<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VALLEY NATIONAL BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
VALLEY NATIONAL BANCORP
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
VALLEY NATIONAL BANCORP
1445 VALLEY ROAD
WAYNE, NEW JERSEY 07470
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, MARCH 22, 1994
------------------------
Notice is hereby given that the Annual Meeting of Shareholders of Valley
National Bancorp (the "Corporation") will be held at the Radisson Hotel,
formerly the Sheraton Fairfield Hotel, 690 Route 46 East, Fairfield, New Jersey,
on Tuesday, March 22, 1994 at 3:00 p.m. for the purpose of considering and
voting upon the following matters:
1. The election of the 16 persons named in the accompanying Proxy
Statement to serve as directors of the Corporation for the ensuing year.
2. Approval of amendments (the "Amendments") to the Corporation's
Long-Term Stock Incentive Plan (the "Plan") approved by the shareholders on
March 28, 1989 pursuant to which the Corporation may issue incentive stock
options, nonqualified stock options, stock appreciation rights and
restricted stock awards for up to 1,577,438 shares of the Corporation's
common stock to officers and key employees of the Corporation and Valley
National Bank (the "Bank").
3. Such other business as shall properly come before the Meeting.
Shareholders of record at the close of business on February 18, 1994 are
entitled to notice of and to vote at the meeting. Whether or not you contemplate
attending the Meeting, it is suggested that the enclosed proxy be executed and
returned to the Corporation. You may revoke your proxy at any time prior to the
exercise of the proxy by delivering to the Corporation a later dated proxy or by
delivering a written notice of revocation to the Corporation prior to or at the
Meeting.
By Order of the Board of Directors
Gerald H. Lipkin
Chairman of the Board
March 1, 1994
<PAGE> 3
VALLEY NATIONAL BANCORP
1445 VALLEY ROAD
WAYNE, NEW JERSEY 07470
------------------------
PROXY STATEMENT
DATED MARCH 1, 1993
------------------------
GENERAL PROXY STATEMENT INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Valley National Bancorp (the "Corporation" or the
"Company") of proxies for use at the Annual Meeting of Shareholders of the
Corporation to be held at the Radisson Hotel, formerly the Sheraton Fairfield
Hotel, 690 Route 46 East, Fairfield, New Jersey, on Tuesday, March 22, 1994, at
3:00 p.m. local time. This Proxy Statement is first being mailed to shareholders
on approximately March 1, 1994.
OUTSTANDING SECURITIES AND VOTING RIGHTS
The record date for determining shareholders entitled to notice of and to
vote at the Annual Meeting is February 18, 1994. Only shareholders of record as
of that date will be entitled to notice of, and to vote at, the Annual Meeting.
On the record date 24,427,274 shares of common stock, no par value, were
outstanding and are eligible to be voted at the Annual Meeting. Each share of
stock is entitled to one vote.
All shares represented by valid proxies received pursuant to this
solicitation will be voted in favor of the election of the 16 nominees for
director who are named in this Proxy Statement and the approval of the proposed
amendments (the "Amendments") to the Corporation's Long-Term Stock Incentive
Plan (the "Plan"), unless the shareholder specifies a different choice by means
of his proxy or revokes the proxy prior to the time it is exercised. Should any
other matters properly come before the Annual Meeting, the persons named as
proxies will vote upon such matters according to their discretion unless the
shareholder otherwise specifies in the proxy.
At the meeting, inspectors of election will tabulate both ballots cast by
shareholders present and voting in person, and votes cast by proxy. Under
applicable state law and the Corporation's certificate of incorporation and
bylaws, abstentions and broker non-votes are counted for purposes of
establishing a quorum but otherwise do not count. Generally, the approval of a
specified percentage of shares voted at a shareholder meeting is required to
approve a proposal and thus abstentions and broker non-votes have no effect on
the outcome of a vote. At the Annual Meeting, a plurality of the shares voted is
required to elect a director. Approval to the Amendments to the Plan requires
the affirmative vote of a majority of those shares present at the annual meeting
and entitled to vote. Where state law or the Corporation's certificate of
incorporation or bylaws require that the matter voted upon be approved by a
specified percentage of the outstanding shares, then abstentions and broker
non-votes have the same effect as negative votes.
REVOCABILITY OF PROXIES
Any shareholder giving a proxy has the right to attend and vote at the
Annual Meeting in person. A proxy may be revoked prior to the Annual Meeting by
delivery to the Corporation prior to the Meeting of a later-dated proxy or by
delivery of a written revocation to Alan D. Eskow, Secretary of the Corporation,
at the administrative headquarters of the Corporation, 1445 Valley Road, Wayne,
New Jersey 07470, if it is received prior to the Meeting. A proxy may be revoked
at the Annual Meeting by filing a later-dated proxy or a written notice of such
revocation with the Secretary of the Meeting prior to the voting of such proxy.
<PAGE> 4
SOLICITATION OF PROXIES
This proxy solicitation is being made by the Board of Directors of the
Corporation and the cost of the solicitation will be borne by the Corporation.
In addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph by officers, directors and employees of the Corporation
who will not be specially compensated for such solicitation activities.
Arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries for forwarding solicitation materials to the beneficial owners
of shares held of record by such persons and the Corporation will reimburse such
persons for their reasonable expenses incurred in that connection.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Corporation's by-laws authorize a minimum of 5 and a maximum of 25
directors, but leave the exact number to be fixed by the Board of Directors. The
Board has fixed the number of directors at 16.
It is intended that the proxies solicited by the Board of Directors will be
voted for the election of the 16 persons named below (unless the shareholder
otherwise directs). If, for any reason, any nominee becomes unavailable for
election, the proxies solicited by the Board of Directors will be voted for such
substitute nominees as are selected by the Board of Directors unless the Board
has reduced its membership prior to the Meeting. The Board has no reason to
believe that any of the named nominees is not available or will not serve if
elected.
Each candidate for director has been nominated to serve a one year term
until the 1995 Annual Meeting of the Corporation and thereafter until his
successor shall have been duly elected and shall have qualified. The following
table sets forth the names and ages of the Board's nominees for election, the
nominees' position with the Corporation (if any), the principal occupation or
employment of each nominee for the past five years and the period during which
each nominee has served as a director of the Corporation. The nominee's prior
service as a director includes prior service as a director of Valley National
Bank (the "Bank").
<TABLE>
<CAPTION>
NAME, AGE AND POSITION PRINCIPAL OCCUPATIONS DURING DIRECTOR
WITH CORPORATION PAST FIVE YEARS SINCE
- ---------------------------------------- -------------------------------------------- --------
<S> <C> <C>
Pamela Bronander, 37.................... Executive Vice President, Scandia Packaging 1993
Machinery Co. (designs & builds packaging
machinery)
Joseph Coccia, Jr., 64.................. Coccia Realty, Inc. (real estate brokers); 1986
previously, Coccia Insurance Associates,
Inc. (insurance brokers)
Austin C. Drukker, 60................... President, Press Publications, Inc. 1973
(newspaper); adjunct professor, Montclair
State College; formerly President-Publisher,
The Herald-News (newspaper)
Thomas P. Infusino, 72.................. Chairman and Chief Executive Officer, 1973
Wakefern Food Corp. (supermarket
distribution centers); also President,
Nutley Park Shoprite (supermarket)
Gerald Korde, 50........................ President, Birch Lumber Company, Inc. 1989
(wholesale and retail lumber distribution
company)
Gerald H. Lipkin, 53
Chairman and Chief Executive
Officer............................... Chairman and Chief Executive Officer of the 1986
Corporation and the Bank
Robert L. Marcalus, 73.................. Chairman and Chief Executive Officer, Marcal 1967
Paper Mills, Inc. (paper products
manufacturer and distributor)
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NAME, AGE AND POSITION PRINCIPAL OCCUPATIONS DURING DIRECTOR
WITH CORPORATION PAST FIVE YEARS SINCE
- ---------------------------------------- -------------------------------------------- --------
<S> <C> <C>
Robert E. McEntee, 61................... Management Consultant; formerly, President, 1979
Russ Berrie and Company, Inc. (marketer of
gift items)
Sam P. Pinyuh, 61
Executive Vice President.............. Executive Vice President of the Corporation 1990
and the Bank; formerly First Senior Vice
President of the Corporation and the Bank
Rubin Rabinowitz, 74.................... Chairman, American Dyestuff Corporation 1981
(distributor and exporter of colorants);
formerly, Chairman, Atlantic Industries,
Inc. (chemical manufacturer and distributor)
Robert Rachesky, 65..................... Chairman, Fujicolor Photo Services, Inc. 1982
(photo developing and supply company);
formerly President, Union Photo Co. (photo
developing and supply company)
Barnett Rukin, 53....................... Chairman and Chief Executive Officer, Hudson 1991
Transit Lines, Inc. (operator of Short Line
Bus Company)
Peter Southway, 59
President and Chief Operating
Officer............................... President and Chief Operating Officer of the 1978
Corporation and the Bank
Richard F. Tice, 64..................... Partner, Tice Farms (farming and real 1982
estate)
Leonard Vorcheimer, 51.................. Principal, L.J.V. Enterprises (investment 1992
concern); formerly Vice President, Kings
Supermarkets, Inc.
Joseph L. Vozza, 64..................... President, Joseph L. Vozza Administrative 1982
Services, Inc. (insurance consultant/
administrator); formerly President, Joseph
L. Vozza Agency, Inc. (insurance broker);
and President, Public Entity Risk Management
Administration Corp. (administrator of self
insurance pools for public entities)
</TABLE>
Consistent with the Corporation's retirement policy, director Paul M.
Densen is not standing for election in 1994. Pamela Bronander was appointed as a
director in December 1993.
Robert L. Marcalus is a director of Delaware Otsego Corp., a publicly
traded company. Except for Mr. Marcalus, no other director of the Corporation is
also a director of any company registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or any company registered as an investment
company under the Investment Company Act of 1940.
Peter Southway is the father of Peter John Southway. Both are executive
officers of the Corporation.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation held 14 meetings during 1993. All
the directors of the Corporation also serve as directors of the Bank.
The Corporation has a standing Audit and Examining Committee. The Committee
reviews significant audit and accounting principles, policies and practices,
meets with the internal auditors of the Bank, reviews the report of the annual
directors' examination of the Corporation conducted by the outside auditors, and
reviews examination reports and other reports of federal regulatory agencies.
The Committee consists of the
3
<PAGE> 6
following directors: Messrs. Densen (Chairman), Rachesky (Vice Chairman),
Drukker, Korde, McEntee, Tice and Vorcheimer. The Committee met 4 times during
1993.
The Corporation also maintains standing Nominating and Compensation
committees. The Compensation Committee sets general compensation levels for all
officers and employees of the Corporation and the Bank and sets specific
compensation for executive officers. The Committee also administers the
Long-Term Incentive Plan and makes awards thereunder. The Committee, which met 5
times in 1993, consists of Messrs. McEntee (Chairman), Marcalus (Vice Chairman),
Drukker, Korde and Rachesky.
The Nominating Committee is responsible for nominating directors to serve
on the board of directors of the Corporation and the Bank. The Committee
consists of Messrs. Infusino (chairman), Coccia, Densen, Drukker, Korde, Lipkin,
Marcalus, Rabinowitz and Rachesky. The Committee met 1 time during 1993.
During 1993 each director attended at least 75% or more of the meetings of
the Board of Directors of the Corporation and of each committee of the Board on
which he served.
STOCK OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SHAREHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Corporation's common stock, without par value, as of January
31, 1994, by each director, by each executive officer of the Corporation for
whom individual information is required to be set forth in this Proxy Statement
under rules of the Securities and Exchange Commission (the "Named Officers"),
and by directors and all executive officers as a group. The Corporation knows of
no person or group which beneficially owns 5% or more of the Corporation's
common stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NUMBER OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OF CLASS(2)
- --------------------------------------------------------------- --------------------- -----------
<S> <C> <C>
Directors and Named Officers:
Pamela Bronander............................................... 2,107(3) 0.01
Joseph Coccia, Jr.............................................. 149,839(4) 0.59
Paul M. Densen................................................. 152,224(5) 0.60
Austin C. Drukker.............................................. 49,706(6) 0.20
Robert Farrell................................................. 5,998(7) 0.02
Thomas P. Infusino............................................. 122,881(8) 0.49
Gerald Korde................................................... 514,644(9) 2.04
Gerald H. Lipkin............................................... 114,888(10) 0.46
Robert L. Marcalus............................................. 252,575(11) 1.00
Robert E. McEntee.............................................. 31,312(12) 0.12
Sam P. Pinyuh.................................................. 43,316(13) 0.17
Rubin Rabinowitz............................................... 139,115(14) 0.55
Robert Rachesky................................................ 145,695(15) 0.58
Barnett Rukin.................................................. 9,417(16) 0.04
Peter Southway................................................. 88,963(17) 0.35
Peter John Southway............................................ 10,803(18) 0.04
Richard F. Tice................................................ 104,418(19) 0.41
Leonard Vorcheimer............................................. 11,962 0.05
Joseph L. Vozza................................................ 24,968 0.10
Directors and Executive Officers as a group (34 persons)....... 2,020,009(20) 8.02
</TABLE>
NOTES
(1) Beneficially owned shares include shares over which the named person
exercises either sole or shared voting power or sole or shared investment
power. It also includes shares owned (i) by a spouse, minor children or by
relatives sharing the same home, (ii) by entities owned or controlled by
the named person and (iii) by other persons if the named person has the
right to acquire such shares within 60 days by the
4
<PAGE> 7
exercise of any right or option. Unless otherwise noted, all shares are
owned of record and beneficially by the named person.
(2) The number of shares of common stock used in calculating the percentage of
the class owned includes 24,425,316 shares of common stock outstanding as
of January 31, 1994, 698,911 shares purchasable pursuant to warrants which
are immediately exercisable, and 75,736 shares purchasable pursuant to
options exercisable within 60 days of January 31, 1994.
(3) This total includes 374 shares held as custodian for children.
(4) This total includes 148,018 shares held by Mr. Coccia jointly with his
wife, 200 shares held by a corporation co-owned by Mr. Coccia and 1,621
shares purchasable pursuant to warrants which are immediately exercisable.
(5) This total includes 9,848 shares held by Mr. Densen's wife in her name, and
30,000 shares held by trusts and foundations which Mr. Densen controls.
(6) This total includes 11,314 shares held by a trust for which Mr. Drukker is
a trustee and of which he is a beneficiary.
(7) This total includes 663 shares held in an IRA for Mr. Farrell's wife, 1,219
shares held in an IRA for Mr. Farrell, 1,563 restricted shares and 1,250
shares purchasable pursuant to stock options exercisable within 60 days,
but not the 7,250 shares potentially available in the future by exercise of
his qualified stock options not exercisable within 60 days of January 31,
1994.
(8) This total includes 14,090 shares held in the name of Mr. Infusino's wife.
(9) This total includes 78,843 shares held in the name of Mr. Korde's wife,
15,496 shares held jointly with his wife, 157,229 shares held by his wife
as custodian for his children, 76,821 shares held by a trust of which Mr.
Korde is a trustee and 48,367 shares held by a profit sharing plan which
Mr. Korde controls.
(10) This total includes 27,059 shares held in the name of Mr. Lipkin's wife,
6,042 shares held jointly with his wife, 5,050 shares held jointly with his
brother and 4,322 shares held by self-directed IRA plans in which Mr.
Lipkin and his wife are beneficiaries. This total also includes Mr.
Lipkin's 13,100 restricted shares and 18,862 shares purchasable pursuant to
options exercisable within 60 days, but not the 34,763 shares potentially
available in the future by exercise of his stock options not exercisable
within 60 days of January 31, 1994.
(11) This total includes 46,975 shares held in the name of Mr. Marcalus' wife
and 121,875 shares held by a corporation which Mr. Marcalus controls and of
which he is a major stockholder. Mr. Marcalus disclaims beneficial
ownership of his wife's shares.
(12) This total includes 29,937 shares held jointly with Mr. McEntee's wife and
1,375 shares held by Mr. McEntee in a self-directed Keogh plan.
(13) This total includes 13,267 shares held jointly with Mr. Pinyuh's wife,
3,650 restricted shares and 16,625 shares purchasable pursuant to options
exercisable within 60 days, but not the 13,325 shares potentially available
in the future by exercise of his stock options not exercisable within 60
days of January 31, 1994.
(14) This total includes 20,952 shares held in the name of Mr. Rabinowitz's wife
and 29,600 shares held by a trust of which Mr. Rabinowitz is co-trustee
under a will. Mr. Rabinowitz disclaims beneficial ownership of his wife's
shares.
(15) This total includes 20,538 shares held by self-directed IRA plans and
125,157 shares held by an annuity trust for which Mr. Rachesky is
co-trustee.
(16) This total includes 5,061 shares held by Mr. Rukin's wife as custodian for
their children.
(17) This total includes 6,695 shares held in the name of Mr. Southway's wife
and 2,131 shares held in self-directed IRA plans. This total also includes
Mr. Southway's 9,437 restricted shares and 21,687 shares purchasable
pursuant to options exercisable within 60 days, but not the 27,313 shares
potentially available in the future by exercise of his stock options not
exercisable within 60 days of January 31, 1994.
5
<PAGE> 8
(18) This total includes 308 shares held by Mr. Southway as custodian for his
child, 2,012 restricted shares and 5,750 shares purchasable pursuant to
stock options exercisable within 60 days, but not the 8,000 shares
potentially available in the future by exercise of his stock options
exercisable within 60 days of January 31, 1994.
(19) This total includes 29,193 shares held jointly with Mr. Tice's wife, 20,000
shares owned by a partnership of which Mr. Tice is a general partner, and
2,000 shares potentially available through the exercise of warrants.
(20) This total includes 45,178 shares owned by 15 executive officers who are
not directors or Named Officers, which total includes 11,562 shares
purchasable pursuant to options exercisable within 60 days. The total does
not include 252,972 shares held by the Bank's trust department over which
the Bank may have the right to exercise voting or investment discretion.
Since some directors serve on the Bank's trust committee or as trustees of
its pension plan, it may be argued that such directors have beneficial
ownership of such shares. However, the directors disclaim beneficial
ownership of such shares.
EXECUTIVE COMPENSATION
GENERAL
Executive compensation is described below in the tabular format mandated by
the Securities and Exchange Commission (the "SEC"). The letters in parentheses
under each column heading are the letters designated by the SEC for such
columns, and are provided to make inter-company comparisons easier. The absence
of any column designated by the SEC means that no compensation was paid or
earned which would be required to be described in such column.
SUMMARY COMPENSATION TABLE
The following table summarizes all compensation earned in the past three
years for services performed in all capacities for the Corporation and its
subsidiaries with respect to the Named Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
AWARDS
------------------------------------
ANNUAL COMPENSATION
(a) -------------------- (f) (g)
NAME AND RESTRICTED SECURITIES (i)
PRINCIPAL (b) (c) (d) STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) AWARD(S)(1)($) OPTIONS/SARS(2)(#) COMPENSATION(3)($)
- --------------------- ----- --------- -------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald H. Lipkin, 1993 390,000 325,000 143,093 19,687 7,075
CEO of the 1992 370,440 250,000 90,000 18,750 10,950
Corporation 1991 326,731 100,000 0 0 2,092
Peter Southway, 1993 350,000 250,000 105,437 13,750 7,075
President of the 1992 330,440 170,000 60,000 18,750 8,705
Corporation 1991 301,154 100,000 0 0 2,092
Sam P. Pinyuh, 1993 190,000 65,000 30,125 6,250 5,340
Executive Vice 1992 180,396 46,000 30,000 9,375 6,970
President of the 1991 165,039 18,000 0 0 2,092
Corporation
Peter John Southway, 1993 125,000 35,000 12,750 3,000 3,750
First Senior Vice 1992 110,242 30,000 14,250 2,500 4,318
President of the Bank 1991 96,308 13,000 12,623 3,750 900
Robert Farrell, First 1993 125,000 25,000 12,750 3,000 3,750
Senior Vice President 1992 110,242 30,000 14,250 2,500 3,317
of the Bank 1991 95,764 13,000 12,623 3,750 0
</TABLE>
6
<PAGE> 9
NOTES:
(1) All restricted stock awards lapse at the rate of 20% per year commencing
with the first anniversary from the date of grant. Upon a "change in
control" as defined in the plan, all restrictions on shares of restricted
stock will lapse. Dividends are credited on restricted stock at the same
time and in the same amount as dividends paid to all other common
shareholders. Credited dividends are accumulated and are subject to the
same restrictions as the underlying restricted stock. For Mr. Lipkin, this
represents awards of 5,938 shares in 1993 and 5,625 shares in 1992. As of
December 31, 1993, Mr. Lipkin held an aggregate of 13,100 shares of
restricted stock with a value of $309,488. For Mr. Peter Southway, this
represents awards of 4,375 shares in 1993 and 3,750 shares in 1992. As of
December 31, 1993, Mr. Peter Southway held an aggregate of 9,437 shares of
restricted stock with a value of $222,949. For Mr. Pinyuh, this represents
awards of 1,250 shares in 1993 and 1,875 shares in 1992. As of December 31,
1993, Mr. Pinyuh held an aggregate of 3,650 shares of restricted stock with
a value of $86,231. For Mr. Peter John Southway, this represents awards of
500 shares in 1993, 625 shares in 1992 and 938 shares in 1991. As of
December 31, 1993, Mr. Peter John Southway held an aggregate of 2,012
shares of restricted stock with a value of $47,534. For Mr. Farrell, this
represents awards of 500 shares in 1993, 625 shares in 1992 and 938 shares
in 1991. As of December 31, 1993, Mr. Farrell held an aggregate of 1,563
shares of restricted stock with a value of $36,926. All values in this
footnote are calculated using the stock price on December 31, 1993.
(2) While the Plan permits the awarding of stock appreciation rights ("SARs"),
no SARs have been granted since 1989. The amounts listed represent options
granted to the Named Officers in the form of qualified incentive stock
options or nonqualified stock options (but in either event granted at the
fair market value on the date of grant). Options become exercisable at the
rate of 20% per year beginning with the first anniversary from the date of
grant. Upon a "change in control" as defined in the plan, all options
become immediately and fully exercisable for a period of 60 days.
(3) All amounts shown in this column reflect employer contributions to a profit
sharing plan and 401(k) plan on behalf of the Named Officer. The profit
sharing plan was converted to a 401(k) plan in 1992.
OPTION GRANTS IN 1993
The following table shows the options granted to Named Officers in 1993,
and their potential value at the end of the option term, assuming certain levels
of appreciation of the Corporation's common stock. While the Plan permits the
Corporation to award stock appreciation rights ("SARs") and the SEC-mandated
column headings refer to SARs, the Corporation has not awarded any SARs since
1989.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
INDIVIDUAL GRANTS RATES OF STOCK
- --------------------------------------------------------------------------------------- PRICE
(b) (c) APPRECIATION FOR
NUMBER OF PERCENT OF (d) OPTION TERM(1)
SECURITIES TOTAL OPTIONS/ EXERCISE -----------------
UNDERLYING SARS GRANTED OR BASE (e)
(a) OPTIONS/SARS TO EMPLOYEES PRICE EXPIRATION (f) (g)
NAME GRANTED (#) IN FISCAL YEAR (#/SH) DATE 5% ($) 10% ($)
- ------------------------------ ------------- -------------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Gerald H. Lipkin.............. 19,687 17.8% 24.10 3/16/2003 298,383 756,162
Peter Southway................ 13,750 12.4% 24.10 3/16/2003 208,400 528,126
Sam P. Pinyuh................. 6,250 5.6% 24.10 3/16/2003 94,727 240,057
Peter John Southway........... 3,000 2.7% 25.50 10/29/2003 48,110 121,921
Robert Farrell................ 3,000 2.7% 25.50 10/29/2003 48,110 121,921
</TABLE>
7
<PAGE> 10
NOTE:
(1) The dollar amounts under these columns are the result of calculations at the
5% and the 10% rates set by the SEC and therefore are not intended to
forecast possible future appreciation, if any, of the Corporation's stock
price. Based upon 24,416,549 common shares outstanding as of December 31,
1993, all shareholders as a group would receive future appreciation of
$362,772,187 with 5% growth, and $919,335,947 with 10% growth, over a
10-year period. With 110,887 stock options granted to all employee
optionees (including but not limited to the Named Officers) in 1993,
employees as a group would receive $1,647,519 and $4,175,136 of the stock
appreciation (assuming 5% and 10% growth, respectively, over a 10-year
period), or 0.45% of what all shareholders as a group would receive.
AGGREGATED OPTION EXERCISES IN 1993 AND YEAR-END OPTION VALUES
The following table shows the options exercised by Named Officers in 1993,
the number of options remaining unexercised at year-end, and the value of
unexercised in-the-money options at year end.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
OPTIONS/SARS AT FY-END(#) SARS AT FY-END($)
SHARES ACQUIRED VALUE
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------ --------------- ----------- ---------------------------- -------------------------
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Gerald H. Lipkin........ 15,018 177,235 7,462/46,163 65,805/272,868
Peter Southway.......... 12,031 141,827 10,125/38,875 92,502/244,214
Sam P. Pinyuh........... 1,350 23,287 10,800/19,150 103,769/126,442
Peter John Southway..... 0 0 7,775/9,350 82,984/51,587
Robert Farrell.......... 0 0 1,250/7,250 8,028/24,498
</TABLE>
PENSION PLANS
BANK PENSION PLAN. The Bank maintains a non-contributory, defined benefit
pension plan (the "Pension Plan") for all eligible employees. The annual
retirement benefit under the Pension Plan is (i) 0.85 of 1% of the employee's
average final compensation up to the employee's average social security wage
base plus (ii) 1.15% of the employee's average final compensation in excess of
the employee's average social security wage base, (iii) multiplied by the years
of credited service (to a maximum of 35 years). Employees who were participants
in the Pension Plan on December 31, 1988, are entitled to the higher of the
foregoing or their accrued benefit as of December 31, 1988 under the terms of
the plan then in effect. An employee's "average final compensation" is the
employee's highest 5 year average of the employee's annual salary (excluding
bonuses, overtime pay and other special pay), i.e., the amount listed as
"Salary" in the Summary Compensation Table, subject to an annual compensation
limit of $235,840 received during the last 10 years of employment. Due to a
recent change in the tax laws, the annual compensation limit for the Pension
Plan will be reduced to $150,000 for the plan year starting in 1994.
8
<PAGE> 11
The following table shows the estimated annual retirement benefits from the
pension plan, assuming retirement at age 65 and a straight life annuity benefit,
for the compensation levels and years of credited service shown. Amounts shown
reflect the $235,840 limit on compensation and the $115,641 maximum benefit
payable and represent the benefits that could be paid from the qualified trust
during 1993. These limits are subject to annual cost of living increases but a
recent amendment to the tax law reduced the limit on compensation to $150,000
per year for plan years beginning after 1993. An employee may receive benefits
greater than those shown in the table below if (a) his accrued benefit as of
December 31, 1988 under the terms of the pre-1989 Plan is higher or (b) he is a
participant in the Benefit Equalization Plan described below.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
50,000 $ 7,603 $10,137 $12,672 $15,206 $17,740
100,000 $16,228 $21,637 $27,047 $32,456 $37,865
150,000 $24,853 $33,137 $41,422 $49,706 $57,990
200,000 $33,478 $44,637 $55,797 $66,956 $78,115
250,000 $36,794 $49,059 $61,324 $73,588 $85,852
300,000 $36,794 $49,059 $61,324 $73,588 $85,852
400,000 $36,794 $49,059 $61,324 $73,588 $85,852
450,000 $36,794 $49,059 $61,324 $73,588 $85,852
500,000 $36,794 $49,059 $61,324 $73,588 $85,852
</TABLE>
BENEFIT EQUALIZATION PLAN. Effective January 1, 1989, the Bank adopted a
Benefit Equalization Plan which provides retirement benefits in excess of the
amounts payable from the Pension Plan for certain highly compensated officers.
The benefits are calculated under the Pension Plan formula but without regard to
the compensation caps and other related limits imposed on the Pension Plan. In
general, officers of the Company who are members of the Pension Plan and who
receive annual compensation in excess of $145,000 are eligible to participate in
the Benefit Equalization Plan. The Compensation Committee of the Board of
Directors has the authority to determine, in its discretion, which eligible
officers will participate in the Benefit Equalization Plan. Effective January 1,
1989, Gerald Lipkin, Peter Southway and Sam Pinyuh became participants in the
Benefit Equalization Plan. No other officers presently participate.
The following table shows the estimated annual retirement benefits from the
Benefit Equalization Plan and qualified Pension Plans combined, assuming
retirement at age 65 in 1993 and a straight life annuity benefit, for the
compensation levels and years of credited service shown. The chart is calculated
using the average social security wage base and social security benefits in
effect during 1993.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
-----------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000 $26,499 $ 35,332 $ 44,165 $ 52,997 $ 61,830
$200,000 $35,874 $ 47,832 $ 59,790 $ 71,747 $ 83,705
$250,000 $45,249 $ 60,332 $ 75,415 $ 90,497 $105,580
$300,000 $54,624 $ 72,832 $ 91,040 $109,247 $127,455
$350,000 $63,999 $ 85,332 $106,665 $127,997 $149,330
$400,000 $73,374 $ 97,832 $122,290 $146,747 $171,205
$450,000 $82,749 $110,332 $137,915 $165,497 $193,080
$500,000 $92,124 $122,832 $153,540 $184,247 $214,955
</TABLE>
Gerald Lipkin, Peter Southway, Sam Pinyuh, Robert Farrell and Peter John
Southway have approximately 17, 35, 25, 3 and 15 years of credited service,
respectively, under the Pension Plan as of January 1, 1994, and, at age 65,
would have 29.1, 40.3, 28.4, 20.5 and 46.1 years of credited service,
respectively. (However, the maximum currently is 35 years of credited service.)
In 1993 the following persons received the compensation shown below for purposes
of determining their retirement benefits under the Pension Plan: Gerald Lipkin
$390,000; Peter Southway $350,000; Sam Pinyuh $190,000; Peter John Southway
$125,000;
9
<PAGE> 12
and Robert Farrell $125,000. Except as contained in the description of the plan
formulas above, the benefits listed in the tables are not subject to any
deduction for social security or other offset amounts.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
On June 6, 1986, the Bank and the Corporation entered into agreements
("Change in Control Agreements") with Gerald Lipkin and Sam Pinyuh. On December
10, 1991, the Bank and Corporation entered into an identical Change in Control
Agreement with Peter Southway and amended the Change in Control Agreements with
Messrs. Lipkin and Pinyuh to extend their expiration dates. The Change in
Control Agreements provide that the covered employees will be continued in their
employment by the Corporation for a three year period following any change of
control (as defined below), or until they die or reach normal retirement age.
During such period, the employee is to receive a base salary, bonus and fringe
benefits at least equal to those received prior to the change in control, with
base salary adjusted for inflation as measured by a metropolitan area Consumer
Price Index. After a change in control, the Corporation may terminate any
covered employee without further compensation only for cause or permanent
disability. If the employee is terminated without cause, or if he resigns for
good reason (defined as an adverse change in such employee's duties or
compensation), the Corporation must pay him the agreed upon compensation through
the end of the three-year period following the change of control. A change of
control will be considered to have taken place if 2/3 or more of the
Corporation's voting securities change hands due to a merger, consolidation or
sale of the Corporation or its shares or assets, or if as the result of a tender
offer, merger, consolidation, sale of assets, plan of acquisition, plan of
exchange, business combination or contested election, the persons who were
directors of the Corporation immediately before such transaction cease to
constitute a majority of the Board of Directors of the Corporation or any
successor to it. The Change in Control Agreements will expire on June 5, 1996,
provided that no change in control has occurred by that date.
On December 10, 1991, the Bank and the Corporation entered into severance
agreements (the "Severance Agreements") with Gerald Lipkin, Peter Southway and
Sam Pinyuh. The Severance Agreements provide that in the event the executive is
terminated without cause, he will be entitled to a lump sum payment equal to
twelve (12) months of his annual salary at the time of termination, plus a
prorated amount of the bonus paid to him in the previous year, based upon the
number of months of the current year during which he served before being
terminated. However, if the termination of employment is due to the executive's
death or disability, no severance payments will be made to Messrs. Southway or
Pinyuh beyond the standard payments under the Corporation's disability and life
insurance policies, as well as the pension plan. However, because Mr. Lipkin was
younger than the other two executives, his Severance Agreement provides
additional payments for death or disability to ensure that he or his wife
receives at least $50,000 a year less any pension benefits payable to Mr. Lipkin
or his wife from the Bank's pension plan.
The Corporation's Long Term Stock Incentive Plan (the "Plan") provides that
upon a "change in control" (as defined in the Plan) all restrictions on shares
of restricted stock granted under the Plan will lapse and all outstanding
options under the Plan will, for a period of 60 days, become immediately and
fully exercisable. With respect to all options which have been outstanding for
at least six months, the optionee may, during the 60-day period following the
change in control, surrender any option (or portion thereof) for a cash payment
in respect of each share covered by the option or portion thereof surrendered
equal to the excess over the option price of (i) in the case of an incentive
stock option, the fair market value of the common stock on the date of surrender
or (ii) in the case of a nonqualified option, the highest price at which the
common stock traded during the 60-day period preceding the date of the Change in
Control.
Except as indicated above, neither the Corporation nor the Bank has any
employment contracts with any of the Named Officers.
DIRECTOR COMPENSATION ARRANGEMENTS
The Corporation pays its directors a $5,000 annual retainer, plus fees of
$250 per board meeting attended, $1,000 for each audit committee meeting, $750
for each executive committee meeting and $500 for each other
10
<PAGE> 13
committee meeting attended. Bank directors fees consist of: an annual retainer
of $5,000, plus $500 for each meeting of the Board attended, $750 for each
executive committee meeting attended and $500 for each other committee meeting
attended. Directors of the Corporation and the Bank who are salaried officers do
not receive directors fees or retainers. The Chairmen of the Compensation
Committee and the Audit Committee, currently Messrs. McEntee and Densen,
respectively, each receive an additional retainer of $5,000 per year. Messrs.
Marcalus and Rachesky, as Vice Chairmen of the Compensation and Audit
Committees, respectively, each receive an additional retainer of $2,500 per
year.
In November 1992, the Corporation instituted a retirement plan for eligible
non-employee directors of the Corporation and/or the Bank with a minimum of 10
years of service. The plan provides for benefits which commence after the
non-employee director has retired from the Board and reached the age of 65. The
benefits terminate in 10 years or earlier upon death of the non-employee
director. The annual benefit is a percentage of the annual Bank and Corporation
retainer paid to the director at the time of retirement, as follows: 10-14 years
of service (50%); 15-19 years of service (75%); 20 or more years of service
(100%).
COMPENSATION COMMITTEE REPORT
The following report was prepared by the Compensation Committee of the
Corporation.
COMPENSATION STRATEGY
The Compensation Committee of the Board of Directors (the "Committee"),
consisting entirely of independent outside directors, is responsible for
establishing and overseeing policies governing annual and long-term compensation
programs for officers named in the compensation tables shown above and other
executive officers of the Corporation.
The Committee evaluates salaries, annual performance goals, awards under
annual incentive plans and administers the Long-Term Stock Incentive Plan. The
actions of the Committee are presented to the Board of Directors for
ratification. When the Committee's actions relate to officers who also are
directors, the Board of Directors (exclusive of the officers-directors) reviews
the recommendations of the Committee and approves final compensation
arrangements.
The objective of the Corporation's executive compensation program is to
align compensation with business strategy, organization values and management
philosophy, and the continued enhancement of shareholder value through stock
price growth and dividends.
A total compensation approach to determining appropriate compensation
levels for executive officers has been adopted by the Committee. Under this
approach, target total compensation levels (covering annual base salary, annual
and long-term incentive award opportunities) are established at the beginning of
each year taking into consideration total compensation opportunities for a group
of high performing banking organizations and the Corporation's performance
relative to this group.
The organizations used for the purpose of developing compensation targets
are based on labor market competition as well as business competition. These
organizations may differ from the banking organizations included in the industry
group used in the Performance Graph of stock growth and dividend reinvestments
shown below.
In evaluating data on the high performing banks and determining the total
compensation arrangements for individual executives, the Committee employs an
independent consulting organization.
Under the total compensation approach, an increasing amount of the
executive total compensation mix is based on pay-for-performance targets. As a
result, when performance objectives are exceeded, executives have an opportunity
to realize compensation above their target total compensation levels when
performance objectives are not met, incentive and total compensation paid is
lower than target.
Specific compensation program components are discussed below.
11
<PAGE> 14
BASE SALARY
Base salary levels are determined each year considering factors that
include the level of knowledge and experience each executive brings to the job
and the labor market levels of compensation paid to executives of comparably
performing banking organizations. Labor market values are established through an
independent analysis of published compensation surveys of similar size
organizations in the banking industry and a review of public information on
executive compensation in the comparable banking organizations.
In 1993, Mr. Lipkin was granted a 5.2% salary increase, bringing his base
salary level to $390,000. This salary recognizes Mr. Lipkin's contribution to
the Corporation's success, the level of knowledge and experience he brings to
the job of Chairman and Chief Executive Officer, and the labor market levels of
compensation paid to Chief Executive Officers of comparably performing banking
organizations.
Salary increases for the other named executive officers ranged from 5.3% to
13.3% of their base salary and reflected their contributions and experience as
well as movement of salaries to competitive labor market levels.
ANNUAL INCENTIVE PLAN
Consistent with the goals of continued financial strength and shareholder
value creation, for 1993, annual incentive awards were based on a combination of
achieving or exceeding corporate targeted percentage growth in net income and
return on average equity, business unit results, and individual performance of
participating officers.
Awards for corporate performance under the plan can vary from no award to
60% greater than target (160% times target) depending upon performance
achievement. Business unit performance and individual performance are applied to
the corporate performance results to adjust individual incentive awards up or
down by a factor of plus or minus 20%. The application of the 20% performance
factor is a subjective judgment by the Committee. No executive can receive an
annual incentive award greater than 92% of their salary on the date the award is
granted (120% times 160% equals 192%).
As a result of 1993 performance far exceeding approved goals, Mr. Lipkin's
contribution to these results and his individual achievement in developing
Valley's management team, improving the Bank's financial strength and expanding
market share, his annual incentive award was 83% of his base salary.
For the other named executive officers, the 1993 annual incentive awards
averaged 38.4% of their 1993 salaries. Awards ranged from 20% to 71% of
individual other named executive salaries, reflecting differences in business
unit results and organization level.
LONG-TERM INCENTIVE PLAN
Long-term incentive awards may be granted in the form of stock options
(qualified incentive stock options or non-qualified stock options), stock
appreciation rights and/or restricted stock to closely align executive long-term
compensation opportunity with the realization of stock price growth and
dividends for shareholders.
As part of the total compensation program, in 1993 Mr. Lipkin was awarded a
qualified incentive stock option for 19,687.5 shares and a restricted stock
award of 5,937.5 shares of the Corporation's common stock at $24.10 per share,
the market value (adjusted for a subsequent stock split) on the date of both
awards. The stock options become exercisable and the restricted stock can be
earned at the rate of 20% per year starting with the first anniversary from the
date of grant. Mr. Lipkin's opportunity to receive value from these awards is
contingent on the growth of the Corporation's stock price and the payment of
dividends over the vesting period of the awards.
During 1993, other executive officers named in the compensation tables
received qualified incentive stock option grants totalling 26,000 shares at an
average grant price of $24.42 per share, and restricted stock awards totaled
6,525 shares at an average price at grant of $24.31 per share. All of these
shares were granted at the market value on the date of grant (adjusted for a
subsequent stock split). All of the factors relating to exercise of options and
earn-out of restricted stock noted above for Mr. Lipkin apply to these stock
awards.
12
<PAGE> 15
DEDUCTIBILITY OF COMPENSATION
As part of the 1993 Omnibus Budget Reconciliation Act ("OBRA '93") -- under
Section 162(m) of the Internal Revenue Code -- effective for taxable years
beginning on or after January 1, 1994, companies are subject to limits on the
deductibility of executive compensation. OBRA '93 limits deductible compensation
for the active named executive officers to $1 million per year. Certain forms of
compensation are exempt from this deductibility limit, primarily
performance-based compensation which is approved by shareholders.
While the Corporation's annual incentive plan described above consists of
performance-based awards, shareholders have not been asked to approve the stated
performance goals. Thus, the 1993 annual incentive awards do not meet the
requirements for exemption from the deductibility limit.
The Corporation's stock option awards meet the exemption requirements for
performance-based compensation and shareholder approval, including the limit on
the number of shares that can be awarded to an individual executive in a plan
year. The Corporation's 1993 restricted stock awards do not meet the
requirements for performance-based awards. Awards of stock options and
restricted stock made on or prior to February 17, 1993 by the Corporation are
under written agreements with executives and are grandfathered as meeting the
exemption requirements under IRS transition rules, as long as these awards are
not modified.
Based on its 1993 salaries, annual incentive awards and the grant price of
its restricted stock awards, the Corporation does not expect any of its active
Named Officers to exceed the $1 million deductibility threshold during the 1994
taxable year.
Detailed information related to the compensation of the five executive
officers is shown in the compensation tables above.
Compensation Committee Members:
Robert E. McEntee (Chairman)
Robert L. Marcalus (Vice Chairman)
Austin C. Drukker
Gerald Korde
Robert Rachesky
13
<PAGE> 16
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a hypothetical
$100 investment made on January 1, 1989 in: (a) the Corporation's common stock;
(b) the Standard and Poor's ("S&P") 500 Stock Index; and (c) Keefe, Bruyette &
Woods (KBW) Eastern Region Index of banking organizations. The graph is
calculated assuming that all dividends are reinvested during the relevant
periods. The graph shows how a $100 investment would increase or decrease in
value over time, based on dividends (stock or cash) and increases or decreases
in the market price of the stock and each of the indexes.
INDEX OF TOTAL RETURNS: VALLEY NATIONAL, S&P 500, KBW EASTERN
JANUARY 1, 1989 -- DECEMBER 31, 1993
<TABLE>
<CAPTION>
VALLEY
MEASUREMENT PERIOD NATIONAL KBW EASTERN S&P 500
(FISCAL YEAR COVERED) BANCORP REGION INDEX
<S> <C> <C> <C>
1/89 100.00 100.00 100.00
12/89 100.66 102.02 131.69
12/90 78.05 62.88 127.58
12/91 115.52 110.57 166.47
12/92 204.20 157.70 179.14
12/93 219.61 159.25 197.19
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All five members of the Compensation Committee have engaged in loan
transactions with the Bank. All such loans were made in the ordinary course of
business of the Bank. No other relationships required to be reported under the
rules promulgated by the SEC exist with respect to members of the Corporation's
Compensation Committee.
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Bank has made and, assuming continued compliance with generally
applicable credit standards, expects to continue to make loans to its directors
and executive officers and their associates. All of such loans (i) were made in
the ordinary course of business, (ii) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and (iii) did not involve more than
the normal risk of collectibility or present other unfavorable features.
RECOMMENDATION AND VOTE REQUIRED ON PROPOSAL 1
Directors will be elected by a plurality of the votes cast at the Annual
Meeting, whether in person or by proxy. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" THE NOMINATED SLATE OF DIRECTORS INCLUDED IN PROPOSAL 1.
14
<PAGE> 17
PROPOSAL 2 -- APPROVAL OF AMENDMENTS TO THE LONG-TERM
STOCK INCENTIVE PLAN
At the meeting, there will be presented to the shareholders a proposal to
approve the adoption by the Board of Directors of certain amendments to the
Valley National Bancorp Long-Term Stock Incentive Plan (the "Plan"). The Plan
was initially approved by the Board of Directors on January 10, 1989, and by the
Corporation's shareholders at the Annual Meeting held on March 28, 1989. On
March 16, 1993, the Board of Directors approved the first amendment to the Plan
("Amendment 1"). Pursuant to Amendment 1, when an employee retires after meeting
certain thresholds with respect to age, service to the Corporation and prior
notice to the Corporation of his or her planned retirement, all options and
stock appreciation rights ("SARs") held by the employee automatically become
fully vested and exercisable and remain so for 90 days, and all restrictions
lapse on shares of restricted stock held by the employee. In addition, Amendment
1 mandates that upon the death or Disability (as defined in the Plan) of an
employee, all options and SARs held by the employee automatically become fully
vested and exercisable and remain so for one year, and all restrictions lapse on
shares of restricted stock held by the employee. The Committee administering the
Plan always had the ability to achieve the same results, either by including
such provisions in the documents awarding the options, SARs or restricted stock,
or by exercising its discretion at the time of the employee's death, disability
or retirement. Amendment 1 thus made mandatory what had always been permissible.
The Committee and the Board approved Amendment 1 because it believed that it was
fair and appropriate to accelerate vesting to award recipients in the event of
recipients' death, disability and retirement under certain conditions. Amendment
1 was not presented to the Corporation's shareholders for prior approval because
the changes it made were not material to the Plan and shareholder approval for
such changes was not required under the Plan.
On January 18, 1994, the Board of Directors approved a second amendment to
the Plan ("Amendment 2") in order to increase from 952,438 to 1,577,438 the
number of shares of the Corporation's common stock ("Shares") available for
awards under the Plan. Amendment 2 allocates the additional 625,000 Shares so
authorized for use as follows: 500,000 Shares for use in connection with options
and SARs and 125,000 Shares for use in connection with restricted stock awards.
(The number of Shares available prior to adoption of Amendment 2, 952,438
Shares, represents the 507,967 Shares originally approved by the Corporation's
shareholders in connection with the Plan, adjusted upward to reflect stock
splits since the date of original adoption of the Plan.) The Corporation has
granted awards for 581,960 Shares during the first five years of the Plan, and
thus the additional 625,000 Shares leave 995,478 Shares able to be awarded.
Amendment 2 also limits to 200,000 the total number of Shares which can be
awarded pursuant to options, SARs or restricted stock awards to any one employee
under the Plan. The cap of 200,000 per person includes awards granted since the
inception of the Plan. Unlike Amendment 1, Amendment 2 must be approved by the
Corporation's shareholders in order to become effective.
With respect to Amendment 2, the Board of Directors approved the increased
number of shares for awards because the Board projected, based upon past
practice, that awards under the Plan would be exhausted well before the
expiration of the Plan. In considering the number of shares to add to the Plan,
the Committee and later the Board considered several issues, including the
benefits derived by the Corporation in motivating performance and the issue of
the possible dilutive effect of such awards on earnings per share. With respect
to the limitation of 200,000 shares for any one officer or employee, the Board
examined the past awards to existing officers and considered appropriate
limitations for future awards. While the Board had not previously adopted an
individual limitation, provisions contained in the Omnibus Budget and
Reconciliation Act of 1993 ("OBRA '93") enacted by Congress last year amended
the Internal Revenue Code of 1986 to add Section 162(m) which requires such
individual limitations to insure that the compensation element of stock options
and SARs is fully deductible to the Corporation for its five highest paid
officers in all circumstances. Specifically, under the new law, if an officer's
compensation (including the compensation derived from exercising stock options
and SAR awards) exceeded $1,000,000 in any one year, such compensation may not
be deductible unless, among other things, the individual limitation is included
in the Plan and approved by the Corporation's shareholders. As of February 15,
1994, the officers named in the compensation table had received aggregate awards
under the Plan for the number of shares shown (such numbers have been adjusted
15
<PAGE> 18
for stock splits): Gerald H. Lipkin: 98,468 Shares; Peter Southway: 87,030
Shares; Sam P. Pinyuh: 42,750 Shares; Peter John Southway: 21,812 Shares; and
Robert Farrell: 11,312 Shares.
The Corporation is now submitting both Amendment 1 and Amendment 2
(collectively, the "Amendments"), for shareholder ratification in the case of
Amendment 1 and for shareholder approval in the case of Amendment 2. The Plan,
as previously amended by Amendment 1 and as proposed to be amended by Amendment
2, with Amendment additions underlined and deletions crossed out, is set forth
as Exhibit A to this Proxy Statement. The following sections present a summary
of the material terms of the Plan and the Amendments. The following description
of the Plan and the Amendments is qualified in its entirety by reference to
Exhibit A.
DESCRIPTION OF THE PLAN AND THE AMENDMENTS
GENERAL
The Plan authorizes a committee appointed by the Board of Directors (the
"Committee"), to grant several types of stock oriented incentives to officers
and key employees of the Corporation and its subsidiaries selected by the
Committee. These include:
Incentive Stock Options. Stock options that qualify as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and have an exercise price of at least 100% of the fair market value of
the shares of Common Stock to which they relate on the date of grant. (These
options are referred to as Incentive Stock Options or Qualified Stock Options.)
Non-Qualified Stock Options. Stock options that do not qualify as incentive
stock options under Section 422 of the Code and that have an exercise price of
not less than 80% of the fair market value of shares of Common Stock on the date
of grant.
Stock Appreciation Rights ("SARs"). The right to receive the increase in
value of a share of Common Stock from the date of grant to the date of exercise,
payable in stock or in cash at the discretion of the Committee.
Restricted Stock. The immediate award for no payment (or a specified
payment) of shares of Common Stock which are subject to total forfeiture under
certain conditions specified in the award, such as if the officer or employee
leaves the employment of the Corporation prior to the end of the vesting period.
The Plan authorizes awards for ten (10) years from the date of the original
adoption of the Plan by the Board of Directors, which is until January 9, 1999.
The Plan is currently administered by the Compensation Committee (the
"Committee") whose members qualify as "disinterested persons" for specified
Federal tax and securities law purposes.
The Committee has full power to select, from among the officers and other
key employees of the Corporation and its subsidiaries, the individuals to whom
awards will be granted, to make any combination of awards to any participants
and to determine the specific terms of each award, including any payment to be
required from the recipient thereof, subject to the provisions of the Plan.
None of the foregoing general provisions would be altered by the
Amendments.
Stock Subject to Plan. Upon approval of Amendment 2, the maximum number of
shares of Common Stock that may be issued or transferred pursuant to all options
and awards under the Plan will be 1,577,438, of which not more than 200,000
shares may be issued or transferred pursuant to options and/or awards to any one
eligible employee. Subject to the foregoing aggregate limitations, the maximum
number of shares that may be issued or transferred pursuant (i) to options or
awards for Incentive Stock Options, Non-Qualified Stock Options and Stock
Appreciation Rights will be 1,357,195 and (ii) to awards of Restricted Stock
will be 220,243. The number of shares referred to above includes shares awarded
pursuant to all options and awards issued or transferred under the Plan prior to
January 18, 1994 (the date the Board of Directors approved Amendment 2) and
takes into account all stock splits (and required adjustments therefor) prior to
January 18,
16
<PAGE> 19
1994. Upon a stock split or other Change in Capitalization (as defined in the
Plan) after January 18, 1994, the shares will be adjusted to the number and kind
of shares of stock or other securities existing after such Change in
Capitalization.
Under the Plan before and after Amendment 2, the maximum number of shares
that may be issued or transferred is as follows:
(i) Pursuant to all options and awards under the Plan: 952,438 Shares
without Amendment 2; 1,577,438 Shares after Amendment 2.
(ii) Pursuant to Incentive Stock Options, Nonqualified Stock Options
and Stock Appreciation Rights: 857,196 Shares without Amendment 2;
1,357,195 Shares after Amendment 2.
(iii) Pursuant to Restricted Stock Awards: 95,242 Shares without
Amendment 2; 220,243 Shares after Amendment 2.
These numbers are adjusted to reflect stock splits prior to January 18,
1994.
STOCK OPTIONS.
The exercise price for each share of Common Stock covered by an option is
determined by the Committee, but must be at least 100% of the fair market value
of such share on the date of grant in the case of incentive stock options, and
must be at least 80% of the fair market value of such share on the date of grant
in the case of nonqualified stock options.
The maximum term for all options granted under the Plan is ten years for
incentive stock options and ten years and one day for nonqualified stock
options. Moreover, no options may be granted under the Plan more than ten years
after the date of its original adoption by the Board of Directors on January 10,
1989. All options are nontransferable other than by will or the laws of descent
and distribution and during an optionee's lifetime may be exercised only by the
optionee. Options will be exercisable at such time and in such installments as
the Committee may provide at the time the option is granted. The purchase price
for shares of Common Stock acquired pursuant to the exercise of an option must
be paid in cash, by check, or, in the discretion of the Committee, in shares of
Common Stock valued at their fair market value at the time of exercise.
Under the Plan as originally approved, unless the Committee included
different provisions in the documents awarding the options, or exercised its
discretion at the time of the employee's death, disability or retirement,
options would generally terminate (i) one year after an optionee's termination
of employment due to death or disability, (ii) 90 days following an optionee's
termination of employment if his termination of employment is by the Company
other than for cause, or (iii) on the date of the optionee's termination of
employment for any other reason. There was no requirement that the Committee
accelerate the exercisability of options upon death, disability or retirement,
and no requirement that the Committee permit exercise of options for any period
of time following retirement. Pursuant to Amendment 1, all options become
immediately exercisable upon the employee's death, disability or Retirement.
Amendment 1 defines "Retirement" to mean the retirement from active employment
by the Corporation of an employee or officer but only if such person: (i) has a
minimum combined total of years of service and age equal to 80, (ii) is age 62
or older, and (iii) provides six months prior written notice to the Corporation
of the retirement. In addition, pursuant to Amendment 1, all options remain
exercisable for 90 days following Retirement. No other changes were made with
respect to the stock options under the Amendments.
Upon a Change in Control (as defined in the Plan) all outstanding options
under the Plan will, for a period of 60 days following the Change in Control,
become immediately and fully exercisable and with respect to all options which
have been outstanding for at least six months, the optionee may, during the
sixty-day period following the Change in Control, surrender any option (or
portion thereof) for a cash payment in respect of each share covered by the
option or a portion thereof surrendered equal to the excess over the option
price of (i) in the case of an incentive stock option, the fair market value of
the Common Stock on the date of surrender or (ii) in the case of a nonqualified
option, the highest price at which the Common Stock traded
17
<PAGE> 20
during the 60-day period preceding the date of the Change in Control or the
price per share paid in connection with the transaction constituting or
resulting in the Change in Control (the "Adjusted Fair Market Value").
STOCK APPRECIATION RIGHTS.
Stock appreciation rights may be granted under the Plan, either alone or in
conjunction with the grant of an option granted under the Plan (and if related
to an option, either at the time of grant of the option or at any time
thereafter during the term of the option). A stock appreciation right, if
related to an option, would permit the optionee to surrender the option or any
portion thereof for cancellation and to receive cash or shares of Common Stock
equal in value up to the excess, if any, of the then fair market value of the
Common Stock subject to such option or portion thereof over the option exercise
price. Upon the exercise of a stock appreciation right relating to an option,
the option will be canceled to the extent of the number of shares of Common
Stock in respect of which the stock appreciation right is exercised. The
Committee may also provide that a stock appreciation right granted in connection
with a nonqualified stock option may be deemed to be automatically exercised
upon the exercise or surrender of the related option, in which event the
optionee would be entitled to the payment provided under the stock appreciation
right in addition to the shares of Common Stock acquired or cash received upon
exercise or surrender of the option. Stock appreciation rights granted in
connection with an option will be exercisable at the same time or times as the
option is exercisable. Stock appreciation rights not related to any option will
be exercisable at such time or times as may be provided by the Committee at the
time the stock appreciation right is granted and will entitle the holder thereof
to a payment equal in amount to the appreciation in the value of the shares of
Common Stock covered thereby, unless restricted by the Committee, from the date
of grant until the date of exercise.
Generally, the amount payable upon the exercise of a stock appreciation
right will be paid in the form of shares of Common Stock, cash or a combination
thereof as the Committee determines. However, in the case of an officer who is
subject to Section 16(b) of the Exchange Act, no cash will be paid upon exercise
of a stock appreciation right unless such exercise is made during the period
beginning on the third business day and ending on the twelfth business day
following the date of release for publication of the Company's quarterly or
annual statements of earnings or during the 60-day period following a Change in
Control.
In the event of a Change of Control, all stock appreciation rights granted
under the Plan more than six months prior to the date of exercise will for a
period of 60 days following the Change in Control be fully exercisable and the
amount payable upon the exercise of a stock appreciation right during the 60-day
period following the Change in Control will be paid in cash. Except in the case
of a stock appreciation right granted in connection with an incentive stock
option, the amount payable upon exercise of a stock appreciation right during
the 60-day period following a Change in Control will be determined by reference
to the Adjusted Fair Market Value of the Common Stock.
Under Amendment 1, all stock appreciation rights become immediately
exercisable upon the grantee's death, disability or Retirement (as defined
above). Upon the death and disability of a grantee, the stock appreciation
rights remain exercisable for a period of one year following the termination of
employment. Upon the Retirement of a grantee, the stock appreciation rights
remain exercisable for a period of 90 days following such termination of
employment. The original Plan did not contain such provisions, but the Committee
always had the ability to achieve the same results, either by including such
provisions in the documents awarding the SARs or by exercising its discretion at
the time of the employee's death, disability or retirement. No other changes
were made with respect to the stock appreciation rights under the Amendments.
RESTRICTED STOCK.
The Plan further provides for the grant of awards of restricted shares of
Common Stock. The terms of the grant of restricted shares of Common Stock,
including the purchase price, if any, for such shares, the restrictions placed
on such shares and the time or times at which such restrictions lapse shall be
determined by the Committee at the time the grant is made. Upon a grantee's
termination of employment prior to the lapsing of restrictions on shares of
Common Stock, all nonvested restricted shares will be forfeited, except that the
Committee may in its discretion remove the restrictions on the shares of Common
Stock. Upon a Change in
18
<PAGE> 21
Control, all restrictions on shares of restricted stock will lapse. Dividends on
the restricted shares may be held in an escrow account and then will only be
distributed when the underlying shares are distributed.
Amendment 1 mandates that upon the death, disability or Retirement of an
employee, all restrictions lapse on shares of restricted stock held by the
employee. The Committee administering the Plan always had the ability to achieve
the same results, either by including such provisions in the documents awarding
the restricted stock, or by exercising its discretion at the time of the
employee's death, disability or retirement. No other changes respect to the
restricted stock was made under the Amendments.
The following aspects of the Plan will remain unchanged by the Amendments:
ADJUSTMENTS FOR CHANGES IN CAPITALIZATION
The Committee is authorized to make appropriate adjustments in connection
with outstanding awards under the Plan to reflect stock dividends, stock splits,
recapitalizations and similar events.
CHANGE IN CONTROL
The Plan calls for acceleration of certain award benefits in the event of a
Change in Control, as defined in the Plan. The Plan defines Change in Control to
mean a transaction or series of transactions in which the beneficial ownership
of 25% or more of the Company's common stock changes and individuals who at the
beginning of such period constitute the Board of Directors ("Continuing
Directors") for any reason cease to constitute a majority of the Board of the
Company or its successor (persons who are nominated or elected to the Board by
two-thirds of the Continuing Directors are also deemed Continuing Directors).
AMENDMENT AND TERMINATION
The Board may terminate or suspend the Plan at any time, but such
termination or suspension may not adversely affect any stock options, stock
appreciation rights or restricted stock awards then outstanding under the Plan,
without the holder's consent. The Board may amend the Plan, but may not, without
the prior approval of the Company's shareholders, make any amendment which would
(l) except as provided under the Plan, increase the number of shares reserved
for grants under the Plan, (2) change the class of employees eligible to receive
awards, (3) change the minimum purchase price of shares pursuant to options or
awards as provided in the Plan, (4) extend the maximum term for options or (5)
increase materially the benefits accruing to eligible employees under the Plan.
The Committee may amend the term of any award or option theretofore granted,
retroactively or prospectively, but no such amendment shall impair the rights of
any holder without the holder's consent. The Committee may also substitute new
stock options for previously granted stock options, including previously granted
stock options having higher option prices.
LOANS
The Plan also permits the Company to grant loans to participants in
connection with the purchase of shares of Common Stock under the Plan. No loan
made under the Plan may exceed the lesser of (i) the aggregate purchase price
paid for the shares acquired plus the amount of the reasonably estimated income
taxes payable with respect to such shares and (ii) the fair market value of the
shares acquired with such loan. Shares of Common Stock with a fair market value
not less than the principal amount of the loan must be pledged as security for
payment of the loan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the Federal income tax consequences of
transactions under the Plan, based on Federal income tax laws in effect on
January 1, 1994. This summary is not intended to be comprehensive and does not
describe state or local income tax consequences.
Benefits which may be granted pursuant to the Plan include incentive stock
options, nonqualified stock options, stock appreciation rights and restricted
stock awards.
19
<PAGE> 22
INCENTIVE STOCK OPTIONS. No income is realized by an optionee upon the
grant or exercise of an incentive stock option. If shares of Common Stock are
transferred to an optionee upon the exercise of an incentive stock option, and
if no disqualifying disposition of such shares is made by such optionee within
two years after the date of grant of the option or within one year after the
transfer of such shares to such optionee, then (1) upon the sale or exchange of
such shares, any amount realized in excess of the option exercise price will be
taxed to such optionee as a long-term capital gain and any loss sustained will
be treated as a long-term capital loss, and (2) no deduction will be allowed to
the Corporation for Federal income tax purposes. The exercise of an incentive
stock option will give rise to an item of tax preference that may result in
alternative minimum tax liability for the optionee.
If Common Stock acquired upon the exercise of an incentive stock option is
disposed of prior to the expiration of either holding period described above,
generally (1) the optionee will realize compensation (i.e., ordinary) income in
the year of disposition in an amount equal to the excess (if any) of the fair
market value of such shares at exercise (or, if less, the amount realized on the
disposition of such shares, if the shares are disposed of by sale or exchange)
over the option exercise price paid for such shares, and (2) the Corporation
will be entitled to deduct the amount of compensation income taxed to the
optionee for Federal income tax purposes, if it complies with applicable
withholding requirements (the "withholding requirements") and if the said amount
represents an ordinary and necessary business expense of the Corporation (the
"ordinary and necessary test"). Any further gain (or loss) realized by the
optionee will be taxed as short-term or long-term capital gain (or loss), as the
case may be, and will not result in any deduction by the Corporation. Different
rules may apply if Common Stock is purchased by an optionee who is also an
officer, director or more than 10% shareholder. See "Special Rules Applicable to
Corporate Insiders," below.
If an incentive stock option is exercised more than three months following
the termination of employment, the exercise of the option will generally be
taxed in the same manner as the exercise of a nonqualified stock option.
NONQUALIFIED STOCK OPTIONS. Except as noted below, in the case of
nonqualified stock options, (1) no income is realized by the optionee at the
time the option is granted; (2) generally, at exercise, ordinary income is
realized by the optionee in an amount equal to the difference between the option
exercise price paid for the shares and the fair market value of the shares, if
unrestricted, on the date of exercise; (3) the Corporation is entitled to a
Federal income tax deduction equal to the amount of income taxed to the
optionee, subject to the Corporation's satisfaction of the withholding
requirements and the ordinary and necessary test; and (4) upon disposition of
the Common Stock acquired by exercise of the option, appreciation (or
depreciation) occurring after the date of exercise is treated as either
short-term or long-term capital gain (or loss), depending on the recipient's
holding period of the shares. Different rules may apply if Common Stock is
purchased by an optionee who is also an officer, director or more than 10%
shareholder. See "Special Rules Applicable to Corporate Insiders," below.
STOCK APPRECIATION RIGHTS. No income will be realized by a grantee in
connection with the grant of a stock appreciation right. When the right is
exercised, the grantee generally will be required to include in gross income as
ordinary income in the year of exercise an amount equal to the amount of cash
received and the fair market value of any shares of Common Stock received on the
exercise. The Corporation will be entitled to a deduction for Federal income tax
purposes at the same time equal to the amount included in the grantee's gross
income by reason of the exercise, subject to satisfaction of the withholding
requirements and the ordinary and necessary test. If the grantee receives shares
of Common Stock upon the exercise of a stock appreciation right, the
post-exercise appreciation (or depreciation) will be treated in the same manner
as discussed above under "Nonqualified Stock Options". See "Special Rules
Applicable to Corporate Insiders," below.
RESTRICTED STOCK. A recipient of restricted stock generally will not be
subject to tax at the time of receipt of the restricted stock, but will be
subject to tax at ordinary income rates on the amount by which the fair market
value of the restricted stock at such time as the stock either is no longer
subject to a substantial risk of forfeiture or is transferrable by the recipient
exceeds the amount (if any) paid for the stock by the recipient. However, a
recipient of restricted stock may elect under Section 83(b) of the Code within
30 days of the date
20
<PAGE> 23
of his receipt of the restricted stock to include in his gross income as
ordinary income in the year of his receipt of the shares an amount equal to the
excess of the fair market value of the restricted stock at the time of transfer
(determined without regard to any restrictions which apply to the shares) over
the amount paid, if any, for the restricted stock. Upon the subsequent sale or
exchange of such stock, the recipient will recognize capital gain or loss
measured by the difference between the amount realized on the disposition and
the basis of the restricted stock, which will equal the sum of the amount paid
for the stock, plus the amount included in gross income under Section 83(b).
If the restricted shares subject to a Section 83(b) election are forfeited
prior to the time they are vested, the recipient may be entitled to a capital
loss for Federal income tax purposes equal to the purchase price, if any, of the
forfeited shares, provided that the Corporation does not reimburse the recipient
for any portion of the purchase price paid.
Upon a sale or exchange of shares after the forfeiture period has expired,
the holding period to determine whether the recipient has long-term or
short-term capital gain or loss generally begins when the restrictions expire
and the tax basis for such shares will generally be based on the fair market
value of such shares on such date. The Corporation generally will be entitled to
a deduction equal to the amount that is taxable as ordinary income to the
recipient, subject to satisfaction of the withholding requirements and the
ordinary and necessary test.
DIVIDENDS ON RESTRICTED STOCK. Dividends on restricted stock transferred to
a participant in the Plan which are paid prior to the time such stock becomes
vested or transferrable by the recipient will generally be treated as
compensation which is taxable as ordinary income to the participant and will be
deductible by the Corporation, subject to satisfaction of the withholding
requirements and the ordinary and necessary test. If the recipient of the
restricted stock makes a timely Section 83(b) election with respect to the
stock, however, dividends paid on such stock will be treated as dividend income
which is taxable as ordinary income to the recipient, but will not be deductible
by the Corporation. If dividends are deferred with respect to restricted stock
which has been awarded, such dividends will be taxed as compensation at ordinary
income rates when paid to the participant and will generally be deductible by
the Corporation at that time, subject to satisfaction of the withholding
requirements and the ordinary and necessary test.
SPECIAL RULES APPLICABLE TO CORPORATE INSIDERS. Generally, individuals
subject to Section 16(b) of the Securities Exchange Act of 1934 ("Insiders") are
not taxed until six months after exercise of a nonqualified stock option, with
the excess of the fair market value of the Common Shares received upon exercise
over the option purchase price, determined as of the end of the six-month
period, being taxed as ordinary income, and the holding period for treating any
gain (or loss) as long-term capital gain (or loss) beginning at the end of such
period. (A similar rule applies with respect to the exercise of stock
appreciation rights settled in stock.) However, an Insider who elects under
Section 83(b) on a timely basis (see discussion above under "Restricted Stock")
may instead be taxed on the basis of the excess of the fair market value at the
time of exercise over the option purchase price.
Depending on their individual circumstances, Insiders receiving restricted
stock awards may not become subject to tax at the times discussed above under
"Restricted Stock", but may have the amount of income calculated (and
recognized) based on the fair market value of the shares of Common Stock at a
later date.
STOCK SWAPS. The Plan provides that with the Corporation's permission an
optionee may transfer previously owned shares to the Corporation to satisfy the
purchase price under an option (a "Stock Swap"). Generally, if an optionee
utilizes previously owned stock to purchase stock upon the exercise of an
Incentive Stock Option, the optionee will not be required to realize any gain
upon the exchange of the old shares for the new shares and he will carry over
into the same number of new shares his basis and holding period for the old
shares. If the optionee purchases more shares than the number of old shares
surrendered in the Stock Swap, the incremental number of shares received in the
Stock Swap will have a basis of zero and a holding period beginning on the date
of the exercise of the Incentive Stock Option. If, however, the optionee pays
the purchase price of the new shares using shares originally acquired through
the exercise of an Incentive Stock Option, and the Stock Swap occurs prior to
the end of the statutory holding period applicable to the old shares, the Stock
Swap will constitute a disqualifying disposition of the old shares, resulting in
the immediate
21
<PAGE> 24
recognition or ordinary income (see "Incentive Stock Options," above). Moreover,
if shares received in a Stock Swap are disposed of prior to the end of the
statutory holding period applicable to such shares, the taxable gain will be
calculated based upon the lowest basis of the shares acquired in the Stock Swap.
If a Stock Swap is used to exercise a Nonqualified Stock Option, the use of
old shares to pay the purchase price of an equal number of new shares generally
will be tax-free to the optionee, and he will carry over into the new shares the
basis and holding period of the old shares. However, unlike the use of Stock
Swaps upon the exercise of Incentive Stock Options, if more shares are acquired
than surrendered, the incremental shares received in the Stock Swap will
generally be taxed as compensation income in an amount equal to their fair
market value at the time of the Swap. The optionee's basis in those additional
shares will be their fair market value taken into account in quantifying the
optionee's compensation income and the holding period for such shares will begin
on the date of the Stock Swap.
CAPITAL GAINS. Under current law, a taxpayer's net capital gain (i.e., the
amount by which the taxpayer's net long-term capital gains exceed his net
short-term capital losses) is subject to tax at a maximum rate of 28% for
Federal income tax purposes. Ordinary income is subject to tax at rates as high
as 39.5%. Capital losses are currently deductible against capital gains without
limitation, but are currently deductible against ordinary income in any year
only to the extent of $3,000 ($1,500 in the case of a married individual filing
a separate return). Capital losses which are not currently deductible by reason
of the foregoing limitation may be carried forward to future years.
PAYMENT IN RESPECT OF A CHANGE IN CONTROL. The Plan provides for the
acceleration of the lapse of restrictions on restricted stock which has been
awarded and the exercisability of all outstanding options granted pursuant to
the Plan, in the event of a "Change in Control," as defined in the Plan. The
acceleration of these benefits may be deemed to constitute a "parachute payment"
under the Internal Revenue Code. "Excess parachute payments," as defined in the
Code, will subject the recipient thereof to an additional 20% excise tax and are
not deductible by the Corporation.
PLAN BENEFITS
There were approximately 200 officers and 881 other employees of the
Corporation and its subsidiaries as of December 31, 1993. Because the Committee
has full discretion to determine who is a "key employee", there is no way to
predict how many employees may ultimately receive awards under the Plan or to
determine in advance the benefits or amounts that will be received in the future
by or allocated to specific officers or employees, or groups thereof under the
Plan. Prior to December 31, 1993, 156 officers and other employees had received
awards.
RECOMMENDATION AND VOTE REQUIRED ON PROPOSAL 2
Approval of the proposed amendments to the Plan requires the affirmative
vote of the holders of a majority of the shares of Common Stock issued and
outstanding and entitled to vote at the Annual Meeting, whether present in
person or by proxy. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
PROPOSAL 2.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick ("Peat Marwick"), independent public accountants, have
audited the books and records of the Corporation since 1986. Selection of the
Corporation's independent public accountants for the 1994 fiscal year will be
made by the Board subsequent to the Annual Meeting.
Peat Marwick has advised the Corporation that one or more of its
representatives will be present at the Annual Meeting of shareholders to make a
statement if they so desire and to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders which are eligible under the rules of the
Securities and Exchange Commission to be included in the Corporation's 1995
proxy material must be received by the Secretary of the Corporation no later
than November 1, 1994.
22
<PAGE> 25
OTHER MATTERS
The Board of Directors is not aware of any other matters which may come
before the annual meeting. However, in the event such other matters come before
the meeting, it is the intention of the persons named in the proxy to vote on
any such matters in accordance with the recommendation of the Board of
Directors.
Shareholders are urged to sign the enclosed proxy, which is solicited on
behalf of the Board of Directors, and return it in the enclosed envelope.
By Order of the Board of Directors
Gerald H. Lipkin
Chairman and Chief Executive Officer
Wayne, New Jersey
March 1, 1994
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K (EXCEPT EXHIBITS)
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED TO ANY
SHAREHOLDER ON WRITTEN REQUEST ADDRESSED TO ALAN ESKOW, SENIOR VICE PRESIDENT,
VALLEY NATIONAL BANCORP, 1445 VALLEY ROAD, WAYNE, NEW JERSEY 07470.
23
<PAGE> 26
EXHIBIT A TO
THE PROXY STATEMENT
The following is the Long-Term Stock Incentive Plan in its entirety.
Proposed amendments to the Plan are {underlined}. The proposed deletions are
[crossed out].
VALLEY NATIONAL BANCORP
LONG-TERM STOCK INCENTIVE PLAN
(ADOPTED BY DIRECTORS JANUARY 10, 1989
ADOPTED BY SHAREHOLDERS MARCH 28, 1989)
{(AS AMENDED BY DIRECTORS MARCH 16, 1993 AND JANUARY 18, 1994)}
1. Purpose. The purpose of the Plan is to provide additional incentive to
those officers and key employees of the Company and its Subsidiaries whose
substantial contributions are essential to the continued growth and success of
the Company's business in order to strengthen their commitment to the Company
and its Subsidiaries, to motivate such officers and employees to faithfully and
diligently perform their assigned responsibilities and to attract and retain
competent and dedicated individuals whose efforts will result in the long-term
growth and profitability of the Company. To accomplish such purposes, the Plan
provides that the Company may grant Incentive Stock Options, Nonqualified Stock
Options, Restricted Stock Awards and Stock Appreciation Rights.
2. Definitions. For purposes of this Plan:
(a) "Adjusted Fair Market Value" means, in the event of a Change of
Control, the greater of (i) the highest Fair Market Value of the Shares
during the sixty (60) day period ending on the date of such Change in
Control or (ii) in the case of a Change in Control described in Section
2(h)(ii) or 2(h)(iii), the highest price per Share paid to holders of the
Shares in any transaction constituting or resulting from such Change in
Control.
(b) "Agreement" means the written agreement between the Company and an
Optionee or Grantee evidencing the grant of an Option or Award and setting
forth the terms and conditions thereof.
(c) "Award" means a grant of Restricted Stock or Stock Appreciation
Rights, or any or all of them.
(d) "Bank" means Valley National Bank, a Subsidiary.
(e) "Board" means the Board of Directors of the Company.
(f) "Cause" means the willful failure by an Optionee or Grantee to
perform his duties with the Company or with any Subsidiary or the willful
engaging in conduct which is injurious to the Company or any Subsidiary,
monetarily or otherwise.
(g) "Change in Capitalization" means any increase, reduction, change
or exchange of Shares for a different number or kind of shares or other
securities of the Company by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, issuance of
warrants or rights, stock dividend, stock split or reverse stock split,
combination or exchange of shares, repurchase of shares, change in
corporate structure or otherwise.
(h) "Change in Control" means any of the following events: (i) when
the Company or a Subsidiary acquires actual knowledge that any person (as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act),
other than an affiliate of the Company or a Subsidiary or an employee
benefit plan established or maintained by the Company, a Subsidiary or any
of their respective affiliates, is or becomes the beneficial owner (as
defined in Rule 13d-3 of the Exchange Act) directly or indirectly, of
securities of the Company representing more than twenty-five percent (25%)
of the combined voting power of the Company's then outstanding securities
(a "Control Person"), (ii) upon the first purchase of the Company's common
stock pursuant to a tender or exchange offer (other than a tender or
exchange offer made by the Company, a Subsidiary or an employee benefit
plan established or maintained by the
24
<PAGE> 27
Company, a Subsidiary or any of their respective affiliates), (iii) upon
the approval by the Company's stockholders of (A) a merger or consolidation
of the Company with or into another corporation (other than a merger or
consolidation which is approved by at least two-thirds of the Continuing
Directors (as hereinafter defined) or the definitive agreement for which
provides that at least two-thirds of the directors of the surviving or
resulting corporation immediately after the transaction are Continuing
Directors (in either case, a "Non-Control Transaction")), (B) a sale or
disposition of all or substantially all of the Company's assets or (C) a
plan of liquidation or dissolution of the Company, (iv) if during any
period of two (2) consecutive years, individuals who at the beginning of
such period constitute the Board (the "Continuing Directors") cease for any
reason to constitute at least two-thirds thereof or, following a Non-
Control Transaction, two-thirds of the board of directors of the surviving
or resulting corporation; provided that any individual whose election or
nomination for election as a member of the Board (or, following a
Non-Control Transaction, the board of directors of the surviving or
resulting corporation) was approved by a vote of at least two-thirds of the
Continuing Directors then in office shall be considered a Continuing
Director, or (v) upon a sale of (A) common stock of the Bank if after such
sale any person (as such term is used in Section 13(d) and 14(d)(2) of the
Exchange Act) other than the Company, an employee benefit plan established
or maintained by the Company or a Subsidiary, or an affiliate of the
Company or a Subsidiary, owns a majority of the Bank's common stock or (B)
all or substantially all of the Bank's assets (other than in the ordinary
course of business). No person shall be considered a Control Person for
purposes of clause (i) above if (A) such person is or becomes the
beneficial owner, directly or indirectly, of more than ten percent (10%)
but less than twenty-five percent (25%) of the combined voting power of the
Company's then outstanding securities if the acquisition of all voting
securities in excess of ten percent (10%) was approved in advance by a
majority of the Continuing Directors then in office or (B) such person
acquires in excess of ten percent (10%) of the combined voting power of the
Company's then outstanding voting securities in violation of law and by
order of a court of competent jurisdiction, settlement or otherwise,
disposes or is required to dispose of all securities acquired in violation
of law.
(i) "Code" means the Internal Revenue Code of 1986, as amended.
(j) "Committee" means a committee consisting of at least three (3)
Disinterested Persons appointed by the Board to administer the Plan and to
perform the functions set forth herein.
(k) "Company" means Valley National Bancorp, a New Jersey corporation.
(l) "Disability" means the condition which results when an individual
has become permanently and totally disabled within the meaning of Section
105(d)(4) of the Code.
(m) "Disinterested Person" means a person (within the meaning of Rule
16b-3 under the Exchange Act) who at the time he exercises discretion as a
member of the Committee is not and at any time within one (1) year prior
thereto has not been eligible for selection (within the meaning of Rule
16b-3 of the Exchange Act) as a person to whom Shares may be allocated or
to whom stock options or stock appreciation rights may be granted pursuant
to this Plan or any other plan of the Company or any Subsidiary entitling
participants therein to acquire stock, stock options or stock appreciation
rights of the Company or any Subsidiary.
(n) "Eligible Employee" means any officer or other key employee of the
Company or a Subsidiary designated by the Committee as eligible to receive
Options or Awards subject to the conditions set forth herein.
(o) "Escrow Agent" means the escrow agent under the Escrow Agreement,
designated by the Committee.
(p) "Escrow Agreement" means an agreement between the Company, the
Escrow Agent and a Grantee, in the form specified by the Committee, under
which shares of Restricted Stock awarded pursuant hereto shall be held by
the Escrow Agent until either (a) the restrictions relating to such shares
expire and the shares are delivered to the Grantee or (b) the Company
reacquires the shares pursuant hereto and the shares are delivered to the
Company.
25
<PAGE> 28
(q) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(r) "Fair Market Value" means the fair market value of the Shares as
determined by the Committee in its sole discretion; provided, however, that
(A) if the Shares are admitted to quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or other
comparable quotation system and have been designated as a National Market
System ("NMS") security, Fair Market Value on any date shall be the last
sale price reported for the Shares on such system on such date or on the
last day preceding such date on which a sale was reported, (B) if the
Shares are admitted to quotation on NASDAQ and have not been designated a
NMS security, Fair Market Value on any date shall be the average of the
highest bid and lowest asked prices of the Shares on such system on such
date, or (C) if the Shares are admitted to trading on a national securities
exchange, Fair Market Value on any date shall be the last sale price
reported for the Shares on such exchange on such date or on the last date
preceding such date on which a sale was reported.
(s) "Grantee" means a person to whom an Award has been granted under
the Plan.
(t) "Incentive Stock Option" means an Option within the meaning of
Section 422A of the Code.
(u) "Nonqualified Stock Option" means an Option which is not an
Incentive Stock Option.
(v) "Option" means an Incentive Stock Option, a Nonqualified Stock
Option, or either or both of them.
(w) "Optionee" means a person to whom an Option has been granted under
the Plan.
(x) "Parent" means any corporation in an unbroken chain of
corporations ending with the Company, if each of the corporations other
than the Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock of one of the other corporations in
such chain.
(y) "Plan" means the Valley National Bancorp Long-Term Stock Incentive
Plan as set forth in this instrument and as it may be amended from time to
time.
(z) "Restricted Stock" means Shares issued or transferred to an
Eligible Employee which are subject to restrictions as provided in Section
8 hereof.
{(aa) "Retirement" means the retirement from active employment by the
Company of an employee or officer but only if such person meets all of the
following requirements: (i) he has a minimum combined total of years of
service and age equal to eighty (80), (ii) he is age sixty-two (62) or
older, and (iii) he provides six (6) months prior written notice to the
Company of the retirement. An employee or officer who retires but fails to
meet such conditions shall not be deemed to be within the definition of
"Retirement" for any purpose under this Plan or any Award or Option granted
thereunder.}
(ab) "Shares" means the common stock, no par value, of the Company
(including any new, additional or different stock or securities resulting
from a Change in Capitalization).
(ac) "Stock Appreciation Right" means a right to receive all or some
portion of the increase in the value of shares of Common Stock as provided
in Section 7 hereof.
(ad) "Subsidiary" means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
(ae) "Successor Corporation" means a corporation, or a parent or
subsidiary thereof, which issues or assumes a stock option in a transaction
to which Section 425(a) of the Code applies.
(af) "Ten-Percent Stockholder" means an eligible Employee, who, at the
time an Incentive Stock Option is to be granted to him, owns (within the
meaning of Section 422A(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company, a Parent or a Subsidiary within the meaning of Section
422A(b)(6) of the Code.
26
<PAGE> 29
3. Administration.
(a) The Plan shall be administered by the Committee which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep minutes of its meetings. A majority of the
Committee shall constitute a quorum and a majority of a quorum may authorize any
action. Each member of the Committee shall be a Disinterested Person. No member
of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan, the Options or the
Awards, and all members of the Committee shall be fully indemnified by the
Company with respect to any such action, determination or interpretation.
Subject to the express terms and conditions set forth herein, the Committee
shall have the power from time to time:
(1) to determine those Eligible Employees to whom Options shall be
granted under the Plan and the number of Incentive Stock Options and/or
Nonqualified Options to be granted to each eligible Employee and to
prescribe the terms and conditions (which need not be identical) of each
Option, including the purchase price per share of each Option;
(2) to select those Eligible Employees to whom Awards shall be granted
under the Plan and to determine the number of shares of Restricted Stock
and/or Stock Appreciation Rights to be granted pursuant to each Award, the
terms and conditions of each Award, including the restrictions or
performance criteria relating to such shares or rights, the purchase price
per share, if any, of Restricted Stock and whether Stock Appreciation
Rights will be granted alone or in conjunction with an Option;
(3) to construe and interpret the Plan and the Options and Awards
granted thereunder and to establish, amend and revoke rules and regulations
for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the
extent it shall deem necessary or advisable to make the Plan fully
effective, and all decisions and determinations by the Committee in the
exercise of this power shall be final and binding upon the Company or a
Subsidiary, the Optionees and the Grantees, as the case may be;
(4) to determine the duration and purposes for leaves of absence which
may be granted to an Optionee or Grantee without constituting a termination
of employment or service for purposes of the Plan; and
(5) generally, to exercise such powers and to perform such acts as are
deemed necessary or advisable to promote the best interests of the Company
with respect to the Plan.
4. Stock Subject to Plan.
[(a) The maximum number of Shares that may be issued or transferred (i)
pursuant to all Options and Awards under this Plan is 507,967 (ii) pursuant to
Nonqualified Stock Options under this Plan is 125,991, (iii) pursuant to Stock
Appreciation Rights under this Plan is 126,991 and (iv) pursuant to Restricted
Stock Awards under this Plan is 50,796 (or, in each case, the number and kind of
shares of stock or other securities which are substituted for those Shares or to
which those Shares are adjusted upon a Change in Capitalization). The Company
shall reserve for the purposes of the Plan, out of its authorized but unissued
Shares or out of Shares held in the Company's treasury, or partly out of each,
such number of Shares as shall be determined by the Board, to permit the award
of all Options and Awards granted or to be granted hereunder.]
{(a) The maximum number of Shares that may be issued or transferred pursuant
to all Options and Awards under this Plan is 1,577,438 of which not more than
200,000 Shares may be issued or transferred pursuant to Options and/or Awards to
any one Eligible Employee. Subject to the foregoing aggregate limitations, the
maximum number of Shares (i) that may be issued or transferred pursuant to
Options or Awards for Incentive Stock Options, Non-Qualified Stock Options and
Stock Appreciation Rights shall be 1,357,195 and (ii) that may be issued or
transferred pursuant to Awards of Restricted Stock shall be 220,243. In each
case, upon a Change in Capitalization after January 18, 1994, the Shares shall
be adjusted to the number and kind of Shares of stock or other securities
existing after such Change in Capitalization.}
27
<PAGE> 30
{The number of Shares set forth herein includes Shares awarded pursuant to
all Options and Awards issued or transferred under this Plan prior to the date
of the amendment to this section and the number of Shares takes into account all
Changes in Capitalization prior to January 18, 1994.}
(b) Whenever any outstanding Option or portion thereof expires, is
cancelled or is otherwise terminated (other than by exercise of the Option or
any related Stock Appreciation Right), the shares of Common Stock allocable to
the unexercised portion of such Option may again be the subject of Options and
Awards hereunder.
(c) Whenever any Shares subject to an Award or Option are resold to the
Company, or are forfeited for any reason pursuant to the terms of the Plan, such
Shares may again be the subject of Options and Awards hereunder.
5. Eligibility. Subject to the provisions of the Plan, the Committee shall
have full and final authority to select those eligible Employees who will
receive Options and/or Awards but no person shall receive any Options or Awards
unless he is an employee of the Company or a Subsidiary at the time the Option
or Award is granted.
6. Stock Options. The Committee may grant Options in accordance with the
Plan, the terms and conditions of which shall be set forth in an Agreement. Each
Option and Option Agreement shall be subject to the following conditions:
(a) Purchase Price. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Option shall be
set forth in the Agreement, provided that the purchase price per Share
under each Incentive Stock Option shall not be less than 100% of the Fair
Market Value of a Share at the time the Option is granted (110% in the case
of an Incentive Stock Option granted to a Ten-Percent Stockholder) and
under each Nonqualified Stock Option shall not be less than 80% of the Fair
Market Value of a Share at the time the Option is granted.
(b) Duration. Options granted hereunder shall be for such term as the
Committee shall determine, provided that (i) no Incentive Stock Option
shall be exercisable after the expiration of ten (10) years from the date
it is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder) and (ii) no Nonqualified Stock Option
shall be exercisable after the expiration of ten (10) years and one (1) day
from the date it is granted. The Committee may, subsequent to the granting
of any Option, extend the term thereof but in no event shall the term as so
extended exceed the maximum term provided for in the preceding sentence.
(c) Non-transferability. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than by will or the
laws of descent and distribution, and an Option may be exercised during the
lifetime of such Optionee only by the Optionee or his guardian or legal
representative. The terms of such Option shall be binding upon the
beneficiaries, executors, administrators, heirs and successors of the
Optionee.
(d) Stock Options; Vesting. Subject to Section 6(h) hereof, each
Option shall be exercisable in such installments (which need not be equal)
and at such times as may be designated by the Committee and set forth in
the Option Agreement. Unless otherwise provided in the Agreement, to the
extent not exercised, installments shall accumulate and be exercisable, in
whole or in part, at any time after becoming exercisable, but not later
than the date the Option expires. {Upon the death. Disability or Retirement
of an Optionee, all Options shall become immediately exercisable.
Notwithstanding the foregoing}, [T]{t}he Committee may accelerate the
exercisability of any Option or portion thereof at any time.
(e) Method of Exercise. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number
of Shares to be purchased and accompanied by payment therefor and otherwise
in accordance with the Agreement pursuant to which the Option was granted.
The purchase price for any shares purchased pursuant to the exercise of an
Option shall be paid in full upon such exercise in cash, by check, or, at
the discretion of the Committee and upon such terms and conditions as the
Committee shall
28
<PAGE> 31
approve, by transferring Shares to the Company. Any Shares transferred to
the Company as payment of the purchase price under an Option shall be
valued at their Fair Market Value on the day preceding the date of exercise
of such Option. If requested by the Committee, the Optionee shall deliver
the Agreement evidencing the Option and the Agreement evidencing any
related Stock Appreciation Right to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to
the Optionee. Not less than 100 Shares may be purchased at any time upon
the exercise of an Option unless the number of Shares so purchased
constitutes the total number of Shares then purchasable under the Option.
(f) Rights of Optionees. No Optionee shall be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i)
the Option shall have been exercised pursuant to the terms thereof, (ii)
the Company shall have issued and delivered the Shares to the Optionee, and
(iii) the Optionee's name shall have been entered as a stockholder of
record on the books of the Company. Thereupon, the Optionee shall have full
voting, dividend and other ownership rights with respect to such Shares.
(g) Termination of Employment. In the event that an Optionee ceases to
be employed by the Company or any Subsidiary, any outstanding Options held
by such Optionee shall, unless the Option Agreement evidencing such Option
provides otherwise, terminate as follows:
(1) If the Optionee's termination of employment is due to his death
or Disability, the Option [(to the extent exercisable at the time of the
Optionee's termination of employment)] shall be exercisable for a period
of one (1) year following such termination of employment, and shall
thereafter terminate;
(2) If the Optionee's termination of employment is by the Company
or a Subsidiary for Cause or is by the Optionee {(other than due to the
Optionee's Retirement)}, the Option shall terminate on the date of the
Optionee's termination of employment; and
(3) If the Optionee's termination of employment is {due to the
Optionee's Retirement} or for any other reason (including an Optionee's
ceasing to be employed by a Subsidiary as a result of the sale of such
Subsidiary or an interest in such Subsidiary), the Option (to the extent
exercisable at the time of the Optionee's termination of employment)
shall be exercisable for a period of ninety (90) days following such
termination of employment, and shall thereafter terminate.
Notwithstanding the foregoing, the Committee may provide, either at
the time an Option is granted or thereafter, that the Option may be
exercised after the periods provided for in this Section 6(g), but in no
event beyond the term of the Option.
(h) Effect of Change in Control. In the event of a Change in Control,
(A) all Options outstanding on the date of such Change in Control shall,
for a period of sixty (60) days following such Change in Control, become
immediately and fully exercisable, and (B) an Optionee will be permitted to
surrender for cancellation within sixty (60) days after such Change in
Control any Option or portion of an Option which was granted more than six
(6) months prior to the date of such surrender, to the extent not yet
exercised, and to receive a cash payment in an amount equal to the excess,
if any, of (1) in the case of a Nonqualified Stock Option, the Adjusted
Fair Market Value of the Shares subject to the Option or portion thereof
surrendered or (2) in the case of an Incentive Stock Option, the Fair
Market Value of the Shares subject to the Option or portion thereof
surrendered, over the aggregate purchase price for such Shares under the
Option.
(i) Substitution and Modification. Subject to the terms of the Plan,
the Committee may modify outstanding Options or accept the surrender of
outstanding Options (to the extent not exercised) and grant new Options in
substitution for them. Notwithstanding the foregoing, no modification of an
Option shall alter or impair any rights or obligations under the Option
without the Optionee's consent.
29
<PAGE> 32
7. Stock Appreciation Rights. The Committee may, in its discretion, either
alone or in connection with the grant of an Option, grant Stock Appreciation
Rights in accordance with the Plan, the terms and conditions of which shall be
set forth in an Agreement. If granted in connection with an Option, a Stock
Appreciation Right shall cover the same shares covered by the Option (or such
lesser number of shares as the Committee may determine) and shall, except as
provided in this Section 7, be subject to the same terms and conditions as the
related Option.
(a) Time of Grant. A Stock Appreciation Right may be granted:
(i) at any time if unrelated to an Option; or
(ii) if related to an Option, either at the time of grant, or at
any time thereafter during the term of the Option.
(b) Stock Appreciation Rights Related to an Option.
(i) Payment. A Stock Appreciation Right granted in connection with
an Option shall entitle the holder thereof, upon exercise of the Stock
Appreciation Right or any portion thereof, to receive payment of an
amount computed pursuant to Section 7(b)(iii).
(ii) Exercise. Subject to Section 7(f), a Stock Appreciation Right
granted in connection with an Option shall be exercisable at such time
or times and only to the extent that the related Option is exercisable,
and will not be transferable except to the extent the related Option may
be transferable. A Stock Appreciation Right granted in connection with
an Incentive Stock Option shall be exercisable only if the Fair Market
Value of a Share on the date of exercise exceeds the purchase price
specified in the related Incentive Stock Option.
(iii) Amount Payable. Except as otherwise provided in Section 7(g),
upon the exercise of Stock Appreciation Right related to an Option, the
Grantee shall be entitled to receive an amount determined by multiplying
(A) the excess of the Fair Market Value of a Share on the date of
exercise of such Stock Appreciation Right over the per Share purchase
price under the related Option, by (B) the number of Shares as to which
such Stock Appreciation Right is being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable with
respect to any Stock Appreciation Right by including such a limit in the
Agreement evidencing the Stock Appreciation Right at the time it is
granted.
(iv) Treatment of Related Options and Stock Appreciation Rights
Upon Exercise. Except as provided in Section 7(b)(v), (A) upon the
exercise of a Stock Appreciation Right granted in connection with an
Option, the Option shall be cancelled to the extent of the number of
Shares as to which the Stock Appreciation Right is exercised and (B)
upon the exercise of an Option granted in connection with a Stock
Appreciation Right or the surrender of such Option pursuant to Section
6(h), the Stock Appreciation Right shall be cancelled to the extent of
the number of Shares as to which the Option is exercised or surrendered.
(v) Simultaneous Exercise of Stock Appreciation Right and Option.
The Committee may provide, either at the time a Stock Appreciation Right
is granted in connection with a Nonqualified Stock Option or thereafter
during the term of the Stock Appreciation Right, that, subject to
Section 7(f), upon exercise of such Option or the surrender of the
Option pursuant to Section 6(h), the Stock Appreciation Right shall
automatically be deemed to be exercised to the extent of the number of
Shares as to which the Option is exercised or surrendered. In such
event, the Grantee shall be entitled to receive the amount described in
Section 7(b)(iii) or 7(g) hereof, as the case may be (or some percentage
of such amount if so provided in the Agreement evidencing the Stock
Appreciation Right), in addition to the Shares acquired or cash received
pursuant to the exercise or surrender of the Option. If a Stock
Appreciation Right Agreement contains an automatic exercise provision
described in this Section 7(b)(v) and the Option or any portion thereof
to which it relates is exercised within six (6) months from the date the
Stock Appreciation Right is granted, such automatic exercise provision
shall not be effective with respect to that exercise of the Option. The
30
<PAGE> 33
inclusion in an Agreement evidencing a Stock Appreciation Right of a
provision described in this Section 7(b)(v) may be in addition to and
not in lieu of the right to exercise the Stock Appreciation Right as
otherwise provided herein and in the Agreement.
(c) Stock Appreciation Rights Unrelated to an Option. The Committee
may grant to Eligible Employees Stock Appreciation Rights unrelated to
Options. Stock Appreciation Rights unrelated to Options shall contain such
terms and conditions as to exercisability, vesting and duration as the
Committee shall determine, but in no event shall they have a term of
greater than ten (10) years. {Upon the death, Disability or Retirement of a
Grantee, all Stock Appreciation Rights shall become immediately
exercisable. Upon the death or Disability of a Grantee, the Stock
Appreciation Rights held by that Grantee shall be exercisable for a period
of one (1) year following such termination of employment, and shall
thereafter terminate. Upon the Retirement of a Grantee, the Stock
Appreciation Rights held by that Grantee shall be exercisable for a period
of ninety (90) days following such termination of employment, and shall
thereafter terminate.} Except as otherwise provided in Section 7(g), the
amount payable upon exercise of such Stock Appreciation Rights shall be
determined in accordance with Section 7(b)(iii), except that "Fair Market
Value of a Share on the date of the grant of the Stock Appreciation Right"
shall be substituted for "purchase price under the related Option."
(d) Method of Exercise. Stock Appreciation Rights shall be exercised
by a Grantee only by a written notice delivered in person or by mail to the
Secretary of the Company at the Company's principal executive office,
specifying the number of Shares with respect to which the Stock
Appreciation Right is being exercised. If requested by the Committee, the
Grantee shall deliver the Agreement evidencing the Stock Appreciation Right
being exercised and the Agreement evidencing any related Option to the
Secretary of the Company who shall endorse thereon a notation of such
exercise and return such Agreements to the Grantee.
(e) Form of Payment. Payment of the amount determined under Sections
7(b)(iii) or 7(c), may be made solely in whole shares of Common Stock in a
number determined at their Fair Market Value on the date of exercise of the
Stock Appreciation Right or, alternatively, at the sole discretion of the
Committee, solely in cash, or in a combination of cash and Shares as the
Committee deems advisable. In the event that a Stock Appreciation Right is
exercised within the sixty-day period following a Change in Control, any
amount payable shall be solely in cash. If the Committee decides to make
full payment in Shares, and the amount payable results in a fractional
Share, payment for the fractional Share will be made in cash.
Notwithstanding the foregoing, no payment in the form of cash may be made
upon the exercise of a Stock Appreciation Right pursuant to Section
7(b)(iii) or 7(c) to an officer of the Company or a Subsidiary who is
subject to Section 16(b) of the Exchange Act, unless the exercise of such
Stock Appreciation Right is made during the period beginning on the third
business day and ending on the twelfth business day following the date of
release for publication of the Company's quarterly or annual statements of
earnings.
(f) Restrictions. No Stock Appreciation Right may be exercised before
the date six (6) months after the date it is granted, except in the event
that the death or Disability of the Grantee occurs before the expiration of
the six-month period.
(g) Effect of Change in Control. In the event of a Change in Control,
subject to Section 7(f), all Stock Appreciation Rights shall, for a period
of sixty (60) days following such Change in Control, become immediately and
fully exercisable. Notwithstanding Sections 7(b)(iii) and 7(c), upon the
exercise, during the sixty (60) day period following a Change in Control,
of a Stock Appreciation Right (other than a Stock Appreciation Right
granted in connection with an Incentive Stock Option) or any portion
thereof, the amount payable shall be determined by reference to the
Adjusted Fair Market Value (rather than by reference to the Fair Market
Value) of the Shares on the date of such exercise.
8. Restricted Stock. The Committee may grant Awards of Restricted Stock
which shall be evidenced by an Agreement between the Company and the Grantee.
Each Agreement shall contain such restrictions, terms and conditions as the
Committee may require and (without limiting the generality of the foregoing)
such
31
<PAGE> 34
Agreements may require that an appropriate legend be placed on Share
certificates. Awards of Restricted Stock shall be subject to the following terms
and provisions:
(a) Rights of Grantee.
(i) Shares of Restricted Stock granted pursuant to an Award
hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted and the purchase
price, if any, is paid by the Grantee, provided that the Grantee has
executed an Agreement evidencing the Award, an Escrow Agreement,
appropriate blank stock powers and any other documents which the
Committee, in its absolute discretion, may require as a condition to the
issuance of such Shares. If a Grantee shall fail to execute the
Agreement evidencing a Restricted Stock Award, an Escrow Agreement or
appropriate blank stock powers or shall fail to pay the purchase price,
if any, for the Restricted Stock, the Award shall be null and void.
Shares issued in connection with a Restricted Stock Award, together with
the stock powers, shall be deposited with the Escrow Agent. Except as
restricted by the terms of the Agreement, upon the delivery of the
Shares to the Escrow Agent, the Grantee shall have all of the rights of
a stockholder with respect to such Shares, including the right to vote
the shares and to receive, subject to Section 8(d), all dividends or
other distributions paid or made with respect to the Shares.
(ii) If a Grantee receives rights or warrants with respect to any
Shares which were awarded to him as Restricted Stock, such rights or
warrants or any Shares or other securities he acquires by the exercise
of such rights or warrants may be held, exercised, sold or otherwise
disposed of by the Grantee free and clear of the restrictions and
obligations provided by this Plan.
(b) Non-transferability. Until any restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set
forth in Section 8(c), such Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated,
nor shall they be delivered to the Grantee. Upon the termination of
employment of the Grantee, all of such Shares with respect to which
restrictions have not lapsed shall be resold by the Grantee to the Company
at the same price paid by the Grantee for such Shares or shall be forfeited
and automatically transferred to and reacquired by the Company at no cost
to the Company if no purchase price had been paid for such Shares. The
Committee may also impose such other restrictions and conditions on the
Shares as it deems appropriate.
(c) Lapse of Restrictions.
(i) Restrictions upon Shares of Restricted Stock awarded hereunder
shall lapse at such time or times and on such terms, conditions and
satisfaction of performance criteria as the Committee may determine;
provided, however, that the restrictions upon such Shares shall lapse
only if the Grantee on the date of such lapse is then and has
continuously been an employee of the Company or a Subsidiary from the
date the Award was granted.
(ii) In the event of a Change in Control, all restrictions upon any
Shares of Restricted Stock shall lapse immediately and all such Shares
shall become fully vested in the Grantee thereof.
(iii) In the event of termination of employment as a result of
death{,} [or] Disability {or Retirement} of a Grantee, [the Committee,
in its absolute discretion, may determine that the] {all} restrictions
upon [some or all] Shares of Restricted Stock awarded to [the] {such}
Grantee shall thereupon immediately lapse. The Committee may also
decide at any time, in its absolute discretion and on such terms and
conditions as it deems appropriate, to remove or modify the
restrictions upon Shares of Restricted Stock awarded hereunder.
(d) Treatment of Dividends. At the time of an Award of Shares of
Restricted Stock, the Committee may, in its discretion, determine that the
payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on Shares of Restricted Stock by the Company shall be
deferred until the earlier to occur of (i) the lapsing of the restrictions
imposed upon such Shares, in which case such dividends
32
<PAGE> 35
shall be paid over to the Grantee, or (ii) the forfeiture of such Shares
under Section 8(b) hereof, in which case such dividends shall be forfeited
to the Company, and such dividends shall be held by the Company for the
account of the Grantee until such time. In the event of such deferral,
interest shall be credited on the amount of such dividends held by the
Company for the account of the Grantee from time to time at such rate per
annum as the Committee, in its discretion, may determine. Payment of
deferred dividends, together with interest accrued thereon as aforesaid,
shall be made upon the earlier to occur of the events specified in (i) and
(ii) of the immediately preceding sentence, in the manner specified
therein.
(e) Delivery of Shares. When the restrictions imposed hereunder and in
the Plan expire or have been cancelled with respect to one or more shares
of Restricted Stock, the Company shall notify the Grantee and the Escrow
Agent of same. The Escrow Agent shall then return the certificate covering
the Shares of Restricted Stock to the Company and upon receipt of such
certificate the Company shall deliver to the Grantee (or such Grantee's
legal representative, beneficiary or heir) a certificate for a number of
shares of Common Stock, without any legend or restrictions (except those
required by any federal or state securities laws), equivalent to the number
of Shares of Restricted Stock for which restrictions have been cancelled or
have expired. A new certificate covering Shares of Restricted Stock
previously awarded to the Grantee which remain restricted shall be issued
to the Grantee and held by the Escrow Agent and the Agreement, as it
relates to such shares, shall remain in effect.
9. Loans.
(a) The Company or any Subsidiary may make loans to a Grantee or
Optionee in connection with the purchase of Shares pursuant to an Award or
in connection with the exercise of an Option, subject to the following
terms and conditions and such other terms and conditions not inconsistent
with the Plan, including the rate of interest, if any, as the Committee
shall impose from time to time.
(b) No loan made under the Plan shall exceed the sum of (i) the
aggregate purchase price payable pursuant to the Option or Award with
respect to which the loan is made, plus (ii) the amount of the reasonably
estimated income taxes payable by the Optionee or Grantee with respect to
the Option or Award. In no event may any such loan exceed the Fair Market
Value, at the date of exercise, of any such Shares.
(c) No loan shall have an initial term exceeding ten (10) years;
provided, that loans under the Plan shall be renewable at the discretion of
the Committee; and provided, further, that the indebtedness under each loan
shall become due and payable, as the case may be, on a date no later than
(i) one (1) year after termination of the Optionee's or Grantee's
employment due to death, retirement or Disability, or (ii) the date of
termination of the Optionee's or Grantee's employment for any reason other
than death, retirement or Disability.
(d) Loans under the Plan may be satisfied by an Optionee or Grantee,
as determined by the Committee, in cash or, with the consent of the
Committee, in whole or in part by the transfer to the Company of Shares
whose Fair Market Value on the date of such payment is equal to the cash
amount for which such Shares are transferred.
(e) A loan shall be secured by a pledge of Shares with a Fair Market
Value of not less than the principal amount of the loan. After partial
repayment of a loan, pledged shares no longer required as security may be
released to the Optionee or Grantee.
(f) Every loan shall meet all applicable laws, regulations and rules
of the Federal Reserve Board and any other governmental agency having
jurisdiction.
10. Adjustment Upon Changes in Capitalization.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to the maximum
number and class of shares of stock with respect to
33
<PAGE> 36
which Options or Awards may be granted under the Plan, the number and class
of shares as to which Options or Awards have been granted under the Plan,
and the purchase price therefor, if applicable.
(b) Any such adjustment in the Shares or other securities subject to
outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a
modification as defined by Section 425(h)(3) of the Code and only to the
extent otherwise permitted by Sections 422A and 425 of the Code.
(c) If, by reason of a Change in Capitalization, a Grantee of an Award
shall be entitled to new, additional or different shares of stock or
securities (other than rights or warrants to purchase securities), such new
additional or different shares shall thereupon be subject to all of the
conditions, restrictions and performance criteria which were applicable to
the Shares or units pursuant to the Award prior to such Change in
Capitalization.
11. Effect of Certain Transactions. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in which the Company
is not the surviving corporation or (iii) the sale or disposition of all or
substantially all of the Company's assets, the Plan and the Options and Awards
issued hereunder shall terminate on the effective date of such transaction,
unless provision is made in connection with such transaction for the assumption
of Options or Awards theretofore granted under the Plan, or the substitution for
such Options or Awards of new options or awards of the Successor Corporation,
with appropriate adjustment as to the number and kind of shares and the purchase
price for shares thereunder.
12. Release of Financial Information. A copy of the Company's annual report
to stockholders shall be delivered to each Optionee and Grantee at the time such
report is distributed to the Company's stockholders. Upon request the Company
shall furnish to each Optionee and Grantee a copy of its most recent annual
report and each quarterly report and current report filed under the Exchange
Act, since the end of the Company's prior fiscal year.
13. Termination and Amendment of the Plan. The Plan shall terminate on the
day preceding the tenth anniversary of its effective date and no Option or Award
may be granted thereafter. The Board may sooner terminate or amend the Plan at
any time, and from time to time; provided, however, that, except as provided in
Sections 10 and 11 hereof, no amendment shall be effective unless approved by
the stockholders of the Company in accordance with applicable law and
regulations at an annual or special meeting held within twelve months before or
after the date of adoption of such amendment, where such amendment will:
(a) increase the number of Shares as to which Options or Awards may be
granted under the Plan;
(b) change the class of persons eligible to participate in the Plan;
(c) change the minimum purchase price of Shares pursuant to Options or
Awards as provided herein;
(d) extend the maximum period for granting or exercising Options
provided herein; or
(e) otherwise materially increase the benefits accruing to Eligible
Employees under the Plan.
Except as provided in Sections 10 and 11 hereof, rights and obligations
under any Option or Award granted before any amendment of the Plan shall not be
altered or impaired by such amendment, except with the consent of the Optionee
or Grantee, as the case may be.
14. Non-Exclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.
15. Limitation of Liability. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:
34
<PAGE> 37
(a) give any person any right to be granted an Option or Award other
than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
(c) limit in any way the right of the Company to terminate the
employment of any person at any time; or
(d) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person in any particular position
at any particular rate of compensation or for any particular period of
time.
16. Regulations and Other Approvals; Governing Law.
(a) This Plan and the rights of all persons claiming hereunder shall
be construed and determined in accordance with the laws of the State of New
Jersey without giving effect to the choice of law principles thereof,
except to the extent that such law is preempted by federal law.
(b) The obligation of the Company to sell or deliver Shares with
respect to Options and Awards granted under the Plan shall be subject to
all applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals
by governmental agencies as may be deemed necessary or appropriate by the
Committee.
(c) The Plan is intended to comply with Rule 16b-3 promulgated under
the Exchange Act and the Committee shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith.
Any provisions inconsistent with such Rule shall be inoperative and shall
not affect the validity of the Plan.
(d) Except as otherwise provided in Section 13, the Board may make
such changes as may be necessary or appropriate to comply with the rules
and regulations of any government authority or to obtain for Eligible
Employees granted Incentive Stock Options the tax benefits under the
applicable provisions of the Code and regulations promulgated thereunder.
(e) Each Option and Award is subject to the requirement that, if at
any time the Committee determines, in its absolute discretion, that the
listing, registration or qualification of Shares issuable pursuant to the
Plan is required by any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the grant
of an Option or the issuance of Shares, no Options shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or
obtained free of any conditions unacceptable to the Committee.
(f) In the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended, and is not otherwise exempt from such
registration, such Shares shall be restricted against transfer to the
extent required by the Securities Act of 1933, as amended, or regulations
thereunder, and the Committee may require any individual receiving Shares
pursuant to the Plan, as a condition precedent to receipt of such Shares
(including upon exercise of an Option), to represent to the Company in
writing that the Shares acquired by such individual are acquired for
investment only and not with a view to distribution.
17. Miscellaneous.
(a) Multiple Agreements. The terms of each Option or Award may differ
from other Options or Awards granted under the Plan at the same time, or at
some other time. The Committee may also grant more than one Option or Award
to a given Eligible Employee during the term of the Plan, either in
addition to, or in substitution for, one or more Options or Awards
previously granted to that Eligible Employee. The grant of multiple Options
and/or Awards may be evidenced by a single Agreement or multiple
Agreements, as determined by the Committee.
35
<PAGE> 38
(b) Withholding of Taxes. The Company shall have the right to deduct
from any distribution of cash to any Optionee or Grantee an amount equal to
the federal, state and local income taxes and other amounts required by law
to be withheld with respect to any Option or Award. Notwithstanding
anything to the contrary contained herein, if an Optionee or Grantee is
entitled to receive Shares upon exercise of an Option or pursuant to an
Award, the Company shall have the right to require such Optionee or
Grantee, prior to the delivery of such Shares, to pay to the Company the
amount of any federal, state or local income taxes and other amounts which
the Company is required by law to withhold. The Agreement evidencing any
Incentive Stock Options granted under this Plan shall provide that if the
Optionee makes a disposition, within the meaning of Section 425(c) of the
Code and regulations promulgated thereunder, of any Share or Shares issued
to him or her pursuant to his or her exercise of the Incentive Stock Option
within the two-year period commencing on the day after the date of grant of
such Option or within the one-year period commencing on the day after the
date of transfer of the Share or Shares to the Optionee pursuant to the
exercise of such Option, he or she shall, within ten (10) days of such
disposition, notify the Company thereof and immediately deliver to the
Company any amount of federal income tax withholding required by law.
(c) Designation of Beneficiary. Each Optionee and Grantee may, with
the consent of the Committee, designate a person or persons to receive in
the event of his/her death, any Option or Award or any amount payable
pursuant thereto, to which he/she would then be entitled. Such designation
will be made upon forms supplied by and delivered to the Company and may be
revoked in writing. If an Optionee fails effectively to designate a
beneficiary, then his/her estate will be deemed to be the beneficiary.
18. Effective Date. The effective date of the Plan shall be the date of its
adoption by the Board, subject only to the approval by the affirmative vote of a
majority of the votes eligible to be cast at a meeting of stockholders to be
held within twelve (12) months of such adoption.
36
<PAGE> 39
APPENDIX TO ELECTRONIC FORMAT DOCUMENT
In Exhibit A to the Proxy Statement, language indicated as being shown
as underlined in the typeset document is enclosed in braces "{" and "}" in the
electronic format document. Language indicated as being shown by strike out
in the typeset document is enclosed in brackets "[" and "]" in the electronic
format document.
<PAGE> 40
VALLEY NATIONAL BANCORP
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MARCH 22, 1994
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Thomas P. Infusino, Robert E.
McEntee and Richard F. Tice and each of them, as Proxy, each with full power of
substitution, to vote all of the shares of Valley National Bancorp standing in
the undersigned's name at the Annual Meeting of Shareholders of Valley National
Bancorp, to be held at the Radisson Hotel, formerly the Sheraton Fairfield
Hotel, 690 Route 46 East, Fairfield, New Jersey on Tuesday, March 22, 1994 at
3:00 p.m., and at any adjournment thereof. The undersigned hereby revokes any
and all proxies heretofore given with respect to such meeting.
This proxy will be voted as specified below. If no choice is
specified, the proxy will be voted FOR the election of the 16 nominees for
director listed in the Proxy Statement and FOR approval of the Amendments to
the Corporation's Long Term Stock Incentive Plan.
The Board of Directors recommends a vote FOR the nominees on
the Proxy Statement and FOR approval of the Amendments to the Corporation's
Long-Term Stock Incentive Plan.
Shares, if any, held for your account by the trustee for the
dividend reinvestment plan will be voted in the same manner as you vote the
shares in your name individually.
1. ELECTION OF 16 DIRECTORS.
FOR the nominees listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below
Pamela Bronander, Joseph Coccia, Jr., Austin C. Drukker, Thomas P.
Infusino, Gerald Korde, Gerald H. Lipkin, Robert L. Marcalus, Robert E.
McEntee, Sam P. Pinyuh, Rubin Rabinowitz, Robert Rachesky, Barnett Rukin, Peter
Southway, Richard F. Tice, Leonard Vorcheimer, Joseph L. Vozza.
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s) write
that nominee's name on the following line.
SEE REVERSE SIDE
<PAGE> 41
2. APPROVAL OF THE AMENDMENTS TO THE PLAN
FOR approval of the Amendments AGAINST approval of the Amendments.
3. In their discretion, upon such other matters as may properly come before the
meeting.
Dated: March __________ , 1994
Signature
Signature
(Please sign exactly as your name
appears. When signing as an executor,
administrator, guardian, trustee or
attorney, please give your title as
such. If signer is a corporation, please
sign the full corporate name and then
an authorized officer should sign his
name and print his name and title below
his signature. If the shares are held in
joint name, all joint owners should sign.)
PLEASE DATE, SIGN AND RETURN PROMPTLY.
