<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NORTH FORK BANCORPORATION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title to each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
NORTH FORK
BANCORPORATION, INC.
March 18, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of North
Fork Bancorporation, Inc., to be held at the Marriott Windwatch Hotel, 1717
Vanderbilt Motor Parkway, Hauppauge, New York, at 10 a.m. on Tuesday, April 23,
1996.
There are three matters scheduled to be acted upon at the meeting:
- - The election of three directors to Class 3 of the Board of Directors;
- - The approval of an amendment to the Key Employee Stock Plan (the "Stock Plan")
to increase the number of shares of the Company's common stock, par value
$2.50 per share, issuable thereunder from 700,000 to 1,200,000; and
- - The approval of the Company's Annual Incentive Compensation Plan (the "Bonus
Plan"), as amended, to ensure that amounts payable to top executives
thereunder will continue to be tax deductible to the Company.
The Board of Directors believes that the election of the nominees listed in the
attached proxy statement, the approval of the amendment to the Stock Plan and
the approval of the Bonus Plan are in the best interests of the Company and its
stockholders and unanimously recommends a vote "FOR" the nominees, the Stock
Plan amendment and the Bonus Plan.
Whether or not you plan to attend in person, it is important that your shares
are represented at the meeting. Accordingly, you are requested to promptly sign,
date and mail the enclosed proxy in the postage prepaid envelope provided.
Please be sure to mark the appropriate box if you do plan to attend.
Thank you for your consideration and continued support.
Sincerely,
/s/ JOHN ADAM KANAS
- --------------------
John Adam Kanas
Chairman of the Board and President
275 BROAD HOLLOW ROAD, MELVILLE, NEW YORK 11747 (516) 844-1004
<PAGE> 3
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 23, 1996
To the Stockholders of
North Fork Bancorporation, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of North
Fork Bancorporation, Inc., a Delaware corporation (the "Company"), will be held
at the Marriott Windwatch Hotel, 1717 Vanderbilt Motor Parkway, Hauppauge, New
York 11788, on Tuesday, April 23, 1996, at 10 a.m. for the purpose of
considering and voting upon the following matters:
1. The election of three directors to Class 3 of the Company's Board
of Directors, each to hold office for a term of three years, and until
their successors have been duly elected and qualified;
2. The approval of an amendment of the Key Employee Stock Plan to
increase the number of shares of the Company's common stock, par value
$2.50 per share, issuable thereunder from 700,000 to 1,200,000;
3. The approval of the Company's Annual Incentive Compensation Plan,
as amended, to ensure that bonus amounts payable to top executives
thereunder will continue to be tax deductible to the Company; and
4. Any other business which may properly be brought before the meeting
or any adjournment thereof.
In accordance with Delaware law and the Bylaws of the Company, a list of
the holders of Company Common Stock entitled to vote at the 1996 annual meeting
will be available for examination by any stockholder for any purpose germane to
the meeting at the branch of North Fork Bank located at 1455 Veteran's Memorial
Highway, Hauppauge, New York, for ten days prior to the meeting, between the
hours of 9:00 a.m. and 3:00 p.m., and at the annual meeting during the entire
time thereof.
By Order of the Board of Directors
/s/ ANTHONY J. ABATE
--------------------------------------
ANTHONY J. ABATE
Vice President and Secretary
March 18, 1996
YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE,
WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON OR NOT. YOU MAY REVOKE YOUR
PROXY AT ANY TIME PRIOR TO THE MEETING, OR IF YOU DO ATTEND THE MEETING YOU MAY
REVOKE YOUR PROXY AT THAT TIME, IF YOU WISH.
<PAGE> 4
NORTH FORK BANCORPORATION, INC.
275 BROAD HOLLOW ROAD
MELVILLE, NEW YORK 11747
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1996
This proxy statement is being furnished in connection with the solicitation
by the Board of Directors of North Fork Bancorporation, Inc. (the "Company") of
proxies to be voted at the Annual Meeting of Stockholders (the "Meeting") to be
held at 10 a.m. on Tuesday, April 23, 1996, at the Marriott Windwatch Hotel,
1717 Vanderbilt Motor Parkway, Hauppauge, New York 11788, and at any adjournment
thereof. This proxy statement and the enclosed form of proxy are first being
sent to stockholders on or about March 18, 1996.
PROXIES
Any stockholder executing a proxy which is solicited hereby has the power
to revoke it prior to exercise of the authority conferred thereby. Revocation
may be made effective by attending the Meeting and voting the shares of stock in
person, or by delivering to the Secretary of the Company at the principal office
of the Company prior to the Meeting a written notice of revocation or a
later-dated, properly-executed proxy.
Proxies will be solicited by mail. They also may be solicited by directors,
officers and other employees of the Company or its subsidiary bank, North Fork
Bank, personally or by telephone or telegraph, but such persons will receive no
additional compensation for their services. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to send this
proxy statement and form of proxy to their principals, and the Company will
reimburse such persons for out-of-pocket expenses incurred in forwarding the
materials. The Company also has retained D.F. King & Co., Inc. to aid in the
solicitation of proxies, at an estimated cost of $6,000, plus reimbursement of
reasonable out-of-pocket expenses. All expenses of solicitation will be paid by
the Company.
RECORD DATE AND VOTING RIGHTS
The Board of Directors has fixed the close of business on March 1, 1996, as
the record date for determining stockholders who are entitled to notice of, and
to vote at, the Meeting. At the close of business on that date, there were
outstanding and entitled to vote 24,943,627 shares of common stock, par value
$2.50 per share, of the Company (the "Common Stock"), which is the only class of
stock of the Company outstanding. Only holders of record of Common Stock at the
close of business on the record date are entitled to notice of and to vote at
the Meeting. Each stockholder of record on that date is entitled to one vote for
each share held with respect to each matter submitted to a vote at the Meeting.
The required vote for the election of directors is the affirmative vote of
a plurality of the shares present in person or represented by proxy at the
Meeting and entitled to vote on the election of directors. The required vote for
approval of the amendment to the Key Employee Stock Plan is the affirmative vote
of a majority of the shares present in person or represented by proxy at the
Meeting and entitled to vote on the matter
1
<PAGE> 5
submitted. The required vote for approval of the Annual Incentive Compensation
Plan is the affirmative vote of a majority of the shares present in person or
represented by proxy at the Meeting and entitled to vote on the matter
submitted. The required vote on any other matter that may be submitted to the
stockholders is the affirmative vote of a majority of the shares present in
person or represented by proxy at the Meeting and entitled to vote on the matter
submitted. A majority of the outstanding shares present or represented by proxy
will constitute a quorum at the Meeting.
Consistent with applicable state law and the Company's Certificate of
Incorporation and Bylaws, the Company will treat all shares represented by proxy
or in person at the Meeting for purposes of determining a quorum. Shares
represented by proxies or voted in person on ballots marked "ABSTAIN" on any
proposal will be treated as shares present or represented at the Meeting for
purposes of such proposal. Shares held in "street name" by brokers but not voted
by such brokers, for any reason, on a particular matter (so-called "broker non-
votes") will not be deemed present or represented at the Meeting for purposes of
such matter, even if such shares have been properly voted by such broker, in
person or by proxy, on one or more other matters brought before the Meeting. In
the election of directors (Item 1), which requires the affirmative vote of a
plurality of the shares present or represented at the Meeting and entitled to
vote, neither broker non-votes nor shares voted "WITHHOLD" will have the effect
of a vote "AGAINST" any or all nominees for director. With respect to the vote
to approve the amendment to the Key Employee Stock Plan (Item 2), the vote to
approve the Annual Incentive Compensation Plan, as amended (Item 3), or any
other matter, ballots marked "ABSTAIN" will have the effect of a vote "AGAINST".
Broker non-votes will not have the effect of a vote "AGAINST" Item 2, Item 3 or
such other matters.
Votes will be counted and vote totals announced at the Meeting by the
inspectors of election.
CERTAIN BENEFICIAL OWNERSHIP
As of December 31, 1995, there was no person known by the Board of
Directors of the Company to be the beneficial owner of more than 5 percent of
the outstanding shares of Common Stock.
ITEM 1. ELECTION OF DIRECTORS AND INFORMATION WITH RESPECT TO DIRECTORS AND
OFFICERS
The first item to be acted upon at the Meeting is the election of three
directors to Class 3 of the Board of Directors, each to hold office for three
years (through the 1999 annual meeting) and until his successor shall have been
duly elected and qualified. Presently, the Board of Directors of the Company
consists of ten members divided into three classes.
All proxies timely received by the Secretary in response to this
solicitation that are in proper form and that have not been revoked will be
voted "FOR" the three nominees to Class 3 listed below (unless any nominee is
unable or unwilling to serve for any reason), subject to any specific voting
instructions received with any proxy, including a direction to "WITHHOLD"
authority to vote for any or all of the nominees.
Each of the nominees listed below has consented to being named in this
proxy statement and to serve if elected, and the Board has no reason to believe
that any nominee will decline or be unable to serve, if elected. In the event
any nominee is unable or unwilling to serve for any reason, it is intended that
the holders of the
2
<PAGE> 6
proxies may vote for the election of such other person or persons as may be
designated by the Board of Directors.
The following information is provided with respect to each nominee for
director and each present director whose term of office extends beyond the date
of the Meeting.
NOMINEES FOR DIRECTOR AND DIRECTORS CONTINUING IN OFFICE
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
SERVED OWNED AS OF
AS A DECEMBER 31, 1995(C)
NAME, AGE, PRINCIPAL OCCUPATION AND DIRECTOR -------------------------
OTHER POSITIONS WITH THE COMPANY(A)(B) SINCE NO. OF SHARES PERCENT
- --------------------------------------------------------------- -------- ------------- -------
<S> <C> <C> <C>
NOMINEES FOR DIRECTOR:
CLASS 3 (terms to expire in 1999):
John Bohlsen, 53............................................... 1986 169,151(1) *
President, The Helm Development Corp. (real estate); Vice
Chairman of the Company (since 1992); Vice Chairman of
North Fork Bank (since 1989)
Malcolm J. Delaney, 69......................................... 1991 71,643(2) *
Former Vice Chairman of the Board of Southold Savings Bank
(1991-1992); President and Chief Executive Officer of
Eastchester Financial Corporation (1986-1991)
James H. Rich, Jr., 68......................................... 1988 11,123(3) *
President, Southold Lumber Co., Inc. (building supplies)
DIRECTORS CONTINUING IN OFFICE:
CLASS 1 (terms expiring in 1997):
Allan C. Dickerson, 63......................................... 1988 15,158(4) *
Former President, Roy H. Reeve Agency, Inc. (general
insurance company) (1975-1994)
Lloyd A. Gerard, 64............................................ 1981 53,806(5) *
Antique Dealer and Auctioneer
John Adam Kanas, 49............................................ 1981 558,723(6) 2.25 %
President and Chief Executive Officer of the Company;
Chairman of the Board (since January 1, 1990); Chairman of
the Board, President and Chief Executive Officer of North
Fork Bank
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
SERVED OWNED AS OF
AS A DECEMBER 31, 1995(C)
NAME, AGE, PRINCIPAL OCCUPATION AND DIRECTOR -------------------------
OTHER POSITIONS WITH THE COMPANY(A)(B) SINCE NO. OF SHARES PERCENT
- --------------------------------------------------------------- -------- ------------- -------
<S> <C> <C> <C>
CLASS 2 (terms expiring in 1998):
James F. Reeve, 55............................................. 1988 52,346(7) *
President, Harold R. Reeve & Sons, Inc. (general
construction)
George H. Rowsom, 60........................................... 1981 7,626(8) *
President, S.T. Preston & Son, Inc. (retail marine supplies
store)
Raymond W. Terry, Jr., 65...................................... 1988 36,000(9) *
Former Chairman of the Board of Southold Savings Bank
(1990-1992); President of Southold Savings Bank
(1980-1989)
Dr. Kurt R. Schmeller, 58...................................... 1994 32,730(10) *
President, Queens Borough Community College, CUNY.
</TABLE>
SHARES BENEFICIALLY OWNED BY OTHER EXECUTIVE OFFICERS AND ALL
DIRECTORS AND OFFICERS AS A GROUP
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED AS OF
DECEMBER 31, 1995(C)
NAME, AGE, AND POSITIONS -------------------------
WITH THE COMPANY(11) NO. OF SHARES PERCENT
- ----------------------------------------------------------------------- ------------- -------
<S> <C> <C>
Daniel M. Healy, 53.................................................... 116,736(12) *
Executive Vice President and Chief Financial Officer of the Company
All 12 Director Nominees, Continuing Directors and Executive
Officers as a Group.................................................. 1,141,661(13) 4.60 %
</TABLE>
- ---------------
NOTES TO BENEFICIAL OWNERSHIP TABLE:
* Less than one percent (1%).
(a) Except as otherwise noted, each of the nominees for director and continuing
directors has held the occupation or position listed for at least the past
five years.
(b) All persons listed as nominees for director or as continuing directors are
also directors of North Fork Bank.
(c) Beneficial ownership of shares, as determined in accordance with applicable
Securities and Exchange Commission Rules, includes shares as to which a
person directly or indirectly has or shares voting power and/or investment
power (which includes the power to dispose) and all shares which the person
has a right to acquire within 60 days of the reporting date. With respect
to Messrs. Kanas, Bohlsen and Healy, the number of shares beneficially
owned includes shares of restricted stock awarded by the Company's
(NOTES CONTINUED ON NEXT PAGE.)
4
<PAGE> 8
NOTES CONTINUED:
Compensation Committee on January 16, 1996, pursuant to initial year-end
determinations regarding executive compensation.
(1) Includes 15,000 shares of restricted stock and options to purchase 66,760
shares previously granted to Mr. Bohlsen under the Company's compensatory
stock plans, 9,324 shares held by his wife, and 9,381 shares held by his
dependent children.
(2) Includes options to purchase 10,000 shares held by Mr. Delaney, and 40,923
shares held by him in joint tenancy with his wife.
(3) Includes 6,138 shares held by Mr. Rich in joint tenancy with his wife, and
150 shares held by his wife.
(4) Includes 7,400 shares held by Mr. Dickerson's wife.
(5) Includes 1,808 shares held by Mr. Gerard in joint tenancy with his
daughter, 1,000 shares held by his wife and 100 shares held by his wife in
her capacity as custodian for a granddaughter.
(6) Includes 83,333 shares of restricted stock and options to purchase 346,980
shares previously granted to Mr. Kanas under the Company's compensatory
stock plans, 100 shares held by him in joint tenancy with his wife, 20,941
shares held by his wife, and 4,700 shares held by his dependent children.
(7) Includes 16,633 shares held by Mr. Reeve's wife.
(8) Includes 1,000 shares held by Mr. Rowsom in joint tenancy with his wife,
153 shares held by his wife, and 3,000 shares held by the S. T. Preston &
Sons, Inc. Profit Sharing Trust, in which Mr. Rowsom shares voting power
with two others.
(9) Includes 30,205 shares held by Mr. Terry in joint tenancy with his wife.
(10) Includes options to purchase 13,748 shares of the Company's Common Stock,
received by Dr. Schmeller in exchange for his options to purchase Metro
Bancshares, Inc. stock in connection with the merger of Metro into the
Company on December 1, 1994.
(11) Although not listed in this table, Mindy G. Butler, who is 43 years of age,
served as Executive Vice President and Chief Lending Officer of North Fork
Bank from April 1994 through August 25, 1995, on which date her service in
those positions ended. As of December 31, 1995, to the best knowledge of
the Company, Ms. Butler beneficially owned 16,619 shares, constituting less
than 1 percent of the total number of shares issued and outstanding.
Included in Ms. Butler's total were options to purchase 15,300 shares
previously granted to Ms. Butler under the Company's compensatory stock
plans. The beneficial ownership totals listed for all nominees, continuing
directors and executive officers as a group include Ms. Butler's
beneficially owned shares. Compensation received by Ms. Butler in 1995 is
included in the Summary Compensation Table.
(12) Includes 8,000 shares of restricted stock and options to purchase 90,184
shares previously granted to Mr. Healy under the Company's compensatory
stock plans, 3,000 shares held by his wife and 2,000 shares held in his
name as custodian for a daughter.
(13) Includes 106,333 shares of restricted stock and options to purchase an
aggregate of 542,972 shares previously granted to such persons under the
Company's compensatory stock plans.
- ---------------
During 1995, the Company's directors and executive officers made timely
filings of all securities transaction reports required to be filed by them with
the Securities and Exchange Commission under Section
5
<PAGE> 9
16(a) of the Securities Exchange Act of 1934, except for two securities
transactions by Ms. Butler that were filed late.
The Board of Directors met 17 times during 1995. Each of the directors
attended at least 75 percent of the total number of meetings of the Board and of
all committees of which the director was a member during the period he was a
director or served on such committees.
BOARD COMMITTEES
The Board of Directors of the Company has an Audit Committee. The functions
performed by the Audit Committee include reviewing the adequacy of internal
controls, internal auditing and the results of examinations made by supervisory
authorities and the scope and results of audit and nonaudit services rendered by
the Company's independent public accountants. The present members of the Audit
Committee are directors Delaney, Gerard and Schmeller. The Audit Committee met
four times during 1995.
The Company's Board of Directors also has a Compensation and Stock
Committee (the "Compensation Committee"). The Compensation Committee reviews and
makes recommendations on the compensation of senior executives and other
officers and administers all of the Company's compensatory stock plans. The
Compensation Committee consists of three directors appointed by the Company's
Board of Directors, none of whom may be eligible to participate in any of the
Company's discretionary stock plans. The present members of the Committee are
directors Dickerson, Gerard and Rowsom. Mr. Healy attends meetings of the
Compensation Committee in an ex officio capacity, to provide information
requested by, or to respond to questions from, Committee members. During 1995
the Committee met eight times. (See "Report of the Compensation Committee" on
page 13.)
The Company's Board of Directors has no nominating committee or committee
performing functions similar to those of a nominating committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is now an officer or an employee of
the Company or any of its subsidiaries or has been at any time an officer of the
Company or any of its subsidiaries.
COMPENSATION OF DIRECTORS
Each member of the Board of Directors of the Company receives an annual fee
of $25,000. This fee is for all duties as a director of the Company, including
any service as a member of one or more committees of the Board of Directors of
the Company. At the December 19, 1995 meeting of the Board of Directors of North
Fork Bank, the Board increased fees for directors of the Bank (who,
collectively, are currently the same individuals who serve as directors of the
Company) from $500 to $750 for each meeting of the Board or any committee of the
Board attended. Chairmen of Bank Board committees receive an additional $250 per
committee meeting attended. Directors Kanas and Bohlsen do not receive any
separate fees for attendance at any Company or Bank committee meetings.
6
<PAGE> 10
The Company maintains a Directors' Deferred Compensation Plan, under which
a director may defer receipt of either 50 percent or 100 percent of all fees
earned by him as director of the Company and the Bank for five or ten years or
until retirement or age 70. During the deferral period, amounts deferred earn
interest at the highest rate offered by North Fork Bank to customers on any
certificate of deposit or individual retirement account, determined on a
quarterly basis.
Certain directors of the Company who were previously directors of Southold
Savings Bank prior to the Company's acquisition of Southold in 1988 currently
receive, or in the future will be entitled to receive, payments from the Bank
under deferred directors' fee agreements entered into by them with Southold
prior to the acquisition. These agreements, similar to the Company's optional
Deferred Compensation Plan for directors described above, permitted these
individuals while they were directors of Southold to defer receipt of some or
all of their director's fees in exchange for a right to receive, commencing on
some designated future date and continuing for a fixed period thereafter,
regular monthly cash payments in a specified amount. The designated payment
amounts essentially represented the estimated future value of the deferred fees,
with compounding of interest at assumed rates during the intervening years.
Company director Rich is currently receiving payments from the Bank under such a
deferred fee agreement, and Company directors Dickerson and Reeve will be
entitled to receive such payments in the future.
7
<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation and
compensatory awards received in the last three years by the Chief Executive
Officer of the Company and each other executive officer whose cash compensation,
including salary and bonus, exceeded $100,000 in 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- -------------------- ----------
(E) (I)
OTHER (F) (G) ALL
(A) ANNUAL RESTRICTED OPTIONS/ (H) OTHER
NAME AND (B) (C) (D) COMPEN- STOCK SARS(4) LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY(1) BONUS SATION(2) AWARDS(3) (SHARES) PAYOUTS(5) SATION(6)
- ----------------------------- ----- -------- -------- --------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John Adam Kanas.............. 1995 $507,000 $500,000 $19,099 $421,900 35,000 $0 $ 40,236
Chairman of the Board, 1994 425,400 250,000 8,239 0 50,000 0 33,066
President and Chief 1993 388,254 75,000 43,341 128,750 103,000 0 31,863
Executive Officer
John Bohlsen................. 1995 266,500 250,000 4,569 246,950 20,000 0 9,045
Vice Chairman of 1994 192,031 125,000 0 0 30,000 0 6,750
the Board 1993 122,485 40,000 0 38,625 46,000 0 5,192
Daniel M. Healy.............. 1995 275,000 150,000 6,723 120,950 20,000 0 10,503
Executive Vice President 1994 240,000 100,000 4,002 0 30,000 0 9,353
and Chief Financial Officer 1993 240,000 50,000 2,095 38,625 51,000 0 11,119
Mindy G. Butler(7)........... 1995 155,769 0 0 0 0 0 442,789
Executive Vice President 1994 156,144 50,000 0 71,250 30,000 0 0
and Chief Lending officer 1993 -- -- -- -- -- -- --
of North Fork Bank
</TABLE>
- ---------------
NOTES TO SUMMARY COMPENSATION TABLE:
(1) Includes salary deferred at the election of the named executive officer
(such as deferred salary under the Company's 401(k) Plan) and all directors'
fees from the Company and the Bank, whether paid or deferred. Salary
deferrals under the 401(k) Plan in 1995 were $9,000 for Mr. Kanas, $9,000
for Mr. Bohlsen and $9,000 for Mr. Healy. Total directors' fees for 1995
were $32,000 for Mr. Kanas and $31,500 for Mr. Bohlsen.
(2) Listed amounts represent tax payments made by the Company for the named
executive officers on the taxable contributions made by the Company on their
behalf under the Company's Supplemental Executive Retirement Plan ("SERP").
(3) Represents the dollar value of shares of restricted stock granted to the
named executive officer for the year in question, calculated by multiplying
the closing market price of the Company's Common Stock on the date of grant
by the number of shares awarded. Amounts listed with respect to 1995 include
the value of shares of restricted stock awarded by the Company's
Compensation Committee on January 16, 1996, as part of the Committee's
year-end determinations regarding executive compensation. Generally, shares
(NOTES CONTINUED ON NEXT PAGE.)
8
<PAGE> 12
NOTES CONTINUED:
of restricted stock granted under the Company's compensatory stock plans
carry the same dividend rights as unrestricted shares of Common Stock from
the date of grant. As of year-end 1995, the total market value of the
restricted stock held by executive officers Kanas, Bohlsen and Healy
(including the grants awarded on January 16, 1996) was $2,104,158, $378,750
and $202,000, respectively, based on the year-end market price for Common
Stock of $25.25 per share. Ms. Butler held no restricted stock as of
December 31, 1995.
(4) Represents total number of shares subject to options granted to the named
executive officers. With respect to 1995, the options listed were granted by
the Company's Compensation Committee on January 16, 1996, as part of the
Committee's year-end determinations regarding executive compensation. No
options granted to the named executive officers have been accompanied by
stock appreciation rights ("SARs").
(5) The Company has no "long-term incentive plans" as defined in the Securities
and Exchange Commission Rules.
(6) Includes, among other things, any Company contributions on behalf of the
named executive officer to the 401(k) Plan and the defined contribution plan
feature of the SERP and specified premiums paid by the Company on certain
insurance arrangements covering the executive officer. Listed amounts for
1995 include 401(k) Plan contributions by the Company on behalf of executive
officers Kanas, Bohlsen and Healy of $6,750 each; contributions by the
Company to the defined contribution plan feature of the SERP on behalf of
executive officers Kanas, Bohlsen and Healy of $9,880, $2,295 and $3,753,
respectively; and the following insurance premiums paid by the Company on
behalf of Mr. Kanas: $12,011 in premiums paid on a disability policy, $686
in premiums paid on a $100,000 life insurance policy, $7,230 in premiums
paid on a $1 million life insurance policy and $3,679 in premiums paid on a
$2 million split dollar insurance policy. Amount listed for Ms. Butler
represents total amount payable to her under a severance arrangement entered
into with the Bank in September 1995. See footnote 7 below.
(7) On August 25, 1995, Ms. Butler resigned as Executive Vice President and
Chief Lending Officer of the Bank. Under the terms of an arrangement, dated
September 14, 1995, between Ms. Butler and the Bank, Ms. Butler received
severance payments totalling $442,789 on October 4, 1995. This amount was
derived from and replaced any amounts that would have been payable to her
under an employment agreement with the Bank, dated March 31, 1994. In
return, Ms. Butler surrendered all rights to severance amounts and any other
benefits due to her under the March 1994 agreement, waived any right to
early vesting of restricted stock or accelerated exercisability of stock
options previously granted to her under the Company's compensatory stock
plans, surrendered any unvested contributions to her account under the
Company's 401(k) Retirement Savings Plan, and executed a general release in
favor of the Company and the Bank.
9
<PAGE> 13
STOCK OPTIONS
The following table sets forth information concerning stock options granted
for 1995 to the executive officers named in the Summary Compensation Table on
page 8.
OPTIONS/SAR GRANTS IN THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
(B)
NUMBER OF (C)
SECURITIES % OF TOTAL (F)
UNDERLYING OPTIONS/SARS (D) GRANT DATE
OPTIONS/SARS GRANTED TO EXERCISE OR (E) PRESENT
(A) GRANTED(1) EMPLOYEES IN BASE PRICE EXPIRATION VALUE(2)
NAME (SHARES) FISCAL YEAR (DOLLARS/SHARE) DATE (DOLLARS)
- ---------------------------- ------------ ------------ --------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
John Adam Kanas............. 35,000 19.1% $ 24.19 1/16/06 $184,870
John Bohlsen................ 20,000 10.9% 24.19 1/16/06 105,640
Daniel M. Healy............. 20,000 10.9% 24.19 1/16/06 105,640
Mindy Butler................ 0 0 0 0 0
</TABLE>
- ---------------
NOTES:
(1) All options listed were non-qualified stock options, granted under the
Company's compensatory stock plans without tandem stock appreciation rights.
All such options were granted by the Compensation Committee on January 16,
1996, as part of the Committee's year-end determinations regarding executive
compensation. All options awarded for 1995 were granted at a per share
exercise price equal to the market price of the common stock on the date of
grant and all such options will become first exercisable six months after
the date of grant.
(2) The estimated grant date present value of the options has been determined by
using the Black-Scholes option pricing model, a commonly-used method of
valuing options on the date of grant. The assumptions utilized in applying
the Black-Scholes model were as follows: (a) the useful life of the options
was estimated to be five years from the date of grant; (b) the risk-free
discount rate applied for purposes of the valuation, consistent with the
five-year estimated life of the options, was the five-year Treasury Rate as
of the date of grant; (c) the volatility factor utilized was the one-year
volatility of the Company's Common Stock, or 21.8 percent (volatility is
calculated based on fluctuations of 1995 weekly closing stock prices); (d)
the dividend yield on the Common Stock was assumed to be 2.4% percent for
purposes of the analysis only; and (e) a discount of 5 percent per year was
utilized reflecting anticipated risk of forfeiture prior to exercise.
10
<PAGE> 14
The following table sets forth information concerning all stock options
that were either exercised in 1995 or held at year-end 1995 (including the
grants received as of January 16, 1996) by the named executive officers in the
Summary Compensation Table on page 8.
AGGREGATED OPTION/SAR EXERCISES IN THE YEAR ENDED DECEMBER 31, 1995,
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(D) (E)
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, DECEMBER 31,
(B) 1995(2) 1995(2)(3)
SHARES ACQUIRED (C) (EXERCISABLE/ (EXERCISABLE/
(A) ON EXERCISE VALUE REALIZED(1) UNEXERCISABLE) UNEXERCISABLE)
NAME (SHARES) (DOLLARS) (SHARES) (DOLLARS)
- ---------------------------------- --------------- ----------------- --------------- --------------------
<S> <C> <C> <C> <C>
John Adam Kanas................... 12,200 $89,125 E- 346,980 E- $3,111,619
U- 63,120 U- 325,330
John Bohlsen...................... 0 0 E- 66,760 E- 774,950
U- 20,240 U- 115,910
Daniel M. Healy................... 0 0 E- 90,184 E- 1,298,171
U- 35,816 U- 183,314
Mindy G. Butler................... 14,700 98,630 E- 15,300 E- 170,213
U- 0 U- 0
</TABLE>
- ---------------
NOTES:
(1) Calculated by subtracting the exercise price of the options from the market
value of the shares received as of the date of exercise.
(2) Includes options awarded to named executive officers as of January 16, 1996.
(3) Calculated by subtracting the exercise price of options from the market
value of underlying shares as of the fiscal year-end, based on a closing
market price of the Common Stock on December 31, 1995, of $25.25 per share.
11
<PAGE> 15
AGREEMENTS WITH EXECUTIVE OFFICERS
At the end of 1994, the Board of Directors of the Company approved
change-in-control agreements for the top three executive officers of the
Company -- President, Chief Executive Officer and Chairman John Adam Kanas, Vice
Chairman John Bohlsen and Chief Financial Officer Daniel M. Healy. The
agreements, each dated December 20, 1994, are substantially identical in form.
Under each agreement the executive is entitled to receive from the Company a
lump sum payment equal to 299 percent of his base salary if, within 24 months
after a change in control of the Company (as defined in the agreement), his
employment is terminated by the Company (other than for cause) or by the
executive voluntarily. Each agreement is a rolling three-year agreement and will
continue in effect until retirement or until two years after a decision by the
Board not to renew the agreement. The agreements provide, in effect, that if any
payments thereunder would be treated as excess parachute payments under Section
280G of the Internal Revenue Code, the aggregate amount of those payments is to
be reduced to the extent necessary to avoid that treatment, except that any
payment to the executive under the Company's Performance Plan or any
acceleration of the vesting of his stock-based awards will not trigger such a
reduction.
Also at the end of 1994, the Board adopted the Performance Plan, under
which executives and other officers and employees may receive cash payments
following a change in control of the Company, if certain financial performance
targets are met in connection with the change-in-control transaction. (See
"Report of the Compensation Committee -- Change-in-Control Arrangements" on page
16.)
12
<PAGE> 16
PERFORMANCE GRAPH
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate by reference future
filings, including this Proxy Statement, in whole or in part, the following
Performance Graph and Compensation Committee Report shall not be incorporated by
reference into any such filings.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS
AMONG NORTH FORK BANCORPORATION, S&P 500 AND KBW EASTERN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500 IN- KBW EASTERN
(FISCAL YEAR COVERED) NFB DEX REGION INDEX
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 86.01 130.29 175.86
1992 146.91 140.13 242.86
1993 232.79 154.15 253.27
1994 253.09 156.20 224.84
1995 478.75 214.88 381.68
</TABLE>
The KBW Eastern Region Index is a market-capitalization-weighted stock
index combining stock price information from 12 of the larger bank holding
companies in the eastern United States.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Company's Board of Directors (the
"Committee") is responsible for conducting periodic reviews of executive
compensation and for taking certain actions regarding the compensation of senior
executives, including the Chief Executive Officer. The Committee consists of not
less than three directors, none of whom may be an officer or employee of the
Company or any of its subsidiaries. The names of current Committee members are
listed at the end of this report. The Committee makes recommendations to the
full Board of Directors concerning salary levels for senior executives and
officers
13
<PAGE> 17
generally and other compensatory arrangements for these individuals, including
cash bonuses if and as appropriate. In addition, all grants of awards to senior
officers and other key employees under the Company's stock-based compensation
plans are made at the sole discretion of the Committee. Finally, the Committee
annually sets performance targets under the Company's Performance Plan,
specifying the corporate performance targets that must be met in order for a
special bonus pool to be funded and distributed to employees in the event a
change-in-control transaction occurs in ensuing periods.
The Compensation Committee is submitting this report summarizing its
involvement in the compensation decisions and policies adopted by the Company
for executive officers generally and for Chairman, President and Chief Executive
Officer John Adam Kanas, specifically.
GENERAL POLICY
The Company's executive compensation policy is to provide an incentive for
executives to achieve corporate and individual goals and to reward executives
when these goals are met. Compensation levels for executives are established
after consideration of financial performance measurements and executive
compensation practices followed in the banking industry generally. Also included
in the deliberative process are qualitative factors such as commitment,
leadership, teamwork and community involvement. Before making its
recommendations and decisions, the Committee elicits the suggestions and advice
of the CEO and certain other executive officers regarding appropriate or desired
levels of compensation for them individually and for management personnel
generally. The Committee has complete access to all necessary Company financial
reports, personnel records and other data and may seek the advice of experts and
compensation consultants if appropriate. Committee members also have regular
contact with management as a result of their service on the Board and other
Board committees, giving members a direct basis upon which to evaluate the
personal qualities and capabilities of management.
The ultimate purpose of the Company's executive compensation structure is
to attract and retain executives of the highest caliber and to motivate these
individuals to put forth maximum effort toward the achievement of specified
corporate goals identified through the strategic planning process of the Board
and management.
Central to the concept and design of the executive compensation strategy is
the paramount importance of long-term stockholder interests and the need to
align management incentives with those interests.
COMPONENTS OF COMPENSATION
In its deliberations regarding executive compensation, the Compensation
Committee focuses upon the following fundamental components: salary, annual
incentive compensation and long-term incentive compensation.
The Committee conducts an annual review of salary levels for executives and
other officers on a Company-wide basis, establishes general policy on salary
levels and makes recommendations or determinations on specific salaries or
salary modifications for executives. Salary levels are reflective of an
individual's responsibilities, experience and performance, as well as
competitive marketplace conditions.
14
<PAGE> 18
The annual incentive component of executive compensation has historically
been provided, if and as appropriate, through the Company's Annual Incentive
Compensation Plan. Following profitable years, the Annual Incentive Compensation
Plan has been used to provide year-end cash distributions to Company executives
and other key employees out of a designated annual bonus pool. The overall size
of the pool is determined by the level of the Company's financial success, based
on a set formula. Individual distributions vary, depending upon an assessment of
the individual's performance and, in selected cases, operational department
achievements. This year the Annual Incentive Compensation Plan has been amended,
subject to stockholder approval, to ensure that amounts paid thereunder to
executives continue to be tax deductible to the Company. See Item 3, Approval of
Annual Incentive Compensation Plan. Determinations under the Annual Incentive
Compensation Plan are made by the Committee, with input by management.
The third component of the Company's executive compensation strategy is the
long-term incentive compensation program, under which executives may be granted
stock options and other stock-based awards offering them the possibility of
future value, depending on the executives' continued employment by the Company
and the long-term price appreciation of the Company's Common Stock. It has been
the Committee's view that a substantial portion of the total compensation of
senior executives over a period of years should consist of such long-term
incentive awards. Currently, the primary vehicle for granting stock-based
incentive awards is the Key Employee Stock Plan. Under the plan, awards may be
granted to executives and other key employees in the form of incentive stock
options, nonqualified stock options or restricted stock. At the Meeting,
stockholders will be asked to vote on an amendment to the Key Employee Stock
Plan, increasing the number of shares available for issuance thereunder in the
form of plan awards. See Item 2, Amendment of the Key Employee Stock Plan.
Under a provision of the Internal Revenue Code, Section 162(m), public
companies are denied a tax deduction for compensation exceeding $1 million paid
to any top executive, subject to certain exemptions. The Key Employee Stock Plan
was designed so that options granted under the plan qualify for an exemption
from this statute and the related amounts of compensation remain tax deductible
to the Company. In addition, the Annual Incentive Compensation Plan has been
amended and is being presented for stockholder approval at the Meeting in order
to qualify bonus grants thereunder for an exemption from Section 162(m). The
Committee's current intention is that substantially all of the compensation paid
to the Company's executives should continue to be tax deductible to the extent
this goal is consistent with the best interests of the Company and its
stockholders.
COMPENSATION COMMITTEE REVIEW OF EXECUTIVE COMPENSATION
The Compensation Committee, in making its recommendations and
determinations at year-end 1995 regarding executive compensation, took note of
the Company's outstanding financial performance during the year. Under both of
the key measurements of bank performance, return-on-average-assets and
return-on-average-equity, the Company placed in the upper quartile of commercial
banks nationwide, in a very good year for commercial banks. These results were
achieved in the context of a substantial, and continuing, growth process. 1995
represented the first full year of operations after the Company's acquisition of
Metro Bancshares in November 1994, a transaction that increased total assets by
50 percent. Also during 1995 the Company completed its acquisition of Great Neck
Bank, a $100 million asset institution, and entered into agreements to acquire
the domestic business of Extebank and the Long Island branches of First
Nationwide Bank, which will
15
<PAGE> 19
add approximately $1 billion in deposits to North Fork Bank. Another major
accomplishment in 1995 was the relocation and consolidation of the Company's
retail, lending and selected administrative departments into a new facility in
Melville, New York.
The Committee believes that the achievement of an excellent earnings record
against this backdrop of dynamic corporate expansion reflects very favorably on
senior management and all key employees of the Company. At the same time, the
Committee observes a continuation during 1995 of favorable trends in other
salient indicators of corporate performance. Especially significant in the
Committee's view was the attainment of an exceptionally low core efficiency
ration of 41.7 percent, far below the industry norm, reflecting management's
continuing emphasis on expense control and identification and development of the
Company's strongest product lines and markets. Asset quality also continued to
improve during 1995, as non-performing assets were reduced from 1.73 percent of
total assets to 1.13 percent of total assets. Net interest margins continued at
healthy levels, despite a modest increase during the year in pricing pressures
on the liability side.
The Committee believes that the executive officers deserve credit for the
foregoing achievements. Due to management's efforts, the Company enters 1996 in
excellent financial shape and is well positioned to benefit from the
extraordinary changes in the banking sector that are currently underway and
widely expected to continue.
Accordingly, the Committee determined at year-end that the executive team
merited favorable treatment in all areas of compensation -- specifically, salary
increases, cash bonuses and stock-based awards. The full Board accepted the
Committee's recommendations on salary and bonus awards for executives, approving
significant year-end salary increases and executive bonuses, indicated in the
Summary Compensation Table. Other Company officers and key employees also
received reasonable year-end salary increases and, where appropriate, bonuses,
with the Committee's concurrence.
In addition, as part of its year-end determinations on executive
compensation, the Committee determined to grant stock-based awards to the senior
executives under the Key Employee Stock Plan relating to an aggregate of 95,000
shares, similar in magnitude to the aggregate amount of grants in prior years.
On an ongoing basis, the Committee in consultation with management also
makes determinations on executive compensation as circumstances warrant. On four
occasions in 1995, the Committee determined to make ad hoc grants of stock-based
awards to executives, relating to small amounts of shares.
CHANGE-IN-CONTROL ARRANGEMENTS
The Committee concurs in the Company's traditional policy of not extending
long-term employment agreements to the executive officers named in the Summary
Compensation Table except in extraordinary circumstances. Currently, no such
named executive officer is serving under an employment agreement.
The Committee also believes, however, that the long-term interests of
stockholders are well served by extending to management certain protections in
the event a change-in-control of the Company should occur in the future. In
reviewing and approving these arrangements, the Committee sought to align
management's interests with stockholders, such that top executives would be
actively encouraged to seek out and aggressively explore possible
change-in-control transactions for the Company at the optimum time for the
optimum price.
16
<PAGE> 20
With this overriding objective, at the end of 1994 the Committee
recommended, and the full Board approved, a change-in-control program involving
two elements, change-in-control agreements and a performance plan. The same
high-quality performance that produces above-average earnings and improves
shareholder value also makes the organization attractive to others.
The Committee does not believe that management will act to protect its own
positions or interests at shareholder expense. The Committee is not aware of any
current proposals to acquire the Company or negotiations regarding any such
proposals. Nevertheless, in accordance with the Committee's belief that
shareholder interests are paramount and that management should be affirmatively
motivated to pursue any strategy or alternative that might achieve maximum
shareholder returns, including if appropriate by aggressively exploring
possibilities for acquisition transactions at the optimum time and at an optimum
price, the Committee approved at year-end 1994 a program calculated to
incentivize management and provide limited income assurance in the exclusive
context of a change in control of the Company.
The change-in-control agreements were extended to the first three executive
officers named in the Summary Compensation Table. These agreements, which are
fairly standard in form and substance, essentially provide that, if there is a
change in control of the Company and within a designated period thereafter the
executive's employment terminates, the executive will receive an amount in cash
equal to a multiple of the executive's salary before termination. The agreements
are described in more detail elsewhere in this Proxy Statement under "Agreements
With Executive Officers."
At the Committee's recommendation, the Company also has adopted a
Performance Plan, which offers not only to senior executives but to all officers
and all salaried employees the possibility of a special, one-time cash
distribution if the Company is acquired in a transaction that produces an
above-average return to the Company's stockholders. Under the Performance Plan,
if a change in control of the Company occurs and the change in control involves
or follows attainment of above-average financial results for stockholders, a
special performance pool will be funded at the time of the change-in-control,
from which senior executives and other officers and employees of the Company
will receive distributions. The availability and size of the special performance
pool will depend upon the level of financial success achieved by the Company,
measured against pre-established, objective performance targets. No pool will be
funded or distributed in connection with any change-in-control transaction that
does not exceed the industry average for such transactions.
At the end of each calendar year, the Committee determines the specific
performance targets that must be met in order for a performance pool to be
funded and distributed in connection with any change-in-control transaction
announced or occurring in the next year, as well as the size of any such
performance pool or the objective criteria determining the size of the pool. In
making these determinations, the Committee is required to utilize objective
measures of corporate performance. Once established for a particular year, the
performance targets and the size of the performance pool may not later be
altered or canceled. In adopting specific performance targets, the Committee is
directed to adhere to the general Performance Plan goal that no performance pool
amounts should be funded or distributed except upon attainment of above-average
financial results by the Company. The maximum size of any performance pool
distributable under the Performance Plan upon a change in control is three
percent of the Company's market capitalization at the time of the change in
control including in the measurement of market capitalization any premium paid
to Company stockholders in the change-in-control transaction. Under the
Performance Plan, a change in control is defined to mean a merger, consolidation
or other similar transaction in which the Company is acquired by another
17
<PAGE> 21
corporation or the acquisition by one person, entity or related group, in a
single transaction or series of transactions, of more than 50 percent of the
Company's outstanding common stock. Once a performance pool is distributed, the
Performance Plan terminates.
Distributions of a performance pool in a change-in-control transaction will
be made in three tranches. Tranche 1 will consist of senior executives,
including the Chief Executive Officer and such other senior officers as may be
determined on a year-to-year basis by the Committee. Tranche 2 will consist of
other officers, as determined by the Committee prior to a pool distribution.
Tranche 3 will include all other employees then participating in the Company's
retirement plan. Under the Performance Plan, the participants in Tranche 3 will
receive not less than 10 percent of any performance pool. The Committee may
determine, on an ongoing basis, how the remaining 90 percent of the pool is to
be divided between the Tranche 1 and Tranche 2 participants. Currently, the
Committee has decided that 75 percent of any performance pool payable in 1996
would be distributed to the Tranche 1 executives. The precise percentage
allocations among the participants in any specific tranche would be determined
by the Committee immediately prior to a change in control. Under the Performance
Plan, the Chief Executive Officer would receive at least 30 percent of Tranche
1.
If the performance pool is distributable under the Performance Plan upon a
change in control because the pre-established performance targets have been
satisfied, all of the pool must be distributed. Participating executives,
officers or employees of the Company need not resign or retire in order to
receive distributions. In addition, the Performance Plan provides a so-called
tax gross-up provision for senior executives, under which the Company would pay
any taxes payable by the senior executives on pool distributions to them,
including any excise taxes on any portions of distributions constituting "excess
parachute payments" under the Internal Revenue Code.
In establishing particular performance targets for 1996, the Committee
selected as a benchmark for measuring any change-in-control transaction
involving the Company that may be completed or agreed upon in 1996, an index
maintained by a designated industry analyst for public sector commercial bank
acquisition transactions announced in the 12 months preceding announcement of
the Company's transaction. Specifically, if the Company's transaction, upon
announcement, involves a multiple of sale price to market price that exceeds the
median multiple of sale price to market price in the index, a performance pool
will be funded upon completion of the transaction. The size of the pool would
depend on the extent to which the multiple in the Company's transaction exceeded
the median multiple, ranging from a pool of 1.5 percent of market capitalization
at closing for transactions barely exceeding the median to 3.0 percent of market
capitalization at closing for transactions in the top decile under the index.
The Committee may elect in future years to alter the performance targets,
the definition of the performance pool or the size and constituency of the
tranches. There can be no assurances that a change-in-control transaction will
be effected within any certain period or at any time.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In assessing appropriate types and amounts of compensation for the Chief
Executive Officer, the Compensation Committee evaluates both corporate and
individual performance. Corporate factors included in the evaluation are return
on stockholders' equity, return on assets, levels and changes in non-performing
assets, the market price of the Common Stock and the Company's performance
compared to peer group institutions.
18
<PAGE> 22
Individual factors include the CEO's initiation and implementation of successful
business strategies, formation of an effective management team and various
personal qualities, including leadership.
The Committee attributes a great deal of the credit for the Company's solid
financial condition and stellar performance in 1995 to CEO John Adam Kanas. Mr.
Kanas personally initiated and led the Company's aggressive but multi-faceted
growth campaign of the last few years, resulting in the successful acquisition
of Metro Bancshares in 1994 and of Great Neck Bank in 1995, as well as the
recent agreements to acquire the domestic banking business of Extebank and the
Long Island branches of First Nationwide Bank. These acquisitions, when the
latter two are completed, will have resulted in a doubling of the Company's size
in less than 18 months. More significant than the size of the acquisitions,
however, is the care with which they have been structured and carried out, and
the evident and immediate economies resulting, and expected to continue,
therefrom.
Although CEO Kanas has received more attention in the business and
financial media for his leadership of the Company's growth campaign, the
Committee observes that he is also the driving force behind the Company's recent
internal efforts to improve both efficiency and asset quality. These efforts
have been notably successful in recent periods, placing the Company in the top
tier of domestic commercial banking organizations under all significant measures
of financial performance.
For all of the above reasons, the Committee recommended to the full Board
at year-end 1995 that Mr. Kanas' salary be increased by $75,000 and that he
receive a cash bonus under the Annual Incentive Compensation Plan of $500,000,
and also awarded to Mr. Kanas under the Key Employee Stock Plan options to
acquire 35,000 shares and 10,000 shares of restricted stock.
CONCLUSION
The Compensation Committee believes that the compensation amounts and
awards established for the Company's senior executives at year-end 1995 reflect
appropriate levels, given Company and individual performance by management
during the year. The Committee will continue to emphasize long-term strategic
performance objectives in forthcoming compensation decisions.
Committee members:
Allan C. Dickerson, Chairman
Lloyd A. Gerard
George H. Rowsom
RETIREMENT PLANS
Executive officers of the Company participate in a retirement plan (the
"Retirement Plan"), which is a defined benefit plan maintained and administered
by the Company. The Retirement Plan covers all employees who have attained age
21, completed at least one year of service and worked a minimum of 1,000 hours
per year. A participant becomes 100 percent vested under the Retirement Plan
after five years of service.
Under the Retirement Plan's benefit formula, participants accrue an amount
through the plan each year equal to five percent of their annual compensation
(as defined under the plan) plus a fixed rate of interest
19
<PAGE> 23
based on one-year Treasury Bill rates, credited quarterly. These amounts are
subject to limitations under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). The benefits subsequently paid under the Retirement
Plan to each participant after retirement are payments based on the accrued
total amount in the plan for that participant, projected over an assumed life
expectancy.
Compensation under the Retirement Plan is total salary and bonuses (i.e.,
columns (c) and (d) in the Summary Compensation Table, excluding any directors'
fees), as well as certain other taxable compensation received by the executives
that is listed in column (i) of the Summary Compensation Table, excluding
Company contributions under the 401(k) Plan and the defined contribution feature
of the SERP.
In addition to the Retirement Plan, the Company has a Supplemental
Executive Retirement Plan (the "SERP"). The SERP restores to specified senior
executives upon their retirement from the Company the full level of retirement
benefits that they would have been entitled to receive under the formula
contained in the Retirement Plan, absent the ERISA provision limiting maximum
payouts and maximum compensation under tax-qualified retirement plans. The SERP
also provides for participating executives a nonqualified defined contribution
plan feature, under which executives may elect to make post-tax contributions,
which will be entitled to matching Company contributions, much like 401(k) plan
deferrals, but not subject to the Internal Revenue Code's limitation on maximum
401(k) plan contributions. The SERP may be funded through a combination of
elective contributions by covered individuals of post-tax dollars and Company
contributions to a secular trust. Under the SERP, the Company will also pay on
behalf of covered individuals any income taxes payable by them as a result of
Company contributions on their behalf. Of the named executive officers in the
Summary Compensation Table on page 8, Messrs. Kanas, Bohlsen and Healy are
covered under the SERP.
Based upon their current compensation and assuming retirement at normal
retirement age (65), executive officers Kanas, Bohlsen and Healy would receive
under the Retirement Plan and the SERP annual benefits payments of approximately
$205,500, $26,000 and $29,600, respectively. Ms. Butler is no longer an
executive officer of the Bank and any amounts accrued through the Retirement
Plan for her benefit were forfeited as of August 25, 1995, the last day of her
employment with the Company and the Bank.
TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS
AND ASSOCIATED PERSONS
Since January 1, 1995, certain of the directors and executive officers of
the Company (and members of their immediate families and corporations,
organizations and trusts with which these individuals are associated) have been
indebted to the Company's subsidiary bank in amounts of $60,000 or more. All
such loans were made in the ordinary course of business, did not involve more
than normal risk of collectability or present other unfavorable features, and
were made on substantially the same terms, including interest rates and
collateral requirements, as those prevailing at the same time for comparable
loan transactions with unaffiliated persons. No such loan was classified by the
subsidiary bank as of December 31, 1995, as a non-accrual, past due,
restructured or potential problem loan.
ITEM 2. APPROVAL OF AMENDMENT TO KEY EMPLOYEE STOCK PLAN
The second item to be acted upon at the Meeting is a proposal to approve an
amendment to the North Fork Bancorporation, Inc. Key Employee Stock Plan (the
"Stock Plan") to increase the number of shares of
20
<PAGE> 24
the common stock, par value $2.50 per share, of the Company ("Common Stock")
issuable under the Stock Plan from 700,000 (of which up to 200,000 shares can be
granted as restricted shares) to 1,200,000 shares (of which up to 400,000 shares
can be granted as restricted shares) (the "Amendment"). Otherwise, the Stock
Plan, as amended, would remain unchanged.
The Stock Plan, first adopted by the Board in December 1993 and approved by
the Company's stockholders in April 1994, permits the issuance of nonqualified
stock options and incentive stock options. In addition, the Stock Plan
authorizes the issuance of restricted shares of Common Stock. These restricted
stock awards, which are described in more detail below, are generally considered
to be at least as effective as stock options in retaining the services of key
employees and tying their overall compensation to long-term corporate
performance.
The total number of shares authorized for issuance under the Stock Plan as
originally adopted was 700,000 (subject to adjustments), which could be divided
up in any fashion among nonqualified stock options, incentive stock options and
restricted stock, provided that no more than 200,000 of such shares were
issuable as restricted stock. Of the 700,000 shares originally authorized for
issuance under the Stock Plan, options and restricted stock relating to
approximately 550,000 shares have already been awarded, leaving less than
150,000 shares available for additional awards under the Stock Plan. The Stock
Plan does not authorize the grant of stock appreciation rights, often referred
to as "SARs," whether in conjunction with stock options or otherwise.
No awards have been made to executive officers or other key employees under
the Stock Plan that are conditioned on the approval of the Amendment. Future
awards under the amended Stock Plan to executive officers or other key employees
are not determinable at this time, and the Amendment would have had no material
effect on the nature or amount of any awards under the Stock Plan if the
Amendment had been in effect for 1995. No individual may receive under the Stock
Plan in any one year option grants for more than 150,000 shares.
The Amendment was adopted by the Board of Directors on December 19, 1995,
subject to approval by the stockholders of the Company. Approval of the
Amendment requires the affirmative vote of a majority of the shares of Common
Stock represented in person or by proxy at the Meeting. Dissenting votes give
rise to no rights on the part of the dissenting stockholders. As of March 13,
1996, the last sale price of Common Stock, as reported on the New York Stock
Exchange, was $23.25 per share.
PURPOSE
The Stock Plan is intended to provide increased incentive for certain key
employees of the Company or any subsidiary or affiliate of the Company and to
encourage them to acquire a proprietary interest in the Company and to work
diligently to help the Company achieve its long-term goals, including consistent
profitability and the attainment of better-than-average financial results as
compared to its peer group. It is also believed that the Stock Plan will
continue to assist the Company in attracting and retaining high quality
personnel. Awards under the Stock Plan are made only to key employees of the
Company or any subsidiary or affiliate of the Company as determined from time to
time by the Compensation Committee of the Board of Directors of the Company. The
Compensation Committee also serves as administrator of the Stock Plan.
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<PAGE> 25
AUTHORIZED TYPES OF AWARDS
Awards granted under the Stock Plan may take one of three forms: incentive
stock options, nonqualified stock options or restricted shares. The 700,000
shares authorized for issuance under the plan may be divided among these types
of awards as the Compensation Committee sees fit, provided that not more than
200,000 restricted shares may be issued under the plan. If the Amendment is
approved, 500,000 additional shares of Common Stock, or 1,200,000 total shares,
will be authorized for issuance under the plan, of which not more than 400,000
restricted shares may be issued.
Incentive Stock Options. The Stock Plan provides for the grant of
incentive stock options as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"). An incentive stock option differs from a
nonqualified stock option in that the optionee exercising an incentive stock
option is not subject to federal income taxation upon exercise but only upon
subsequent disposition of the shares; by contrast, the optionee exercising a
nonqualified stock option is subject to federal income taxation upon exercise.
See "Federal Income Tax Consequences." The exercise price per share for
incentive stock options may not be less than the fair market value per share of
Common Stock on the date of grant, with fair market value to be determined
according to the New York Stock Exchange price listing (or the price listing of
another applicable exchange or market system or, if no such exchange or system
applies, by the Compensation Committee). An incentive stock option, by its
terms, may be exercised only during an option period established by the
Compensation Committee upon grant of the option, provided that the option period
may not commence earlier than the date six months after the date of grant and
may not extend longer than ten years after the date of grant, and subject to
certain additional restrictions. Incentive stock options may be exercised only
during a limited period after termination of employment as established by the
Compensation Committee, which will not normally extend for more than three
months after termination. There are certain quantity limitations on the number
of incentive stock options that may be granted to any one employee in any
calendar year. In addition, if optionees exercising incentive stock options are
to receive the tax benefits provided under the Code for such options, the shares
received by them upon exercise of incentive stock options may not be sold for a
period of one year following exercise or for a period of two years following
grant. A sale within either of these periods will result in disqualification of
the incentive stock option status of the option and loss of the tax benefits.
Full payment for shares purchased shall be made at the time of exercise of an
option. Payment must be made in cash or, if authorized by the Compensation
Committee in the grant, in whole or in part in Common Stock valued at fair
market value. Options may be exercised in whole or in part.
Nonqualified Stock Options. The Stock Plan also provides for the grant of
nonqualified stock options ("NQSOs"). Unlike incentive stock options, NQSOs are
not subject to any restrictions under the Code, but are limited only by the
terms of the Plan. Like incentive stock options, NQSOs may be exercised only
during an option period specified by the Compensation Committee upon grant of
the option, which may not commence earlier than six months after the date of
grant and may not extend longer than ten years after the date of grant. Also
like incentive stock options, NQSOs granted under the Stock Plan may be
exercised only during a limited period following termination of employment as
established by the Compensation Committee upon grant, which will not normally
extend for more than three months after termination. The manner of exercise
provisions for NQSOs are identical to those provisions for incentive stock
options. The exercise price per share for NQSOs as set by the Compensation
Committee may not be less than the fair market value of the underlying shares on
the date of grant.
22
<PAGE> 26
Restricted Shares. Restricted shares also may be granted under the Stock
Plan. Typically, restricted shares will be granted at no purchase price,
although if required under applicable corporate law, the Compensation Committee
may establish a purchase price set at par value of the Common Stock, payable in
cash or by other means, including recognition of past employment. Restricted
shares are merely shares of Common Stock which the grantee is not entitled to
sell or otherwise transfer until ownership of the shares vests. The vesting
schedule for restricted shares is determined by the Compensation Committee upon
grant. The minimum vesting period is three years. Recipients of restricted
shares shall receive certain other rights attaching to shares of Common Stock
generally, such as dividend and voting rights, as of the date of grant or such
later date as the Committee may determine upon grant (but not later than the
date of vesting for such shares). If the recipient of restricted shares ceases
to be employed by the Company including its subsidiaries and affiliates before
the vesting date, the restricted shares will be forfeited to the Company.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the federal income tax consequences of
the various awards which may be granted under the Stock Plan. The discussion is
for purposes of general information only and does not address the specific facts
and circumstances that may apply to individual award recipients. All persons who
receive awards under the Stock Plan should consult their own tax advisor to
determine the particular tax consequences to them of their Stock Plan awards.
Incentive Stock Options: Persons receiving incentive stock options under
the Stock Plan will not recognize any income for federal income tax purposes
upon the grant to them of the options, nor will the Company receive any tax
deduction at the time of the grant. Moreover, if upon exercise of the incentive
stock option the optionee complies with all provisions of the Code relating to
incentive stock options and subsequently complies with the Code provisions
requiring holding periods before disposing of the shares, the optionee will not
recognize any taxable income upon exercise. Upon subsequent disposition of the
shares, the optionee will recognize capital gain or loss equal to the difference
between the sale price of the shares and the purchase price paid therefor upon
exercise, and the Company will receive no tax deduction. If an optionee disposes
of the option shares before expiration of the required holding periods under the
Code (one year after exercise, two years after grant), some or all, depending on
the facts, of the optionee's gain upon disposition of the option shares will be
characterized as compensation income taxable as ordinary income.
Nonqualified Stock Options: Persons receiving NQSOs under the Stock Plan
will not recognize any income for federal income tax purposes upon the grant to
them of the options, nor will the Company receive any tax deduction at the time
of grant. Upon exercise of a nonqualified stock option, in cash or by surrender
of stock already owned, the difference between the fair market value of the
shares acquired at exercise and the purchase price paid therefor will be treated
as ordinary income received as additional compensation, subject to federal
income tax withholding and employment tax provisions, and the Company will
receive a corresponding tax deduction. Generally, subsequent disposition of the
option shares will result in recognition by the holder of capital gain or loss.
Restricted Shares: Under Section 83 of the Code, persons receiving
restricted shares under the Stock Plan will not recognize any income for federal
income tax purposes upon grant, and the Company will not receive any tax
deduction, as long as the restricted shares are subject to a substantial risk of
forfeiture and are non-transferable. At such time as the substantial risk of
forfeiture ceases to exist or the shares become
23
<PAGE> 27
transferable, the shares will be taxable to the recipient as ordinary income
received as compensation in an amount equal to the then fair market value of the
shares (less the purchase price of the shares, if any), subject to federal
income tax withholding and employment tax provisions, and the Company will be
entitled to a corresponding tax deduction.
The above description is a summary of the significant provisions of the
Stock Plan and the Amendment. Stockholders may obtain a copy of the Stock Plan,
as amended, for their review upon request to the Corporate Secretary.
The Board of Directors believes adoption of the Amendment will be in the
best interests of the stockholders and, accordingly, recommends a vote FOR this
proposal, which is ITEM 2 on the Proxy Card. Proxies received in response to the
Board's solicitation will be voted "FOR" approval of the Amendment if no
specific instructions are included thereon for Item 2.
ITEM 3. APPROVAL OF ANNUAL INCENTIVE COMPENSATION PLAN
The third item to be acted upon at the Meeting is a proposal to approve the
North Fork Bancorporation, Inc. Annual Incentive Compensation Plan (the "Bonus
Plan"). The Bonus Plan has been in place for several years but is now being
submitted for stockholder approval because of a provision recently added to the
Internal Revenue Code. Under this provision, Section 162(m), public companies
may be denied a tax deduction for compensation paid to top executives in excess
of $1 million subject to various exemptions. One of the exemptions is for
performance-based compensation that meets certain qualifications, including
shareholder approval.
The Company has been able to deduct compensation paid to executives for tax
purposes thus far, even without an exemption under Section 162(m) for amounts
paid under the Bonus Plan. The Board of Directors has determined that it is
appropriate to make certain that all amounts payable in the future under the
Bonus Plan to executives remain fully deductible for federal income tax
purposes, and to reconfigure the Bonus Plan to achieve this result. On March 11,
1996, the Compensation Committee of the Board of Directors amended the Bonus
Plan to meet the requirements of the Code. If the stockholders of the Company
now approve the Bonus Plan as thus amended, amounts paid to executives in the
future, including for fiscal year 1996, will qualify for an exemption under
Section 162(m).
GENERAL DESCRIPTION OF THE PLAN
The Bonus Plan, which was adopted in its present form by the Board of
Directors in 1994, provides that, if certain pre-determined performance targets
are met by the Company in any fiscal year, a bonus pool will be formed at
year-end, to be distributed among Company executives and other key employees.
The overall size of the bonus pool is determined by the extent to which the
Company's performance exceeds the threshold target levels. Individual
distributions from the bonus pool may vary, depending upon individual
performance and, in some cases, operational department achievements. The Bonus
Plan is administered by the Compensation Committee, which makes all
discretionary determinations thereunder. In making determinations, Committee
members evaluate management's input and other relevant information.
In the course of each calendar year, the Committee selects the particular
financial or performance criteria against which the Company and, in some cases,
subsidiaries and operational departments of the Company are
24
<PAGE> 28
to be measured under the Bonus Plan for that year, as well as the target
threshold level or levels of performance that will determine whether or not an
annual bonus pool will be established that year under the Bonus Plan. The
Committee may establish additional target levels of performance above the
threshold level, which if met may result in a larger bonus pool. The Committee
also may determine, by specific or categorical identification, those key
employees of the Company who will be entitled to consideration as participants
in the Bonus Plan for that year.
After the Committee's initial determination of performance targets, the
Committee continues throughout the year to monitor actual performance against
the pre-determined targets. Except for the performance targets pre-selected for
executives (see "Executive Award Feature", below), the Committee may decide, at
any time before final determination at calendar year-end of the overall amount
of the bonus pool, if any, and individual distribution amounts, to make such
adjustments to the pre-determined target levels as it deems appropriate to take
into account unusual or unanticipated corporate or industry-wide developments.
In past years, the principal measures of Company performance under the
Bonus Plan have been pre-tax earnings (net of extraordinary items). Additional
measures that may be considered include return on equity, return on assets, net
interest income, and achievement of subsidiary or departmental budgets. The
measures of performance selected for executives are discussed below under
"Executive Award Feature".
PURPOSE
The purpose of the Bonus Plan is to provide a meaningful incentive on an
annual basis to all key employees of the Company and its subsidiaries, to
motivate them to assist the Company in achieving ambitious but realistic
short-term goals, as established by the Committee. The Bonus Plan concentrates
on Company-wide performance objectives but also includes, in select cases,
consideration of operational department performance, so as to enable the
Committee to establish a program of internal incentives where it determines that
this may be the most effective and appropriate way to motivate and reward
performance.
EXECUTIVE AWARD FEATURE
In order to comply with Section 162(m), the Committee amended the Bonus
Plan on March 11, 1996, subject to stockholder approval, to add special
provisions applicable only to those top executive officers who are determined
each year by the Committee as likely to be "covered employees" for that year, as
that term is defined in the statute. Essentially, covered employees are those
executive officers whose compensation is identified in the proxy statement
compensation tables (the "Executive Officers").
Under the Bonus Plan as amended, no later than the 90th day of each
calendar year, the Committee will set the Executive Targets for that year,
consisting of (a) an Earnings Per Share Target and (b) a Stock Valuation Target.
The Earnings Per Share Target will be expressed as a specific target earnings
per share for the Company's Common Stock on a fully diluted basis, before the
after-tax effect of any extraordinary items, the cumulative effect of accounting
changes, or other nonrecurring items of income or expense including
restructuring charges. The Stock Valuation Target will be expressed as a
specific target market price for the Company's Common Stock as of year-end
(based upon the average of the reported closing prices over the last thirty (30)
trading days of the year), adjusted to reflect any intervening stock splits or
dividends.
25
<PAGE> 29
If at year-end either of the Executive Targets has been met, the maximum
amount payable to the Executive Officers under the Bonus Plan will be (i) for
the Chief Executive Officer, .0175 of net income for such year (excluding the
after-tax effect of any extraordinary items, the cumulative effect of accounting
changes, or other nonrecurring items of income or expense including
restructuring charges) ("Defined Net Income"), (ii) for the Chairman (if not the
CEO) and the Vice Chairman, .00875 of Defined Net Income, (iii) for the Chief
Financial Officer, .0075 of Defined Net Income, and (iv) for any other Executive
Officer designated by the Committee, .005 of Defined Net Income. The overall
maximum amount payable to the Executive Officers under the Bonus Plan for any
calendar year will be .04375 of Defined Net Income.
The Committee also recognizes the need to evaluate executive performance on
additional performance factors, including individual achievement and those other
objective and subjective factors mentioned above under "General Description of
the Bonus Plan." Under the Bonus Plan as amended, the Committee may reduce the
award payable to any Executive Officer for the year below the maximum level
indicated above, but in no event may the Committee increase the amount payable
to an Executive under the Bonus Plan above the maximum level indicated. Any
reductions in Executive Officer awards below the maximum levels may or may not
be included in the overall bonus pool distributable to employees generally, at
the discretion of the Committee.
The following table indicates the maximum amounts that would have been
distributed in 1995 to each of the Executive Officers and to the Executive
Officers as a group under the Bonus Plan, if the recent amendments had been in
effect and the Committee had established separate Executive Targets for that
year, and assuming one or both such Targets would have been satisfied. Actual
bonuses received by the Executive Officers during such year are listed below and
in the Summary Compensation Table on page 8.
<TABLE>
<CAPTION>
MAXIMUM POTENTIAL
PAYMENTS UNDER ACTUAL PAYMENTS
NAME/GROUP AMENDED BONUS PLAN FOR 1995
- ----------------------------------------------- -------------------------- ---------------------
<S> <C> <C>
John Adam Kanas, CEO, President and Chairman $914,000 $500,000
John Bohlsen, Vice Chairman $457,000 $250,000
Daniel M. Healy, Chief Financial Officer and $392,000 $150,000
Executive Vice President
All Executive Officers as a Group* $1,763,000 $900,000
All Non-Executive Directors as a Group Not Included in Plan Not Included in Plan
All Non-Executive Employees as a Group Not Included in Executive $525,000
Award Feature of Plan
</TABLE>
- ---------------
* Mindy G. Butler, who is listed in the Summary Compensation Table on page 8, is
no longer employed by the Bank and, therefore, is not included in the table
above.
- ---------------
Under the Bonus Plan, the Board of Directors or, if the Board delegates the
authority, the Committee may amend the plan from time to time, provided, that
any such amendment that, without stockholder approval, would result in loss of
the exemption under Section 162(m) must be approved by the stockholders.
26
<PAGE> 30
The above description is a summary of the significant provisions of the
amended Bonus Plan, including the Executive Award Feature. Stockholders may
obtain a copy of the plan for their review upon request to the Corporate
Secretary.
Approval of the Bonus Plan, as amended, requires the affirmative vote of a
majority of the shares of Common Stock present in person or represented by proxy
at the Meeting and entitled to vote thereon. Dissenting votes give rise to no
rights on the part of dissenting stockholders.
The Board of Directors believes approval of the Bonus Plan will be in the
best interest of the stockholders and, accordingly, recommends a vote FOR this
proposal, which is ITEM 3 on the Proxy Card. Proxies received in response to the
Board's solicitation will be voted "FOR" approval of the amended Bonus Plan if
no specific instructions are included therein for Item 3.
STOCKHOLDER PROPOSALS
Stockholder proposals to be considered for inclusion in the Company's proxy
materials for the 1997 Annual Meeting of Stockholders must be received in
writing by the Secretary of the Company at the Company's principal executive
office no later than November 19, 1996. Such proposals must also meet the other
requirements established by the Securities and Exchange Commission for
stockholder proposals.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, Certified Public Accountants, were the independent
auditors of the Company for the year ended December 31, 1995, and have also been
selected to serve as auditors for 1996. Representatives of KPMG Peat Marwick are
expected to be present at the Meeting with an opportunity to make a statement if
they so desire and are expected to be available to respond to appropriate
questions from stockholders.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Directors of the Company is not aware of any other matters
that may come before the Meeting. However, the proxies may be voted with
discretionary authority with respect to any other matters that may properly come
before the Meeting.
Date: March 18, 1996
By Order of the Board of Directors
/s/ ANTHONY J. ABATE
--------------------------------------
ANTHONY J. ABATE
Vice President and Secretary
27
<PAGE> 31
PROXY
NORTH FORK BANCORPORATION, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
APRIL 23, 1996
The undersigned stockholder(s) of North Fork Bancorporation, Inc., a Delaware
corporation (the "Company") hereby appoint(s) Irving L. Price, Jr., and Alma
T. Suter, and each of them, with full power to act alone, the true and lawful
attorneys-in-fact and proxies of the undersigned, with full power of
substitution, and hereby authorize(s) them and each of them, to represent the
undersigned and to vote all shares of common stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Marriott Windwatch Hotel, 1717 Vanderbilt Motor
Parkway, Hauppage, New York at 10:00 a.m. on Tuesday, April 23, 1996, and at any
adjournments or postponements thereof, with all powers the undersigned would
possess if personally present, on the following proposals and any other
matters coming before said meeting.
1. Election of Directors of the Board of (CHANGE OF ADDRESS)
Directors whose term expires at the
1999 Annual Meeting of Stockholders _______________________
_______________________
Nominees: John Bohlsen, Malcolm J. Delaney, _______________________
James H. Rich, Jr. _______________________
(Over)
(Check one box only for all nominees)
2. Approval of the Amendment to the Key Employee Stock Plan
3. Approval of the Annual Incentive Compensation Plan
This proxy will be voted in the manner directed herein by the undersigned.
If no direction is given, this proxy will be voted FOR proposals 1, 2 and 3,
and in the discretion of the proxies on such other matters as may properly come
before the annual meeting or any adjournments or postponements thereof.
SEE REVERSE SIDE
/X/ Please mark your votes as in this 0103
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3
1. Election of FOR WITHHOLD
Directors
(see reverse) / / / /
WITHHOLD for the following only. Write name(s) below.
_____________________________________________________
2. Aproval of the FOR AGAINST ABSTAIN
Amendment to
the Key Employee / / / / / /
Stock Plan
_____________________________________________________
3. Approval of the FOR AGAINST ABSTAIN
Annual Incentive
Compensation Plan / / / / / /
Please indicate below whether you plan on attending the Annual Meeting.
I PLAN TO I DO NOT PLAN TO
ATTEND ATTEND
/ / / /
CHANGE OF ADDRESS ON REVERSE SIDE / /
Receipt of the Notice of Annual Meeting of Stockholders and accompanying
Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this proxy. Joint owners
should each sign personally. If signing as attorney, executor,
administrator, trustee or guardian, please include your full title.
Corporate proxies should be signed by an authorized officer.
_______________________________________________________________________________
_______________________________________________________________________________
SIGNATURE(S) DATE
<PAGE> 32
(THIS PLAN AMENDMENT IS BEING SUBMITTED PURSUANT TO INSTRUCTION 3 TO ITEM 10 OF
SCHEDULE 14A. IT IS NOT PRINTED IN THE PROXY STATEMENT BEING SENT TO
STOCKHOLDERS.)
FIRST AMENDMENT TO THE
NORTH FORK BANCORPORATION, INC.
KEY EMPLOYEE STOCK PLAN
1. Amendment to Section 4.
Section 4 of the Key Employee Stock Plan (the "Plan") is hereby
deleted in its entirety and the following is substituted in lieu thereof:
"SECTION 4. SHARES RESERVED UNDER THE PLAN
There is hereby reserved for issuance under the Plan an aggregate of
1,200,000 shares of Stock, of which a maximum of 400,000 shares may be issued
as Restricted Stock, subject in each case to adjustment as provided in Section
11 of the Plan. Such shares may be authorized but unissued shares or treasury
shares. Shares of Stock underlying outstanding Options will be counted against
the Plan maximum while such Options are outstanding. Calculation of the number
of shares remaining available for issuance under the Plan shall be by those
methods permissible under Rule 16b-3 which result in the greatest number of
shares remaining available for issuance."
2. No Other Changes.
Except as provided above with regard to Section 4 of the Plan, all
other terms and conditions of the Plan shall remain unchanged and in full force
and effect.
<PAGE> 33
(THIS PLAN IS BEING SUBMITTED PURSUANT TO INSTRUCTION 3 TO ITEM 10 OF SCHEDULE
14A. IT IS NOT PRINTED IN THE PROXY STATEMENT BEING SENT TO STOCKHOLDERS.)
NORTH FORK BANCORPORATION, INC.
ANNUAL INCENTIVE COMPENSATION PLAN
1. Name. The name of the Plan is the North Fork Bancorporation, Inc. Annual
Incentive Compensation Plan (the "Plan").
2. Basic Function. The Plan provides for payment of annual bonuses at year-end
to select key employees of North Fork Bancorporation, Inc. (the "Company")
and its subsidiaries, depending upon the financial performance of the
Company or certain subsidiaries or departments and/or the job performance
of the individual employees in question. Bonuses, if paid, are paid at
year-end out of a bonus pool, the existence and aggregate size of which are
determined by the actual performance of the Company or its subsidiaries or
departments against one or more pre-established financial goals or targets.
Payments of awards to top executives are made pursuant to the "Executive
Award Feature" (see Section 10).
3. Purpose. The purpose of the Plan is to provide a meaningful incentive on an
annual basis to all key employees of the Company and its subsidiaries, and
to motivate them to assist the Company in achieving ambitious but realistic
short-term goals, as established by the Committee. The Plan concentrates on
Company-wide performance objectives but also includes, in select cases,
consideration of operational department performance, so as to enable the
Committee to establish a program of internal incentives where it determines
that this may be the most effective and appropriate way to motivate and
reward performance. Individual bonus determinations are, in certain cases,
also affected by individual job performance.
4. Termination; Amendment. The Plan shall continue to be in effect, unless and
until terminated by the Board of Directors of the Company (the "Board").
The Plan was initially adopted by the Board on July 18, 1994, and as set
forth below reflects amendments made by the Compensation Committee of the
Board (the "Committee") on March 11, 1996. The Plan as thus amended is
subject to the approval of the stockholders of the Company, by the
affirmative vote of the holders of a majority of the shares present in
person or represented by proxy, and entitled to vote thereon, at a meeting
of the stockholders at which a quorum is present or represented. The Plan
may be further amended from time to time by the Board or, if the Board
delegates a power to amend to the Committee, by the Committee, provided
that any amendment which, if effected without the approval of the
stockholders of the Company, would result in the loss of an exemption from
federal income taxation under
<PAGE> 34
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), for amounts payable thereunder but would not result in such loss
if approved by the stockholders, shall become effective only upon approval
thereof by the stockholders of the Company within the meaning of Section
162(m).
5. Administration. The Plan is administered by the Committee, which has sole
authority to make all discretionary determinations under the Plan. In
suitable circumstances, the Committee may elicit recommendations and advice
from management of the Company, as well as from any outside parties it
deems appropriate.
6. Participation. Key employees eligible for participation in the Plan will be
determined by the Committee on a year-to-year basis. Top executives
eligible to receive awards under the Executive Award Feature of the Plan
will be identified each year by the Committee as described in Section 10
below.
7. General Bonus Pool; Determination of Annual Targets; Distribution of Pool.
The Committee will determine the measure or measures of financial
performance and/or the target levels of performance, the attainment of
which in any year will result in the funding of the general bonus pool at
year-end, out of which awards will be made to all participants except for
those executives covered by the Executive Award Feature. Such
determinations on financial performance measures or target levels may be
made, and under appropriate circumstances may subsequently be modified, by
the Committee at any time prior to termination of the Plan year, provided
that at the time such measures or target levels are set or modified, the
attainment thereof will continue to serve as a meaningful incentive to key
employees throughout the remainder of the year. Alternative performance
measures or targets may be established and different target levels may be
selected with different general pool amounts established for each. The
general bonus pool, if funded upon attainment of the target goals, need not
be distributed in full. The amount of the general bonus pool may be
adjusted before distribution thereof, depending upon the size of awards
paid under the Executive Award Feature (see Section 11).
8. Performance Measures. Measures of financial performance selected by the
Committee on a year-to-year basis for determination of the general bonus
pool, for the Company or for designated subsidiaries, departments or
employees, may include one or more of the following: stock price, earnings
per share (with or without extraordinary items), net income (with or
without extraordinary items), return on equity, return on assets, net
interest income, net interest margin, net interest spread, non-performing
assets, total assets, operating expenses, other expenses, other income,
loan income, fee income, and any sub-categories or ratios of or between any
2
<PAGE> 35
of the above, on a GAAP basis, tax-equivalent basis or any other
regularly-utilized method of financial or regulatory accounting or
presentation. Target performance may be expressed as absolute or average
dollar amounts, percentages, changes in dollar amounts or changes in
percentages, and may be considered on an institution-alone basis or
measured against specified peer groups or companies. The size of the
general bonus pool distributable upon attainment of the target levels
determined may be expressed as a dollar amount, or as a percentage of some
other measurement or amount, or as a ratio, and may be adjusted by the
Committee as it deems appropriate. Notwithstanding the foregoing, the
measures of financial or Company performance for determination of awards
payable under the Plan to those executives covered under the Executive
Award Feature and the calculation of the maximum amount payable and amounts
actually paid to such executives under the Plan shall be as set forth in
the Executive Award Feature of the Plan (see Section 10).
9. Individual Factors. The Committee, in exercising discretion under the Plan
on determinations of cash bonuses payable to individuals, may consider
particular individual goals as well as subjective factors, including any
unique contribution.
10. Executive Award Feature. Notwithstanding any other provision of the Plan
to the contrary, any awards under the Plan for any year to those
individuals identified by the Committee as "Executive Officers" for
purposes of the Plan for such year shall be governed by the provisions of
this Section 10.
(i) On or before the ninetieth (90th) day of each calendar year while
the Plan is in effect, the Committee will (a) identify those individuals
who it reasonably anticipates will qualify as the "covered employees" of
the Company for such calendar year within the meaning of Section 162(m) of
the Code (the "Covered Executives"), (b) established the Earnings Per Share
Target (as defined below) for such calendar year, and (c) establish the
Stock Valuation Target (as defined below) for such year (the Earnings Per
Share Target and the Stock Valuation Target to be referred to collectively
as the "Executive Targets"). The Executive Targets for any year will be
treated as confidential by the Committee, the Covered Executives and all
other directors, officers and employees of the Company who become aware
thereof.
(ii) The Earnings Per Share Target shall be expressed as a specific
target earnings per share for such year for the Company's common stock on a
fully diluted basis, before the after-tax effect of any extraordinary
items, the cumulative effect of accounting changes, or other nonrecurring
items of income or expense including restructuring charges.
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(iii) The Stock Valuation Target shall be expressed as a target market
price for the Company's common stock a year-end, based upon the average of
the reported closing prices of the Company's common stock for the last
thirty (30) trading days of such calendar year, adjusted to reflect any
intervening stock splits or stock dividends or similar capital changes.
(iv) If for any calendar year, either of the Executive Targets for
such year is met, the maximum bonus amount payable under the Plan for such
year to each of the Covered Executives identified for such year by the
Committee shall be as follows: (a) for the Chief Executive Officer, .0175
of net income for such year (excluding the after-tax effect of any
extraordinary items, the cumulative effect of accounting changes, or other
nonrecurring items of income or expense including restructuring charges)
("Defined Net Income"), (b) for the Chairman (if not the CEO) and the Vice
Chairman, .00875 of Defined Net Income, (c) for the Chief Financial
Officer, .0075 of Defined Net Income, and (d) for any other Covered
Executive designated by the Committee for such year, .005 of Defined Net
Income. The maximum aggregate bonus amount payable under the Plan for such
year to all Covered Executives as a group shall be .04375 of Defined Net
Income. At the discretion of the Committee, taking into account such
factors as it may deem appropriate in the case of any such Covered
Executive, the actual amount of the bonus award under the Plan paid to such
Covered Executive may be less than the maximum bonus amount payable to such
Covered Executive identified above (including zero), but in no event may
the actual amount of the bonus award paid exceed such maximum amount. No
Covered Executive shall be entitled to any additional award under the Plan
for such year from the general bonus pool out of which awards to key
employees other than Covered Executives will be made.
11. Relationship of General Bonus Pool to Executive Award Feature. The overall
bonus pool available for distribution under the Plan at year-end shall
equal (a) the total of the maximum awards distributable to Covered
Executives under the Executive Award Feature (if any), plus (b) the
amount of the general bonus pool otherwise determined to be available for
distribution to non-Covered Executives (if any). In calculating or
determining the amount of the general bonus pool available for
distribution to non-Covered Executives, the Committee may, where
appropriate, deduct from any calculation of such general bonus pool
amount the maximum amount distributable to Covered Executives, provided
that in no case shall any calculation of any maximum amount determined to
be distributable under the general bonus pool feature of the Plan, or
under any formula applicable thereto adopted by the Committee, reduce or
affect in any way the maximum amount distributable to any Covered
Executive or to the Covered
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Executives as a group under the Executive Award Feature. Distribution of
less than the maximum amounts available for distribution to Covered
Executives under the Executive Award Feature shall not necessarily result
in availability of additional amounts for distribution to non-Covered
Executives from the general bonus pool, if any.
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