<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
North Fork Bancorporation, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[NORTH FORK LOGO]
March 25, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
North Fork Bancorporation, Inc., to be held at the Islandia Marriott Long
Island, 3635 Express Drive North, Hauppauge, New York 11788, at 10 a.m. on
Tuesday, April 27, 1999.
There is one matter scheduled to be acted upon at the meeting:
- The election of three directors to Class 3 of the Board of Directors.
The Board of Directors believes that the election of the nominees listed in
the attached proxy statement is in the best interests of the Company and its
stockholders and unanimously recommends a vote "FOR" the nominees.
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 complete, 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,
John Kanas signature
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 27, 1999
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 Islandia Marriott Long Island, 3635 Express Drive North, Hauppauge, New
York 11788, on Tuesday, April 27, 1999, at 10 a.m. for the purpose of
considering and voting upon the following items:
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; and
2. 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 1999 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 99 Smithtown Bypass,
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.
March 25, 1999
By Order of the Board of Directors
/s/ Aurelie S. Graf
AURELIE S. GRAF
Corporate Secretary
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 27, 1999
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 April 27, 1999, at the Islandia Marriott Long Island, 3635
Express Drive North, 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 25, 1999.
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 primary banking subsidiary,
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 $7,000, 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, 1999, 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 141,042,425 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.
<PAGE> 5
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 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 count 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 on any other matter, ballots marked "ABSTAIN" will have the effect of a
vote "AGAINST" such matter but broker non-votes will not have the effect of a
vote "AGAINST" such matter.
Votes will be counted and vote totals announced at the Meeting by the
inspectors of election.
CERTAIN BENEFICIAL OWNERSHIP
As of December 31, 1998, 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 of the Company, each to hold
office for three years (through the annual meeting in the year 2002) and until
his successor shall have been duly elected and qualified.
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
2
<PAGE> 6
that the holders of the 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 current 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, 1998(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 2002):
John Bohlsen, 56........................................ 1986 886,877(1) *
Vice Chairman of the Company and North Fork Bank;
President, The Helm Development Corp. (real estate
company)
Thomas M. O'Brien, 48................................... 1997 993,190(2) *
Vice Chairman of the Company and North Fork Bank
(since January 1997); Former Chairman, President
and Chief Executive Officer, North Side Savings
Bank
Patrick E. Malloy, III, 56.............................. 1998 2,581,177 1.80%
Former Chairman, New York Bancorp Inc.; President,
Malloy Enterprises, Inc. (private investment
company)
DIRECTORS CONTINUING IN OFFICE:
CLASS 1 (terms to expire in 2000):
Allan C. Dickerson, 66.................................. 1988 48,844(3) *
Former President, Roy H. Reeve Agency, Inc. (general
insurance company) (1975-1994)
Lloyd A. Gerard, 67..................................... 1981 173,132(4) *
Antique Dealer and Auctioneer
John Adam Kanas, 52..................................... 1981 2,310,587(5) 1.61%
Chairman, President and Chief Executive Officer of the
Company and North Fork Bank
Irvin L. Cherashore, 63................................. 1997 63,204 *
Director of Winchester Group, Inc. (money management
and institutional brokerage company); Former
Director, North Side Savings Bank
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
SERVED OWNED AS OF
AS A December 31, 1998(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 to expire in 2001):
James F. Reeve, 58...................................... 1988 167,554(6) *
President, Harold R. Reeve & Sons, Inc. (general
construction company)
George H. Rowsom, 63.................................... 1981 24,053(7) *
President, S.T. Preston & Son, Inc. (retail marine
supplies company)
Raymond W. Terry, Jr., 68............................... 1988 108,000(8) *
Former Chairman and President, Southold Savings Bank
Dr. Kurt R. Schmeller, 61............................... 1994 78,190 *
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, 1998(c)
NAME, AGE, AND POSITIONS ------------------------
WITH THE COMPANY NO. OF SHARES PERCENT
------------------------ ------------- -------
<S> <C> <C>
Daniel M. Healy, 56......................................... 649,681(9) *
Executive Vice President and Chief Financial Officer of
the Company and North Fork Bank
All Director Nominees, Continuing Directors and Executive
Officers as a Group....................................... 8,084,489(10) 5.64%
</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.
4
<PAGE> 8
(1) Includes 239,899 shares of restricted stock and options to purchase 178,371
shares previously granted to Mr. Bohlsen under the Company's compensatory
stock plans, 2,568 shares held by his wife, 32,572 shares held by his
dependent children, and 40,000 shares held by the John and Linda Bohlsen
Family Foundation, a charitable foundation established by Mr. Bohlsen that
is qualified under section 501(c)(3) of the Internal Revenue Code.
(2) Includes 62,500 shares of restricted stock and options to purchase 108,583
shares previously granted to Mr. O'Brien under the Company's compensatory
stock plans, 268,605 shares held by him in joint tenancy with his wife,
1,296 shares held as custodian for his dependent children, and 35,000
shares held by The Galway Bay Foundation, Inc., a charitable foundation
established by Mr. O'Brien that is qualified under section 501(c)(3) of the
Internal Revenue Code.
(3) Includes 23,845 shares held by Mr. Dickerson's wife.
(4) Includes 5,827 shares held by Mr. Gerard in joint tenancy with his
daughter, 3,000 shares held by his wife, and 300 shares held by his wife in
her capacity as custodian for a granddaughter.
(5) Includes 690,136 shares of restricted stock and options to purchase 632,985
shares previously granted to Mr. Kanas under the Company's compensatory
stock plans, 55,300 shares held by him in joint tenancy with his wife,
62,823 shares held by his wife, 14,900 shares held by his dependent
children, 400 shares held by his wife in joint tenancy with his son, 400
shares held by his wife as custodian for their son, and 109,000 shares held
by the John A. Kanas and Elaine M. Kanas Family Foundation, a charitable
foundation established by Mr. Kanas that is qualified under section
501(c)(3) of the Internal Revenue Code.
(6) Includes 55,625 shares held by Mr. Reeve's wife.
(7) Includes 3,000 shares held by Mr. Rowsom in joint tenancy with his wife,
928 shares held by his wife, and 9,000 shares held by the S. T. Preston &
Sons, Inc. Profit Sharing Trust, in which Mr. Rowsom shares voting power
with two others.
(8) Includes 45,000 shares held by Mr. Terry's wife.
(9) Includes 125,985 shares of restricted stock and options to purchase 212,020
shares previously granted to Mr. Healy under the Company's compensatory
stock plans, 9,000 shares held by his wife, and 6,000 shares held in his
name as custodian for a daughter.
(10) Includes 1,118,520 shares of restricted stock and options to purchase an
aggregate of 1,131,959 shares previously granted to such persons under the
Company's compensatory stock plans.
5
<PAGE> 9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than 10
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Such individuals are required by regulations promulgated by the
Securities and Exchange Commission to furnish the Company with copies of all
Section 16(a) forms they file. Based solely on review of the copies of such
forms furnished to the Company or written representations that no reports were
required to be filed, the Company believes that such persons complied with all
Section 16(a) filing requirements applicable to them with respect to
transactions during 1998.
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 Terry, Gerard and Schmeller. The Audit Committee met 10
times during 1998.
The Company's Board of Directors also has a Compensation and Stock
Committee. The Compensation and Stock Committee reviews and makes
recommendations on salary levels for executives and other officers, makes
certain decisions affecting executive bonuses under the Company's Annual
Incentive Compensation Plan and determines all awards to executives under the
Company's compensatory stock plans. The Committee consists of three directors
appointed by the Company's Board of Directors, none of whom may be an employee
or have substantial separate business dealings with the Company. The present
members of the Committee are directors Dickerson, Gerard and Rowsom. During 1998
the Compensation and Stock Committee met 4 times. (See "Report of the
Compensation Committee" on page 16.)
The Company's Board of Directors has no nominating committee or committee
performing functions similar to those of a nominating committee. However, the
Company's By-laws provide a procedure under which a stockholder of the Company
may nominate a person for election as director at an annual meeting. (See
"Stockholder Proposals" on page 29.)
The Board of Directors met 13 times during 1998. 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No current member of the Compensation and Stock Committee is now an officer
or an employee of the Company or any of its subsidiaries or has ever been an
officer of the Company or any of its subsidiaries or during the last fiscal year
has had any substantial business dealings with the Company.
6
<PAGE> 10
COMPENSATION OF DIRECTORS
Each member of the Board of Directors of the Company receives an annual fee
of $30,000. 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. Each member of the Board of Directors of North Fork Bank
(currently, the same group that serves as the Board of Directors of the Company)
receives a fee of $750 for each meeting of the Board or any committee of the
Board attended. Chairmen of North Fork Bank Board committees receive an
additional $250 per committee meeting attended. Directors Kanas, Bohlsen and
O'Brien do not receive any separate fees for attendance at any Company or North
Fork Bank committee meetings.
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 North Fork 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 directors of Southold Savings
Bank prior to the Company's acquisition of Southold in 1988 now receive, or in
the future will receive, payments from North Fork Bank under deferred directors'
fee agreements entered into by them with Southold prior to the 1988 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 directors Dickerson and
Reeve will be entitled to receive such payments in the future.
Under the terms of the merger agreement entered into by the Company in
connection with its 1998 acquisition of New York Bancorp, the Company entered
into a one-year consulting agreement with director Patrick E. Malloy, III,
former Chairman of New York Bancorp, providing for a fee of $750,000 for
services rendered. The consulting agreement contains a non-competition provision
and expires on March 28, 1999.
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
from the Company, including salary and bonus, exceeded $100,000 in 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------- -----------------------------------
(A) (B) (C) (D) (E) (G) (I)
OTHER (F) SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
NAME AND COMPEN- STOCK OPTIONS(4) COMPEN-
PRINCIPAL POSITION YEAR SALARY(1) BONUS SATION(2) AWARDS(3) (SHARES) SATION(5)
- ------------------ ---- --------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
John Adam Kanas............. 1998 $887,750 $1,200,000 $48,164 $ 818,800 506,088(6) $122,779
Chairman of the Board, 1997 684,750 950,000 46,500 1,268,800(7) 764,775(8) 107,560
President and Chief 1996 584,000 750,000 8,449 1,020,000 150,000 40,236
Executive Officer
John Bohlsen................ 1998 437,750 600,000 23,178 511,750 139,551(6) 46,236
Vice Chairman of the 1997 434,750 450,000 56,125 730,500(7) 171,636(8) 40,419
Board 1996 334,750 350,000 6,611 680,000 90,000 16,638
Thomas M. O'Brien........... 1998 437,750 600,000 25,290 511,750 78,583(6) 44,081
Vice Chairman of the 1997 357,250 450,000 42,767 730,500 30,000 16,687
Board 1996
Daniel M. Healy............. 1998 350,000 325,000 15,756 307,050 144,520(6) 31,761
Executive Vice President 1997 350,000 275,000 14,062 475,800(7) 166,068(8) 30,337
and Chief Financial
Officer 1996 300,000 200,000 4,164 340,000 60,000 14,288
</TABLE>
- ---------------
NOTES TO SUMMARY COMPENSATION TABLE:
(1) Includes salary deferred at the election of the named executive officer
(including deferral amounts under the Company's 401(k) Plan) and all
directors' fees from the Company and North Fork Bank, whether paid or
deferred. The salary deferral amount under the 401(k) Plan for each of the
named executive officers in 1998 was $9,600. Total directors' fees for 1998
were $37,750 for Mr. Kanas, $37,750 for Mr. Bohlsen, and $37,750 for Mr.
O'Brien.
(2) Listed amounts represent tax payments made by the Company on the taxable
contributions made by it on behalf of the named executive officers under the
Company's Supplemental Executive Retirement Plan ("SERP").
(3) Represents the dollar value of restricted shares granted to the named
executive officers during the year in question, exclusive of any replacement
restricted shares received by them in 1997 (see
8
<PAGE> 12
Note 7, below). The listed dollar values represent the number of such
restricted shares multiplied by the closing market price of the Company's
Common Stock on the date of grant, less the purchase price, if any, paid by
the executive upon grant. Restricted shares 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 1998, the
number (and total dollar value) of restricted shares held by the named
executive officers were as follows: Mr. Kanas -- 690,136 shares
($16,521,856); Mr. Bohlsen -- 239,899 shares ($5,743,182); Mr.
O'Brien -- 62,500 shares ($1,496,250); and Mr. Healy -- 125,985 shares
($3,016,081). These dollar values are based on the closing market price of
the Company's Common Stock on December 31, 1998 ($23.94 per share), with no
discount for forfeitability or lack of transferability.
(4) Represents the total number of shares subject to stock options received by
the named executive officers during the year in question. Includes both
regular stock options (i.e., options awarded by the Compensation and Stock
Committee as part of its regular decisions regarding executive compensation
occurring during the year) and so-called "reload" stock options (i.e.,
options awarded to officers during the year upon their decision to exercise
previously held stock options by surrendering shares of Common Stock to the
Company in payment of the exercise price). The number of reload stock
options received in 1997 and 1998 by each of the executive officers is
separately identified in Note 6 and 8, respectively. No options issued to
the named executive officers have been accompanied by stock appreciation
rights ("SARs"). All options issued before May 15, 1998 have been adjusted
to reflect the 3-for-2 stock split effective on that date, and all options
issued before May 15, 1997 also have been adjusted to reflect the 2-for-1
stock split effective on that date.
(5) Includes Company contributions on behalf of the named executive officers
under the 401(k) Plan and under the defined contribution plan feature of the
SERP and specified premiums paid by the Company on certain insurance
arrangements covering the executive officers. Listed amounts for 1998
include 401(k) Plan contributions by the Company on behalf of executive
officers Kanas, Bohlsen, O'Brien and Healy of $7,200 each; contributions by
the Company under the defined contribution plan feature of the SERP on
behalf of executive officers Kanas, Bohlsen, O'Brien and Healy of $68,033,
$32,738, $35,724 and $22,256, respectively; and the following insurance
premiums paid by the Company on their behalf: for Mr. Kanas, $13,682 in
premiums on a disability policy, $25,000 in premiums on a life insurance
policy and $8,864 in premiums on two split dollar life insurance policies;
for Mr. Bohlsen, $6,298 in premiums on a split dollar life insurance policy;
for Mr. O'Brien, $1,157 in premiums on a split dollar life insurance policy;
and for Mr. Healy, $2,305 in premiums on a split dollar life insurance
policy.
(6) Includes the following numbers of reload stock options issued to the named
executive officers in 1998: Mr. Kanas -- 476,088 shares; Mr.
Bohlsen -- 119,551 shares; Mr. O'Brien -- 58,583 shares; and Mr.
Healy -- 134,520 shares.
(7) Listed amount does not include the dollar value of the replacement
restricted shares received by the named executive officer in 1997. The
Compensation and Stock Committee determined to incentivize the executives to
remain with the Company on a long term basis by shifting the vesting dates
of restricted shares granted to executives from the near-term to a
retirement basis. The Committee encouraged executives to surrender their old
restricted shares and when they did so, in
9
<PAGE> 13
early 1997, granted them replacement restricted shares with retirement
vesting. The total number of restricted shares surrendered and replacement
restricted shares received by each executive was as follows: Mr.
Kanas -- 286,668 shares surrendered and 590,136 replacement shares received;
Mr. Bohlsen -- 105,000 shares surrendered and 177,399 replacement shares
received; and Mr. Healy -- 54,000 shares surrendered and 88,485 replacement
shares received. The aggregate market value, based on the closing market
price of the Company's Common Stock on the grant date (February 25, 1997),
of the net new replacement restricted shares (replacement shares minus
surrendered shares) received by each executive was as follows: Mr.
Kanas -- $4,084,173; Mr. Bohlsen -- $973,562; and Mr. Healy -- $464,111. All
restricted shares granted before May 15, 1998 have been adjusted to reflect
the 3-for-2 stock split effective on that date, and all restricted shares
granted before May 15, 1997 have been adjusted to reflect the 2-for-1 stock
split effective on that date.
(8) Includes the following numbers of reload stock options issued to the named
executive officer in 1997: Mr. Kanas -- 719,775 shares; Mr.
Bohlsen -- 141,636 shares; and Mr. Healy -- 151,068 shares.
STOCK OPTIONS
The following table sets forth information concerning stock options granted
during 1998 to each of the named executive officers in the Summary Compensation
Table on page 8. Option grants have been divided between regular stock options
(i.e., awards of new options at the discretion of the Compensation and Stock
Committee as part of its regular reviews and decisions regarding executive
compensation occurring during the year) and so-called "reload" stock options
(i.e., options issued upon the option holder's decision to exercise previously
granted options by surrender of shares of Common Stock to the Company as payment
of the exercise price). See the discussion of reload options in the Report of
the Compensation Committee under the heading, "Recent Revisions to Long-Term
Executive Compensation." All information relating to options granted prior to
May 15, 1998 has been adjusted to reflect the 3-for-2 stock split effective on
that date.
10
<PAGE> 14
OPTION GRANTS IN 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(A) (B) (C) (E) (F)
NUMBER OF % OF TOTAL (D)
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS EMPLOYEES PRICE PRESENT
GRANTED(1) IN FISCAL (DOLLARS/ EXPIRATION VALUE(3)
NAME (SHARES) YEAR(2) SHARE) DATE (DOLLARS)
---- ---------- ---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
John Adam Kanas........ Regular 30,000 $20.47 12/16/08 $157,611.00
Reload 27,596 26.88 08/18/03 172,657.13
219,308 26.88 03/28/99 531,471.01
9,167 26.88 12/21/03 59,191.32
67,196 26.88 12/09/06 558,869.13
9,407 26.88 12/14/00 41,944.87
16,569 26.88 12/21/03 106,986.03
54,305 26.88 01/16/06 451,654.69
59,937 26.88 12/19/04 498,496.03
12,603 26.88 08/02/98 14,986.23
-----
50.4%
John Bohlsen........... Regular 20,000 20.47 12/16/08 105,074.00
Reload 29,124 26.88 12/09/06 242,224.31
31,031 26.88 01/16/06 258,084.83
35,963 26.88 12/19/04 299,104.27
16,557 26.88 08/18/03 103,590.53
6,876 26.88 12/21/03 44,398.33
-----
13.9%
Thomas M. O'Brien...... Regular 20,000 20.47 12/16/08 105,074.00
Reload 9,774 26.88 06/22/03 60,282.12
48,809 26.88 01/22/03 288,090.24
-----
7.8%
Daniel M. Healy........ Regular 10,000 20.47 12/16/08 52,537.00
Reload 38,072 26.88 12/09/06 316,644.82
35,963 26.88 12/19/04 299,104.27
31,029 26.88 01/16/06 258,068.19
22,580 26.88 03/16/02 123,934.85
6,876 26.88 12/21/03 44,398.33
-----
14.4%
</TABLE>
11
<PAGE> 15
- ---------------
NOTES:
(1) All regular stock options listed were granted to the named executive
officers on December 16, 1998, when the average of the high and low price
per share of the Common Stock on the New York Stock Exchange ("NYSE") was
$20.47. All reload stock options listed were issued to the named executive
officers as a result of their stock-for-stock exercises of underlying
options on April 23, 1998, when the average of the high and low price per
share of the Common Stock on the NYSE was $26.88, adjusted for the 3-for-2
stock split in May 1998. All stock options issued in 1998, including the
reload options, provide for the grant of a reload option upon the
stock-for-stock exercise thereof, subject to the approval of the
Compensation and Stock Committee. All reload options relate to a number of
shares of Common Stock equal to the number of shares of Common Stock
surrendered or deemed surrendered upon exercise of the underlying option,
including shares surrendered to or withheld by the Company for tax
withholding purposes. All reload options have an exercise price equal to the
closing market price of the Common Stock on the date of grant, are
exercisable immediately, and expire on the date the underlying option would
have expired. Each stock option granted to the named executive officers
contains a transferability feature under which the executives are permitted
to transfer their stock options, prior to exercise, exclusively by gift and
exclusively to members of their immediate family. In addition, named
executive officers, upon exercise of a stock option by delivery of
previously owned shares of Common Stock, may direct the Company to defer the
delivery of the new shares until a specified later date. (See "Report of the
Compensation Committee -- Recent Revisions to Long-Term Executive
Compensation" on page 20.)
(2) The listed percentage for each named executive officer represents the
percentage of all compensatory stock options (both regular options and
reload options) issued by the Company during the year that were received by
such executive officer.
(3) The listed Grant Date Present Value of the options is an estimate 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 six years for options with an original term greater than
six years or the option's remaining term if its original maturity is less
than six years; (b) the risk-free discount rate applied for purposes of the
valuation ranged from 4.50 to 5.66 percent; (c) the volatility factor
utilized ranged from 21 to 30 percent; (d) the dividend yield on the Common
Stock was assumed to be 2.25 percent for purposes of the analysis only; and
(e) no rate of forfeiture was assumed.
12
<PAGE> 16
The following table sets forth information concerning all stock options
that were either exercised in 1998 or held at year-end 1998 by the named
executive officers in the Summary Compensation Table on page 8. The option
exercise information includes reload exercises of options, that is, option
exercises resulting in the issuance of reload options to the executives.
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1998,
AND YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
OPTION EXERCISES IN 1998 DECEMBER 31, DECEMBER 31,
----------------------------------- 1998 1998(3)
SHARES ACQUIRED (EXERCISABLE/ (EXERCISABLE/
ON EXERCISE(1) VALUE REALIZED(2) UNEXERCISABLE) UNEXERCISABLE)
NAME (SHARES) (DOLLARS) (SHARES) (DOLLARS)
---- --------------- ----------------- --------------- --------------------
<S> <C> <C> <C> <C>
John Adam Kanas................. 780,873 $11,911,400 E - 632,985 E - $2,019,273
U - 44,100 U - 555,858
John Bohlsen.................... 187,536 2,891,016 E - 178,371 E - 264,291
U - 27,984 U - 352,724
Thomas M. O'Brien............... 128,646 2,979,344 E - 108,583 E - 153,119
U - 0 U - 0
Daniel M. Healy................. 211,068 3,255,171 E - 212,020 E - 1,275,466
U - 0 U - 0
</TABLE>
- ---------------
NOTES:
(1) All option exercises in 1998 by the listed executives were stock-for-stock
exercises. Listed numbers of shares of Common Stock acquired on exercise
includes both shares received replacing shares surrendered and net new
shares received. All share numbers have been adjusted to reflect the 3-for-
2 stock split paid to all stockholders of record as of April 24, 1998.
(2) Calculated by subtracting the exercise price of the options from the market
value of the shares received as of the date of exercise. All amounts listed
are on a pre-tax basis and constitute compensation income taxable to the
named executive at ordinary income rates.
(3) Calculated by subtracting the exercise price of options from the market
value of underlying shares at year-end, based on a closing market price of
the Common Stock on December 31, 1998, of $23.94 per share.
13
<PAGE> 17
AGREEMENTS WITH EXECUTIVE OFFICERS
In 1994, the Company entered into change-in-control agreements with three
executive officers of the Company-Chairman, President and Chief Executive
Officer John Adam Kanas, Vice Chairman John Bohlsen and Chief Financial Officer
Daniel M. Healy. The agreements are substantially identical in form. In
addition, the Company entered into a substantially similar change-in-control
arrangement with Vice Chairman Thomas M. O'Brien, as part of the employment
agreement (further described below) it entered into with him in connection with
the Company's acquisition of North Side Savings Bank at year-end 1996. 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 is reached by the
Board not to renew the agreement. The agreements provide 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 will 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.
In connection with the acquisition of North Side Savings Bank at year-end
1996, the Company entered into an employment agreement with Vice Chairman Thomas
M. O'Brien. The employment agreement provides for a three year term and an
annual base salary of $325,000, which amount may be increased at the discretion
of the Company's Board of Directors, provided that such annual base salary shall
be substantially equivalent to the annual base salary of any other Vice Chairman
of the Company and shall be no less than 50% of the annual base salary of the
Chief Executive Officer of the Company. The agreement also provides that Vice
Chairman O'Brien shall be eligible for annual bonuses, which bonuses shall be
substantially equivalent to the annual bonus, if any, paid to any other Vice
Chairman of the Company. If the Company terminates the agreement other than for
"cause," as defined, or Mr. O'Brien terminates the agreement for a material
uncured breach thereof by the Company, then Mr. O'Brien will be entitled to a
lump sum payment equal to the aggregate amount of his base salary for the
otherwise remaining term of the agreement multiplied by 130%.
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 -- Performance Plan" on page 25.)
14
<PAGE> 18
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.
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock over a five year period with the cumulative
total return on the Standard and Poor's 500 Stock Index and the KBW Eastern
Region Index over the same period, assuming the investment of $100 in each on
December 31, 1993, and the reinvestment of all dividends. The KBW Eastern Region
Index, available from Keefe, Bruyette & Woods, Inc., is a
market-capitalization-weighted bank-stock index combining stock price
information from 10 of the larger bank holding companies in the eastern United
States.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS AMONG NORTH FORK
BANCORPORATION,
S&P 500 INDEX AND KBW EASTERN REGION INDEX
[COMPARISON GRAPH]
<TABLE>
<CAPTION>
NFB S&P 500 INDEX KBW EASTERN REGION INDEX
--- ------------- ------------------------
<S> <C> <C> <C>
'1993' 100.00 100.00 100.00
'1994' 108.72 101.33 88.77
'1995' 205.66 139.39 150.69
'1996' 297.53 171.11 206.69
'1997' 577.89 228.20 330.74
'1998' 631.63 293.41 344.56
</TABLE>
15
<PAGE> 19
REPORT OF THE COMPENSATION COMMITTEE
The Stock and 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 affecting the compensation of senior
executives, including the Chief Executive Officer. The Committee currently
consists of three directors, none of whom is an officer or employee of the
Company or any of its subsidiaries or has any separate, substantial business
relationship with the Company. The names of the 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 generally.
In addition, the Committee plays a major role in determining the annual bonuses
paid to senior executives and other key employees under the Company's annual
bonus plan and has full discretion in granting stock options and other stock
awards to senior executives under the Company's stock-based incentive
compensation plans. Finally, the Committee monitors post-retirement compensation
arrangements for senior executives and sets performance targets under the
Company's long-term performance plan, which may affect the level of
post-retirement payments to senior executives after any change-in-control of the
Company.
The 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.
EXECUTIVE COMPENSATION POLICY
The basic policy of the Company on executive compensation, as set by the
Board of Directors and the Committee, is to provide an incentive for executives
to achieve corporate and individual goals and to reward executives when these
goals are met. A central theme underlying executive compensation is the
paramount importance of long-term stockholder interests and the need to align
senior management incentives with those interests. Executive incentive pay has
worked well for North Fork and its stockholders, and the Committee sees no
reason to alter that emphasis.
In determining overall amounts and types of compensation for senior
executives, the Board and the Committee give substantial weight to corporate
performance measures as well as executive compensation practices followed by the
Company's competitors. Also included in the deliberative process are personal
factors such as commitment, leadership, teamwork and community involvement. In
reviewing competitive factors, the Board and the Committee focus on executive
compensation paid by other top performing banks of a comparable size, and also
monitor executive pay at nonbank companies that compete with the Company for key
personnel.
The Board and the Committee obtain suggestions and advice from the CEO and
other senior executives regarding appropriate or desired levels of compensation
for them individually and for management personnel generally. Board and
Committee members also have access to all relevant Company financial
information, personnel records and other data and obtain the advice of experts
and compensation consultants, as appropriate. In 1998, at the direction of the
Committee, the Company retained the consulting firm of William M. Mercer,
Incorporated, to review and analyze North Fork's
16
<PAGE> 20
executive compensation structure and practices. The resulting Mercer analysis
was relied upon extensively by the Board and the Committee in making their
year-end compensation decisions.
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.
COMPONENTS OF EXECUTIVE COMPENSATION
In its deliberations regarding executive compensation, the Committee
focuses upon the following fundamental components: salary, short-term (i.e.,
annual) incentive compensation, and long-term incentive compensation.
Historically, the Company has placed special emphasis on incentive compensation,
both short-term and long-term, in setting overall levels of executive pay. The
Mercer analysis recently commissioned by the Company reveals that North Fork's
executives have received a much higher percentage of their total compensation in
the form of incentive compensation than has been the case, on average, for their
counterparts in the Company's peer group of banks.
Salary
The Committee conducts an annual review of salary levels for all senior
executives and other officers, assists the full Board in setting general Company
policy on executive salaries, and makes recommendations on specific salaries or
salary modifications for management. Salary levels are reflective of an
executive's responsibilities, experience and performance, the Company's overall
performance in relation to its peer group, and competitive marketplace
considerations.
Annual Incentive Compensation
Short-term incentive compensation for executives is provided through the
Company's Annual Incentive Compensation Plan (the "Bonus Plan"). Following
profitable and successful years, senior executives as well as other key
employees receive year-end cash distributions out of a designated annual bonus
pool established under the Bonus Plan. Bonuses awarded to senior executives
generally represent a larger percentage of their base salaries than bonuses
awarded to junior personnel. The overall size of the bonus pool is determined by
the level of the Company's financial success based on one or more measures.
The Committee is responsible for establishing or approving the criteria
that determine the overall size of the annual bonus pool. The Committee may
select one or several measures of financial performance as targets and may
express a particular financial target in terms of a graduated series of
achievement levels, with successively larger bonus pools resulting from
correspondingly higher levels of achievement. The financial target or targets
for a particular year are identified during the course of the year, with
occasional modifications to reflect unusual circumstances affecting the Company,
the regional or national economy or the banking industry generally. In recent
years, the principal measure of
17
<PAGE> 21
performance selected by the Committee for purposes of setting the overall size
of the bonus pool has been diluted earnings per share, net of extraordinary or
nonrecurring items.
In 1996, the Bonus Plan was amended with stockholder approval to ensure
that amounts paid thereunder to executives would continue to be fully tax
deductible to the Company. See "Tax Deductibility of Certain Payments," below.
Under the amended Bonus Plan, the Committee, in addition to setting general
performance targets that govern the funding of the annual bonus pool on a
Company-wide basis, also establishes, on or before March 31 of each year, one or
more specific performance goals that govern the determination of annual bonuses
for the Company's top executives (those individuals named in the Summary
Compensation Table in the Proxy Statement). The annual executive goal currently
consists of an Earnings Per Share Target. Unlike the goals for the Company-wide
bonus pool, the executive goal or goals, once established in the first quarter
of each year, may not subsequently be adjusted or supplemented. If at the end of
the year the Company has satisfied the pre-established executive goal (or, if
more than one executive goal has been set, as many of such goals as the
Committee may specify), each top executive may receive, as his maximum annual
bonus for that year, an amount calculated under an objective formula established
under the Bonus Plan. Under this formula, the maximum bonus for each executive
is based on the officer's position with the Company and the Company's "net
income" for the year as defined in the plan. For 1998, the aggregate of the
maximum annual bonuses payable under the Bonus Plan to the named executives in
the Summary Compensation Table as a group was 4.75 percent of the Company's "net
income" for the year, as thus defined.
Although the maximum annual bonus for each executive is determined under
the formula described above, the Committee in its sole discretion determines at
year-end the actual bonus payment to be received by each top executive under the
Bonus Plan, which may be less than (but may not exceed) the maximum bonus for
that individual determined under the objective formula.
Long-Term Incentive Compensation
The final component of the executive compensation program, which is greatly
emphasized by the Company, is the long-term incentive compensation feature. This
feature consists of stock-based awards, such as stock options, that offer
executives the possibility of future value depending on the long-term price
appreciation of the Company's Common Stock and the executives' continued
employment with the Company.
The Committee believes that, from a motivational standpoint, the Company's
use of stock-based compensation has been a notable success and has contributed
greatly to the Company's superior financial performance in recent years,
eliciting maximum effort and dedication from the senior executives. It is this
belief in the efficacy of stock-based compensation that has led the Board and
the Committee to revise and expand the long-term incentive compensation program
of the Company during recent years, in ways that affect both senior executives
and other key personnel. The purpose and effect of such revisions have been to
increase the importance of long-term incentive compensation to senior executives
and to extend the reach of equity-based incentive compensation to a broader
range of junior officers and other employees. The recent revisions to the
Company's long-term incentive compensation
18
<PAGE> 22
program, including the adoption by the Company of a new compensatory stock plan
at year-end 1998, are discussed further below.
Under all the Company's compensatory stock plans, the Committee has sole
discretion in determining grants of stock-based awards to senior executives,
including the timing, amounts and types of awards. In the case of individual
executives, the Committee's award decisions are based on an evaluation of both
the Company's performance (measured against its own pre-established goals and
against its peer group) and the executive's accomplishments. The Committee also
takes into consideration the incentive award practices followed by the Company's
peer banks for their top executives. The Company, like the other top performing
banks in its peer group, has consistently paid more than 50 percent of total
executive compensation in the form of long-term incentive awards.
Stock-based awards typically consist of stock options or shares of
restricted stock (which are merely shares of Common Stock that are forfeitable
and are subject to restrictions on transfer prior to the vesting date). The
exercisability of options and the vesting of restricted stock depends upon the
continued employment of the executive with the Company. Options have no value
unless the Company's stock price rises over time, and the value of restricted
shares over time also is directly proportionate to the market value of the
Company's stock. Thus, although the dollar value of the compensatory stock
awards granted by the Committee to the Company's top executives in recent years
has been substantial (exceeding the dollar value of the salaries and annual
bonuses paid to this group), the Committee notes that the high value of the
stock awards both reflects and is directly proportional to the exceptional
increase in value enjoyed by all the Company's stockholders over the same
periods.
NEW STOCK PLAN. In December 1998 the Committee approved, and the Board of
Directors ratified, a new long-term incentive stock plan, the 1998 Stock
Compensation Plan. This plan (the "New Stock Plan") is similar to the plan it
replaces, the Key Employee Stock Plan, which was adopted in 1994. Unlike the
earlier plan, however, awards under the New Stock Plan may be granted not only
to senior executives but also to a broad selection of junior level employees, if
and as appropriate. Most of the stock awards granted to executives at year-end
1998 came out of the new plan.
Awards under the New Stock Plan may be either nonqualified stock options or
shares of restricted stock. All options granted under the new plan must have an
exercise price at least equal to the market value of the Company's Common Stock
on the date of grant. The repricing of any options previously granted under the
New Stock Plan (or under any other Company stock plan) is prohibited. Options
may be exercised only for a limited period of time after the optionee leaves the
Company's employment. Restricted shares awarded under the new plan carry
dividend and voting rights from the date of grant; vesting of the shares may be
set at any date or dates not earlier than three years after grant. Restricted
shares are forfeited if the award holder leaves the Company's employment before
vesting.
The total number of shares authorized for awards under the New Stock Plan
is 1,500,000, which represents slightly more than 1 percent of the total number
of shares of Common Stock currently outstanding. No more than 500,000 of the
shares authorized under the new plan may take the form of restricted stock. No
executive may receive a total number of shares under the plan exceeding 1
percent of the total number of shares of Common Stock outstanding on the date
the plan was adopted. Because
19
<PAGE> 23
of the relatively small number of shares authorized for awards under the New
Stock Plan, stockholder approval of the plan is not required under applicable
securities laws and regulations. All awards to executives under the new plan are
at the sole discretion of the Committee.
The Committee believes that the New Stock Plan will be sufficient to meet
the Company's compensatory stock needs for several years.
RECENT REVISIONS TO LONG-TERM EXECUTIVE COMPENSATION. In the past two
years, the Company has modified various aspects of its long-term incentive
compensation program for executives. The general purpose of such revisions has
been to increase the relative significance to executives of long-term incentive
compensation versus other types of compensation, and to reinforce the long-range
commitment of senior management to the Company. Some of the more significant
revisions include the introduction of "reload" stock options for executives, the
implementation of a program to extend the vesting date of executives' restricted
shares until their retirement, and the addition of special features to
executives' stock options to make them more attractive compensatory vehicles,
such as by making executive options transferable by gift prior to exercise and
by permitting executives to exercise options while deferring receipt of the
underlying shares.
(i) Reload Options. With Board and Committee approval, the concept of
"reload" stock options was added to the executive compensation program in late
1996. The reload option is a device intended to encourage option exercise. It
works as follows: if the executive exercises some or all of his existing stock
options in a stock-for-stock exercise (that is, by surrendering to the Company,
as payment of the option exercise price, a number of shares of Common Stock
previously owned by the executive valued at the current market price), the
executive receives from the Company, in addition to the shares deliverable to
him upon exercise of the original, or "underlying," option, a new "reload"
option to acquire an additional number of shares equal to the number of shares
surrendered in exercise of the "underlying" option. Under the Company's reload
option program, if the executive authorizes the Company to withhold any of his
option shares as payment of his tax withholding obligation, the number of
withheld shares will be added to the number of shares covered by the new reload
option. The reload option bears an exercise price per share equal to the market
price of the Common Stock on the date the underlying option is exercised, and
expires on the same date the underlying option would have expired. The purpose
of reload options is to enable the executives to exercise their existing options
by surrender of pre-owned shares while maintaining their same overall level of
percentage ownership interest in the Company. The Committee determines on a
case-by-case basis whether and under what circumstances executives will be
entitled to receive reload options.
In each of the past two years, the Company's top executives, taking
advantage of the Committee's willingness to grant them reload options, have
exercised a substantial portion of their outstanding, exercisable options in
stock-for-stock exercises, thereby triggering the issuance to them of a number
of reload options. These reload options have been separately identified in the
executive compensation tables included in this Proxy Statement. The Committee
expects that it will approve the grant of reload options to executives again in
the future, if in each case it concludes that doing so will serve as an
incentive to the executives and will be in the best interests of stockholders.
20
<PAGE> 24
(ii) Retirement-Based Vesting of Restricted Stock. Another feature added
to the Company's long-term incentive compensation program for executives in
recent years is the retirement-based vesting of restricted stock. Under this
approach, first implemented with Board and Committee approval in 1997, shares of
restricted stock awarded to the Company's most senior executives (i.e., the
executives named in the Summary Compensation Table) will remain unvested, and
will continue to be forfeitable, until the anticipated date of their retirement.
Previously, the vesting of restricted shares was set at some designated number
of years after grant, e.g., on the fifth, sixth or seventh anniversaries of
grant. All restricted shares awarded to the top executives in the past two years
have been structured so that vesting will not occur until the executive retires,
or until his earlier death or permanent disability or a change-in-control of the
Company occurs. Termination of employment prior to one of these events will
result in forfeiture. Moreover, in early 1997, Company executives Kanas, Bohlsen
and Healy surrendered all non-vested restricted shares then held by them, all of
which had shorter vesting periods, and the Committee subsequently elected in its
sole discretion to replace the surrendered shares by granting these executives
restricted shares having retirement-based vesting. The Committee believes that
retirement-based vesting of restricted stock will encourage top management to
commit to the Company for a longer period of time, thereby benefiting the
Company and its stockholders.
(iii) Modifications to Executives' Options. In 1998, the Committee
approved certain additional changes to the stock options held by senior
management. These changes are intended to make the options more attractive as
forms of compensation. Similar changes to executive stock options have been made
in recent periods by other publicly-held companies that, like North Fork,
emphasize stock-based incentive compensation for management. Certain senior
executives are now permitted to transfer their compensatory stock options prior
to exercise, exclusively by gift and exclusively to members of their immediate
families. This feature provides executives with additional flexibility in their
estate planning. Additionally, senior executives are now permitted, when they
exercise their stock options by delivery of previously owned shares of Common
Stock, to direct the Company to defer until some later date the actual delivery
to the executives of the new shares of Common Stock otherwise deliverable to
them upon exercise. In appropriate cases, this deferred delivery feature may
enable executives to exercise all their stock options currently while enjoying
the benefits of a tax-deferred compensation plan payable in Company Common
Stock. The Company added these new features to its executive stock program, with
the Committee's approval, in order to reinforce the executives' comfort with,
and commitment to, Company stock as a major component of long-term executive
compensation.
EXPANSION OF COMPENSATORY STOCK PLANS TO MORE EMPLOYEES. Another recent
change to long-term compensation policy that the Committee approves and supports
is the extension of stock-based incentive compensation to a broader group of
employees. In addition to the Company's 401(k) plan, which has been in place for
many years and which gives participating employees the opportunity to invest on
a tax-deferred basis in Company stock (as well as other investment options), the
Company recently implemented a more broadly-based compensatory stock program for
employees. Under this program, the Company has awarded stock options and shares
of restricted stock in the past two years to approximately 230 junior officers
and other selected employees. The Committee believes that stock awards will
prove equally as effective in motivating this broader group of employees as has
been the case with senior executives. The New Stock Plan adopted at year-end
1998 authorizes awards to this broader
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group of employees as well as to management. However, the shares of restricted
stock awarded to the broader group of employees will not have the
retirement-based vesting feature discussed above but will vest over shorter
periods, and the stock options awarded to the broader group will not have the
special features discussed above that have recently been added to executives'
stock options (i.e., the reload feature, transferability prior to exercise, and
deferred delivery of option stock).
TAX DEDUCTIBILITY OF CERTAIN PAYMENTS
Under a provision of the Internal Revenue Code, Section 162(m),
publicly-traded companies are denied a tax deduction for compensation exceeding
$1 million paid to any of the top executives, subject to certain exemptions. The
Company's Bonus Plan has been designed so that bonuses awarded thereunder to
executives qualify for an exemption from this statute and remain tax deductible
to the Company. In addition, stock options granted under some of the Company's
older stock plans also may be exempt from the restrictions of Section 162(m),
such that the compensation related to stock options granted to top executives
under these plans may remain tax deductible to the Company. Thus, some of the
few shares remaining under these older plans may be reserved for future grants
of options to the Company's most senior officers. The Committee intends to work
with the Board to ensure that compensation paid to senior executives remains tax
deductible, to the extent practicable.
YEAR-END 1998 COMMITTEE REVIEW OF EXECUTIVE COMPENSATION
The Committee's review of executive compensation at the end of 1998 was
primarily influenced by the Company's excellent financial performance during the
year. Yet again in 1998, North Fork's earnings levels far exceeded industry
averages and also exceeded the Company's own earnings levels achieved in prior
years, which were themselves excellent.
North Fork continues to be one of the best performers nationwide in the
banking industry, and to be widely recognized as such. Recent reviews of the 50
largest commercial bank holding companies in the United States (North Fork was
the 48th largest at year-end, measured by total assets) reveal that the Company
was the top-rated institution in several key performance areas in 1998 and among
the highest-rated in many others. At year-end, several industry analysts issued
a "buy" recommendation for the Common Stock, on the strength of the Company's
consistently exceptional performance.
Return on average equity for 1998 was 25.2% and return on average assets
was 2.04%, excluding restructuring charges related to acquisitions. These
earnings ratios solidified North Fork's position as one of the top-earning banks
of any size in the United States.
All other measures of financial performance showed gains as well. The
Company substantially improved asset quality in 1998. The ratio of
non-performing loans to total loans decreased markedly, from .66% to .27%, and
the coverage ratio (allowance for loan losses as a percentage of non-performing
loans) was 470% at year-end. By each measure, North Fork was among the leaders
in the banking industry. At the same time that its asset quality was improving,
the Company also managed to defy the general industry trend in 1998 and improve
its net interest margin to 4.48 percent, 6 basis points above the prior year's
margin.
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Most impressively, the Company's efficiency ratio, which for several years
has been among the nation's best, improved yet again. For 1998, North Fork's
core efficiency ratio was 35.03%. According to a report released at year-end by
the bank analysis firm Keefe, Bruyette and Woods, this was the best efficiency
ratio for any of the 50 largest commercial bank holding companies in the United
States.
The companion of efficiency is employee productivity, and here, too, the
Company excelled in 1998. For the year, the ratio of net income to compensation
expense, excluding non-recurring items, was 258%. The Company believes, based on
the information available to it from a number of sources, that this employee
productivity ratio substantially exceeded that attained by any of the other 50
largest bank holding companies in the United States in 1998.
The Committee notes that the Company achieved this stellar financial record
while continuing its multi-year history of significant and efficient expansion.
During 1998, North Fork completed the acquisition and successful integration of
Home Federal Savings Bank, a thrift institution with $3.3 billion in assets and
branches located throughout the New York City metropolitan area. By year-end,
all projected cost savings for this non-dilutive transaction, which closed in
the first quarter of the year, had been fully realized. Also during the year the
Company completed its first acquisition of an investment firm, with the June
1998 purchase of Amivest Corporation, an asset management company. As a result
of the Amivest acquisition, the Company doubled the dollar amount of assets
under management.
The Company's capital position remains strong, as internally-generated
equity has more than kept pace with asset growth, notwithstanding a 70 percent
increase from 1997 to 1998 in per share cash dividends (including the special
cash dividend of $.15 per share declared in the fourth quarter of 1998). The
Company also commenced a stock repurchase program at the end of 1998, as
management and the Board continue to implement strategies to strengthen per
share returns and ensure that stockholder equity is suitably leveraged.
Like other commercial banks, including many other top performing banks, the
Company saw the price of its Common Stock fluctuate sharply over the past twelve
months, mirroring upheavals in the broader market. Nevertheless, from year-end
1997 to year-end 1998 the market price of the Common Stock increased by 6.39
percent, adjusted for a 3-for-2 stock split in May 1998. This gain represents a
better-than-average market performance for the Company's stock as against the
Company's peer group, and is particularly impressive when considered against the
exceptional market performance of the Company's Common Stock in the several
preceding years. At December 31, 1998, the Common Stock was trading at more than
400% of its book value per share, reflecting the market's esteem for the
Company's earnings power and the consistent performance of North Fork
management. Thus, the all-in return on the Company's stock during 1998,
including the increased dividend pay-out, is viewed as a success by the
Committee, especially in light of the serious erosion experienced by many bank
stocks and bank stock indices over the same period.
In summary, 1998 was another excellent year for North Fork. For their
efforts in leading the Company to its impressive performance, the senior
executives deserve to be commended and rewarded. The Committee has determined
that the executives should receive increases in their over-all compensation, as
detailed below.
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Salary
With the Committee's support, the four top executives received salary
increases at year-end 1998 ranging from 14 percent to 25 percent over their
prior salaries. In concluding that increases were appropriate, the Committee was
particularly influenced by the Mercer analysis obtained during the year,
discussed earlier in this report under "Executive Compensation Policy." The
Committee also observes that the executive team did not receive general salary
increases at the end of 1997, although that too was an excellent year for the
Company. It remains the Committee's position that the incentive components of
executive compensation should be emphasized more than cash salary, and the
Summary Compensation Table in the proxy statement and the information contained
in the Mercer analysis indicate that incentive compensation is the dominant form
of executive compensation at North Fork.
Annual Incentive Compensation
In light of the Company's excellent earnings record for 1998, annual
bonuses paid to the senior executives at year-end under the Bonus Plan increased
substantially over the prior year. The increases in bonuses ranged from 18% to
33%. Even these increased bonus amounts, however, did not equal the maximum
bonus amounts that might have been paid to the senior executives under the
objective formula set forth in the Bonus Plan. Utilizing the discretion given it
under the plan, the Committee made downward adjustments from the maximum bonus
amounts determined under the plan's objective formula. The bonus amounts
actually paid to the top executives for 1998 are identified in the Summary
Compensation Table.
Long-Term Incentive Compensation
The Committee has traditionally conducted a year-end review of long-term
compensation for executives. In 1998, the Committee was able to supplement its
review with the information and recommendations set forth in the Mercer
analysis. As a result of its review, the Committee determined at year-end to
make new grants of stock-based awards to senior management. Most of these awards
were made under the Company's new 1998 Stock Compensation Plan, discussed under
"Components of Executive Compensation -- Long-Term Incentive Compensation; New
Stock Plan," above. The four executives listed in the Summary Compensation Table
received stock-based awards (options and restricted stock) at year-end for an
aggregate of 185,000 shares. Although these awards were identical, both in types
of awards and numbers of shares per award, to the awards received by each of
these executives at the end of 1997, the number of shares per award was not
adjusted for the intervening 3-for-2 stock split in May 1998. Thus, the
grant-date value of the 1998 awards received by the executives was lower than
the grant-date value of the awards received by them at year end 1997.
In the first half of 1998, the Committee elected to approve reload option
exercises by the executives. As a result, when the executives completed
stock-for-stock exercises of their outstanding options in April 1998, they
received new reload options from the Company. Information on these new reload
options is set forth separately in the Option Grant table in the proxy
statement.
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CHANGE-IN-CONTROL ARRANGEMENTS AFFECTING EXECUTIVE OFFICERS
The Committee approves of the Company's traditional policy of not extending
long-term employment agreements to executive officers under normal
circumstances. Only in the context of certain acquisitions has the Company
varied from this policy, by occasionally agreeing to give employment contracts
to officers of an acquired bank, generally in replacement of their pre-existing
contracts with the acquired bank. Of the named executive officers in the Summary
Compensation Table, only Vice Chairman O'Brien is currently serving under an
employment agreement with the Company, which replaces the agreement he had with
North Side Savings Bank prior to the Company's acquisition of North Side at
year-end 1996.
On the other hand, the Committee believes that the long-term interests of
stockholders are well served by extending to senior management certain
protections in the event a change-in-control of the Company should occur in the
future. In approving these arrangements, the Committee has sought to align
management's interest with that of 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 and for the
optimum price.
The Company's change-in-control program for senior management involves two
elements, change-in-control agreements and a Performance Plan, each of which is
discussed in more detail below.
The Committee does not believe that management will act to protect its own
positions or interests at stockholder expense. Nor is the Committee aware of any
current meaningful offers to acquire the Company or discussions or negotiations
regarding such an acquisition.
Change-in-Control Agreements
Several years ago, the Company entered into change-in-control agreements
with Company executives Kanas, Bohlsen and Healy. The Company entered into a
similar change-in-control agreement with Company executive O'Brien at year-end
1996, when North Fork acquired North Side Savings Bank, of which Mr. O'Brien was
President and Chief Executive Officer. These change-in-control agreements, which
are fairly standard in form and substance, 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 the heading,
"Agreements With Executive Officers."
Performance Plan
In 1994, the Company adopted a Performance Plan. Under this Plan, if the
Company is acquired in a change-in-control transaction that produces an
above-average return to the Company's stockholders, the senior executives of the
Company as well as junior officers and other salaried employees whose services
are important to the accomplishment of the transaction will be entitled to
receive a special, one-time cash distribution payable out of a special
performance pool. The availability and size of the performance pool will depend
upon the level of financial success achieved by the Company in connection with
the acquisition, measured against pre-established, objective performance
targets. No pool will be funded or distributed in connection with any
acquisition of the Company that does not exceed the
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industry average for similar acquisition transactions in the period in question,
using as a basis of comparison the ratio of the acquisition price paid to book
value.
The Committee sets objective financial performance targets under the
Performance Plan at the end of each calendar year. If and to the extent that the
objective targets are met in connection with any change in control of the
Company that is first announced in the ensuing year, at closing of the
transaction the performance pool will be funded and distributed. Once
established for a particular year, the performance targets may not later be
altered or canceled. The basic limitation under the Performance Plan is that no
performance pool amounts will be funded or distributed in connection with a
change in control except upon attainment of above-average financial returns for
stockholders in that transaction. The maximum size of any performance pool
distributable under the Performance Plan upon a change in control is 3 percent
of the Company's market capitalization at the time the change in control is
completed, including in market capitalization the premium paid to the Company's
stockholders in the transaction. Once a performance pool is distributed, the
Performance Plan terminates.
Distributions of the performance pool 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 by the Committee on
a year-to-year basis. Tranche 2 will consist of other officers who have
contributed to the success of the transaction as determined by the Committee.
Tranche 3 will include all other employees of the Company whose contributions to
the transaction's success are deemed significant by the Committee. The
participants in Tranche 3 may receive up to, but not more than, 10 percent of
any performance pool. The Committee may determine, on an ongoing basis, how the
remaining portion of the pool is to be divided between Tranches 1 and 2.
Currently, the Committee has decided that 75 percent of any performance pool
payable in 1999 would be distributed to the Tranche 1 executives, who for 1999
will be the four executives named in the Summary Compensation Table. The precise
percentage allocations among the participants in any specific tranche would be
determined by the Committee at some point prior to closing. Under the
Performance Plan, the Chief Executive Officer currently is entitled to receive
at least 30 percent of Tranche 1.
If the performance pool is distributable under the Performance Plan because
a change in control has occurred and the pre-established performance targets
have been satisfied, the entire pool must be distributed. Executives, officers
or employees of the Company selected to receive distributions from the
performance pool need not resign or retire in order to receive their
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 1999, the Committee
selected as a benchmark for measuring any completed change-in-control
transaction that may be first announced in 1999, 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 book value of the Company's Common Stock
that exceeds the median multiple of sale price to book value in the index, a
performance pool will be funded upon completion of the transaction. The size of
the pool would depend
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on the extent to which the multiple in the Company's transaction exceeded the
median multiple, ranging from a performance pool equaling 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 90th
percentile 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 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. 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 believes that much of the credit for the Company's excellent
financial performance in recent years belongs to CEO John Adam Kanas. The
discipline required to increase earnings in a fiercely competitive commercial
banking environment starts at the top. North Fork's industry-leading efficiency
and employee productivity ratios are a testament, the Committee feels, to Mr.
Kanas's ability to maintain discipline and instill dedication throughout the
organization.
The Committee also recognizes Mr. Kanas's key role in the success of the
Company's expansion campaign in recent years. Over the past decade, the Company
has increased tenfold in size, principally due to a series of acquisitions of
banks, thrift institutions and securities firms. The Committee notes that every
one of these acquisitions has been non-dilutive to pre-existing stockholders, as
the cost savings projected for each have been achieved within the targeted time
frames. The resulting North Fork franchise, which now extends throughout Long
Island and the New York City metropolitan area and into Connecticut, is an
enviable one. The Company is well positioned for the future, both in terms of
further expansion and the protection and enhancement of stockholder value.
Mr. Kanas has been acclaimed in the industry press for this dual
achievement of unmatched efficiency and strategic growth, and justly so. The
Committee further observes that he leads by example. The demands in recent years
on the time and effort of Mr. Kanas and the other members of his senior
management team have been extraordinary, and they have responded. His (and
their) overall compensation in recent years, although above industry norms, has
been earned. The Committee notes that, when compared to management at the other
top performing banks in the Company's peer group (those other banks in the 90th
percentile of financial performance), Mr. Kanas and his senior officers are not
overcompensated, in terms of either cash compensation or incentive-based pay.
For all the reasons cited above, the Committee recommended to the full
Board at year-end 1998 that Mr. Kanas's salary be increased by 18% (and it was)
and determined that the cash bonus actually
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paid to him under the Bonus Plan, within the objectively determined plan
maximum, would be increased by 26% over his 1997 bonus. The Committee also made
year-end awards to Mr. Kanas of options to acquire 30,000 shares and 40,000
shares of restricted stock, the same number and type of stock awards given him
at year-end 1997. However, the number of shares per award was not adjusted for
the intervening 3-for-2 stock split in May 1998, and therefore the grant-date
value of his 1998 stock awards was lower than the value of his 1997 awards.
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 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 as defined 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 such as the amounts of insurance premiums paid on their behalf by
the Company which is included in column (i) of the Summary Compensation Table.
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 on a tax-deferred basis and 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
and Company matching contributions, both made to a secular trust.
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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. Each of the named executive officers in the Summary Compensation Table
on page 8 is covered under the SERP.
Based upon their current covered compensation and assuming retirement at
normal retirement age (65), executive officers Kanas, Bohlsen, O'Brien and Healy
would receive under the Retirement Plan and the SERP combined annual benefit
payments of approximately $296,800, $64,400, $174,100 and $50,900, respectively.
TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS
AND ASSOCIATED PERSONS
Since January 1, 1998, 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 North Fork 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 collectibility 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 North
Fork Bank as of December 31, 1998, as a non-accrual, past due, restructured or
potential problem loan.
STOCKHOLDER PROPOSALS
The Company may consider a stockholder's proposal for inclusion in the
Company's proxy materials for the 2000 Annual Meeting of Stockholders only if
such proposal is received in writing by the Secretary of the Company at the
Company's principal executive offices no later than November 25, 1999 and meets
the other requirements established by the Securities and Exchange Commission for
stockholder proposals. Please address your proposals to: Ms. Aurelie S. Graf,
Corporate Secretary, North Fork Bancorporation, Inc., 275 Broad Hollow Road,
Melville, New York 11747.
Under the By-laws of the Company, any stockholder who wishes to bring a
matter before the annual meeting of stockholders must deliver a written notice
to the Secretary of the Company not less than 45 days nor more than 90 days
before the anniversary date of the day that proxy materials were first mailed
for the prior year's annual meeting of stockholders, provided the actual date of
the annual meeting of stockholders is within 30 days of the anniversary date of
the prior year's annual meeting. The written notice must contain the name and
record address of the stockholder submitting the proposal, a brief description
of the proposal sought to be raised at the meeting, the number of shares of
Company stock beneficially owned by the proposing stockholder (who must be a
record holder of Company stock both on the day the stockholder gives written
notice of the proposal and on the record date for the meeting) and certain other
information specified in the By-laws of the Company. Failure to comply with this
advance notice requirement will preclude the stockholder from submitting the
proposal to the annual meeting of stockholders. For the 2000 Annual Meeting of
Stockholders, such written notice must be given not later than February 8, 2000,
and not earlier than December 25, 1999. In addition, the
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Company's By-laws specify procedures for a stockholder to submit a nomination
for director at the annual meeting of stockholders. A copy of the relevant
sections of the By-laws may be obtained from the Corporate Secretary upon
request. Please note that the requirements contained in this paragraph relate
only to matters that a stockholder may wish to bring before an annual meeting of
stockholders and are independent from the requirements of the Securities and
Exchange Commission to have a stockholder proposal included in the Company's
proxy statement as discussed in the preceding paragraph.
INDEPENDENT AUDITORS
KPMG, LLP, Certified Public Accountants, were the independent auditors of
the Company for the year ended December 31, 1998, and have also been selected to
serve as auditors for 1999. Representatives of KPMG, LLP 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 to the extent permitted under applicable law.
By Order of the Board of Directors
[/s/ Aurelie S. Graf]
AURELIE S. GRAF
Corporate Secretary
Date: March 25, 1999
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NORTH FORK BANCORPORATION, INC.
P PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
R This proxy is solicited on behalf of the Board of Directors
O April 27, 1999
X
Y
The undersigned stockholders(s) of North Fork Bancorporation, Inc., a
Delaware corporation (the "Company"), hereby appoint(s) James H. Rich, 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 that the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Islandia Marriott Long Island, 3635 Express Drive
North, Hauppauge, New York 11788 at 10:00 a.m. on Tuesday, April 27, 1999, 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 to the Board of Directors
for terms to expire at the 2002 Annual Meeting (CHANGE OF ADDRESS)
of Stockholders
Nominees: John Bohlsen, Thomas M. O'Brien and _____________________
Patrick E. Malloy, III _____________________
(Check one box only for all nominees) _____________________
(Over)
This proxy will be voted in the manner directed herein by the undersigned. If no
direction is given, this proxy will be voted FOR proposal 1, 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 to the extent
permitted under applicable law.
SEE REVERSE SIDE
<PAGE> 35
X Please mark your
votes as in this
example.
The Board of Directors recommends a vote FOR Proposal 1
FOR WITHHOLD
1. Election of Directors
(see reserve) / / / /
WITHHOLD for the following only. Write name(s) below.
- -------------------------------------------------------------------------------
Receipt of the Notice of Annual Meeting of
Stockholders and accompanying Proxy
Statement is hereby acknowledged.
Please indicate whether you
plan on attending the Meeting
I PLAN TO ATTEND I DO NOT PLAN CHANGE OF ADDRESS
TO ATTEND ON RESERVE SIDE
/ / / / / /
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.
-------------------------------------------
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SIGNATURE(S) DATE
