INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-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 Rules 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 security to which transaction
applies:
-----------------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
-----------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
-----------------------------------------------------------
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:
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<PAGE>
1455 Valley Road
Wayne, New Jersey 07470
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held Tuesday, April 2, 1996
-------------------------
Notice is hereby given that the Annual Meeting of
Shareholders of Valley National Bancorp (the "Corporation") will
be held at the Radisson Hotel, 690 Route 46 East, Fairfield, New
Jersey, on Tuesday, April 2, 1996 at 3:00 pm. for the purpose of
considering and voting upon the following matters:
1. The election of the 19 persons named in the
accompanying Proxy Statement to serve as directors of the
Corporation for the ensuing year.
2. Approval of an amendment to the Corporation's
Certificate of Incorporation to increase the authorized common
stock of the Corporation to 75 million shares as more fully set
forth in the Proxy Statement.
3. Such other business as shall properly come
before the Meeting.
Shareholders of record at the close of business on February
16, 1996 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 __, 1996
<PAGE>
VALLEY NATIONAL BANCORP
1455 Valley Road
Wayne, New Jersey 07470
PROXY STATEMENT
Dated March ___, 1996
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") of proxies for use at the Annual Meeting of
Shareholders of the Corporation to be held at the Radisson Hotel,
690 Route 46 East, Fairfield, New Jersey, on Tuesday, April 2,
1996, at 3:00 p.m. local time. This Proxy Statement is first
being mailed to shareholders on approximately March ___, 1996.
Outstanding Securities and Voting Rights
The record date for determining shareholders entitled to
notice of and to vote at the Annual Meeting is February 16, 1996.
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 35,xxx,xxx 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 19 nominees for director who are named in this Proxy
Statement and in favor of the proposal to amend the Corporation's
Certificate of Incorporation to increase the authorized common
stock, unless the shareholder specifies a different choice by
means of his proxy or revokes the proxyprior 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 majority of the shares voted is
required to approve the proposal to amend the Corporation's
certificate of incorporation, and a plurality of the shares voted
is required to elect a director. 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, 1455 Valley Road,
Wayne, New Jersey 07470, if it is received prior to the Annual
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.
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
DIRECTOR INFORMATION
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 19.
It is intended that the proxies solicited by the Board of
Directors will be voted for the election of the 19 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 1997 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") prior to the formation of the holding company.
<TABLE>
<CAPTION>
Name, Age and Position With Principal Occupations During Director
the Corporation Past Five Years Since
--------------------------- --------------------------------------------- ---------
<C> <S> <S>
Andrew B. Abramson, 42 . . . President and Chief Executive Officer, The 1994
Value Group, Inc. (real estate development
and property management firm)
Pamela Bronander, 39 . . . . Executive Vice President, Scandia Packaging 1993
Machinery Co. (designs & builds packaging
machinery)
Joseph Coccia, Jr., 66 . . . Coccia Realty, Inc. (real estate brokers); 1986
previously, Coccia Insurance Associates, Inc.
(insurance brokers)
Austin C. Drukker, 62 . . . . President, Press Publications, Inc. 1973
(newspaper); adjunct professor, Montclair
State College; formerly President-Publisher,
The Herald-News (newspaper)
Michael Francis, 51 . . . . . Chairman and Chief Executive Officer, Planned 1995
Building Services, Inc. (cleaning and
maintenance company)
Willard L. Hedden, 68 . . . . Retired, formerly Executive Vice President, 1995
Spartan Oil Co. (fuel oil company)
Thomas P. Infusino, 74 . . . Chairman and Chief Executive Officer, 1973
Wakefern Food Corp. (supermarket
distribution centers); also President, Nutley
Park ShopRite (supermarket)
Gerald Korde, 52 . . . . . . President, Birch Lumber Company, Inc. 1989
(wholesale and retail lumber distribution
company)
Gerald H. Lipkin, 55 . . . . Chairman and Chief Executive Officer of the 1986
Chairman and Chief Executive Corporation and the Bank
Officer
Joleen Martin, 63 . . . . . . President and Sole Stockholder, C.P. Test 1995
Services, Inc. (valve manufacturing company)
Robert E. McEntee, 63 . . . . Management Consultant; formerly, President, 1979
Russ Berrie and Company, Inc. (marketer of
gift items)
William McNear, 72 . . . . . President and sole owner McNear Excavating 1995
Company (excavating company)
Sam P. Pinyuh, 63 . . . . . . Executive Vice President of the Corporation 1990
Executive Vice President and the Bank.
Robert Rachesky, 67 . . . . . Consultant, Fujicolor Photo Services, Inc. 1982
(photo developing and supply company);
fomerly Chairman, Fujicolor Photo Services, Inc.
formerly President, Union Photo Co. (photo
developing and supply company)
Barnett Rukin, 55 . . . . . . Chairman and Chief Executive Officer, Hudson 1991
Transit Lines, Inc. (operator of Short Line
Bus Company)
Peter Southway, 61 . . . . . President and Chief Operating Officer of the 1978
President and Chief Corporation and the Bank
Operating Officer
Richard F. Tice, 66 . . . . . Partner, Tice Farms (farming and real estate) 1982
Leonard Vorcheimer, 53 . . . Principal, L.J.V. Enterprises (investment 1992
concern); formerly Vice President, Kings
Supermarkets, Inc.
Joseph L. Vozza, 66 . . . . . President, Joseph L. Vozza Administrative 1982
Services, Inc. (insurance consultant/adminis-
trator); 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 Robert
Marcalus is not standing for election in 1996. Messrs. Hedden and McNear were
appointed as directors in July, 1995 in connection with the acquisition of
Lakeland First Financial Group, Inc. Mr. Francis and Ms. Martin were appointed
as directors in December, 1995.
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 13 meetings
during 1995. 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
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 following
directors: Messrs. Rachesky (Chairman), Drukker, Korde, McEntee,
Tice and Vorcheimer. The Committee met five times during 1995.
The Corporation also maintains standing Nominating and
Personnel and Compensation committees. The Personnel and
Compensation Committee (the "Committee") sets general
compensation levels for all officers and employees and sets
specific compensation for executive officers. The Committee also
administers the Long-Term Incentive Plan and makes awards
thereunder. The Committee, which met six times in 1995, 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, Drukker, Korde, Lipkin, Marcalus, Rabinowitz
and Rachesky. The Committee met three times during 1995.
During 1995 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 or she served, except Mr.
Tice, who attended 74% of such meetings.
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, 1996, by each director, by each
executive officer of the Corporation for whom individual
information is required to be set forth in this Proxy Statement
(the "Named Officers") under rules of the Securities and Exchange
Commission (the "SEC"), 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.
Number of Shares
Beneficially Owned Percent of
Name of Beneficial Owner <F1> Class <F2>
------------------------------------- ------------------ ----------
Directors and Named Officers:
Andrew B. Abramson . . . . . . . . . 49,169<F3> 0.14%
Pamela Bronander . . . . . . . . . . 4,901<F4> 0.01
Joseph Coccia, Jr . . . . . . . . . . 178,960<F5> 0.50
Austin C. Drukker . . . . . . . . . . 65,856<F6> 0.18
Michael Francis . . . . . . . . . . . 29,440<F7> 0.08
Willard L. Hedden . . . . . . . . . . 37,245 0.10
Thomas P. Infusino . . . . . . . . . 141,926<F8> 0.40
Gerald Korde . . . . . . . . . . . . 609,541<F9> 1.70
Gerald H. Lipkin . . . . . . . . . . 165,395<F10> 0.46
Alan Lipsky . . . . . . . . . . . . . 25,793<F11> 0.07
Robert L. Marcalus . . . . . . . . . 291,837<F12> 0.81
Joleen Martin . . . . . . . . . . . . 79,264<F13> 0.22
Robert E. McEntee . . . . . . . . . . 36,604<F14> 0.10
William McNear . . . . . . . . . . . 135,749<F15> 0.38
Sam P. Pinyuh . . . . . . . . . . . . 54,909<F16> 0.15
Robert Rachesky . . . . . . . . . . . 176,013<F17> 0.49
Barnett Rukin . . . . . . . . . . . . 13,723<F18> 0.04
Peter Southway . . . . . . . . . . . 130,305<F19> 0.36
Peter John Southway . . . . . . . . . 23,880<F20> 0.07
Richard F. Tice . . . . . . . . . . . 123,100<F21> 0.34
Leonard Vorcheimer . . . . . . . . . 21,165 0.07
Joseph L. Vozza . . . . . . . . . . . 28,837<F22> 0.08
Directors and Executive Officers as a
group (28 persons) . . . . . . . . . 2,471,318<F23> 6.88%
NOTES
<F1> 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 exercise of any right or option.
Unless otherwise noted, all shares are owned of record and
beneficially by the named person.
<F2> The number of shares of common stock used in calculating
the percentage of the class owned includes 35,713,374
shares of common stock outstanding as of January 31, 1996,
and 196,396 shares purchasable pursuant to options
exercisable within 60 days of January 31, 1996.
<F3> This total includes 1,811 shares held by Mr. Abramson's
wife, 3,687 shares held by his wife in trust for his
children, and 15,849 shares held by two family trusts for
which Mr. Abramson is trustee.
<F4> This total includes 562 shares held in custody for
children and 2,338 shares held by a trust for which Ms.
Bronander is co-trustee.
<F5> This total includes 163,324 shares held by Mr. Coccia
jointly with his wife, 10,507 shares held by a family
foundation and 5,129 shares held by his wife.
<F6> This total includes 13,067 shares held by a trust for
which Mr. Drukker is a trustee and of which he is a
beneficiary, 462 shares in trust for his children and
2,257 shares held by a family foundation.
<F7> This total includes 5,109 shares held in a self-directed
Keogh in the name of Mr. Francis and 856 shares held in a
self-directed IRA.
<F8> This total includes 16,273 shares held in the name of Mr.
Infusino's wife.
<F9> This total includes 93,446 shares held in the name of Mr.
Korde's wife, 18,366 shares held jointly with his wife,
186,349 shares held by his wife as custodian for his
children, 90,629 shares held by a trust for which Mr.
Korde is a trustee and 57,326 shares held by a profit
sharing plan which Mr. Korde controls.
<F10> This total includes 31,252 shares held in the name of Mr.
Lipkin's wife, 2,667 shares held jointly with his wife,
3,202 shares held jointly with his brother, 5,422 shares
held by self-directed IRA plans in which Mr. Lipkin and
his wife are beneficiaries and 3,915 shares held by a
family foundation. This total also includes Mr. Lipkin's
16,582 restricted shares and 34,791 shares purchasable
pursuant to options exercisable within 60 days, but not
the 35,678 shares potentially available in the future by
exercise of his stock options not exercisable within 60
days of January 31, 1996.
<F11> This total includes 279 shares owned by Mr. Lipsky's wife
and 1,277 shares held by his wife in a self-directed IRA.
This total also includes Mr. Lipsky's 300 restricted
shares and 2,484 shares purchasable pursuant to options
exercisable within 60 days, but not the 2,000 shares
potentially available in the future by exercise of his
stock options not exercisable within 60 days of January
31, 1996.
<F12> This total includes 54,255 shares held in the name of Mr.
Marcalus' wife and 140,765 shares held by a corporation
which Mr. Marcalus controls and to which he is a major
stockholder. Mr. Marcalus disclaims beneficial ownership
of his wife's shares.
<F13> This total includes 39,548 shares held by Ms. Martin
jointly with her husband and 9,316 held by her husband.
<F14> This total includes 34,576 shares held jointly with Mr.
McEntee's wife and 2,028 shares held by Mr. McEntee in a
self-directed Keogh plan.
<F15> This total includes 94,145 shares held jointly with Mr.
McNear's wife.
<F16> This total includes 13,340 shares held jointly with Mr.
Pinyuh's wife, 1,800 shares held in a family foundation,
2,657 restricted shares and 9,738 shares purchasable
pursuant to options exercisable within 60 days, but not
the 12,546 shares potentially available in the future by
exercise of his stock options not exercisable within 60
days of January 31, 1996.
<F17> This total includes 6,820 shares held by Mr. Rachesky's
wife, 11,798 shares held by self-directed IRA plan, 12,840
shares held in a self-directed IRA by his wife and 144,555
shares held by an annuity trust for which Mr. Rachesky is
co-trustee.
<F18> This total includes 5,843 shares held by Mr. Rukin's wife
as custodian for their children, 1,744 shares held by a
private foundation of which Mr. Rukin is an officer and
100 shares for a pension in which Mr. Rukin is a trustee.
<F19> This total includes 7,834 shares held in the name of Mr.
Southway's wife, 2,500 shares held in a family foundation
and 2,459 shares held in self directed IRA plans. This
total also includes Mr. Southway's 11,673 restricted
shares and 35,735 shares purchasable pursuant to options
exercisable within 60 days, but not the 25,251 shares
potentially available in the future by exercise of his
stock options not exercisable within 60 days of January
31, 1996.
<F20> This total includes 426 shares held by Mr. Southway as
custodian for his child, 3,190 restricted shares and
15,439 shares purchasable pursuant to stock options
exercisable within 60 days, but not the 11,621 shares
potentially available in the future by exercise of his
stock options exercisable within 60 days of January 31,
1996.
<F21> This total includes 38,048 shares held jointly with Mr.
Tice's wife and 23,100 shares owned by a partnership of
which Mr. Tice is a general partner.
<F22> This total includes 3,150 shares held by a family
foundation.
<F23> This total includes 47,706 shares owned by six executive
officers who are not directors or Named Officers, which
total includes 8,326 restricted shares and 15,276 shares
purchasable pursuant to options exercisable within 60
days. The total does not include 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 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.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
-------------------------
Annual Compensation Awards
-----------------------------------------------------------
(a) (b) (c) (d) (f) (g) (i)
Restricted Securities
Stock Underlying All Other
Name and Principal Awards(s) Options/ Compensation
Position Year Salary($) Bonus($) <F1>($) SARs<F2>(#) <F3>($)
------------------ ---- --------- -------- ---------- ---------- ------------
<C> <S> <S> <S> <S> <S> <S>
Gerald H. Lipkin, 1995 421,500 260,000 130,620 15,749 34,490
CEO of the 1994 410,000 315,000 143,110 17,325 9,240
Corporation 1993 390,000 325,000 143,093 22,737 7,075
Peter Southway, 1995 368,600 200,000 91,434 10,499 9,240
President of the 1994 368,000 241,000 100,177 11,550 9,240
Corporation 1993 350,000 250,000 105,437 15,881 7,075
Sam P. Pinyuh, 1995 205,000 40,000 - 5,249 9,240
Executive Vice 1994 200,000 62,000 28,622 5,486 5,538
President of the 1993 190,000 65,000 30,125 7,218 5,340
Corporation
Peter John Southway, 1995 150,000 40,000 48,000 5,000 9,240
First Senior Vice 1994 135,000 35,000 9,900 3,150 3,894
President of the Bank 1993 125,000 35,000 12,750 3,465 3,750
Alan Lipsky, First Senior 1995 157,500 15,000 7,200 2,000 9,240
Vice President of the Bank 1994 157,500 10,000 - - -
1993 - - - - -
</TABLE>
NOTES:
<F1> All restrictions on restricted stock awards lapse at the
rate of 20% per year commencing with the first anniversary
from the date of grant. 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. The
restricted stock awards are made pursuant to the Valley
National Bancorp Long-Term Stock Incentive Plan (the
"Plan"). Upon a "change in control" as defined in the
Plan, all restrictions on shares of restricted stock will
lapse. Under the Plan, a "change in control" is defined
to mean any of the following events: (i) when the
Corporation or a Subsidiary (as defined in the Plan)
acquires actual knowledge that any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")),
other than an affiliate of the Corporation or a Subsidiary
or an employee benefit plan established or maintained by
the Corporation, 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 Corporation representing more than
twenty-five percent (25%) of the combined voting power of
the Corporation's then outstanding securities (a "Control
Person"), (ii) upon the first purchase of the
Corporation's common stock pursuant to a tender or
exchange offer (other than a tender or exchange offer made
by the Corporation, a Subsidiary or an employee benefit
plan established or maintained by the Corporation, a
Subsidiary or any of their respective affiliates), (iii)
upon the approval by the Corporation's stockholders of (A)
a merger or consolidation of the Corporation 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
Corporation's assets or (C) a plan of liquidation or
dissolution of the Corporation, (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 Corporation,
an employee benefit plan established or maintained by the
Corporation or a Subsidiary, or an affiliate of the
Corporation 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
Corporation'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 Corporation'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.
For Mr. Lipkin, this represents awards of 15,749 shares in
1995, 5,775 shares in 1994 and 6,857 shares in 1993. As
of December 31, 1995, Mr. Lipkin held an aggregate of
16,583 shares of restricted stock with a value of
$414,575. For Mr. Peter Southway, this represents awards
of 10,499 shares in 1995, 4,042 shares in 1994 and 5,052
shares in 1993. As of December 31, 1995, Mr. Peter
Southway held an aggregate of 11,674 shares of restricted
stock with a value of $291,850. For Mr. Pinyuh, this
represents awards of 5,249 shares in 1995, 1,155 shares in
1994 and 1,443 shares in 1993. As of December 31, 1995,
Mr. Pinyuh held an aggregate of 2,656 shares of restricted
stock with a value of $66,400. For Mr. Peter John
Southway, this represents awards of 5,000 shares in 1995,
420 shares in 1994 and 577 shares in 1993. As of December
31, 1995, Mr. Peter John Southway held an aggregate of
3,189 shares of restricted stock with a value of $79,725.
For Mr. Lipsky, this represents awards of 2,000 shares in
1995. As of December 31, 1995, Mr. Lipsky held an
aggregate of 300 shares of restricted stock with a value
of $7,500. All values in this footnote are calculated
using the stock price on December 31, 1995.
<F2> 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). Upon a
"change in control" as defined in the Plan (see footnote 1
above), all options become immediately and fully
exercisable for a period of 60 days. For 1995, 5,250 of
the options granted to Mr. Lipkin, 3,500 of the options
granted to Mr. Peter Southway, and 1,750 of the options
granted to Mr. Pinyuh had tandem stock appreciation rights
("SARs"). As to those options/SARs, the executive will
have the choice of exercising the option for stock or
obtaining the cash value of the option on the exercise
date. No other SARs have been granted by the Corporation
since 1989.
<F3> All amounts shown in this column reflect employer
contributions to a 401(k) plan on behalf of the Named
Officer, except that $25,250 of the amount shown for Mr.
Lipkin in 1995 represents the cost to the Corporation of
Mr. Lipkin's $1,000,000 split dollar life insurance plan.
Option Grants in 1995
The following table shows the options granted to Named
Officers in 1995, and their potential value at the end of the
option term, assuming certain levels of appreciation of the
Corporation's common stock. As noted in footnote (2) to the
preceding table, certain options have been granted in tandem with
SARs.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Price
Appreciation for
Individual Grants Option Term <F1>
------------------------------------------------------------------------ -------------------
(a) (b) (c) (d) (e) (f) (g)
Percent of
Number of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year (#/Sh) Date 5%($) 10%($)
____ ____________ ___________ _______ __________ _______ _______
<C> <S> <S> <S> <S> <S> <S>
Gerald H. Lipkin 15,749<F2> 17.9% 24.88 2/15/2005 246,423 624,484
Peter Southway 10,499<F2> 11.9% 24.88 2/15/2005 164,277 416,310
Sam P. Pinyuh 5,249<F2> 6.0% 24.88 2/15/2005 82,131 208,135
Peter John Southway 5,000<F2> 5.7% 24.00 11/08/2005 75,467 191,249
Alan Lipsky 2,000<F2> 2.3% 24.00 11/08/2005 30,187 76,500
</TABLE>
NOTE:
<F1> 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 common stock
price. Based upon 35,782,308 common shares outstanding as
of December 31, 1995, all shareholders as a group would
receive future appreciation of $559,582,531 with 5%
growth, and $1,425,694,589 with 10% growth, over a 10-year
period.
<F2> These options become exercisable at the rate of 20% per
year beginning February 28, 1996 as to Messrs. Lipkin,
Southway and Pinyuh and November 15, 1996 as to Peter John
Southway and Alan Lipsky.
Aggregated Option Exercises in 1995 and Year-End Option Values
The following table shows the options exercised by Named
Officers in 1995, the number of options/SARs remaining
unexercised at year-end, and the value of unexercised
in-the-money options/SARs at year end.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of Securities Value of Unexercised In-
Underlying Unexercised the-Money Options/SARs at
Shares Options/SARs at FY-End (#) FY-End ($)
Acquired on Value
Name Exercise(#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- ------------ ------------------------- -------------------------
(a) (b) (c) (d) (e)
<C> <S> <S> <S> <S>
Gerald H. Lipkin 15,840 223,079 19,554/51,915 118,485/158,012
Peter Southway 8,832 125,915 23,055/37,931 202,486/139,423
Sam P. Pinyuh 20,221 239,020 3,984/18,300 12,193/67,814
Peter John Southway 749 12,912 15,439/11,621 180,419/32,334
Alan Lipsky -0- -0- 2,366/2,000 19,848/2,000
</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 $150,000, received during the last 10 years of
employment.
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
$150,000 limit on compensation and the $120,000 maximum benefit
payable and represent the benefits that could be paid from the
qualified trust during 1995. These limits are subject to annual
cost of living increases. 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, (b) his accrued benefit as of December 31, 1993
(based on the compensation limits in effect before 1994) is
higher or (c) he is a participant in the Benefit Equalization
Plan described below.
PENSION PLAN TABLE
Years of Service
-------------------------------------------------
Average Final 15 20 25 30 35
------------- -- -- -- -- --
Compensation
------------
$ 25,000 $ 3,188 $ 4,250 $ 5,313 $ 6,375 $ 7,438
$ 50,000 $ 7,459 $ 9,945 $ 12,431 $ 14,917 $ 17,403
$ 100,000 $16,084 $ 21,445 $ 26,806 $ 32,167 $ 37,528
$ 150,000 and higher $24,709 $ 32,945 $ 41,181 $ 49,417 $ 57,653
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. Benefits
are determined as (a) minus (b) as follows: (a) the benefit
calculated under the Pension Plan formula in effect prior to
January 1, 1989 and without regard to the limits on recognized
compensation and maximum benefits payable from a qualified
deferred benefit plan, minus (b) the individual's Pension Plan
benefit. In general, officers of the Corporation 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 Personnel and 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
Plan combined, assuming retirement at age 65 in 1995 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 1995.
Years of Credited Service
-------------------------------------------------
Average
Final
Compensation 15 20 25 30 35 40
------------ -- -- -- -- -- --
$150,000 $26,302 $ 35,069 $ 43,836 $ 52,603 $ 61,370 $ 70,138
$200,000 $35,677 $ 47,569 $ 59,461 $ 71,353 $ 83,245 $ 95,138
$250,000 $45,052 $ 60,069 $ 75,086 $ 90,103 $105,120 $120,138
$300,000 $54,427 $ 72,569 $ 90,711 $108,853 $126,995 $145,138
$350,000 $63,802 $ 85,069 $106,336 $127,603 $148,870 $170,138
$400,000 $73,177 $ 97,569 $121,961 $146,353 $170,745 $195,138
$450,000 $82,552 $110,069 $137,586 $165,103 $192,620 $220,138
$500,000 $91,927 $122,569 $153,211 $183,853 $214,495 $245,138
Gerald Lipkin, Peter Southway, Sam Pinyuh, Peter John
Southway and Alan Lipsky have approximately 20, 36, 27, 17 and
17 years of credited service, respectively, under the Pension
Plan (and with respect to the Benefit Equalization Plan for those
officers who participate in it) as of January 1, 1996, and, at
age 65, would have 29.1, 40.3, 28.4, 46.1 and 20.5 years of
credited service, respectively. (However, the maximum currently
is 40 years of credited service.) In 1995 the following persons
received the compensation shown below for purposes of determining
their retirement benefits under the Pension Plan (and with
respect to the Benefit Equalization Plan for those officers who
participate in it): Gerald Lipkin $421,500; Peter Southway
$368,600; Sam Pinyuh $205,000; Peter John Southway $150,000; and
Alan Lipsky $157,500. 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 August 17, 1994, the Corporation and the Bank 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
12 months of his annual salary at the time of termination, plus a
fraction of the bonus paid to the Executive in the previous year,
where such fraction is the number of months of the current year
during which the Executive served before being terminated,
divided by 12. All three executives also receive health and
dental benefits through age 65. With respect to Mr. Lipkin, who
is younger than the other two executives, his Severance Agreement
provides additional payments in the event of his death or
disability. Commencing at age 57, a minimum retirement benefit
of $150,000 per year is provided to Mr. Lipkin in the form of a
joint and two-thirds survivor annuity.
As of January 1, 1995, the Corporation and the Bank entered
into change-in-control agreements with Gerald Lipkin, Peter
Southway and Sam Pinyuh. The change-in-control agreements
generally provide employment protection to the covered Executives
for a three year period following any change-of-control (as
defined in the Agreement). If the Executive is terminated
without cause, or if he resigns for good reason (as defined) the
Executive receives a lump sum equal to 2.99 times the highest
annual compensation paid to the Executive during any calendar
year in the three calendar years immediately preceding the
change-in-control, plus continuation of the Executive's health,
hospitalization and medical insurance during the remainder of the
three year period. The change-in-control payments and benefits
to the Executive may not exceed the limitations imposed upon
parachute payments under the Internal Revenue Code, which limit
all payments contingent on a change in control to an amount not
to exceed three times the Executive's average taxable wage
compensation in the five years prior to a change-in-control.
These "tax cut back" provisions generally will cause the benefits
to the Executive to be substantially reduced from those set forth
above.
As of January 1, 1995, the Corporation and the Bank also
entered into change-in-control agreements with all First Senior
Vice Presidents and Senior Vice Presidents who have at least
three years of continuous service with the Bank. These
agreements are substantially identical to the change-in-control
agreements entered into with Messrs. Lipkin, Southway and Pinyuh,
except with respect to the lump sum payments. Generally, First
Senior Vice Presidents with six years or more of service are
entitled to a lump sum payment equal to two years salary plus a
pro rata bonus and continuation of medical, dental and life
insurance benefits. The lump sum is reduced to one year of base
salary and a pro rata bonus for officers with between three years
and six years of service. Similarly, Senior Vice Presidents with
six years or more of service are entitled to one year of base
salary and a pro rata bonus, and the lump sum is six months and a
pro rata bonus for Senior Vice Presidents with between three and
six years of service. Pursuant to this policy, as of January 1,
1995, the Corporation and the Bank entered into a
change-in-control agreement with Peter John Southway, which
provides for a lump sum severance payment in the event of a
termination of employment without cause or a resignation for good
reason in the three-year period after a change-in-control equal
to two years of salary, plus pro rata bonus and the continuation
of medical, dental and life insurance benefits.
All change-in-control agreements are for a fixed term (five
years with respect to the top three officers and two years with
respect to other officers), but provide for automatic annual
extensions unless the Corporation takes specific action to halt
the renewal.
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. The value of such accelerated vesting will be
considered a parachute payment.
As of July 7, 1995, the Corporation and Mr. Lipkin entered
into a split dollar life insurance arrangement. Under the
arrangement, the Corporation agreed to pay the annual premiums
necessary to fund a $1,000,000 second-to-die life insurance
policy on the lives of Mr. Lipkin and his wife. When the policy
is fully paid, or from the death benefits thereunder, the
Corporation will be repaid all of its premium payments made by it
(without interest). In return, in an agreement as of that date,
Mr. Lipkin waived all rights he has to group term policies under
the Corporation's benefit policies or otherwise. The split
dollar policy is anticipated to require annual premium payments
by the Corporation of $25,250 for 11 years, although the amount
and duration of the premiums depends on the dividends paid by the
insurance company. The Corporation has also agreed that it will
pay the premiums, regardless of whether Mr. Lipkin continues to
be employed by the Corporation.
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 and $500 for each other
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 Personnel and Compensation Committee, the Audit
Committee and the Compliance Committee, currently Messrs.
McEntee, Rachesky and Drukker, respectively, each receive an
additional retainer of $5,000 per year. The Vice Chairman of the
Personnel and Compensation Committee, receives 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%).
Section 16 Compliance
As required by the SEC rules under Section 16 of the Exchange
Act, the Corporation notes that Austin C. Drukker filed an untimely
report on Form 4, the report used when there is a change in an
insider's stock ownership.
PERSONNEL AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The following is a preliminary draft of the report prepared
by the Personnel and Compensation Committee of the Corporation
and is subject to further review and revision by the Personnel
and Compensation Committee.
The following report was prepared by the Personnel and
Compensation Committee of the Corporation regarding executive
compensation policy and its relation to the Corporation's
performance.
COMPENSATION REVIEW PROCESS
The Personnel and 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 used an independent compensation consulting
firm to assist in its deliberations. The Committee has sought
the consultant's guidance in maintaining levels of executive
compensation that are consistent with banks that are similarly
situated in terms of business and labor market of competition
(the compensation peer group).
With this outside, independent assistance, the Committee
evaluates salaries, annual performance goals, awards under annual
incentive plans and administers the Long-Term Stock Incentive
Plan.
When the Committee's actions relate to officers who also
are directors, the Board of Directors (exclusive of the officer-
directors) reviews the recommendations of the Committee and
approves final compensation arrangements.
COMPENSATION STRATEGY
The objective of the Corporation's executive compensation
program is to align compensation with business strategy 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. Target total compensation levels (consisting of
annual base salary, and annual and long-term incentive award
opportunities, including stock options and restricted stock) are
established at the beginning of each year. These targets take
into consideration the Corporation's performance relative to its
compensation peer group and total compensation opportunities for
the peer group. Under this total compensation approach, an
increasing amount of the executive total compensation mix is
based on pay-for-performance targets and performance compared to
peers.
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.
Target total compensation is determined through a
statistical process that builds a model of peer group
compensation relative to asset size and performance. The peer
group modeling process provides an objective basis to identify
those performance measures best related to compensation in the
peer companies. These performance measures can vary from year to
year based on the statistical results and may include earnings
growth, return on assets and return on equity.
The Corporation's size and performance results are factored
into the peer group model to identify appropriate target total
compensation opportunities for the Corporation's executives. 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, the total compensation paid is lower than target.
Specific compensation program components are discussed
below.
BASE SALARY
Base salary levels are determined each year, in part, by
considering the labor market levels of compensation paid to
executives of comparable banking organizations. Labor market
values are established by the peer group banking organization
modeling process described above and supplemented by the average
results of an analysis of published compensation surveys of
similar size organizations in the banking industry to reflect
broader industry trends.
The labor market values are used to create salary ranges.
Individual executive salaries are determined relative to the
ranges on the basis of a subjective assessment of each
executive's contribution to the bank's success as well as the
level of knowledge and experience each executive brings to the
job.
ANNUAL INCENTIVE PLAN
Consistent with the goals of continued financial strength
and shareholder value creation for 1995, annual incentive awards
were based on a combination of achieving or exceeding corporate
objectives for return on assets and return on average equity, and
individual performance of participating officers.
The annual incentive plan has minimum performance
requirements, below which no bonuses may be awarded. Targets for
minimum return on average equity and return on average assets
before extraordinary items are determined each year at the
beginning of the annual incentive plan year.
Each year target annual incentive opportunities for
executives are established using the data from the peer group,
again, supplemented by the results of the analysis of published
surveys of compensation in the banking industry and internal
relationships. The Committee adopted a policy of setting target
opportunities near the average of those available in the
competitive market place. Target awards range up to 60% of base
salary.
Actual annual incentive awards are determined through a
performance measurement process relative to achievement of the
Corporation goals and individual performance objectives.
Corporate performance accounts for 75% of each participant's
target award. Individual performance achievement measures are
both objective (e.g., pre-determined goals) and subjective (e.g.,
Board assessment of the executive's leadership and management of
resources). In addition, the Committee can, at its discretion,
adjust individual awards by plus or minus 20%. As a result,
actual awards can range from 0% to 115% of an executives's base
salary depending on Corporation and individual performance.
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. The purpose of these awards is to align executive long-
term compensation opportunities with the realization of stock
price growth and dividends for shareholders.
The number of stock options and restricted stock awards are
determined on an annual basis using the target long-term
incentive award opportunity as a guide. This is initially
determined as the difference between the target total
compensation opportunity and the sum of the executives's base
salary and target annual incentive award opportunity. A
combination of restricted stock and stock options are then
awarded up to the target long-term incentive award opportunity on
a subjective basis, taking into account the Corporation's
performance, competitive practices, and individual performance.
Previous stock option and restricted stock awards also may be
considered by the Committee and the Board, at its discretion, in
determining the number of stock option and restricted shares to
be granted.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER AND OTHER NAMED
EXECUTIVE OFFICERS
In 1995, Mr. Lipkin was granted a 2.8% salary increase,
bringing his base salary level to $421,500. This salary increase
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
comparable banking organizations. Additionally, Mr. Lipkin led
the Corporation in achieving annual objectives.
Salary increases for the other named executive officers
ranged from 0% to 11.1% of their base salaries and reflected
their contributions to the growth of the Bank and experience and
skill levels as well as the movement of salaries in competitive
labor markets.
The 1995 base salary levels were determined in accordance
with the Corporation's policy as described in "Base Salary"
above.
In 1995, the Corporation's performance met targeted levels
and approved goals. Mr. Lipkin contributed to this success by
developing the Corporation management team, improving the
Corporation's financial strength, and expanding market share. As
a result of these contributions, Mr. Lipkin's annual incentive
award was therefore 62% of his base salary.
For the other named executive officers, the 1995 annual
incentive awards averaged 27% of their 1995 salaries. Awards
ranged from 10% to 54% of individual other named executive
salaries, reflecting differences in business unit results and
organization level.
1995 annual incentive awards were determined in accordance
with the Corporation's policy as described in "Annual Incentive
Plan" above.
As part of the total compensation program, in 1995 Mr.
Lipkin was awarded a qualified incentive stock option for 15,749
shares at $24.88 per share and a restricted stock award of 5,250
shares of the Corporation's common stock at $24.88 per share.
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 those 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 1995, other executive officers named in the
compensation tables received qualified incentive stock option
grants totaling 22,748 shares at an average grant price of $24.61
per share, and restricted stock awards totaled 5,250 shares at an
average price grant of $24.54 per share. All of these shares
were granted at the market value on the date of grant. 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.
The long-term incentive awards to executive officers in
1995 were made in accordance with the total target compensation
approach described under "Long-Term Incentive Plan" above. In
addition, previous stock options and restricted stock awards were
considered in making these awards.
DEDUCTIBILITY OF COMPENSATION
As part of the 1993 Omnibus Budget Reconciliation Act
("OBRA '93") under Section 162(m) of the Internal Revenue Code
for taxable years beginning on or after January 1, 1994,
companies are subject to limits on the deductibility of executive
compensation. OBRA' 93 limits deductibile 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 has been approved
by shareholders.
Based on its 1996 salaries, annual incentive awards, stock
option and restricted stock awards, the Corporation does not
expect any of its active named executive officers to exceed the
$1 million deductibility threshold during the 1996 taxable year.
Detailed information related to the compensation of the
five executive officers is shown in the compensation tables
above.
Personnel and Compensation Committee Members:
Robert E. McEntee, Chairman
Robert I. Marcalus, Vice Chairman
Austin C. Drukker
Gerald Korde
Robert Rachesky
PERFORMANCE GRAPH
The following graph compares the cumulative total return on
a hypothetical $100 investment made on January 1, 1991 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.
--GRAPHICAL REPRESENTATION OF DATA TABLE BELOW--
- ----------------------------------------------------------------------------
1/91 12/91 12/92 12/93 12/94 12/95
- ----------------------------------------------------------------------------
Valley National Bancorp 100.0 148.91 277.20 287.09 374.05 378.51
- ----------------------------------------------------------------------------
KBW Eastern Region 100.0 109.37 155.55 162.73 143.13 251.26
- ----------------------------------------------------------------------------
S&P 500 Index 100.0 121.16 134.48 147.98 149.92 206.20
- ----------------------------------------------------------------------------
PERSONNEL AND COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
All members of the Personnel and Compensation Committee
have engaged in loan transactions with the Bank, except for Mr.
Rachesky. Committee members include Messrs. McEntee (Chairman),
Marcalus (Vice Chairman), Drukker, Korde and Rachesky. 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 Personnel and 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
collectability 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.
PROPOSAL 2 -- AMENDMENT TO CERTIFICATE OF INCORPORATION
INCREASING THE NUMBER OF COMMON SHARES
AUTHORIZED TO BE ISSUED AND AUTHORIZING THE
ISSUANCE OF PREFERRED STOCK AND PERMITTING
THE BOARD OF DIRECTORS TO DETERMINE THE
RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS
OF SUCH PREFERRED STOCK
General
On January 16, 1996, the Board of Directors
unanimously approved an amendment (the "Amendment") to Article V
of the Corporation's Certificate of Incorporation (the
"Certificate") to increase the authorized common stock of the
Corporation to 75 million shares from the presently authorized
39,414,375 million shares.
As of the record date for the Annual Meeting, 35,xxx,xxx
shares of common stock were outstanding. Of the authorized but
unissued shares of the Corporation's common stock, 1,847,030
shares of common stock were reserved for issuance under
the Long-Term Stock Incentive Stock Plan.
The purpose of the Amendment is to maximize the
Corporation's ability to expand its capital base. The full text
of the proposed Amendment is attached to this Proxy Statement as
Exhibit A. The following description of the Amendment is
qualified in its entirety by reference to Exhibit A.
Purpose of The Proposal
While the Corporation may consider effecting an equity
offering of common stock in the future for the purposes of
raising additional working capital or otherwise, the Corporation,
as of the date hereof, has no agreements or understandings with
any third party to effect any such offering and no assurances are
given that any offering will in fact be effected. If the
issuance of shares is deemed advisable by the Board, having the
authority to issue the additional shares of common stock would
avoid the time delay and expense of a special shareholders'
meeting to authorize the issuance of common stock. No further
action or authorization by the Corporation's shareholders would
be necessary prior to issuance of such stock, except as may be
required for a particular transaction by applicable law or
regulation, including but not limited to the listing regulations
of the New York Stock Exchange which may require approval under
certain circumstances.
One circumstance which could cause the Corporation to
issue shares in the foreseeable future is the need for additional
capital to support acquisitions of financial institutions. Since
1990, the Corporation and the Bank have been actively involved
in acquiring financial institutions. In the past, many of the
Corporation's acquisitions involved the issuance of shares of the
Corporation's common stock to the shareholders of the acquired
institution. Because the acquisition process is often
fast-paced, complex and unpredictable, the Corporation cannot
predict when and if stock issuance to target shareholders or for
capital raising purposes will be deemed appropriate by management
or will be required as a commitment in connection with a specific
acquisition. However, the Corporation currently believes that if
securities are issued to target shareholders, the Corporation
would most likely use common stock.
The additional shares of common stock to be authorized by
the proposed Amendment will be identical to the shares of common
stock now authorized and outstanding, and the Amendment will not
affect the terms and rights of the holders of those shares.
Possible Adverse Effects of The Proposal
The issuance of further common stock would increase the
number of shares of common stock outstanding, thereby diluting
percentage ownership of existing shareholders. The issuance of
more common stock also could possibly dilute book value per share
and/or earnings per share.
Possible Anti-Takeover Effects of the Proposal
The Board of Directors is required by law to make any
determination to issue shares of common stock based upon its
judgment as to the best interests of the shareholders and the
Corporation. Although the Board of Directors has no present
intention of doing so, it could issue shares of common stock
(within the limits imposed by applicable law) that could,
depending on the terms of such issuance, make more difficult or
discourage an attempt to obtain control of the Corporation by
means of a merger, tender offer, proxy contest or other means.
When in the judgment of the Board of Directors such action would
be in the best interests of the shareholders and the Corporation,
the issuance of shares of common stock could be used to create
voting or other impediments or to discourage persons seeking to
gain control of the Corporation, for example, by the sale of
common stock to purchasers favorable to the Board of Directors.
The existence of the additional authorized shares could have the
effect of discouraging unsolicited takeover attempts. The
issuance of new shares could also be used to dilute the stock
ownership of a person or entity seeking to obtain control of the
Corporation should the Board of Directors consider the action of
such entity or person not to be in the best interests of the
shareholders and the Corporation. Such issuance of common stock
could also have the effect of diluting the earnings per share and
book value per share of the common stock held by then existing
holders of common stock.
Recommendation and Vote Required for Adoption of Proposal 2
In accordance with the New Jersey Business Corporation Act
and the Corporation's Certificate, the affirmative vote of a
majority of those shares of common stock voting on this proposal
is required to adopt the Amendment. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 2.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP ("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 1996 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 1997 proxy material must be received by the
Secretary of the Corporation no later than November 1, 1996.
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 __, 1996
A copy of the Corporation's Annual Report on Form 10-K
(except exhibits) filed with the Securities and Exchange
Commission will he furnished to any shareholder on written
request addressed to Alan Eskow, Senior Vice President, Valley
National Bancorp, 1455 Valley Road, Wayne, New Jersey 07470.
<PAGE>
EXHIBIT A
Amendment to Certificate
The following would be added as Article V of the
Corporation's Certificate of Incorporation.
ARTICLE V
CAPITAL STOCK
The Corporation is authorized to issue 75,000,000 shares of
common stock without nominal or par value.
Deletions from Certificate
Article V of the Certificate, which presently reads as set
forth below, shall be deleted in its entirety.
ARTICLE V
CAPITAL STOCK
The Corporation is authorized to issue 39,414,375 shares of
common stock without nominal or par value.
<PAGE>
VALLEY NATIONAL BANCORP
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS
Tuesday, April 2, 1996
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 stock 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, 690 Route 46 East, Fairfield, NJ, on
Tuesday, April 2, 1996 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
19nominees for director listed in the Proxy Statement and FOR the
Amendment to the Corporation's Certificate of Incorporation.
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.
(see reverse side)
<PAGE>
1. ELECTION OF 19 DIRECTORS
/ / FOR the nominees listed below (except as marked to
the contrary below):
/ / FOR ALL nominees except:
(Instructions: To withhold authority to vote for
any individual nominee(s) write that nominee's name
on the above line.)
/ / WITHHOLD AUTHORITY to vote for all nominees listed
below
Andrew B. Abramson, Pamela Bronander, Joseph Coccia, Jr., Austin
C. Drukker, Michael Francis, Willard L. Hedden, Thomas P.
Infusino, Gerald Korde, Gerald H. Lipkin, Joleen Martin, Robert
L. Marcalus, Robert E. McEntee, Sam P. Pinyuh, Robert Rachesky,
Barnett Rukin, Peter Southway, Richard F. Tice, Leonard
Vorcheimer, Joseph L. Vozza.
2. APPROVAL OF AN AMENDMENT TO THE CORPORATION'S CERTIFICATE
OF INCORPORATION INCREASING THE AUTHORIZED COMMON STOCK TO
75 MILLION SHARES
/ / FOR
/ / AGAINST
/ / ABSTAIN
3. In their discretion, upon such other matters as may
properly come before the meeting.
Dated: March , 1996
----------------------------
Signature
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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
