
1
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
Election of Directors
There currently are 10 directors of the Company. The Company's
certificate of incorporation ("Certificate of Incorporation") provides that the
Board of Directors of the Company shall be divided into three classes as nearly
equal in number as possible, with one class to be elected annually. Stockholders
of the Company are not permitted to cumulate their votes for the election of
directors.
No director or executive officer of the Company is related to any other
director or executive officer of the Company by blood, marriage or adoption, and
each of the nominees currently serve as a director of the Company.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If the person or persons named as nominee should be unable or unwilling
to stand for election at the time of the Annual Meeting, the proxies will
nominate and vote for one or more replacement nominees recommended by the Board
of Directors. At this time, the Board of Directors knows of no reason why the
nominees listed below may not be able to serve as directors if elected.
2
<PAGE>
The following tables present information concerning the nominees for
director of the Company and each director whose term continues.
<TABLE>
<CAPTION>
Nominees for Director for Three-Year Term Expiring in 2002
Director
Name and Position Age(1) Since(2)
----------------- ------ --------
<S> <C> <C>
Harold Banks 75 1983
Director
Denis P. Kelleher 60 1988
Director
Julius Mehrberg 69 1996
Director
</TABLE>
The Board of Directors recommends that you vote FOR the election of the
above nominees for director.
Members of the Board of Directors Continuing in Office
<TABLE>
<CAPTION>
Directors Whose Terms Expire in 2000
Director
Name and Position Age(1) Since(2)
----------------- ------ --------
<S> <C> <C>
Harry P. Doherty 56 1989
Chairman of the Board and Chief
Executive Officer
William G. Horn 75 1968
Director
William E. O'Mara 68 1994
Director
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Directors Whose Terms Expire in 2001
Director
Name and Position Age(1) Since(2)
----------------- ------ --------
<S> <C> <C>
Charles J. Bartels 75 1964
Director
James R. Coyle 52 1990
Director, President and Chief
Operating Officer
John R. Morris 60 1986
Director
Kenneth W. Nelson 76 1977
Director
</TABLE>
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(1) At March 19, 1999.
(2) Includes service as a director of the Savings Bank.
3
<PAGE>
Information concerning the principal position with the Company and the
Savings Bank and principal occupation of each nominee for director and members
of the Board continuing in office during the past five years is set forth below.
Harold Banks. Mr. Banks is a cemetarian and has been Executive
Director, Secretary and Treasurer of Ocean View The Cemetery Beautiful, Staten
Island, New York, since 1979. Mr. Banks also serves on the Boards of the Elmweir
Cemetery Association and Mt. Zion Cemetery.
Charles J. Bartels. Mr. Bartels is President and Chief Executive
Officer of Bartels & Eleford, Inc., a real estate appraisal firm located in
Staten Island, New York.
James R. Coyle. Mr. Coyle has served as President and Chief Operating
Officer of the Savings Bank since June 1990. Previously, Mr. Coyle served as
Executive Vice President from 1987 to 1990 and as Chief Financial Officer from
1989 to 1990. Mr. Coyle has been employed by the Savings Bank since 1970. Mr.
Coyle is a member of the Board of the Center for Financial Studies, Fairfield,
Connecticut, and is a member of Community Bankers Association of New York State
("CBANYS").
Harry P. Doherty. Mr. Doherty has served as Chairman of the Board and
Chief Executive Officer of the Savings Bank since May 1990. Previously, Mr.
Doherty served as President and Chief Operating Officer from 1989 to 1990 and
Executive Vice President from 1987 to 1989. Mr. Doherty has been employed by the
Savings Bank since 1966. Mr. Doherty serves as a director of the Institutional
Investors Capital Appreciation Mutual Fund as well as the MSB Fund. Mr. Doherty
serves as a director of both CBANYS and America's Community Bankers.
William G. Horn. Mr. Horn is currently retired. Previously, Mr. Horn
was a Senior Account Agent for the Allstate Insurance Company.
Denis P. Kelleher. Mr. Kelleher is Chief Executive Officer of Wall
Street Access (formerly Wall Street Investors Services), a financial services
company and member firm of the NYSE, located in New York City. Mr. Kelleher also
serves as a director of the Irish Investment Fund, a closed end investment
company listed on the NYSE having a main investment focus in Irish-based
securities.
Julius Mehrberg. Mr. Mehrberg is a principal and partner in various
real estate development and management companies, primarily Fingerboard Estates
Corp., located in Staten Island, New York.
John R. Morris. Mr. Morris retired from Merrill Lynch in May 1997 where
he served as a Vice President of the Capital Markets and Private Client groups.
Mr. Morris has over 35 years of experience in the financial services area. Mr.
Morris currently is a private investor and is self-employed as a consultant.
Kenneth W. Nelson. Mr. Nelson is Chairman, President and Chief
Executive Officer of Tech Products, Inc., a manufacturing and marketing company
located in Staten Island, New York. Mr. Nelson is also Chairman of Methods
Research Corp., an importing and marketing company located in Farmingdale, New
Jersey, and Chairman, President and Chief Executive Officer of Carey Realty
Corp., a real estate holding company located in Staten Island, New York. Mr.
Nelson also serves as a director of American Centurion Life Assurance Co., a
subsidiary of American Express Insurance and Annuities, and of First Fortis Life
Insurance Company, a subsidiary of Fortis, Inc. Insurance and Annuities.
William E. O'Mara. Mr. O'Mara is an employee with the firm of Wohl and
O'Mara, civil engineers and land surveyors, located in Staten Island, New York.
Prior to January 2, 1998, he served as a partner in the firm.
4
<PAGE>
Stockholder Nominations
Article IV, Section 4.15 of the Company's Bylaws governs nominations
for election to the Board of Directors and requires all such nominations, other
than those made by the Board of Directors or committee appointed by the Board,
to be made at a meeting of stockholders called for the election of directors,
and only by a stockholder who has complied with the notice provisions in that
section. Stockholder nominations must be made pursuant to timely notice in
writing to the Secretary of the Company. Generally, to be timely, a
stockholder's notice must be delivered to, or mailed, postage prepaid, to the
principal executive offices of the Company not later than 120 days prior to the
anniversary date of the mailing of proxy materials by the Company in connection
with the immediately preceding annual meeting of stockholders of the Company.
Each written notice of a stockholder nomination is required to set forth certain
information specified in the Bylaws. Any such nomination by a stockholder must
have been delivered or received no later than the close of business on November
30, 1998. No such nominations by stockholders were received with respect to the
Annual Meeting.
Board of Directors Meetings and Committees of the Company and the Savings Bank
Regular meetings of the Board of Directors of the Company are held as
necessary. Through the year ended December 31, 1998, the Board of Directors of
the Company met 12 times. No director attended fewer than 75% of the total
number of Board meetings or committee meetings on which he or she served that
were held during this period. The entire Board of Directors of the Company acts
as a Nominating Committee. The Board of Directors of the Company has established
the following committees:
Audit Committee. The Audit Committee of the Company recommends
independent auditors to the Board annually and reviews the Company's financial
statements and the scope and results of the audit performed by the Company's
independent auditors and the Company's system of internal control with
management and such independent auditors and reviews regulatory examination
reports. The Audit Committee, which is comprised of Messrs. Morris (Chairman),
Horn, Kelleher and O'Mara met four times during fiscal 1998.
Compensation Committee. The Compensation Review Committee of the
Company reviews and recommends compensation and benefits for the Company
employees. The Compensation Review Committee, which is comprised of Messrs. Horn
(Chairman), Bartels and Morris, met four times during fiscal 1998.
The Board of Directors of the Savings Bank meets on a monthly basis and
may have additional special meetings. During the year ended December 31, 1998,
the Board of Directors of the Savings Bank met 12 times. The Board of Directors
of the Savings Bank has established nine committees, including an Executive
Committee, Compensation Committee, Investment Committee, Loan Review and Loan
Real Estate Investment Committee. No director attended fewer than 75% of the
total number of Board meetings or committee meetings on which he served that
were held during this period.
Executive Officers Who Are Not Directors
Set forth below is information concerning the executive officers of the
Company and the Savings Bank who do not serve on the Board of Directors of the
Company. All executive officers are elected by the Board of Directors and serve
until their successors are elected and qualified. No executive officer is
<PAGE>
related to any director or other executive officer of the Company by blood,
marriage or adoption, and there are no arrangements or understandings between a
director of the Company and any other person pursuant to which such person was
elected an executive officer.
John P. Brady. Age 47 years. Mr. Brady has served as Executive Vice
President and Chief Lending Officer of the Savings Bank since May 1987. Mr.
Brady has been employed by the Savings Bank since 1982 and previously served as
Vice President and mortgage officer and as the Community Reinvestment Act
officer for the Savings Bank.
5
<PAGE>
Frank J. Besignano. Age 44 years. Mr. Besignano has served as Senior
Vice President of the Savings Bank for Marketing, Business Development and
Compliance since May 1991. Mr. Besignano has been employed by the Savings Bank
since 1982 and previously served as Vice President and marketing officer since
1987.
Edward J. Klingele. Age 46 years. Mr. Klingele has served as Senior
Vice President and Chief Financial Officer of the Savings Bank since May 1990
and of the Company since its inception. Mr. Klingele has been employed by the
Savings Bank since 1976 and previously served as Controller of the Savings Bank
from 1984 to 1990.
Deborah Pagano. Age 44 years. Ms. Pagano has served as Senior Vice
President - Branch Administration for the Savings Bank since May 1989. Ms.
Pagano has been employed by the Savings Bank since 1976 and previously served as
Vice President of the Savings Bank from 1984 to 1989.
Donald C. Fleming. Age 50 years. Mr. Fleming has served as Senior Vice
President of the Savings Bank for Strategic Planning and Technical Services
since January 1997. Previously, Mr. Fleming served as Director, Executive Vice
President and Chief Financial Officer of North Side Savings Bank, Floral Park,
New York, from 1988 to 1996.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of the Common Stock, to file reports of ownership and changes
in ownership with the Securities and Exchange Commission ("SEC") and the New
York Stock Exchange. Officers, directors and greater than 10% stockholders are
required by regulation to furnish the Company with copies of all Section 16(a)
forms they file. The Company knows of no person who owns 10% or more of the
Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, or written representations from its officers and directors, the Company
believes that with respect to the year ended December 31, 1998, the Company's
officers and directors satisfied the reporting requirements promulgated under
Section 16(a) of the 1934 Act except that Messrs. Coyle and Kelleher each filed
late Form 4s with respect to one and two transactions to purchase Common Stock
during the year, respectively.
6
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) each person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
Exchange Act, who or which was known to the Company to be the beneficial owner
of more than 5% of the issued and outstanding Common Stock; (ii) the directors
of the Company; (iii) certain executive officers of the Company and the Savings
Bank; and (iv) all directors and certain executive officers of the Company and
the Savings Bank as a group.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group March 19, 1999(1) Common Stock
---------------- ----------------- ------------
<S> <C> <C>
Staten Island Bancorp, Inc. 3,438,500(2) 8.06%
Employee Stock Ownership Plan
15 Beach Street
Staten Island, New York 10304
Directors:
Harold Banks 101,066(3) *
Charles J. Bartels 58,585(4) *
James R. Coyle 195,078(5) *
Harry P. Doherty 296,944(6) *
William G. Horn 52,343(7) *
Denis P. Kelleher 86,839(8) *
Julius Mehrberg 59,950(9) *
John R. Morris 84,000(10) *
Kenneth W. Nelson 110,000(11) *
William E. O'Mara 44,000(12) *
Certain Executive Officers:
Frank J. Besignano 93,033(13) *
John P. Brady 99,369(14) *
Donald C. Fleming 67,215(15) *
Deborah Pagano 95,031(16) *
Edward J. Klingele 85,907(17) *
All Directors and certain Executive Officers of the
Company and the Savings Bank as a group (15 persons) 1,529,360 3.58%
</TABLE>
- -----------------
* Represents less than 1% of the outstanding stock.
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals.
(Footnotes continued on following page)
7
<PAGE>
Under regulations promulgated pursuant to the Exchange Act, shares of
Common Stock are deemed to be beneficially owned by a person if he or
she directly or indirectly has or shares (i) voting power, which
includes the power to vote or to direct the voting of the shares, or
(ii) investment power, which includes the power to dispose or to
direct the disposition of the shares. Unless otherwise indicated, the
named beneficial owner has sole voting and dispositive power with
respect to the shares.
(2) The Staten Island Bancorp, Inc. Employee Stock Ownership Plan Trust
("Trust") was established pursuant to the Staten Island Bancorp, Inc.
Employee Stock Ownership Plan ("ESOP") by an agreement between the
Company and Messrs. Coyle, Doherty, Horn, Kelleher and O'Mara who act
as trustees of the plan ("Trustees"). As of the Voting Record Date,
3,204,657 shares of Common Stock held in the Trust were unallocated
and 233,843 shares had been allocated to the accounts of participating
employees. Under the terms of the ESOP, the Trustees will generally
vote the allocated shares held in the ESOP in accordance with the
instructions of the participating employees. Unallocated shares held
in the ESOP will generally be voted in the same ratio on any matter as
those allocated shares for which instructions are given, subject in
each case to the fiduciary duties of the ESOP trustees and applicable
law. Any allocated shares which either abstain on the proposal or are
not voted will be disregarded in determining the percentage of stock
voted for and against each proposal by the participants and
beneficiaries. The amount of Common Stock beneficially owned by
directors who serve as Trustees of the ESOP and by all directors and
executive officers as a group does not include the shares held by the
ESOP (except for shares allocated to an executive officer as a
participant).
(3) Includes 40,000 shares held in the Recognition and Retention Plan
Trust ("Recognition Plan") allocated to Mr. Banks and 48,566 shares
held by the retirement fund of Ocean View The Cemetery Beautiful, of
which Mr. Banks is the Executive Director. Mr. Banks disclaims
beneficial ownership with respect to such shares held in the Ocean
View The Cemetery Beutiful retirement fund.
(4) Includes 2,459 shares held by Mrs. Bartels, 40,000 shares held in the
Recognition Plan allocated to Mr. Bartels and 1,290 shares held in
trust for Mr. Bartel's grandchildren as to which he is custodian.
(5) Includes 11,824 shares held jointly with Mr. Coyle's spouse, 3,645
shares held by children of Mr. Coyle who reside with him, 36,574
shares held by the Savings Bank's 401(k) Plan, 1,935 shares held by
the Directors' Deferred Compensation Plan, 138,000 shares held in the
Recognition Plan allocated to Mr. Coyle and 3,100 shares allocated to
him pursuant to the ESOP.
(6) Includes 36,835 shares held jointly with Mr. Doherty's spouse, 1,750
shares held by children of Mr. Doherty who reside with him, 51,059
shares held by the Savings Bank's 401(k) Plan, 4,200 shares held by
the Directors' Deferred Compensation Plan, 200,000 shares held in the
Recognition Plan allocated to Mr. Doherty and 3,100 shares allocated
to him pursuant to the ESOP.
(7) Includes 4,010 shares held by the Directors' Deferred Compensation
Plan amd 40,000 shares held in the Recognition Plan allocated to Mr.
Horn.
(8) Includes 1,343 shares held individually by Mr. Kelleher's spouse,
25,496 shares held by the Directors' Deferred Compensation Plan and
40,000 shares held in the Recognition Plan allocated to Mr. Kelleher.
(9) Includes 10,000 shares held individually by Mr. Mehrberg's spouse and
7,950 shares held by the Directors' Deferred Compensation Plan and
40,000 shares held in the Recognition Plan allocated to Mr. Mehrberg.
<PAGE>
(10) Includes 42,000 shares held jointly with Mr. Morris's spouse and
40,000 shares held in the Recognition Plan allocated to Mr. Morris.
(11) Includes 18,000 shares held individually by Mrs. Nelson, 24,000 shares
held by Tech Product, Inc. of which Mr. Nelson is a controlling
shareholder, 40,000 shares held in the Recognition Plan alloacated to
Mr. Nelson, 2,000 shares held in trust for Mr. Nelson's children and
grandchildren as to which he is custodian and 10,000 shares held by
the Margaret M. Nelson Realty Trust for which Mr. Nelson serves as a
trustee. Mr. Nelson disclaims beneficial ownership with respect to
such shares held in trust.
(Footnotes continued on following page)
8
<PAGE>
(12) Includes 40,000 shares held in the Recognition Plan allocated to Mr.
O'Mara.
(13) Includes 8,333 shares held jointly with Mr. Besignano's spouse, 421
shares held in his Individual Retirement Account, 26,697 shares held
by the Savings Bank's 401(k) Plan, 55,200 shares held in the
Recognition Plan allocated to Mr. Besignano and 2,382 shares allocated
to Mr. Besignano and 2,382 shares allocated to Mr. Besignano pursuant
to the ESOP.
(14) Includes 23,881 shares held by the Savings Bank's 401(k) Plan,
72,000 shares held in the Recognition Plan allocated to Mr. Brady and
3,100 shares allocated to him pursuant to the ESOP.
(15) Includes 10,000 shares held jointly with Mr. Fleming's spouse,
55,000 shares held in the Recognition Plan allocated to Mr. Fleming
and 2,015 shares allocated to him pursuant to the ESOP.
(16) Includes 625 shares held by the Individual Retirement Account of Ms.
Pagano's spouse, 23,579 shares held by the Savings Bank's 401(k) Plan,
5,234 held jointly with Ms. Pagano's spouse, 62,900 shares held in the
Recognition Plan allocated to Ms. Pagano and 2,693 shares allocated to
her pursuant to the ESOP.
(17) Includes 590 shares held jointly with Mr. Klingele's spouse, 5,750
shares held in trust for children of Mr. Klingele who reside with him,
178 shares held by his Individual Retirement Account, 11,750 shares
held by the Savings Bank's 401(k) Plan, 65,000 shares held in the
Recognition Plan allocated to Mr. Klingele and 2,639 shares allocated
to him pursuant to the ESOP.
9
<PAGE>
Summary Compensation Table
The following table sets forth a summary of certain information
concerning the compensation paid by the Savings Bank (including amounts deferred
to future periods by the officers) for services rendered in all capacities
during the year ended December 31, 1998 to the Chief Executive Officer of the
Savings Bank and the four other most highly compensated officers of the Savings
Bank.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------ ----------------------------------------
Awards Payouts
--------------------------- ---------
Name and Other Securities
Principal Annual Restricted Underlying LTIP All Other
Position Year Salary Bonus Compensation(1) Stock(2) Options Payouts Compensation(3)
-------- ---- ------ ----- --------------- -------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harry P. Doherty 1998 $519,426 -- -- $4,050,00 325,000 -- $120,331
Chairman and 1997 504,015 -- -- 0 -- -- 50,625
Chief Executive 1996 356,457 -- -- -- -- -- 43,500
Officer --
James R. Coyle 1998 373,923 -- -- 2,794,500 225,000 -- 101,806
President and 1997 348,513 -- -- -- -- -- 37,236
Chief Operating 1996 275,715 -- -- -- -- -- 35,680
Officer
John P. Brady 1998 161,554 -- -- 1,458,000 103,000 -- 73,257
Executive Vice 1997 163,190 -- -- -- -- -- 20,973
President 1996 137,909 -- -- -- -- -- 20,500
Deborah Pagano 1998 139,676 -- -- 1,273,725 90,000 -- 62,033
Senior Vice 1997 125,852 -- -- -- -- -- 19,298
President 1996 117,394 -- -- -- -- -- 18,053
Edward J. Klingele 1998 145,497 -- -- 1,316,250 93,000 -- 58,084
Senior Vice 1997 129,473 -- -- -- -- -- 16,584
President 1996 116,833 -- -- -- -- -- 15,876
</TABLE>
- ---------------
(1) Does not include amounts attributable to miscellaneous benefits
received by the named executive officer. In the opinion of management
of the Savings Bank, the costs to the Savings Bank of providing such
benefits to the named executive officer during the year ended December
31, 1998 did not exceed the lesser of $50,000 or 10% of the total of
annual salary and bonus reported for the individual.
(2) Represents the grant of 200,000, 138,000, 72,000, 65,000 and 62,900
shares of restricted Common Stock to Messrs. Doherty, Coyle, Brady and
Klingele and Ms. Pagano, respectively, pursuant to a Recognition Plan,
which were deemed to have had the indicated value at the date of
grant, and which had a fair market value at December 31, 1998 of
$3,987,600, $2,751,444, $1,435,536, $1,295,970 and $1,236,156 for the
grants to Messrs. Doherty, Coyle, Brady and Klingele and Ms. Pagano,
respectively. The awards vest 20% per year from the date of grant.
Dividends paid on the restricted Common Stock are held in a
Recognition Plan Trust and paid to the recipient when the restricted
stock vests.
<PAGE>
(3) In 1998, consists of the Savings Bank's contributions to the Savings
Bank's 401(k) profit sharing plan of $9,600, $9,600, $9,600, $5,468
and $8,340 for the account of Messrs. Doherty, Coyle, Brady and
Klingele and Ms. Pagano, respectively, $48,923, $30,398 and $1,849
allocated to Messrs. Doherty, Coyle and Brady, respectively, pursuant
to the Savings Bank's Supplemental Executive Retirement Plan ("SERP"),
$61,808, $61,808, $61,808, $52,616 and $53,693 allocated on behalf of
Messrs. Doherty, Coyle, Brady, Klingele and Ms. Pagano, respectively,
pursuant to the ESOP.
10
<PAGE>
Stock Options
The following table sets forth certain information concerning grants
of stock options awarded to the named executive officers during the year ended
December 31, 1998.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term(4)
--------------------------------------------------------------- -------------------------
Options % of Total Options Granted Exercise Expiration
Name Granted(1) to Employees(2) Price(3) Date 5% 10%
---- ---------- --------------- -------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Harry P. Doherty 325,000 10.63% $22.875 7/10/2008 $4,675,438 $11,848,479
James R. Coyle 225,000 7.36 22.875 7/10/2008 3,236,842 8,202,793
John P. Brady 103,000 3.37 22.875 7/10/2008 1,481,754 3,755,056
Deborah Pagano 90,000 2.95 22.875 7/10/2008 1,294,737 3,281,117
Edward J. Klingele 93,000 3.04 22.875 7/10/2008 1,337,895 3,390,488
</TABLE>
(1) Consists of stock options exercisable at the rate of 20% per year from
the date of grant.
(2) Percentage of options granted to all employees during fiscal 1998.
(3) In all cases the exercise price was based on the fair market value of
a share of Common Stock on the date of grant.
(4) Assumes compounded rates of return for the remaining life of the
options and future stock prices of $37.261 and $59.332 at compounded
rates of return of 5% and 10%, respectively.
The following table sets forth certain information concerning exercises
of stock options by the named executive officers during the year ended December
31, 1998 and options held at December 31, 1998
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised
Unexercised Options at
Shares Options at Year End Year End(1)
Acquired on Value -------------------------------- ------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harry P. Doherty -- -- -- 325,000 $ -- $ --
James R. Coyle -- -- -- 225,000 -- --
John P. Brady -- -- -- 103,000 -- --
Deborah Pagano -- -- -- 90,000 -- --
Edward J. Klingele -- -- -- 93,000 -- --
</TABLE>
(1) Based on a per share market price of $19.938 at December 31, 1998.
11
<PAGE>
Employment Agreements
The Company and the Savings Bank (the "Employers") have entered into
employment agreements with each of Messrs. Doherty, Coyle, Brady, Besignano,
Klingele and Fleming and Ms. Pagano (the "Senior Executive Officers"). The
Employers have agreed to employ the executives for a term of three years, in
each case in their current respective positions. Initially, the agreements with
the executives are at their current salary levels. The executives' compensation
and expenses shall be paid by the Company and the Savings Bank in the same
proportion as the time and services actually expended by the Senior Executive
Officers on behalf of each respective Employer. With respect to Messrs. Doherty
and Coyle, the employment agreements will be reviewed annually, and with respect
to the five other Senior Executive Officers, the employment agreements will be
reviewed prior to the second anniversary and each anniversary thereafter by the
Boards of Directors of the Employers. At such times, the term of the executives'
employment agreements shall be extended each year for a successive additional
one-year period upon the approval of the Employers' Boards of Directors, unless
either party elects, not less than 30 days prior to the annual anniversary date,
not to extend the employment term.
Each of the employment agreements are terminable with or without cause
by the Employers. The Senior Executive Officers shall have no right to
compensation or other benefits pursuant to the employment agreements for any
period after voluntary termination or termination by the Employers for cause.
The agreements provide for certain benefits in the event of the executive's
death, disability or retirement. In the event that (i) the executive terminates
his or her employment because of failure to comply with any material provision
of the employment agreement or the Employers change the executive's title or
duties or (ii) the employment agreement is terminated by the Employers other
than for cause, disability, retirement or death or by the executive as a result
of certain adverse actions which are taken with respect to the executive's
employment following a change in control of the Company, as defined, Messrs.
Doherty and Coyle will be entitled to a cash severance amount equal to three
times their average annual compensation, as defined, plus an amount to reimburse
the executives for certain tax obligations, and the five other Senior Executive
Officers will be entitled to a cash severance amount equal to two times their
average annual compensation, as defined.
A change in control is generally defined in the employment agreements
to include any change in control of the Company required to be reported under
the federal securities laws, as well as (i) the acquisition by any person of 20%
or more of the Company's outstanding voting securities and (ii) a change in a
majority of the directors of the Company during any three-year period without
the approval of at least two-thirds of the persons who were directors of the
Company at the beginning of such period.
With respect to the employment agreements with the other Senior
Executive Officers, each employment agreement provides that, in the event that
any of the payments to be made thereunder or otherwise upon termination of
employment are deemed to constitute "excess parachute payments" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), then such payments and benefits received thereunder shall be reduced by
the amount which is the minimum necessary to result in the payments not
exceeding three times the recipient's average annual compensation from the
employer which was includable in the recipient's gross income during the most
<PAGE>
recent five taxable years. Recipients of excess parachute payments are subject
to a 20% excise tax on the amount by which such payments exceed the base amount,
in addition to regular income taxes, and payments in excess of the base amount
are not deductible by the employer as compensation expense for federal income
tax purposes.
Although the above-described employment agreements could increase the
cost of any acquisition of control of the Company, management of the Company
does not believe that the terms thereof would have a significant anti-takeover
effect. The Company and/or the Savings Bank may determine to enter into similar
employment agreements with other officers in the future.
Director's Compensation
Directors of the Company, except for Messrs. Doherty and Coyle, receive
$1,800 per meeting attended of the Board and $1,200 per committee meeting ($600
in the case of the Savings Bank Loan Review Committee) attended. The Chairman of
each committee of the Board also receives $1,500 per meeting attended ($750 in
the case of the Savings Bank Loan Review Committee). Board fees are subject to
periodic adjustment by the Board of Directors.
12
<PAGE>
Retirement Plan
The Savings Bank maintains a non-contributory, tax-qualified defined
benefit pension plan (the "Retirement Plan") for eligible employees. All
salaried employees at least age 21 who have completed at least one year of
service are eligible to participate in the Retirement Plan. The Retirement Plan
provides for a benefit for each participant, including executive officers named
in the Executive Compensation Table above, equal to 2% of the participant's
final average compensation (average annual compensation during the 36
consecutive calendar months during the final 120 consecutive calendar months of
employment) multiplied by the participant's years (and any fraction thereof) of
eligible employment (up to a maximum of 30 years). A participant is fully vested
in his or her benefit under the Retirement Plan after five years of service. The
Retirement Plan is funded by the Savings Bank on a actuarial basis and all
assets are held in trust by the Retirement Plan trustee.
The following table illustrates the annual benefit payable upon normal
retirement at age 65 (in single life annuity amounts with no offset for Social
Security benefits) at various levels of compensation and years of service under
the Retirement Plan and the SERP maintained by the Savings Bank.
<TABLE>
<CAPTION>
Years of Service
---------------------------------------------------------------------------------------
Remuneration 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
450,000 135,000 180,000 225,000 270,000 270,000
500,000 150,000 200,000 250,000 300,000 300,000
550,000 165,000 220,000 275,000 330,000 330,000
600,000 180,000 240,000 300,000 360,000 360,000
</TABLE>
- ------------
(1) The annual retirement benefits shown in the table do not reflect a
deduction for Social Security benefits and there are no other offsets
to benefits.
(2) For the fiscal year of the Retirement Plan beginning on January 1,
1998, the average final compensation for computing benefits under the
Retirement Plan cannot exceed $160,000 (as adjusted for subsequent
years pursuant to Code provisions). Benefits in excess of the
limitation are provided through the SERP.
(3) For the fiscal year of the Retirement Plan beginning on January 1,
1998, the maximum annual benefit payable under the Retirement Plan
cannot exceed $130,000 (as adjusted for subsequent years pursuant to
Code provisions).
(4) The maximum years of service credited for benefit purposes is 30 years.
13
<PAGE>
The following table sets forth the years of credited service and the
average annual earnings (as defined above) determined as of December 31, 1998,
the end of the 1998 plan year, for each of the individuals named in the
Executive Compensation Table.
<TABLE>
<CAPTION>
Years of Credited Average Annual
Service Earnings
------------------ --------------
<S> <C> <C>
Harry P. Doherty................... 33 years $450,000
James R. Coyle..................... 29 years 330,000
John P. Brady...................... 17 years 149,066
Deborah Pagano..................... 20 years 128,766
Edward J. Klingele................. 22 years 131,900
</TABLE>
Supplemental Executive Retirement Plan
The Savings Bank has adopted the SERP to provide for eligible employees
benefits that would be due under its Retirement Plan and 401(k) Plan if such
benefits were not limited under the Code. SERP benefits provided with respect to
the Retirement Plan are reflected in the pension table. The Board of Directors
of the Savings Bank intends to adopt an amendment to the SERP to provide
eligible employees with benefits that would be due under the ESOP if such
benefits were not limited under the Code.
Transactions With Certain Related Persons
In accordance with applicable federal laws and regulations, the Savings
Bank offers mortgage loans to its directors, officers and employees as well as
members of their immediate families for the financing of their primary
residences and certain other loans. Until November 1996, the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 required that all
loans or extensions of credit to executive officers and directors be made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with the general public and
not involve more than the normal risk of repayment or present other unfavorable
features. In addition, loans made to a director or executive officer in excess
of the greater of $25,000 or 5% of the Savings Bank's capital and surplus (up to
a maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors.
Except as hereinafter indicated, all loans made by the Savings Bank to
its executive officers and directors are made in the ordinary course or
business, 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 collectibility or
present other unfavorable features.
In accordance with applicable regulations, the Savings Bank extends
residential first mortgage loans to its directors and executive officers secured
by their primary residence pursuant to a benefit program that is widely
available to employees of the Savings Bank and does not give preference to any
executive officer or director over other employees of the Savings Bank. Under
the terms of such loans, the interest rate is 1% below that charged on similar
loans to non-employees and certain fees and charges are waived. Set forth in the
following table is certain information relating to such preferential loans to
executive officers and directors which were outstanding at December 31, 1998.
<PAGE>
<TABLE>
<CAPTION>
Largest Amount of
Indebtedness between
January 1, 1998 Balance as of Interest
Name Year Loan Made and December 31, 1998 December 31, 1998 Rate
---- -------------- --------------------- ----------------- ----
<S> <C> <C> <C> <C>
John P. Brady 1998 $ 77,498 $ 64,940 5.25%
Donald C. Fleming 1998 200,000 199,551 5.875
Edward J. Klingele 1998 171,000 169,513 5.625
Deborah Pagano 1998 130,000 127,169 5.25
</TABLE>
14
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors of the Company and
the Savings Bank determines the salaries and bonuses of the Company's and the
Savings Bank's Senior Executive Officers. The Compensation Committee also
reviews and approves the salaries and bonuses for the Savings Bank's other
officers and employees as prepared and submitted to the Compensation Committee
by the Savings Bank's Senior Executive Officers. During 1998, the members of the
committee were Messrs. Horn (Chairman), Bartels and Morris. The report of the
Compensation Committee with respect to compensation for the Chief Executive
Officer and all other Savings Bank officers and employees for the year ended
December 31, 1998 is set forth below:
Report of the Compensation Committee
The purpose of the Compensation Committee is to assist the Company and
the Savings Bank in attracting and retaining qualified management, motivating
executives to achieve performance goals as outlined in the Company's business
plan and to ensure that executive compensation is related to and supports the
Company's overall objective of enhancing stockholder value.
In order to establish base salary levels for the Company's Chief
Executive Officer and the six other Senior Executive Officers, the Compensation
Committee considered the financial performance of the Company, including net
income of the Company and various financial ratios. The Compensation Committee
also considered the additional responsibilities related to being a public
company. Further, with respect to the Savings Bank's other officers and
employees, the Compensation Committee reviewed and approved the salary increases
and bonuses as submitted by the Savings Bank's Senior Executive Officers.
Based upon the above factors, the Compensation Committee increased Mr.
Doherty's base salary by approximately $75,000 or 16.8% to $525,000 for fiscal
1998. The Compensation Committee provided for an average 6.8% salary increase
for the six other Senior Executive Officers.
Following review and approval by the Compensation Committee, all issues
pertaining to executive compensation are submitted to the full Board of
Directors for their approval. No officer participates in the review of his or
her respective compensation.
William G. Horn, Chairman
Charles J. Bartels, Director
John R. Morris, Director
15
<PAGE>
Performance Graph
The following graph demonstrates comparison of the cumulative total
returns for the Common Stock of the Company, the SNL Securities All Thrift Index
and Standard and Poor's 500 Index for the period commencing on December 22,
1997, the date the Common Stock began trading on the NYSE, and December 31,
1998.
Total Return Performance
[GRAPHIC-GRAPH PLOTTED TO POINTS LISTED BELOW]
<TABLE>
<CAPTION>
Period Ending
Index 12/22/97 12/31/97 3/31/98 6/30/98 9/30/98 12/31/98
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Staten Island Bancorp, Inc. 100.00 109.84 106.88 119.71 95.10 105.80
S&P 500 100.00 101.81 119.84 107.92 130.90
SNL Thrift Index 100.00 102.51 109.91 105.75 82.93 90.16
</TABLE>
The above graph represents $100 invested in the Common Stock at
$19.0625 per share, the closing price per share as of December 22, 1997, the
date it commenced trading on the NYSE. The cumulative total returns include the
payment of dividends by the Company.
16
<PAGE>
PROPOSAL TO AMEND THE 1998 STOCK OPTION PLAN AND THE
1998 RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT
The Board of Directors of the Company adopted the 1998 Stock Option
Plan ("Option Plan") and the 1998 Recognition and Retention Plan and Trust
Agreement ("Recognition Plan")(together, the "Plans"), both of which were
approved by stockholders of the Company at a special meeting of stockholders
held on July 10, 1998 (the "Special Meeting"). The Company completed its
Conversion in December 1997. Under applicable regulations of the Office of
Thrift Supervision (the "OTS"), stock benefit plans such as the Plans
established or implemented within one year following the completion of a mutual
to stock conversion are required to contain certain restrictions and
limitations. Specifically, the OTS regulations provide, among other provisions,
that awards granted pursuant to such plans begin vesting no earlier than one
year from the date the plans are approved by stockholders, shall not vest at a
rate in excess of 20% per year and shall not provide for accelerated vesting
except in the case of disability or death unless then authorized by regulation
or not otherwise prohibited by law or regulations. The Plans provide that in the
event of a change in control of the Company or retirement of the recipient (as
defined) vesting of awards would accelerate if, as of such date, such treatment
is either authorized or is not prohibited by applicable law and regulations. The
OTS has authorized the elimination of these provisions more than one year after
a conversion, provided that stockholder approval of such amendments to the Plans
is obtained.
The Board of Directors of the Company has adopted amendments to the
Plans, subject to approval by the stockholders, in order to remove the
restrictions described above and to provide that new awards shall vest at the
rate determined by the Board or the administering committee and that both
existing and new awards shall accelerate and vest upon a change in control of
the Company or upon retirement, as defined in the Plans. The Plans were also
amended for conforming changes and certain administrative matters. These
amendments are consistent with the Company's intentions when it originally
adopted these Plans and such intentions were fully disclosed in the proxy
materials for the Special Meeting. OTS policy requires that these amendments be
presented to stockholders more than one year after a mutual to stock conversion.
The amendments do not increase the number of shares reserved for issuance under
the Plans or change the vesting schedule or terms of outstanding awards under
the Plans other than to accelerate the vesting upon a change in control or
retirement. In the event that these amendments to the Plans are not approved by
stockholders, the vesting of existing awards will not accelerate in the event of
a change in control or retirement (unless authorized at such time or not
prohibited by applicable laws or regulations), but the other provisions of the
Plans will remain in effect as originally adopted. The Company is currently not
in discussions with respect to any transaction that would result in a change in
control of the Company, and there are no proposals, arrangements or
understandings known to the Company that would result in a change in control.
The Plans were adopted by the Company to attract and retain qualified
personnel in key positions, provide officers and employees with a proprietary
interest in the Company as an incentive to contribute to the success of the
Company and reward key employees for outstanding performance. The Plans are also
designed to retain qualified directors for the Company. The Option Plan provides
for the grant of incentive stock options intended to comply with the
requirements of Section 422 of the Code ("incentive stock options"),
non-incentive or compensatory stock options and stock appreciation rights.
Awards are available for grant to non-employee directors and key employees of
<PAGE>
the Company and any subsidiaries, except that non-employee directors are
eligible to receive only awards of non-incentive stock options. Officers, key
employees and non-employee directors of the Company and its subsidiaries who are
selected by the Board of Directors of the Company or members of the
administering committee appointed by the Board are eligible to receive plan
share awards under the Recognition Plan.
The Plans are administered and interpreted by a committee of the Board
of Directors ("Committee") that is comprised solely of two or more non-employee
directors. The members of the Committee consists of Messrs. William G. Horn,
Julius Mehrberg and John R. Morris.
Under the Option Plan, the Board of Directors or the Committee
determines which officers, key employees and non-employee directors will be
granted options and stock appreciation rights, whether such options will be
incentive or compensatory options (in the case of options granted to employees),
the number of shares subject to each option, the
17
<PAGE>
exercise price of each option, whether such options may be exercised by
delivering other shares of Common Stock and when such options become
exercisable. The per share exercise price of a stock option shall be at least
equal to the fair market value of a share of Common Stock on the date the option
is granted. Under the Recognition Plan, the Board of Directors or the Committee
determines which officers, key employees and non-employee directors will be
granted plan share awards, the number of shares subject to each award and the
vesting schedule of such awards.
As of March 1, 1999, options to purchase 3,056,000 shares of Common
Stock have been granted and are outstanding under the Option Plan and 1,242,125
shares remain available for future grant under the plan. As of March 1, 1999,
plan share awards for 1,501,725 shares have been granted under the Recognition
Plan and 217,525 shares are available for future grant under the plan.
Previously granted awards under the Plans will vest at the rate of 20% per year
over five years. The proposed amendments to the Plans will not affect the number
of shares previously granted nor change the vesting schedule of outstanding
awards under the Plans but will provide that outstanding awards as well as newly
granted awards will accelerate in certain circumstances as described above.
A copy of the Amended and Restated1998 Stock Option Plan is attached
hereto as Appendix A and a copy of the Amended and Restated 1998 amended
Recognition and Retention Plan and Trust Agreement is attached hereto as
Appendix B.
The Board of Directors recommends that stockholders vote FOR adoption
of the amendments to the 1998 Stock Option Plan and the 1998 Recognition and
Retention Plan and Trust Agreement to provide that any future awards granted
thereunder may vest at the rate determined by the Board of Directors or the
Committee and that both existing and future awards will accelerate under certain
circumstances.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Arthur Andersen
L.L.P., independent certified public accountants, to perform the audit of the
Company's financial statements for the year ending December 31, 1999, and
further directed that the selection of auditors be submitted for ratification by
the stockholders at the Annual Meeting.
The Company has been advised by Arthur Andersen L.L.P. that neither
that firm nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. Arthur Andersen L.L.P. will have one
or more representatives at the Annual Meeting who will have an opportunity to
make a statement, if they so desire, and who will be available to respond to
appropriate questions.
The Board of Directors recommends that you vote FOR the ratification of
the appointment of Arthur Andersen L.L.P. as independent auditors for the fiscal
year ending December 31, 1999.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which currently is scheduled to be held in April 2000, must be
received at the principal executive offices of the Company, 15 Beach Street,
Staten Island, New York 10304, Attention: Patricia J. Villani, Corporate
Secretary, no later than November 30, 1999.
<PAGE>
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Section 2.14 of the Company's
Bylaws, which provides that business at an annual meeting of stockholders must
be (a) properly brought before the meeting by or at the direction of the Board
of Directors, or (b) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the Company. To be timely, a stockholder's notice must be
delivered to, or mailed and received at, the principal executive offices of the
Company not later than 120 days prior to
18
<PAGE>
the mailing of proxy materials with respect to the immediately preceding annual
meeting of stockholders of the Company. Stockholder proposals submitted pursuant
to Section 2.14 of the Bylaws for the next annual meeting of stockholders must
be received by the Company no later than November 30, 1999.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year
ended December 31, 1998 accompanies this Proxy Statement. Such annual report is
not part of the proxy solicitation materials.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of the Company's Annual Report on Form 10-K
for fiscal 1998 required to be filed under the Exchange Act. Such written
requests should be directed to Donald C. Fleming, Staten Island Bancorp, Inc.,
15 Beach Street, Staten Island, New York 10304. The Form 10-K is not part of the
proxy solicitation materials.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the election
of any person as a director if the nominee is unable to serve or for good cause
will not serve, matters incident to the conduct of the meeting, and upon such
other matters as may properly come before the Annual Meeting. Management is not
aware of any business that may properly come before the Annual Meeting other
than the matters described above in this Proxy Statement. However, if any other
matters should properly come before the meeting, it is intended that the proxies
solicited hereby will be voted with respect to those other matters in accordance
with the judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending the proxy
materials to the beneficial owners of the Common Stock. In addition to
solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
By Order of the Board of Directors
/s/Patricia J. Villani
----------------------
Patricia J. Villani
Corporate Secretary
March 29, 1999
19
<PAGE>
Appendix A
STATEN ISLAND BANCORP, INC.
AMENDED AND RESTATED
1998 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Staten Island Bancorp, Inc. (the "Corporation") hereby establishes this
1998 Stock Option Plan (the "Plan") upon the terms and conditions hereinafter
stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of
the Corporation and its Subsidiary Companies by providing Employees and
Non-Employee Directors with a proprietary interest in the Corporation as an
incentive to contribute to the success of the Corporation and its Subsidiary
Companies, and rewarding Employees and Non-Employee Directors for outstanding
performance. All Incentive Stock Options issued under this Plan are intended to
comply with the requirements of Section 422 of the Code, and the regulations
thereunder, and all provisions hereunder shall be read, interpreted and applied
with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Award" means an Option or Stock Appreciation Right granted
pursuant to the terms of this Plan.
3.02 "Bank" means Staten Island Savings Bank, the wholly owned
subsidiary of the Corporation.
3.03 "Board" means the Board of Directors of the Corporation.
3.04 "Change in Control of the Corporation" shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act,
whether or not the Corporation in fact is required to comply with Regulation 14A
thereunder; provided that, without limitation, such a change in control shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than the Corporation, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 25% or
more of the combined voting power of the Corporation's then outstanding
securities, or (ii) during any period of twenty-four consecutive months during
the term of an Option, individuals who at the beginning of such period
constitute the Board of the Corporation cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination for election by
the Corporation's stockholders, of each director who was not a director at the
date of grant has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the period.
<PAGE>
3.05 "Code" means the Internal Revenue Code of 1986, as amended.
3.06 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof each of whom shall be a Non-Employee
Director as defined in Rule 16b-3(b)(3)(i) of the Exchange Act or any successor
thereto.
A-1
<PAGE>
3.07 "Common Stock" means shares of the common stock, par value $.01 per
share, of the Corporation.
3.08 "Disability" means any physical or mental impairment which
qualifies an individual for disability benefits under the applicable long-term
disability plan maintained by the Corporation or a Subsidiary Company, or, if no
such plan applies, which would qualify such individual for disability benefits
under the long-term disability plan maintained by the Corporation, if such
individual were covered by that plan.
3.09 "Effective Date" means the day upon which the Board approves this
Plan.
3.10 "Employee" means any person who is employed by the Corporation or a
Subsidiary Company, or is an Officer of the Corporation or a Subsidiary Company,
but not including directors who are not also Officers of or otherwise employed
by the Corporation or a Subsidiary Company.
3.11 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3.12 "Fair Market Value" shall be equal to the fair market value per
share of the Corporation's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) or national quotation system in which such
shares are then traded, or if no such closing prices are reported, the mean
between the high bid and low asked prices that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Committee.
3.13 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.14 "Non-Employee Director" means a member of the Board of the
Corporation or Board of Directors of the Bank, including a Director Emeritus of
the Board of the Corporation or Board of Directors of the Bank, who is not an
Officer or Employee of the Corporation or any Subsidiary Company.
3.15 "Non-Qualified Option" means any Option granted under this Plan
which is not an Incentive Stock Option.
3.16 "Offering" means the offering of Common Stock to the public in
connection with the conversion of the Bank to the stock form and the issuance of
the capital stock of the Bank to the Corporation.
3.17 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.18 "Option" means a right granted under this Plan to purchase Common
Stock.
3.19 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.
<PAGE>
3.20 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Corporation or a Subsidiary Corporation, or, if no such plan is applicable,
which would constitute "retirement" under the Corporation's pension benefit
plan, if such individual were a participant in that plan.
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3.21 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Board or the Committee in accordance with
Section 8.10.
3.22 "Subsidiary Companies" means those subsidiaries of the Corporation,
including the Bank, which meet the definition of "subsidiary corporations" set
forth in Section 425(f) of the Code, at the time of granting of the Option in
question.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 Duties of the Committee. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority to adopt, amend
and rescind such rules, regulations and procedures as, in its opinion, may be
advisable in the administration of the Plan, including, without limitation,
rules, regulations and procedures which (i) deal with satisfaction of an
Optionee's tax withholding obligation pursuant to Section 12.02 hereof, (ii)
include arrangements to facilitate the Optionee's ability to borrow funds for
payment of the exercise or purchase price of an Award, if applicable, from
securities brokers and dealers, and (iii) include arrangements which provide for
the payment of some or all of such exercise or purchase price by delivery of
previously-owned shares of Common Stock or other property and/or by withholding
some of the shares of Common Stock which are being acquired. The interpretation
and construction by the Committee of any provisions of the Plan, any rule,
regulation or procedure adopted by it pursuant thereto or of any Award shall be
final and binding in the absence of action by the Board.
4.02 Appointment and Operation of the Committee. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a Non-Employee Director, as defined
in Rule 16b-3(b)(3)(i) of the Exchange Act or any successor thereto. In
addition, each member of the Committee shall be an "outside director" within the
meaning of Section 162(m) of the Code and regulations thereunder at such times
as is required under such regulations. The Committee shall act by vote or
written consent of a majority of its members. Subject to the express provisions
and limitations of the Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its affairs. It may
appoint one of its members to be chairman and any person, whether or not a
member, to be its secretary or agent. The Committee shall report its actions and
decisions to the Board at appropriate times but in no event less than one time
per calendar year.
4.03 Revocation for Misconduct. The Board or the Committee may by
resolution immediately revoke, rescind and terminate any Option, or portion
thereof, to the extent not yet vested, or any Stock Appreciation Right, to the
extent not yet exercised, previously granted or awarded under this Plan to an
Employee who is discharged from the employ of the Corporation or a Subsidiary
Company for cause, which, for purposes hereof, shall mean termination because of
the Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Options granted
to a Non-Employee Director who is removed for cause pursuant to the
Corporation's Articles of Incorporation and Bylaws or the Bank's Charter and
Bylaws shall terminate as of the effective date of such removal.
<PAGE>
4.04 Limitation on Liability. Neither the members of the Board nor any
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan, any rule, regulation or procedure adopted
by it pursuant thereto or any Awards granted under it. If a member of the Board
or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Corporation
shall, subject to the requirements of applicable laws and regulations, indemnify
such member against all liabilities and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement
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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 the best interests of the Corporation and its Subsidiary Companies and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
4.05 Compliance with Law and Regulations. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Corporation shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of or obtaining of consents or approvals with respect to such
shares under any federal or state law or any rule or regulation of any
government body, which the Corporation shall, in its sole discretion, determine
to be necessary or advisable. Moreover, no Option or Stock Appreciation Right
may be exercised if such exercise would be contrary to applicable laws and
regulations.
4.06 Restrictions on Transfer. The Corporation may place a legend upon
any certificate representing shares acquired pursuant to an Award granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees and Non-Employee Directors of
the Corporation and its Subsidiary Companies as may be designated from time to
time by the Board or the Committee. Awards may not be granted to individuals who
are not Employees or Non-Employee Directors of either the Corporation or its
Subsidiary Companies. Non-Employee Directors shall be eligible to receive only
Non-Qualified Options pursuant to this Plan.
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 Option Shares. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 4,298,125, which is equal to 10.0% of the shares of Common
Stock issued in the Offering. None of such shares shall be the subject of more
than one Award at any time, but if an Option as to any shares is surrendered
before exercise, or expires or terminates for any reason without having been
exercised in full, or for any other reason ceases to be exercisable, the number
of shares covered thereby shall again become available for grant under the Plan
as if no Awards had been previously granted with respect to such shares.
Notwithstanding the foregoing, if an Option is surrendered in connection with
the exercise of a Stock Appreciation Right, the number of shares covered thereby
shall not be available for grant under the Plan. During the time this Plan
remains in effect, grants to each Employee and each Non-Employee Director shall
not exceed 25% and 5% of the shares of Common Stock available under the Plan,
respectively. Awards made to Non-Employee Directors in the aggregate may not
exceed 30% of the number of shares available under this Plan.
6.02 Source of Shares. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market or from private sources for use under the
Plan.
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ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Board or the Committee shall, in its discretion, determine from time
to time which Employees and Non-Employee Directors will be granted Awards under
the Plan, the number of shares of Common Stock subject to each Award, whether
each Option will be an Incentive Stock Option or a Non-Qualified Stock Option
(in the case of Employees) and the exercise price of an Option. In making all
such determinations there shall be taken into account the duties,
responsibilities and performance of each respective Employee and Non-Employee
Director, his present and potential contributions to the growth and success of
the Corporation, his salary and such other factors deemed relevant to
accomplishing the purposes of the Plan.
ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 Stock Option Agreement. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which shall
set forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified Option or an Incentive Stock
Option, and such other terms, conditions, restrictions and privileges as the
Board or the Committee in each instance shall deem appropriate, provided they
are not inconsistent with the terms, conditions and provisions of this Plan.
Each Optionee shall receive a copy of his executed Stock Option Agreement.
8.02 Option Exercise Price.
(a) Incentive Stock Options. The per share price at which the
subject Common Stock may be purchased upon exercise of an Incentive Stock Option
shall be no less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock at the time such Incentive Stock Option is granted, except
as provided in Section 8.09(b).
(b) Non-Qualified Options. The per share price at which the
subject Common Stock may be purchased upon exercise of a Non-Qualified Option
shall be established by the Committee at the time of grant, but in no event
shall be less than the greater of (i) the par value or (ii) one hundred percent
(100%) of the Fair Market Value of a share of Common Stock at the time such
Non-Qualified Option is granted.
8.03 Vesting and Exercise of Options.
(a) General Rules. Incentive Stock Options and Non-Qualified
Options granted to Employees shall become vested and exercisable at the rate, to
the extent and subject to such limitations as may be specified by the Board or
the Committee. Notwithstanding the foregoing, no vesting shall occur on or after
an Employee's employment or service as a Non-Employee Director with the
Corporation and all Subsidiary Companies is terminated for any reason other than
his death, Disability or Retirement. In determining the number of shares of
Common Stock with respect to which Options are vested and/or exercisable,
fractional shares will be rounded up to the nearest whole number if the fraction
is 0.5 or higher, and down if it is less.
<PAGE>
(b) Accelerated Vesting. Unless the Board or the Committee shall
specifically state otherwise at the time an Option is granted, all Options
granted under this Plan shall become vested and exercisable in full on the date
an Optionee terminates his employment with the Corporation or a Subsidiary
Company or service as a Non-Employee Director because of his death, Disability
or Retirement. In addition, all outstanding Options hereunder shall become
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vested and exercisable in full in the event of a Change in Control of the
Corporation as of the effective date of the Change in Control of the Company.
8.04 Duration of Options.
(a) General Rule. Except as provided in Sections 8.04(b) and
8.09, each Option or portion thereof granted to an Employee shall be exercisable
at any time on or after it vests and becomes exercisable until the earlier of
(i) ten (10) years after its date of grant or (ii) one (1) year after the date
on which the Employee ceases to be employed by the Corporation and all
Subsidiary Companies, unless the Board or the Committee in its discretion
decides at the time of grant or thereafter to extend such period of exercise
upon termination of employment to a period not exceeding five (5) years.
Except as provided in Sections 8.04(b) and 8.09, each Option or portion
thereof granted to a Non-Employee Director shall be exercisable at any time on
or after it vests and becomes exercisable until the earlier of (i) ten (10)
years after its date of grant or (ii) three (3) years after the date on which
the Non-Employee Director ceases to serve as a director of the Corporation and
all Subsidiary Companies, unless the Board or the Committee in its discretion
decides at the time of grant or thereafter to extend such period of exercise
upon termination of service to a period not exceeding five (5) years.
(b) Exceptions. Unless the Board or the Committee shall
specifically state otherwise at the time an Option is granted: (i) if an
Employee terminates his employment with the Corporation or a Subsidiary Company
as a result of Disability or Retirement without having fully exercised his
Options, the Employee shall have the right, during the three (3) year period
following his termination due to Disability or Retirement, to exercise such
Options, and (ii) if a Non-Employee Director terminates his service as a
director with the Corporation or a Subsidiary Company as a result of Disability
or Retirement without having fully exercised his Options, the Non-Employee
Director shall have the right, during the three (3) year period following his
termination due to Disability or Retirement, to exercise such Options.
Unless the Board or the Committee shall specifically state otherwise at
the time an Option is granted, if an Employee or Non-Employee Director
terminates his employment or service with the Corporation or a Subsidiary
Company or has his employment or service terminated following a Change in
Control of the Corporation without having fully exercised his Options, the
Optionee shall have the right to exercise such Options during the remainder of
the original ten (10) year term of the Option from the date of grant.
If an Optionee dies while in the employ or service of the Corporation or
a Subsidiary Company or terminates employment or service with the Corporation or
a Subsidiary Company as a result of Disability or Retirement and dies without
having fully exercised his Options, the executors, administrators, legatees or
distributees of his estate shall have the right, during the one (1) year period
following his death, to exercise such Options.
In no event, however, shall any Option be exercisable more than ten (10)
years from the date it was granted.
<PAGE>
8.05 Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative. Notwithstanding the foregoing, or any other provision
of this Plan, an Optionee who holds Non-Qualified Options may transfer such
Options to his or her spouse, lineal ascendants, lineal descendants, or to a
duly established trust for the benefit of one or more of these individuals.
Options so transferred may thereafter be transferred only to the Optionee who
originally received the grant or to an individual or trust to whom the Optionee
could have initially transferred the Option pursuant to this Section 8.05.
Options which are transferred pursuant to this Section 8.05 shall be exercisable
by the transferee according to the same terms and conditions as applied to the
Optionee.
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8.06 Manner of Exercise. Options may be exercised in part or in whole
and at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.
8.07 Payment for Shares. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall be
made to the Corporation upon exercise of the Option. All shares sold under the
Plan shall be fully paid and nonassessable. Payment for shares may be made by
the Optionee (i) in cash or by check, (ii) by delivery of a properly executed
exercise notice, together with irrevocable instructions to a broker to sell the
shares and then to properly deliver to the Corporation the amount of sale
proceeds to pay the exercise price, all in accordance with applicable laws and
regulations, or (iii) at the discretion of the Committee, by delivering shares
of Common Stock (including shares acquired pursuant to the exercise of an
Option) equal in Fair Market Value to the purchase price of the shares to be
acquired pursuant to the Option, by withholding some of the shares of Common
Stock which are being purchased upon exercise of an Option, or any combination
of the foregoing.
8.08 Voting and Dividend Rights. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.
8.09 Additional Terms Applicable to Incentive Stock Options. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.08 above, to those contained in this
Section 8.09.
(a) Notwithstanding any contrary provisions contained elsewhere
in this Plan and as long as required by Section 422 of the Code, the aggregate
Fair Market Value, determined as of the time an Incentive Stock Option is
granted, of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year under
this Plan, and stock options that satisfy the requirements of Section 422 of the
Code under any other stock option plan or plans maintained by the Corporation
(or any parent or Subsidiary Company), shall not exceed $100,000.
(b) Limitation on Ten Percent Stockholders. The price at which
shares of Common Stock may be purchased upon exercise of an Incentive Stock
Option granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option shall by its
terms not be exercisable after the earlier of the date determined under Section
8.03 or the expiration of five (5) years from the date such Incentive Stock
Option is granted.
(c) Notice of Disposition; Withholding; Escrow. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
<PAGE>
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Corporation shall be entitled to withhold from any compensation
or other payments then or thereafter due to the Optionee such amounts as may be
necessary to satisfy any withholding requirements of federal or state law or
regulation and, further, to collect from the Optionee any additional amounts
which may be required for such purpose. The Committee or the Board may, in its
discretion, require shares of Common Stock acquired by an Optionee upon exercise
of an Incentive Stock Option to be held in an escrow arrangement for the purpose
of enabling compliance with the provisions of this Section 8.09(c).
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8.10 Stock Appreciation Rights.
(a) General Terms and Conditions. The Board or the Committee may,
but shall not be obligated to, authorize the Corporation, on such terms and
conditions as it deems appropriate in each case, to grant rights to Optionees to
surrender an exercisable Option, or any portion thereof, in consideration for
the payment by the Corporation of an amount equal to the excess of the Fair
Market Value of the shares of Common Stock subject to the Option, or portion
thereof, surrendered over the exercise price of the Option with respect to such
shares (any such authorized surrender and payment being hereinafter referred to
as a "Stock Appreciation Right"). Such payment, at the discretion of the Board
or the Committee, may be made in shares of Common Stock valued at the then Fair
Market Value thereof, or in cash, or partly in cash and partly in shares of
Common Stock.
The terms and conditions with respect to a Stock Appreciation Right may
include (without limitation), subject to other provisions of this Section 8.10
and the Plan: the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised; the method for valuing shares of
Common Stock for purposes of this Section 8.10; a ceiling on the amount of
consideration which the Corporation may pay in connection with exercise and
cancellation of the Stock Appreciation Right; and arrangements for income tax
withholding. The Board or the Committee shall have complete discretion to
determine whether, when and to whom Stock Appreciation Rights may be granted.
(b) Time Limitations. If a holder of a Stock Appreciation Right
terminates service with the Corporation as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within which
the Option to which it relates may be exercised.
(c) Effects of Exercise of Stock Appreciation Rights or Options.
Upon the exercise of a Stock Appreciation Right, the number of shares of Common
Stock available under the Option to which it relates shall decrease by a number
equal to the number of shares for which the Stock Appreciation Right was
exercised. Upon the exercise of an Option, any related Stock Appreciation Right
shall terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.
(d) Time of Grant. A Stock Appreciation Right granted in
connection with an Incentive Stock Option must be granted concurrently with the
Option to which it relates, while a Stock Appreciation Right granted in
connection with a Non-Qualified Option may be granted concurrently with the
Option to which it relates or at any time thereafter prior to the exercise or
expiration of such Option.
(e) Non-Transferable. The holder of a Stock Appreciation Right
may not transfer or assign the Stock Appreciation Right otherwise than by will
or in accordance with the laws of descent and distribution, and during a
holder's lifetime a Stock Appreciation Right may be exercisable only by the
holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any outstanding Award relates,
<PAGE>
the maximum number of shares that can be covered by Awards to each Employee and
each Non-Employee Director and all Non-Employee Directors as a group and the
exercise price per share of Common Stock under any outstanding Option shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the effective date of
this Plan resulting from a split, subdivision or consolidation of shares or any
other capital adjustment, the payment of a stock dividend, or other increase or
decrease in such shares effected without receipt or payment of consideration by
the Corporation. If, upon a merger, consolidation, reorganization, liquidation,
recapitalization or the like of the Corporation, the shares of the Corporation's
Common Stock shall be exchanged for other securities of the Corporation or of
another corporation, each recipient of an Award shall be entitled, subject to
the conditions herein stated, to purchase or acquire such number of
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shares of Common Stock or amount of other securities of the Corporation or such
other corporation as were exchangeable for the number of shares of Common Stock
of the Corporation which such optionees would have been entitled to purchase or
acquire except for such action, and appropriate adjustments shall be made to the
per share exercise price of outstanding Options.
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan
with respect to any shares of Common Stock as to which Awards have not been
granted, subject to any required stockholder approval or any stockholder
approval which the Board may deem to be advisable for any reason, such as for
the purpose of obtaining or retaining any statutory or regulatory benefits under
tax, securities or other laws or satisfying any applicable stock exchange
listing requirements. The Board may not, without the consent of the holder of an
Award, alter or impair any Award previously granted or awarded under this Plan
except as specifically authorized herein.
ARTICLE XI
EMPLOYMENT AND SERVICE RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action
taken by the Committee or the Board in connection with the Plan shall create any
right on the part of any Employee or Non-Employee Director to continue in such
capacity.
ARTICLE XII
WITHHOLDING
12.01 Tax Withholding. The Corporation may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes, and if the amount of such cash payment is
insufficient, the Corporation may require the Optionee to pay to the Corporation
the amount required to be withheld as a condition to delivering the shares
acquired pursuant to an Award. The Corporation also may withhold or collect
amounts with respect to a disqualifying disposition of shares of Common Stock
acquired pursuant to exercise of an Incentive Stock Option, as provided in
Section 8.09(c).
12.02 Methods of Tax Withholding. The Board or the Committee is
authorized to adopt rules, regulations or procedures which provide for the
satisfaction of an Optionee's tax withholding obligation by the retention of
shares of Common Stock to which the Employee would otherwise be entitled
pursuant to an Award and/or by the Optionee's delivery of previously-owned
shares of Common Stock or other property.
ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 Effective Date of the Plan. This Plan shall become effective on
the Effective Date, and Awards may be granted hereunder no earlier than the date
that this Plan is approved by stockholders of the Corporation and prior to the
termination of the Plan, provided that this Plan is approved by stockholders of
the Corporation pursuant to Article XIV hereof.
<PAGE>
13.02 Term of the Plan. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
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ARTICLE XIV
STOCKHOLDER APPROVAL
The Corporation shall submit this Plan to stockholders for approval at a
meeting of stockholders of the Corporation held within twelve (12) months
following the Effective Date in order to meet the requirements of (i) Section
422 of the Code and regulations thereunder, (ii) Section 162(m) of the Code and
regulations thereunder, (iii) the New York Stock Exchange ("NYSE") for listing
of the Common Stock on the NYSE, and (iv) regulations of the Office of Thrift
Supervision.
ARTICLE XV
MISCELLANEOUS
15.01 Governing Law. To the extent not governed by federal law, this
Plan shall be construed under the laws of the State of Delaware.
15.02 Pronouns. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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Appendix B
STATEN ISLAND BANCORP, INC.
AMENDED AND RESTATED
1998 RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Staten Island Bancorp, Inc. (the "Corporation") hereby establishes
the 1998 Recognition and Retention Plan (the "Plan") and Trust (the "Trust")
upon the terms and conditions hereinafter stated in this 1998 Recognition and
Retention Plan and Trust Agreement (the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to retain personnel of experience and
ability in key positions by providing Employees and Non-Employee Directors of
the Corporation and Staten Island Savings Bank ("Bank") with a proprietary
interest in the Corporation as compensation for their contributions to the
Corporation, the Bank, and any other Subsidiaries and as an incentive to make
such contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Agreement with an
initial capital letter, unless the context clearly indicates otherwise, shall
have the meanings set forth below. Wherever appropriate, the masculine pronouns
shall include the feminine pronouns and the singular shall include the plural.
3.01 "Bank" means Staten Island Savings Bank, the wholly-owned
subsidiary of the Corporation.
3.02 "Beneficiary" means the person or persons designated by a Recipient
to receive any benefits payable under the Plan in the event of such Recipient's
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate.
3.03 "Board" means the Board of Directors of the Corporation.
3.04 "Change in Control of the Corporation" shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act,
whether or not the Corporation in fact is required to comply with Regulation 14A
<PAGE>
thereunder; provided that, without limitation, such a change in control shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than the Corporation, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 25% or
more of the combined voting power of the Corporation's then outstanding
securities, or (ii) during any period of twenty-four consecutive months during
the term of a Plan Share Award, individuals who at the beginning of such period
constitute the Board of the Corporation cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination for election by
the Corporation's stockholders, of each director who was not a director at the
date of grant
B-1
<PAGE>
has been approved in advance by directors representing at least two-thirds of
the directors then in office who were directors at the beginning of the period.
3.05 "Code" means the Internal Revenue Code of 1986, as amended.
3.06 "Committee" means the committee appointed by the Board pursuant to
Article IV hereof.
3.07 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Corporation.
3.08 "Disability" means any physical or mental impairment which
qualifies an individual for disability benefits under the applicable long-term
disability plan maintained by the Corporation or any Subsidiary or, if no such
plan applies, which would qualify such individual for disability benefits under
the long-term disability plan maintained by the Corporation, if such individual
were covered by that plan.
3.09 "Effective Date" means the day upon which the Board approves this
Plan.
3.10 "Employee" means any person who is employed by the Corporation, the
Bank, or any Subsidiary, or is an officer of the Corporation, the Bank, or any
Subsidiary, including officers or other employees who may be directors of the
Corporation.
3.11 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3.12 "Non-Employee Director" means a member of the Board of the
Corporation or the Board of Directors of the Bank, including a Director Emeritus
of the Board of the Corporation or the Board of Directors of the Bank, who is
not an Employee.
3.13 "Offering" means the offering of Common Stock to the public in
connection with the conversion of the Bank to the stock form and the issuance of
the capital stock of the Bank to the Corporation.
3.14 "Plan Shares" or "Shares" means shares of Common Stock held in the
Trust which may be distributed to a Recipient pursuant to the Plan.
3.15 "Plan Share Award" or "Award" means a right granted under this Plan
to receive a distribution of Plan Shares upon completion of the service
requirements described in Article VII.
3.16 "Recipient" means an Employee or Non-Employee Director who receives
a Plan Share Award under the Plan.
3.17 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Corporation or a Subsidiary Corporation, or, if no such plan is applicable,
which would constitute "retirement" under the Corporation's pension benefit
plan, if such individual were a participant in that plan.
3.18 "Subsidiary" means the Bank and any other subsidiaries of the
Corporation or the Bank which, with the consent of the Board, agree to
participate in this Plan.
3.19 "Trustee" means such firm, entity or persons approved by the Board
to hold legal title to the Plan for the purposes set forth herein.
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<PAGE>
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and
interpreted by the Committee, which shall consist of two or more members of the
Board, each of whom shall be a Non-Employee Director, as defined in Rule 16b-
3(b)(3)(i) of the Exchange Act. The Committee shall have all of the powers
allocated to it in this and other Sections of the Plan. The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan Share
Award granted hereunder shall be final and binding in the absence of action by
the Board. The Committee shall act by vote or written consent of a majority of
its members. Subject to the express provisions and limitations of the Plan, the
Committee may adopt such rules, regulations and procedures as it deems
appropriate for the conduct of its affairs. The Committee shall report its
actions and decisions with respect to the Plan to the Board at appropriate
times, but in no event less than one time per calendar year.
4.02 Role of the Board. The members of the Committee and the Trustee
shall be appointed or approved by, and will serve at the pleasure of, the Board.
The Board may in its discretion from time to time remove members from, or add
members to, the Committee, and may remove or replace the Trustee, provided that
any directors who are selected as members of the Committee shall be Non-Employee
Directors.
4.03 Limitation on Liability. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Plan Shares or Plan Share Awards granted under it. If a member of
the Board or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Corporation
shall, subject to the requirements of applicable laws and regulations, indemnify
such member against all liabilities and 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 the best interests of the
Corporation and any Subsidiaries and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
4.04 Compliance with Laws and Regulations. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency or stockholders as
may be required.
ARTICLE V
CONTRIBUTIONS
5.01 Amount and Timing of Contributions. The Board shall determine the
amount (or the method of computing the amount) and timing of any contributions
by the Corporation and any Subsidiaries to the Trust established under this
Plan. Such amounts may be paid in cash or in shares of Common Stock and shall be
paid to the Trust at the designated time of contribution. No contributions by
Employees or Non-Employee Directors shall be permitted.
5.02 Investment of Trust Assets; Number of Plan Shares. Subject to
Section 8.02 hereof, the Trustee shall invest all of the Trust's assets
primarily in Common Stock. The aggregate number of Plan Shares available for
distribution pursuant to this Plan shall be 1,719,250 shares of Common Stock,
<PAGE>
subject to adjustment as provided in Section 9.01 hereof, which shares shall be
purchased (from the Corporation and/or, if permitted by applicable regulations,
from stockholders thereof) by the Trust with funds contributed by the
Corporation. During the time this Plan remains in effect, Awards to each
Employee and each Non-Employee Director shall not exceed 25% and 5% of the
shares of Common Stock available under the Plan, respectively. Plan Share Awards
to Non-Employee Directors in the aggregate shall not exceed 30% of the number of
shares available under this Plan.
B-3
<PAGE>
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 Awards. Plan Share Awards may be made to such Employees and
Non-Employee Directors as may be selected by the Board or the Committee. In
selecting those Employees to whom Plan Share Awards may be granted and the
number of Shares covered by such Awards, the Board or the Committee shall
consider the duties, responsibilities and performance of each respective
Employee and Non-Employee Director, his present and potential contributions to
the growth and success of the Corporation, his salary and such other factors as
deemed relevant to accomplishing the purposes of the Plan. The Board or the
Committee may but shall not be required to request the written recommendation of
the Chief Executive Officer of the Corporation other than with respect to Plan
Share Awards to be granted to him.
6.02 Form of Allocation. As promptly as practicable after an allocation
pursuant to Sections 6.01 that a Plan Share Award is to be issued, the Board or
the Committee shall notify the Recipient in writing of the grant of the Award,
the number of Plan Shares covered by the Award, the terms upon which the Plan
Shares subject to the Award shall be distributed to the Recipient and the rate
at which the Plan Share Award shall terminate. The date on which the Board or
the Committee so notifies the Recipient shall be considered the date of grant of
the Plan Share Award. The Board or the Committee shall maintain records as to
all grants of Plan Share Awards under the Plan.
6.03 Allocations Not Required to any Specific Employee or Non-Employee
Director. No Employee or Non-Employee Director shall have any right or
entitlement to receive a Plan Share Award hereunder, such Awards being at the
total discretion of the Board or the Committee.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earning Plan Shares; Forfeitures.
(a) General Rules. Subject to the terms hereof, Plan Share Awards
shall be earned by a Recipient at the rate determined by the Board or the
Committee pursuant to Article VI hereof. If the employment of an Employee or
service as a Non-Employee Director is terminated prior to the date such Awards
are vested for any reason (except as specifically provided in subsections (b),
(c) and (d) below), the Recipient shall forfeit the right to any Shares subject
to the Award which have not theretofore been earned. In the event of a
forfeiture of the right to any Shares subject to an Award, such forfeited Shares
shall become available for allocation pursuant to Section 6.01 hereof as if no
Award had been previously granted with respect to such Shares. No fractional
shares shall be distributed pursuant to this Plan.
(b) Exception for Terminations Due to Death, Disability or
Retirement. Notwithstanding the general rule contained in Section 7.01(a), all
Plan Shares subject to a Plan Share Award held by a Recipient whose employment
with the Corporation or any Subsidiary or service as a Non-Employee Director
terminates due to death, Disability or Retirement shall be deemed earned as of
the Recipient's last day of employment with or service to the Corporation or any
Subsidiary and shall be distributed as soon as practicable thereafter.
(c) Exception for Termination after a Change in Control of the
Corporation. Notwithstanding the general rule contained in Section 7.01(a), all
Plan Shares subject to a Plan Share Award held by a Recipient shall be deemed to
be earned in the event of a Change in Control of the Corporation as of the
effective date of the Change in Control of the Corporation.
<PAGE>
(d) Revocation for Misconduct. Notwithstanding anything
hereinafter to the contrary, the Board may by resolution immediately revoke,
rescind and terminate any Plan Share Award, or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder to the Recipient, whether or not yet earned, in the case of an
Employee who is discharged from the employ of the Corporation or any Subsidiary
for cause (as hereinafter defined). Termination for cause shall mean termination
because of the Employee's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
B-4
<PAGE>
perform stated duties, willful violation of any law, rule, or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order.
Plan Share Awards granted to a Non-Employee Director who is removed for cause
pursuant to the Corporation's Articles of Incorporation and Bylaws or the Bank's
Charter and Bylaws shall terminate as of the effective date of such removal.
7.02 Distribution of Dividends. Any cash dividends (including special
large and nonrecurring dividends including one that has the effect of a return
of capital to the Corporation's stockholders) or stock dividends declared in
respect of each unvested Plan Share Award will be held by the Trust for the
benefit of the Recipient on whose behalf such Plan Share Award is then held by
the Trust and such dividends, including any interest thereon, will be paid out
proportionately by the Trust to the Recipient thereof as soon as practicable
after the Plan Share Awards become earned. Any cash dividends or stock dividends
declared in respect of each vested Plan Share held by the Trust will be paid by
the Trust, as soon as practicable after the Trust's receipt thereof, to the
Recipient on whose behalf such Plan Share is then held by the Trust.
7.03 Distribution of Plan Shares.
(a) Timing of Distributions: General Rule. Plan Shares shall be
distributed to the Recipient or his Beneficiary, as the case may be, as soon as
practicable after they have been earned.
(b) Form of Distributions. All Plan Shares, together with any
Shares representing stock dividends, shall be distributed in the form of Common
Stock. One share of Common Stock shall be given for each Plan Share earned and
distributable. Payments representing cash dividends shall be made in cash.
(c) Withholding. The Trustee may withhold from any cash payment
or Common Stock distribution made under this Plan sufficient amounts to cover
any applicable withholding and employment taxes, and if the amount of a cash
payment is insufficient, the Trustee may require the Recipient or Beneficiary to
pay to the Trustee the amount required to be withheld as a condition of
delivering the Plan Shares. The Trustee shall pay over to the Corporation or any
Subsidiary which employs or employed such Recipient any such amount withheld
from or paid by the Recipient or Beneficiary.
(d) Restrictions on Selling of Plan Shares. Plan Share Awards may
not be sold, assigned, pledged or otherwise disposed of prior to the time that
they are earned and distributed pursuant to the terms of this Plan. Following
distribution, the Board or the Committee may require the Recipient or his
Beneficiary, as the case may be, to agree not to sell or otherwise dispose of
his distributed Plan Shares except in accordance with all then applicable
Federal and state securities laws, and the Board or the Committee may cause a
legend to be placed on the stock certificate(s) representing the distributed
Plan Shares in order to restrict the transfer of the distributed Plan Shares for
such period of time or under such circumstances as the Board or the Committee,
upon the advice of counsel, may deem appropriate.
7.04 Voting of Plan Shares. After a Plan Share Award has been made, the
Recipient shall be entitled to direct the Trustee as to the voting of the Plan
Shares which are covered by the Plan Share Award and which have not yet been
earned and distributed to him pursuant to Section 7.03, subject to rules and
procedures adopted by the Committee for this purpose. All shares of Common Stock
held by the Trust which have not been awarded under a Plan Share Award and
shares which have been awarded as to which Recipients have not directed the
voting shall be voted by the Trustee in its discretion.
B-5
<PAGE>
ARTICLE VIII
TRUST
8.01 Trust. The Trustee shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the provisions
of the Plan and Trust and the applicable directions, rules, regulations,
procedures and policies established by the Committee pursuant to the Plan.
8.02 Management of Trust. It is the intent of this Plan and Trust that
the Trustee shall have complete authority and discretion with respect to the
arrangement, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustee determines that the holding
of monies in cash or cash equivalents is necessary to meet the obligations of
the Trust. In performing their duties, the Trustee shall have the power to do
all things and execute such instruments as may be deemed necessary or proper,
including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust
assets in Common Stock without regard to any law now or hereafter in force
limiting investments for trustees or other fiduciaries. The investment
authorized herein may constitute the only investment of the Trust, and in making
such investment, the Trustee are authorized to purchase Common Stock from the
Corporation or from any other source, and such Common Stock so purchased may be
outstanding, newly issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above, in such deposit accounts, and certificates of
deposit, obligations of the United States Government or its agencies or such
other investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any
time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered
in the name of a nominee, without the addition of words indicating that such
security is an asset of the Trust (but accurate records shall be maintained
showing that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may in the
opinion of the Trustee be reasonable for the proper operation of the Plan and
Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
(g) To hire counsel to render advice with respect to their
rights, duties and obligations hereunder, and such other legal services or
representation as they may deem desirable.
(h) To hold funds and securities representing the amounts to be
distributed to a Recipient or his Beneficiary as a consequence of a dispute as
to the disposition thereof, whether in a segregated account or held in common
with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of court for the exercise of any power
herein contained, or give bond.
<PAGE>
8.03 Records and Accounts. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Board or the Committee.
8.04 Expenses. All costs and expenses incurred in the operation and
administration of this Plan shall be borne by the Corporation or, in the
discretion of the Corporation, the Trust.
B-6
<PAGE>
8.05 Indemnification. Subject to the requirements of applicable laws and
regulations, the Corporation shall indemnify, defend and hold the Trustee
harmless against all claims, expenses and liabilities arising out of or related
to the exercise of the Trustee's powers and the discharge of their duties
hereunder, unless the same shall be due to their gross negligence or willful
misconduct.
ARTICLE IX
MISCELLANEOUS
9.01 Adjustments for Capital Changes. The aggregate number of Plan
Shares available for distribution pursuant to the Plan Share Awards, the number
of Shares to which any Plan Share Award relates and the maximum number of Plan
Shares which may be granted to any Employee, to any Non-Employee Director or to
all Non-Employee Directors as a group shall be proportionately adjusted for any
increase or decrease in the total number of outstanding shares of Common Stock
issued subsequent to the effective date of the Plan resulting from any split,
subdivision or consolidation of shares or other capital adjustment, or other
increase or decrease in such shares effected without receipt or payment of
consideration by the Corporation.
9.02 Amendment and Termination of Plan. The Board may, by resolution, at
any time amend or terminate the Plan, subject to any required stockholder
approval or any stockholder approval which the Board may deem to be advisable
for any reason, such as for the purpose of obtaining or retaining any statutory
or regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements. The Board may not, without the
consent of the Recipient, alter or impair his Plan Share Award except as
specifically authorized herein. Notwithstanding any other provision of this
Plan, this Plan may not be terminated until such time as all Plan Shares held by
the Trust have been Awarded to Plan Recipients and shall be deemed to be earned
prior to the time of termination.
9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Recipient, and during the lifetime of the Recipient,
Plan Shares may only be earned by and paid to a Recipient who was notified in
writing of an Award by the Committee pursuant to Section 6.03 No Recipient or
Beneficiary shall have any right in or claim to any assets of the Plan or Trust,
nor shall the Corporation or any Subsidiary be subject to any claim for benefits
hereunder.
9.04 Employment or Service Rights. Neither the Plan nor any grant of a
Plan Share Award or Plan Shares hereunder nor any action taken by the Trustee,
the Committee or the Board in connection with the Plan shall create any right on
the part of any Employee or Non-Employee Director to continue in such capacity.
9.05 Voting and Dividend Rights. No Recipient shall have any voting or
dividend rights or other rights of a stockholder in respect of any Plan Shares
covered by a Plan Share Award, except as expressly provided in Sections 7.02 and
7.04 above, prior to the time said Plan Shares are actually earned and
distributed to him.
9.06 Governing Law. To the extent not governed by federal law, the Plan
and Trust shall be governed by the laws of the State of Delaware.
<PAGE>
9.07 Effective Date. This Plan shall be effective as of the Effective
Date, and Awards may be granted hereunder as of or after the Effective Date and
as long as the Plan remains in effect. Notwithstanding the foregoing or anything
to the contrary in this Plan, the implementation of this Plan and any Awards
granted pursuant hereto are subject to the approval of the Corporation's
stockholders.
9.08 Term of Plan. This Plan shall remain in effect until the earlier of
(1) ten (10) years from the Effective Date, (2) termination by the Board, or (3)
the distribution to Recipients and Beneficiaries of all assets of the Trust.
9.09 Tax Status of Trust. It is intended that the trust established
hereby be treated as a Grantor Trust of the Corporation under the provisions of
Section 671 et seq. of the Code, as the same may be amended from time to time.
B-7
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Agreement to be executed by its duly authorized officers and the corporate seal
to be affixed and duly attested, and the Trustee of the Trust established
pursuant hereto have duly and validly executed this Agreement, all on this 17th
day of February 1999.
STATEN ISLAND BANCORP, INC.
By: /s/ Harry P. Doherty
--------------------
Harry P. Doherty
Chairman of the Board and
Chief Executive Officer
ATTEST: TRUSTEES:
/s/ Patricia J. Villani /s/ William G. Horn
- ----------------------- -------------------
Patricia J. Villani William G. Horn
Secretary
/s/ Julius Mehrberg
-------------------
Julius Mehrberg
/s/ John R. Morris
------------------
John R. Morris
B-8
<PAGE>
REVOCABLE PROXY
STATEN ISLAND BANCORP, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF STATEN ISLAND
BANCORP, INC. FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL
29, 1999 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of Staten Island
Bancorp, Inc. ( the "Company") as proxies, each with power to appoint his
substitute, and hereby authorizes them to represent and vote, as designated
below, all the shares of Common Stock of the Company held of record by the
undersigned on March 19, 1999 at the Annual Meeting of Stockholders to be held
at the Excelsior Grand located at 2380 Hylan Boulevard, Staten Island, New York,
on Thursday, April 29, 1999 at 10:00 a.m., Eastern Time, and at any adjournment
thereof:
1. ELECTION OF DIRECTORS
Nominees for a three-year term expiring in 2002:
Harold Banks, Denis P. Kelleher and Julius Mehrberg
For All
[ ] For [ ] Withhold [ ] Except
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. PROPOSAL to amend the Company's 1998 Stock Option Plan and the Company's 1998
Recognition and Retention Plan and Trust to revise the provisions relating to
the vesting of options and awards.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL to ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for the year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THE SHARES OF THE COMPANY'S
COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT OTHERWISE SPECIFIED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTOR,
FOR THE PROPOSAL TO AMEND THE COMPANY'S STOCK BENEFIT PLANS, FOR THE PROPOSAL TO
RATIFY THE AUDITORS, AND OTHERWISE AT THE DISCRETION OF THE PROXIES. YOU MAY
REVOKE THIS PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED AT THE ANNUAL
MEETING.
<PAGE>
Please be sure to sign and date
this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
STATEN ISLAND BANCORP, INC.
PLEASE SIGN ABOVE EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS PROXY. WHEN
SIGNING IN A REPRESENTATIVE CAPACITY, PLEASE GIVE FULL TITLE. WHEN SHARES ARE
HELD JOINTLY, ONLY ONE HOLDER NEED SIGN.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
