<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
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. ___)
[x] Filed by the Registrant
[_] Filed by a Party other than the Registrant
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE BEAR STEARNS COMPANIES INC.
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined.):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
<PAGE>
THE BEAR STEARNS COMPANIES INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
--------------
To Our Stockholders:
You are cordially invited to attend the 1995 Annual Meeting of
Stockholders, which will be held on Monday, October 30, 1995, at
5:00 P.M., New York City time, in the Bear Stearns Auditorium,
245 Park Avenue, 5th Floor, New York, New York.
At the meeting, we will be reporting to you on your Company's
current operations and outlook. Stockholders will elect directors of
the Company and transact such other items of business as are listed in
the Notice of Annual Meeting and more fully described in the Proxy
Statement which follows. The Board of Directors and management hope
that many of you will be able to attend the meeting in person.
The formal Notice of Annual Meeting and the Proxy Statement
follow. It is important that your shares be represented and voted at
the meeting, regardless of the size of your holdings. Accordingly,
please mark, sign and date the enclosed Proxy and return it promptly
in the enclosed envelope to ensure that your shares will be
represented. If you do attend the Annual Meeting, you may, of course,
withdraw your Proxy should you wish to vote in person.
Sincerely yours,
Alan C. Greenberg
Chairman of the Board
September 28, 1995
<PAGE>
<PAGE>
THE BEAR STEARNS COMPANIES INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
--------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 30, 1995
--------------
To the Stockholders of
THE BEAR STEARNS COMPANIES INC.:
The Annual Meeting of Stockholders of The Bear Stearns Companies
Inc., a Delaware corporation (the "Company"), will be held on Monday,
October 30, 1995, at 5:00 P.M., New York City time, in the Bear
Stearns Auditorium, 245 Park Avenue, 5th Floor, New York, New York,
for the following purposes:
1. To elect thirty-eight directors to serve until the next
Annual Meeting of Stockholders or until their successors are duly
elected and qualified.
2. To approve the fiscal year 1996 performance goals under The
Bear Stearns Companies Inc. Management Compensation Plan.
3. To approve an amendment to The Bear Stearns Companies Inc.
Capital Accumulation Plan for Senior Managing Directors.
4. To transact such other business as may properly be brought
before the meeting and any adjournments or postponements thereof.
Holders of record of Common Stock, par value $1.00 per share, of
the Company at the close of business on September 20, 1995, will be
entitled to notice of and to vote on all matters presented at the
meeting and at any adjournments or postponements thereof.
By order of the Board of Directors
Kenneth L. Edlow,
Secretary
September 28, 1995
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE TO ENSURE THAT YOUR
SHARES WILL BE REPRESENTED. YOU MAY NEVERTHELESS VOTE IN PERSON IF
YOU ATTEND THE MEETING.
NYFS04...:\25\22625\0110\2322\PRX7205T.57I<PAGE>
<PAGE>
THE BEAR STEARNS COMPANIES INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
--------------
PROXY STATEMENT
--------------
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 30, 1995
--------------
This Proxy Statement and the accompanying Notice of Annual
Meeting of Stockholders and form of proxy are being furnished to the
holders of common stock of The Bear Stearns Companies Inc. (the
"Company") in connection with the solicitation of proxies by the Board
of Directors of the Company (the "Board of Directors") for use at the
1995 Annual Meeting of Stockholders of the Company (the "Annual
Meeting") to be held in the Bear Stearns Auditorium, 245 Park Avenue,
5th Floor, New York, New York, on Monday, October 30, 1995, at
5:00 P.M., New York City time, and at any adjournments or
postponements thereof. These proxy materials are being mailed on or
about September 28, 1995, to holders of record on September 20, 1995,
of the Company's Common Stock, par value $1.00 per share ("Common
Stock").
A proxy may be revoked by a stockholder prior to its exercise in
any of three ways: by written notice to the Secretary of the Company;
by submission of another proxy bearing a later date; or by voting in
person at the Annual Meeting. Revocation by notice to the Secretary
of the Company or by submission of a later proxy will not affect a
vote on any matter which is taken prior to the receipt of the notice
or later proxy by the Company. The mere presence at the Annual
Meeting of the stockholder appointing the proxy will not revoke the
appointment. If not revoked, the proxy will be voted at the Annual
Meeting in accordance with the instructions indicated on the proxy by
the stockholder or, if no instructions are indicated, will be voted
FOR the slate of directors described herein, FOR the approval of the
fiscal year 1996 performance goals under The Bear Stearns Companies
Inc. Management Compensation Plan (as amended and restated as of July
1, 1994) (the "Management Compensation Plan") as described herein, FOR
the approval of an amendment to The Bear Stearns Companies Inc.
Capital Accumulation Plan for Senior Managing Directors (the "Capital
Accumulation Plan") as described herein, and, as to any other matter
of business that may be brought before the Annual Meeting, in
accordance with the judgment of the person or persons voting on the
matter.
The Company has adopted a policy of encouraging stockholder
participation in corporate governance by ensuring the confidentiality
of stockholder votes. The Company has designated an independent third
party, Chemical Bank, which is the Company's transfer agent, to
receive and to tabulate stockholder proxy votes. The manner in which
any stockholder votes on any particular issue will be kept
confidential and will not be disclosed to the Company or any of its
officers or employees except (i) where disclosure is required by
applicable law, (ii) where disclosure of a vote of a stockholder is
expressly requested by such stockholder and (iii) where the Company
concludes in good faith that a bona fide dispute exists as to the
authenticity of one or more proxies, ballots or votes, or as to the
accuracy of any tabulation of such proxies, ballots or votes.
However, aggregate vote totals may be disclosed to the Company from
time to time and publicly announced at the Annual Meeting. The policy
of ensuring confidentiality of stockholder votes will also apply to
shares of Common Stock held in customer accounts at the Company's
subsidiary, Bear, Stearns Securities Corp. Holders of Common Stock
whose shares are held in such accounts will be requested to give
instructions with respect to the manner in which their shares are to
be voted to Automatic Data Processing, Inc., which has been directed
not to disclose such instructions to the Company.
<PAGE>
<PAGE>
This solicitation is being made by the Company. All expenses of
the Company in connection with this solicitation will be borne by the
Company. In addition to solicitation by mail, proxies may be
solicited by directors, officers and other employees of the Company,
by telephone, in person or otherwise, without additional compensation.
The Company also will request that brokerage firms, nominees,
custodians and fiduciaries forward proxy materials to the beneficial
owners of shares held of record by such persons and will reimburse
such persons and the Company's transfer agent for reasonable
out-of-pocket expenses incurred by them in forwarding such materials.
THE COMPANY
The Company was incorporated under the laws of the State of
Delaware on August 21, 1985. The Company succeeded to the business of
Bear, Stearns & Co., a New York limited partnership (the
"Partnership"), on October 29, 1985. As used in this Proxy Statement,
all references to "Bear Stearns" and "BSSC" are to Bear, Stearns & Co.
Inc., and Bear, Stearns Securities Corp., respectively, the principal
subsidiaries of the Company.
VOTING SECURITIES
Holders of record of Common Stock at the close of business on
September 20, 1995 are entitled to notice of and to vote at the Annual
Meeting and at any adjournments or postponements thereof. Each
outstanding share of Common Stock entitles the holder thereof to one
vote. Shares of Common Stock represented by CAP Units (as hereinafter
defined) credited pursuant to the Capital Accumulation Plan are not
outstanding and are not entitled to vote at the Annual Meeting.
On September 20, 1995, 117,696,334 shares of Common Stock were
outstanding. The presence in person or by proxy at the Annual Meeting
of the holders of a majority of such shares shall constitute a quorum.
Assuming the presence of a quorum at the Annual Meeting, the
affirmative vote of a plurality of the votes cast by holders of shares
of Common Stock is required for the election of directors. The
affirmative vote of a majority of the shares of Common Stock
represented at the meeting and entitled to vote on each matter is
required for the approval of the fiscal year 1996 performance goals
under the Management Compensation Plan and the approval of an
amendment to the Capital Accumulation Plan. An abstention with
respect to any proposal will be counted as present for purposes of
determining the existence of a quorum but will have the practical
effect of a negative vote as to that proposal. Brokers (other than
Bear Stearns and BSSC) that do not receive a stockholder's
instructions are entitled to vote on the election of directors. The
New York Stock Exchange (the "NYSE") determines whether brokers that
do not receive instructions will be entitled to vote on the other
proposals contained in this Proxy Statement. Under the rules of the
NYSE, if Bear Stearns and BSSC do not receive a stockholder's
instructions and other brokers are entitled to vote on a proposal,
Bear Stearns and BSSC are entitled to vote such shares only in the
same proportion as the shares represented by all votes cast with
respect to such proposal. In the event of a broker non-vote with
respect to any proposal coming before the meeting, due to the absence
of authorization by the beneficial owner to vote on that issue, the
proxy will be counted as present for the purpose of determining the
existence of a quorum, but will not be deemed present and entitled to
vote on that proposal for the purpose of determining the total number
of shares of which a majority is required for adoption and has the
practical effect of reducing the number of affirmative votes required
to achieve a majority vote for such matter by reducing the total
number of shares from which a majority is calculated.
<PAGE>
<PAGE>
The following table sets forth certain information furnished to
the Company regarding each person or group of persons known to the
Company to be the beneficial owner of more than 5% of the Company's
outstanding Common Stock as of September 1, 1995:
<TABLE>
<CAPTION>
Percentage of
Name and address of Number of shares Outstanding
Beneficial Owner of Common Stock Common Stock
---------------- --------------- ------------
<S> <C> <C>
FMR Corp. (1) 11,716,946 9.94%
82 Devonshire Street
Boston, MA 02109
Pacific Financial Research Inc. (2) 6,161,697 5.23%
9601 Wilshire Boulevard
Suite 800
Beverly Hills, CA 90210
<FN>
________________
(1) This number includes 11,432,501 shares beneficially owned
by Fidelity Management & Research Company, as a result of
its serving as investment adviser to various investment
companies registered under Section 8 of the Investment Company
Act of 1940 and serving as investment adviser to certain
other funds which are generally offered to limited groups of
investors; and 284,445 shares beneficially owned by Fidelity
Management Trust Company as a result of its serving as trustee
or managing agent for various private investment accounts,
primarily employee benefit plans, and serving as investment
adviser to certain other funds which are generally offered to
limited groups of investors.
FMR Corp. has sole voting power with respect to 107,310 shares
and sole dispositive power with respect to 11,716,946 shares.
(2) Pacific Financial Research Inc. beneficially owns such shares
as a result of its serving as investment adviser to various
companies registered under Section 8 of the Investment
Company Act of 1940.
</TABLE>
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following information with respect to the outstanding shares
of Common Stock beneficially owned by each director of the Company,
each nominee for director of the Company, each executive officer named
in the Summary Compensation Table under "Executive Compensation" and
all directors, nominees and executive officers of the Company as a
group, is furnished as of September 1, 1995. Also set forth below as
of such date is certain information with respect to the number of
shares of Common Stock represented by CAP Units credited to the
accounts of such persons pursuant to the Capital Accumulation Plan
(notwithstanding that shares underlying CAP Units generally are not
deemed to be beneficially owned for this purpose because the named
persons have neither the present ability to direct the vote nor the
ability to dispose of such shares and will not have such rights within
the next 60 days).
<TABLE>
<CAPTION>
PERCENTAGE OF
AMOUNT PERCENT OF OUTSTANDING
AND NATURE COMMON STOCK COMMON STOCK COMMON STOCK
OF BENEFICIAL BENEFICIALLY REPRESENTED AND CAP UNITS
NAME AND ADDRESS (1) OWNERSHIP (2)(3) OWNED BY CAP UNITS COMBINED
---------------------- ------------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
E. Garrett Bewkes, III . . . . 50,356 (4) -- (4)
Denis A. Bovin . . . . . . . . 1,214 (4) 231,295 (4)
James E. Cayne (5) . . . . . . 3,517,682 2.98% 1,188,686 3.41%
Peter D. Cherasia . . . . . . . 49,403 (4) 206,513 (4)
Barry J. Cohen . . . . . . . . 121,967 (4) 101,428 (4)
Stephen M. Cunningham . . . . . 37,754 (4) 96,431 (4)
Wendy L. de Monchaux . . . . . -- (4) 124,246 (4)
Kevin J. Finnerty . . . . . . . 6,473 (4) 385,669 (4)
Grace J. Fippinger . . . . . . 4,176 (4) -- (4)
Bruce E. Geismar (6) . . . . . 129,039 (4) 88,494 (4)
Carl D. Glickman (7) . . . . . 326,808 (4) -- (4)
Thomas R. Green . . . . . . . . 53,146 (4) -- (4)
Alan C. Greenberg . . . . . . . 1,200,000 1.02% 623,288 1.32%
Donald J. Harrington, C.M. . . 221 (4) -- (4)
Richard Harriton . . . . . . . 134,998 (4) 178,958 (4)
Daniel L. Keating (8) . . . . . 176,889 (4) 96,575 (4)
John W. Kluge . . . . . . . . . 31,906 (4) -- (4)
Mark E. Lehman (9) . . . . . . 74,920 (4) 87,409 (4)
David A. Liebowitz . . . . . . 23,577 (4) 524,866 (4)
Bruce M. Lisman . . . . . . . . 182,801 (4) 133,937 (4)
Roland N. Livney . . . . . . . 25,078 (4) 164,147 (4)
Vincent J. Mattone (3)(10) . . 1,967,390 1.67% 92,357 1.49%
Michael Minikes (11) . . . . . 411,399 (4) 352,178 (4)
William J. Montgoris . . . . . 268,261 (4) 149,856 (4)
Donald R. Mullen, Jr. . . . . . 31,792 (4) 219,403 (4)
Frank T. Nickell . . . . . . . 27,563 (4) -- (4)
Craig M. Overlander . . . . . . 27,507 (4) 212,669 (4)
Stephen E. Raphael . . . . . . 1,844 (4) 77,258 (4)
E. John Rosenwald, Jr. (3)(12) 442,215 (4) 10,056 (4)
Lewis A. Sachs . . . . . . . . 5,098 (4) 160,669 (4)
Frederic V. Salerno . . . . . . 330 (4) -- (4)
Alan D. Schwartz . . . . . . . 1,022,271 (4) 693,976 1.24%
John C. Sites, Jr. (3)(13). . . 1,493,423 1.27% 166,348 1.20%
David M. Solomon . . . . . . . 129 (4) 161,675 (4)
Warren J. Spector (14) . . . . 374,787 (4) 1,227,228 1.16%
Robert M. Steinberg (15) . . . 1,309,141 1.11% 181,298 1.08%
Michael L. Tarnopol (16) . . . 1,060,594 (4) 491,851 1.13%
Vincent Tese . . . . . . . . . -- (4) -- (4)
Fred Wilpon . . . . . . . . . . 1,103 (4) -- (4)
Uzi Zucker . . . . . . . . . . 391,863 (4) 43,063 (4)
All directors, nominees and
executive officers as a
group (42 individuals) . . . 12,148,150 10.31% 8,287,469 14.82%
<FN>
(Footnotes on following page)<PAGE>
<PAGE>
---------------
(1) The address in each case is 245 Park Avenue, New York, New York
10167.
(2) Nature of beneficial ownership is sole voting and investment
power except as indicated in subsequent notes. Includes an
aggregate of 17,271 shares of Common Stock owned by directors,
nominees and executive officers through The Bear Stearns
Companies Inc. Employee Stock Ownership Plans (the "ESOPs").
Shares owned by the ESOPs that are allocated to employees'
accounts are voted on a "pass through" basis by the employees to
whose accounts such shares are allocated. Shares not allocated
to employees' accounts and allocated shares for which voting
directions have not been received are voted by the trustee of the
ESOPs in proportion to the manner in which allocated shares are
directed to be voted by the employees.
(3) Does not include shares underlying CAP Units credited under the
Capital Accumulation Plan, except for 515,368, 12,215 and 76,109
shares expected to be distributed to Messrs. Mattone, Rosenwald
and Sites, respectively, in October 1995.
(4) Less than one percent.
(5) Does not include 12,154 shares of Common Stock owned by Mr.
Cayne's wife, as to which shares Mr. Cayne disclaims beneficial
ownership. Does not include 218,429 shares of Common Stock held
by trusts established for Mr. Cayne's children, as to which
shares Mr. Cayne disclaims beneficial ownership. Does not
include 6,622 shares of Common Stock owned by a child of Mr.
Cayne, as to which shares Mr. Cayne disclaims beneficial
ownership.
(6) Does not include 538 shares of Common Stock owned by a child of
Mr. Geismar, as to which shares Mr. Geismar disclaims beneficial
ownership. Mr Geismar also has a short position of 18,182 shares
of Common Stock.
(7) Does not include 2,820 shares of Common Stock owned by
Mr. Glickman's wife, as to which shares Mr. Glickman disclaims
beneficial ownership.
(8) Includes 1,782 shares of Common Stock held by Mr. Keating as
custodian for his children.
(9) Does not include 26,878 shares of Common Stock held in a trust
established for Mr. Lehman's wife, as to which shares Mr. Lehman
disclaims beneficial ownership.
(10) Effective September 6, 1995, Mr. Mattone resigned as a Director
and Executive Vice President of the Company. Does not include
1,475 shares of Common Stock owned by Mr. Mattone's wife, as to
which shares Mr. Mattone disclaims beneficial ownership.
(11) Does not include 1,468 shares of Common Stock owned by
Mr. Minikes' wife, as to which shares Mr. Minikes disclaims
beneficial ownership.
(12) Does not include 880 shares of Common Stock owned by
Mr. Rosenwald's wife, as to which shares Mr. Rosenwald disclaims
beneficial ownership.
(13) Effective July 17, 1995, Mr. Sites resigned as a Director and
Executive Vice President of the Company.
<PAGE>
<PAGE>
(14) Does not include 500 shares of Common Stock owned by Mr.
Spector's wife, as to which shares Mr. Spector disclaims
beneficial ownership.
(15) Does not include 68,851 shares of Common Stock held by a trust
established for Mr. Steinberg's children with respect to which
Mr. Steinberg's wife acts as trustee and as to which shares Mr.
Steinberg disclaims beneficial ownership. Includes 10 shares of
Common Stock owned by a child of Mr. Steinberg.
(16) Does not include 10,000 shares of Common Stock held in a
charitable foundation for which Mr. Tarnopol acts as trustee and
as to which shares Mr. Tarnopol disclaims beneficial ownership.
</TABLE>
I. ELECTION OF DIRECTORS
The Board of Directors has nominated and recommends the election
of each of the nominees set forth below as a director of the Company
to serve until the next Annual Meeting of Stockholders or until his or
her successor is duly elected and qualified. Each nominee is
currently a director of the Company except Ms. de Monchaux and
Messrs. Cohen, Geismar, Livney, Sachs and Solomon.
Each nominee who is elected or re-elected to the Board of
Directors will hold office until the next Annual Meeting of
Stockholders, in accordance with the By-laws of the Company. Should
any nominee become unable or unwilling to accept nomination or
election, it is intended that the persons named in the enclosed proxy
will vote the shares that they represent for the election of a
substitute nominee designated by the Board of Directors, unless the
Board of Directors reduces the number of directors. At present, it is
anticipated that each nominee will be a candidate.
The affirmative vote of a plurality of the votes cast by holders
of shares of Common Stock is required for the election of directors.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED TO
AGE AS OF SERVE AS
SEPTEMBER 15, PRINCIPAL OCCUPATION DIRECTOR OF
NAME 1995 AND DIRECTORSHIPS HELD THE COMPANY
---- --------------- ---------------------- -----------
<S> <C> <S> <C>
E. Garrett Bewkes, III . . . . 44 Member of Management Committee, 1989
Investcorp International, Inc.;
Director, Circle K Corporation, Saks
Holdings Inc., Star Markets Company,
Inc., Primeco Inc. and Tatham
Offshore, Inc.
Denis A. Bovin . . . . . . . . 47 Senior Managing Director of Bear 1992
Stearns
James E. Cayne . . . . . . . . 61 President and Chief Executive Officer 1985
of the Company and Bear Stearns,
member of the Executive Committee (as
hereinafter defined) and Chairman of
the Management and Compensation
Committee (as hereinafter defined)
Peter D. Cherasia . . . . . . . 36 Senior Managing Director 1993
of Bear Stearns
Barry J. Cohen . . . . . . . . 43 Senior Managing Director Nominee
of Bear Stearns
Stephen M. Cunningham . . . . . 41 Senior Managing Director 1994
of Bear Stearns
Wendy L. de Monchaux . . . . . 35 Senior Managing Director Nominee
of Bear Stearns
Kevin J. Finnerty . . . . . . . 41 Senior Managing Director 1993
of Bear Stearns
Grace J. Fippinger . . . . . . 67 Former Vice President and Treasurer of 1985
NYNEX Corp.; Director, Pfizer Inc. and
Connecticut Mutual Life Insurance
Company
Bruce E. Geismar . . . . . . . 49 Senior Managing Director Nominee
of Bear Stearns
Carl D. Glickman . . . . . . . 69 Private Investor; In the United 1985
States, Director, Andal Corporation,
Continental Health Affiliates, Inc.,
Franklin Holdings, Inc., Infutech,
Inc., Lexington Corporate Properties,
Inc. and Office Max Inc.; In Israel,
Director, Alliance Tire Company (1992)
Ltd. and The Jerusalem Economic
Corporation Ltd.
<PAGE>
<PAGE>
<CAPTION>
YEAR FIRST
ELECTED TO
AGE AS OF SERVE AS
SEPTEMBER 15, PRINCIPAL OCCUPATION DIRECTOR OF
NAME 1995 AND DIRECTORSHIPS HELD THE COMPANY
---- --------------- ---------------------- -----------
<S> <C> <S> <C>
Thomas R. Green . . . . . . . . 61 Attorney in Private Practice 1991
Alan C. Greenberg . . . . . . . 68 Chairman of the Board of the Company 1985
and Bear Stearns and Chairman of the
Executive Committee; Director, Petrie
Stores Inc.
Donald J. Harrington, C.M.. . . 49 President, St. Johns University; 1993
Director, The Reserve Fund, Reserve
Institutional Trust, Reserve Tax-
Exempt Trust, Reserve New York Tax-
Exempt Trust and Reserve Special
Portfolios Trust
Richard Harriton . . . . . . . 60 Senior Managing Director of Bear 1989
Stearns and member of the Management
and Compensation Committee
Daniel L. Keating . . . . . . . 45 Senior Managing Director of Bear 1992
Stearns
John W. Kluge . . . . . . . . . 80 Chairman and President of Metromedia 1985
Company; Director, Conair Corporation,
Metromedia Steakhouses Company, L.P.,
Occidental Petroleum Corp., Orion
Pictures Corporation and WorldCom,
Inc.
Mark E. Lehman . . . . . . . . 44 Executive Vice President of the 1995
Company and Bear Stearns and member of
the Executive Committee
David A. Liebowitz . . . . . . 36 Senior Managing Director of Bear 1992
Stearns
Bruce M. Lisman . . . . . . . . 48 Senior Managing Director of Bear 1991
Stearns and member of the Management
and Compensation Committee
Roland N. Livney . . . . . . . 34 Senior Managing Director of Bear Nominee
Stearns
Michael Minikes . . . . . . . . 52 Treasurer of the Company and Bear 1989
Stearns; Director, Depository Trust
Company
<PAGE>
<PAGE>
<CAPTION>
YEAR FIRST
ELECTED TO
AGE AS OF SERVE AS
SEPTEMBER 15, PRINCIPAL OCCUPATION DIRECTOR OF
NAME 1995 AND DIRECTORSHIPS HELD THE COMPANY
---- --------------- ---------------------- -----------
<S> <C> <S> <C>
William J. Montgoris . . . . . 48 Chief Operating Officer and Chief 1989
Financial Officer of the Company and
Bear Stearns and member of the
Management and Compensation Committee
Donald R. Mullen, Jr. . . . . . 37 Senior Managing Director of Bear 1993
Stearns and member of the Management
and Compensation Committee
Frank T. Nickell . . . . . . . 48 President, Kelso & Company; Director, 1993
American Standard Inc., Earle M.
Jorgensen Company and Peebles Inc.
Craig M. Overlander . . . . . . 35 Senior Managing Director of Bear 1994
Stearns
Stephen E. Raphael . . . . . . 50 Senior Managing Director of Bear 1994
Stearns; Director, AutoLend Group
E. John Rosenwald, Jr. . . . . 65 Vice Chairman of the Board of the 1985
Company and Senior Managing Director
of Bear Stearns; Director, Frequency
Electronics, Inc. and Hasbro, Inc.
Lewis A. Sachs . . . . . . . . 32 Senior Managing Director of Bear Nominee
Stearns
Frederic V. Salerno . . . . . . 52 Vice Chairman of the Board and 1992
Director of NYNEX Corp.; Chairman of
the Board of the State University of
New York; Director, Avnet, Inc.,
Orange & Rockland Utilities, Inc. and
Viacom, Inc.
Alan D. Schwartz . . . . . . . 45 Executive Vice President of the 1987
Company and Bear Stearns and member of
the Executive Committee and the
Management and Compensation Committee;
Director, Daka International, Inc. and
Protein Databases, Inc.
<PAGE>
<PAGE>
<CAPTION>
YEAR FIRST
ELECTED TO
AGE AS OF SERVE AS
SEPTEMBER 15, PRINCIPAL OCCUPATION DIRECTOR OF
NAME 1995 AND DIRECTORSHIPS HELD THE COMPANY
---- --------------- ---------------------- -----------
<S> <C> <S> <C>
David M. Solomon . . . . . . . 33 Senior Managing Director of Bear Nominee
Stearns
Warren J. Spector . . . . . . . 37 Executive Vice President of the 1990
Company and Bear Stearns and member of
the Executive Committee and the
Management and Compensation Committee
Robert M. Steinberg . . . . . . 50 Senior Managing Director of Bear 1985
Stearns and member of the Management
and Compensation Committee
Michael L. Tarnopol . . . . . . 59 Executive Vice President of the 1985
Company and Bear Stearns and member of
the Executive Committee; Director, The
Leslie Fay Companies, Inc.
Vincent Tese . . . . . . . . . 52 Chairman, Wireless Cable International 1994
Inc.
Fred Wilpon . . . . . . . . . . 59 Chairman of the Board of Directors of 1993
Sterling Equities, Inc.; President and
Chief Executive Officer of the New
York Mets
Uzi Zucker . . . . . . . . . . 59 Senior Managing Director of Bear 1985
Stearns; In the United States,
Director of Carnival Cruise Lines,
Inc., Conair Corporation and Titan
Pharmaceuticals Inc.; In Israel,
Chairman of the Board of Alliance Tire
Company (1992) Ltd.; and Director of
The Jerusalem Economic Corporation
Ltd., Industrial Buildings Corp. Ltd.,
Tnuport Ltd. and Mivnat Ltd.
</TABLE>
<PAGE>
<PAGE>
Except as indicated below, each of the executive officers of
the Company, and each of the directors or director nominees of
the Company who is also a Senior Managing Director of Bear
Stearns, has been a Senior Managing Director of Bear Stearns for
more than the past five years.
Mr. Bewkes has been a member of the Management Committee of
Investcorp International Inc. since March 1994. Prior thereto,
Mr. Bewkes was a Senior Managing Director and Vice Chairman of
Investment Banking of Bear Stearns.
Mr. Bovin has been a Senior Managing Director of Bear
Stearns and has been involved in the management of Bear Stearns'
Investment Banking Division since February 1992. Mr. Bovin is
Vice Chairman of the Investment Banking Division of Bear Stearns
and a member of its Investment Banking Policy Committee. Prior
to joining Bear Stearns, Mr. Bovin was a managing director of
Salomon Brothers Inc.
Mr. Cayne has been Chief Executive Officer of the Company
and Bear Stearns since July 1993. Mr. Cayne has been President
of the Company for more than the past five years.
Mr. Cherasia has been a member of the Financial Analytics
and Structural Transactions Group of Bear Stearns for more than
the past five years and currently is the head of such department.
Mr. Cohen has been co-head of Bear Stearns' Risk Arbitrage
Department for more than the past five years.
Mr. Cunningham is head of Bear Stearns' Emerging Markets
Investment Banking Group and has been involved in the management
of Bear Stearns' Emerging Markets Group for more than the past
five years. Mr. Cunningham is a member of Bear Stearns'
Investment Banking Policy Committee.
Ms. de Monchaux has been a Senior Managing Director heading
Bear Stearns' Derivatives Department since February 1993. Prior
to joining Bear Stearns, Ms. de Monchaux was Senior Vice
President in charge of the Global Derivative Products Group at
Banque Indosuez from April 1990 to June 1992.
Mr. Finnerty has been involved in the management of Bear
Stearns' Mortgage Department for more than the past five years
and currently is the head of such department.
Ms. Fippinger was Vice President, Treasurer and Secretary of
NYNEX Corp. from January 1984 to January 1991 and currently
serves as a director of Pfizer Inc. and Connecticut Mutual Life
Insurance Company.
Mr. Geismar has been in charge of Bear Stearns' Operations
Department for more than the past five years.
Mr. Glickman has been a private investor for more than the
past five years.
Mr. Green has been an attorney in private practice for more
than the past five years. Mr. Green has also been the president
and a director of National States Insurance Company and National
Real Estate Management Corporation for more than the past five
years.
Mr. Greenberg has been Chairman of the Board of the Company
for more than the past five years. Mr. Greenberg was Chief
Executive Officer of the Company and Bear Stearns from the
Company's inception until July 1993.
Father Harrington has been the President of St. Johns
University for more than the past five years.
<PAGE>
<PAGE>
Mr. Harriton has been in charge of the Company's
correspondent clearing services (through BSSC since July 1, 1991
and previously through Bear Stearns) for more than the past five
years. Mr. Harriton has been President of BSSC since its
inception.
Mr. Keating has been responsible for Bear Stearns' Municipal
Bond Department and Public Finance Department for more than the
past five years.
Mr. Kluge has been Chairman and President of Metromedia
Company for more than the past five years.
Mr. Lehman became an Executive Vice President of the Company
on September 7, 1995. Prior thereto, Mr. Lehman was Senior Vice
President - General Counsel of Bear Stearns for more than the
past five years. Mr. Lehman is General Counsel of the Company
and Bear Stearns.
Mr. Liebowitz has directed Bear Stearns' Convertible
Securities Group for more than the past five years.
Mr. Lisman is head of the Institutional Equity Group of Bear
Stearns and has been head or co-head of such Group for more than
the past five years.
Mr. Livney has been a member of Bear Stearns' Fixed Income
Sales Department for more than the past five years. Mr. Livney
is involved in the management of Bear Stearns' Fixed Income Sales
Department.
Mr. Minikes has been Treasurer of the Company and Bear
Stearns for more than the past five years.
Mr. Montgoris has been Chief Operating Officer of the
Company and Bear Stearns since August 1993. Mr. Montgoris has
been Chief Financial Officer of the Company and Bear Stearns for
more than the past five years.
Mr. Mullen is currently the head of Bear Stearns' High
Yield/Bankruptcy Department and was the co-head thereof from
January 1991 until May 1995. Mr. Mullen has been involved in the
management of Bear Stearns' Investment Banking Division since
January 1995, and is a member of Bear Stearns' Investment Banking
Policy Committee. Prior to joining Bear Stearns, Mr. Mullen was
employed in the high yield areas of Salomon Brothers and Drexel
Burnham Lambert, Inc.
Mr. Nickell has been President of Kelso & Company, a
privately held merchant banking firm, for more than the past five
years.
Mr. Overlander has been a member of Bear Stearns' Fixed
Income Sales Department for more than the past five years. Mr.
Overlander is currently the head of Bear Stearns' Fixed Income
Sales Department.
Mr. Raphael has been a member of Bear Stearns' Private
Client Services Department for more than the past five years.
Mr. Rosenwald has been the senior investment banker in Bear
Stearns' Investment Banking Division for more than the past
five years. Mr. Rosenwald has been Vice Chairman of the Board of
Directors for more than the past five years.
Mr. Sachs has been involved in Bear Stearns' Fixed Income
Capital Markets Department for more than the past five years.
Mr. Sachs is responsible for Bear Stearns' Fixed Income Capital
Markets, Corporate Bond Trading and High Grade Research Groups.
Mr. Sachs is also a member of Bear Stearns' Investment Banking
<PAGE>
<PAGE>
Policy Committee. Mr. Sachs has been a Senior Managing Director of
Bear Stearns since July 1991 and was a Managing Director of Bear Stearns
prior thereto.
Mr. Salerno has been the Vice Chairman of the Board of NYNEX
Corp. since March 1991. Prior to that time, Mr. Salerno was
President and Chief Executive Officer of the New York Telephone
Company.
Mr. Schwartz has been an Executive Vice President of the
Company for more than the past five years. Mr. Schwartz is
Chairman of Bear Stearns' Investment Banking Policy Committee.
Mr. Solomon has been involved in the management of the Bear
Stearns High Yield/Bankruptcy Department since January 1991.
Currently, Mr. Solomon is responsible for the High Yield Capital
Markets Group, the Financial Buyers Group, the Leveraged Finance
Group and the Gaming Group. Mr. Solomon is also a member of Bear
Stearns' Investment Banking Policy Committee. Mr. Solomon has
been a Senior Managing Director of Bear Stearns since September
1992 and was a Managing Director of Bear Stearns from January
1991 to September 1992. Prior to joining Bear Stearns, Mr.
Solomon was a Vice President in the high yield group at Salomon
Brothers Inc.
Mr. Spector became an Executive Vice President of the
Company in November 1992. Prior thereto, Mr. Spector was
involved in the management of Bear Stearns' Mortgage Department
for more than the past five years. Mr. Spector is responsible
for all fixed income activities of Bear Stearns.
Mr. Steinberg has been co-head of Bear Stearns' Risk
Arbitrage Department for more than the past five years. Mr.
Steinberg has been Chairman of the Credit Policy Committee of
Bear Stearns since October 1992.
Mr. Tarnopol has been an Executive Vice President of the
Company for more than the past five years. Mr. Tarnopol is
Chairman of the Investment Banking Division of Bear Stearns and a
member of its Investment Banking Policy Committee.
Mr. Tese has been Chairman of Wireless Cable International
Inc. (a wireless cable company) since April 1995. Mr. Tese was
Chairman of Cross Country Wireless Inc. (a wireless cable
company) from October 1994 to July 1995 and was a corporate
officer of the general partner of Cross Country Wireless Inc.'s
predecessors, Cross Country Wireless Cable - I, L.P. and Cross
Country Wireless Cable West, L.P., from 1990 until October 1994.
Mr. Tese was the Director of Economic Development for the State
of New York from June 1987 to December 1994.
Mr. Wilpon has been Chairman of the Board of Directors of
Sterling Equities, Inc., a privately held entity, and certain
affiliates thereof, which are primarily real estate
development/owner management companies, for more than the past
five years. Mr. Wilpon has also been President and Chief
Executive Officer of the New York Mets baseball team for more
than the past five years.
Mr. Zucker has been a member of Bear Stearns' Investment
Banking Division for more than the past five years and, from
September 1989 to August 1991, was an Executive Vice President of
the Company.
There is no family relationship among any of the directors
or executive officers of the Company.
All directors hold office until the next Annual Meeting of
Stockholders or until their successors have been duly elected and
qualified. Officers serve at the discretion of the Board of
Directors.
<PAGE>
<PAGE>
BOARD AND COMMITTEE MEETINGS
The Board of Directors held five meetings (exclusive of
committee meetings) and acted by unanimous written consent once
during the preceding fiscal year. In addition, the Board of
Directors has established four committees whose functions and
current members of which are noted below. Each current director,
except Ms. Fippinger and Messrs. Kluge, Bewkes, Harriton,
Schwartz and Tarnopol attended 75% or more of the aggregate
number of meetings of the Board of Directors and committees on
which he or she served which were held during such period.
Executive Committee. The Executive Committee of the Board
-------------------
of Directors (the "Executive Committee") consists of
Messrs. Cayne, Greenberg (Chairman), Lehman (since September
1995), Schwartz, Spector and Tarnopol, who also constitute six of
the seven members of the Board of Directors of Bear Stearns. The
Executive Committee also included Mr. Mattone until his
resignation in September 1995 and Mr. Sites until his resignation
in July 1995. It meets once each week and more frequently as
required and has held 55 meetings during the preceding fiscal
year. The Executive Committee has the authority between meetings
of the Board of Directors to take all actions with respect to the
management of the Company's business which require action of the
Board of Directors, except with respect to certain matters that
by law and the provisions of the Certificate of Incorporation
must be approved by the entire Board of Directors.
Audit Committee. The Audit Committee of the Board of
---------------
Directors (the "Audit Committee") consists of Messrs. Bewkes
(since October 1994), Glickman (Chairman), Green, Harrington,
Salerno, Tese (since January 1995) and Wilpon. Each of the
foregoing is a director who is not employed by the Company or
affiliated with management. This Committee is responsible for
reviewing and helping to ensure the integrity of the Company's
financial statements. Among other matters, the Audit Committee
reviews the Company's expenditures, reviews the Company's
internal accounting controls and financial statements, reviews
with the Company's independent accountants the scope of their
audit, their report and their recommendations, and recommends the
selection of the Company's independent accountants. The Audit
Committee held five meetings during the preceding fiscal year.
Compensation Committee. The Compensation Committee of the
----------------------
Board of Directors (the "Compensation Committee") consists of Ms.
Fippinger and Messrs. Glickman (Chairman), Green, Nickell and
Salerno. Each of the foregoing is a director who is not employed
by the Company or affiliated with management. The Compensation
Committee establishes the compensation policies used in
determining the compensation of all executive officers and other
Senior Managing Directors, including members of the Board of
Directors who are employees of the Company ("employee
directors"). The Compensation Committee administers The Bear
Stearns Companies Inc. Management Compensation Plan (the
"Management Compensation Plan") pursuant to which the salary and
bonus compensation of the members of the Executive Committee is
determined. See "Executive Compensation - Compensation Committee
Report." The Compensation Committee also approves the salary and
bonus compensation of the employee directors and the other
executive officers based upon recommendations by the Executive
Committee and the Management and Compensation Committee of the
Board of Directors (the "Management and Compensation Committee")
applying criteria established by the Compensation Committee. The
Compensation Committee also administers The Bear Stearns
Companies Inc. 1985 Stock Option Plan for Senior Managing
Directors (the "Stock Option Plan") and certain aspects of the
Capital Accumulation Plan. The Compensation Committee held six
meetings and acted by unanimous written consent once during the
preceding fiscal year.
Management and Compensation Committee. The Management and
-------------------------------------
Compensation Committee consists of Messrs. Cayne (Chairman),
Harriton (since September 1995), Lisman (since September 1995),
Montgoris, Mullen, Schwartz, Spector and Steinberg, and also
included Mr. Sites until his resignation in July 1995. The <PAGE>
<PAGE>
Management and Compensation Committee considers and acts upon
matters involving the day-to-day business and affairs of the
Company and its subsidiaries and, where appropriate, recommends
action to the Board of Directors or other committees of the Board
of Directors with respect to those matters not in the ordinary
course of business and affairs of the Company, in either case
without in any way limiting or impairing the existing power or
authority of the executive officers of the Company. In
connection therewith, the Management and Compensation Committee
approves compensation amounts for employees of the Company and
its subsidiaries below the level of Senior Managing Director, and
recommends to the Compensation Committee and/or the Executive
Committee compensation amounts for Senior Managing Directors of
Bear Stearns other than participants in the Management
Compensation Plan. The Management and Compensation Committee
also administers certain aspects of the Capital Accumulation
Plan. The Management and Compensation Committee meets once a
week and more frequently as required and held 61 meetings during
the preceding fiscal year.
The Board of Directors does not have a nominating committee.
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
OVERVIEW
The Compensation Committee establishes the compensation
policies applicable to all executive officers and other Senior
Managing Directors. The salary and bonus compensation of the
members of the Executive Committee was determined by the
operation of the Management Compensation Plan which the
Compensation Committee has adopted and administers. Stockholders
have approved the performance goals contained in the Management
Compensation Plan. The salaries and bonuses of employee
directors and other executive officers, to the extent not
determined by the Management Compensation Plan, were approved by
the Compensation Committee based upon recommendations by the
Executive Committee and the Management and Compensation
Committee, which committees based their recommendations on
criteria established by the Compensation Committee.
COMPENSATION POLICIES
From the time of the Company's initial public offering after
succession on October 29, 1985 to the business of the
Partnership, compensation for senior executives of the Company
has been strongly influenced by the principle that the
compensation of senior executives should be structured to
directly link the executives' financial reward to Company
performance. Thus, senior executives would both share in the
success of the Company as a whole and be adversely affected by
poor Company performance, thereby aligning their interests with
the interests of the Company's stockholders. The Management
Compensation Plan, which has been in effect in various forms
since the Company's initial public offering, is designed to
implement the foregoing philosophy. The salary and bonus
compensation of the Chief Executive Officer and other members of
the Executive Committee is determined by the Management
Compensation Plan. The Management Compensation Plan provides
each participant with a base salary of $200,000 per annum and a
share of a bonus fund determined based on the Company's Adjusted
Annual Pre-Tax Return on Equity ("ROE," as defined below).
The Company's compensation practice with respect to
executive officers who are not members of the Executive Committee
and other Senior Managing Directors is designed to link
individual compensation with performance. Accordingly, the base
salary of executive officers and most other Senior Managing
Directors is limited to $200,000 per annum, with the most
significant portion of total compensation being in the form of a
bonus determined on the basis of the following criteria: (a) the
overall annual performance of the Company; (b) the performance of
any business unit or units in which the employee participates;
(c) the individual performance of the employee in question from
the viewpoints of (1) management responsibilities, (2) direct
production of revenue, (3) preservation and development of the
Company's franchise, and (4) promoting cooperation within and
between business units; and (d) the need to maintain compensation
levels comparable to those of competing financial services
companies, including those in the Peer Group (as defined below).
The Compensation Committee also considers the relationship
of the Company's total compensation expense to the Company's
total revenues, net of interest expense, in evaluating the
overall reasonableness of the compensation of employee directors
and other executive officers.
The Compensation Committee believes that the establishment
of the Capital Accumulation Plan during fiscal year 1991
represented an important additional step in the Company's goal to
further strengthen the alignment of management and stockholder
interests, by increasing employee ownership of the Company's
Common Stock. During fiscal year 1995, over 90% of the more than
250 Senior Managing Directors participated in the Capital Accumulation
Plan, and all employee directors, employee director nominees and
executive officers of the Company participated.<PAGE>
<PAGE>
The Compensation Committee views the Company's compensation
policies as having substantially contributed to the Company's
historical operating performance, which has been characterized by
consistently high levels of pre-tax return on common equity (see
comparison in the chart below to the average pre-tax return on
common equity of the Company's peers (the "Peer Group"),
consisting of Merrill Lynch & Co., Inc., Morgan Stanley Group
Inc., Paine Webber Group Inc. and Salomon Inc). The following
chart compares the Company's pre-tax return on common equity to
the Peer Group for the five twelve-month periods ended June 30
shown below:
PRE-TAX RETURN ON EQUITY
THE BEAR STEARNS COMPANIES INC. V. PEER GROUP AVERAGE
GRAPHIC MATERIAL (1) OMITTED
<TABLE>
<CAPTION>
June 30,
-------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
The Bear Stearns Companies Inc. 22.1% 47.7% 48.8% 38.7% 21.6%
Peer Group 16.7% 35.1% 33.4% 26.9% 9.8%
</TABLE>
<PAGE>
<PAGE>
MANAGEMENT COMPENSATION PLAN
The Compensation Committee administers the Management
Compensation Plan, which provides that each member of the
Executive Committee will receive a base salary of $200,000 per
annum and share in a bonus fund determined on the basis of the
Company's Adjusted Annual Pre-Tax Return on Equity ("ROE" as
defined below). If the Company's fiscal year 1995 ROE had not
exceeded 2%, the compensation of the members of the Executive
Committee would have been limited to their salaries of $200,000
per annum. For information with respect to the members of the
Executive Committee, see "Election of Directors - Board and
Committee Meetings - Executive Committee."
The total amount of the bonus fund for the 1995 fiscal year
was determined on the basis of the following ranges with the
precise amounts determined (pro rata) based on fiscal year 1995
ROE:
<TABLE>
<CAPTION>
RANGE OF ROE RANGE OF BONUS FUND
------------ -------------------
<S> <C>
up to 2% . . . . . . . . . . . . . . . . . -0-
over 2% but not exceeding 5% . . . . . . . up to $5.4 million
over 5% but not exceeding 10% . . . . . . . $5.4 million to $14.8 million
over 10% but not exceeding 15% . . . . . . $14.8 million to $24.4 million
over 15% but not exceeding 20% . . . . . . $24.4 million to $34.2 million
over 20% but not exceeding 30% . . . . . . $34.2 million to $54.1 million
over 30% but not exceeding 40% . . . . . . $54.1 million to $74.5 million
over 40% . . . . . . . . . . . . . . . . . $74.5 million plus the
incremental rate of $2.05
million for each percent of
ROE in excess of 40%.
</TABLE>
"ROE" is defined generally in the Management Compensation
Plan as the number expressed as a percentage determined by
dividing (a) Adjusted Annual Pre-Tax Income (as defined below) by
(b) Consolidated Common Stockholders' Equity as of the last day
of the immediately preceding fiscal year.
"Adjusted Annual Pre-Tax Income" of the Company is defined
generally in the Management Compensation Plan as consolidated
income before income taxes, after deducting the base salaries of
participants in the Management Compensation Plan and dividends on
preferred stock, but before deducting any bonus payments under
the Management Compensation Plan and any adjustments relating to
the Capital Accumulation Plan. Adjusted Annual Pre-Tax Income
for purposes of this Plan may be decreased, but not increased, at
the sole discretion of the Compensation Committee as appropriate
to carry out the purpose of the Management Compensation Plan.
The share of the bonus fund to be allocated to each member
of the Executive Committee was determined in August 1994 by the
Compensation Committee upon the recommendation of the Executive
Committee, which based such recommendation on the same criteria
established by the Compensation Committee for determining the
total compensation of Senior Managing Directors who are not
members of the Executive Committee for fiscal year 1994.
The Management Compensation Plan is based on the proposition
that ROE is an appropriate measure upon which to base the
compensation of the members of the Executive Committee. Although
the short-term
<PAGE>
<PAGE>
performance of the Common Stock will tend to fluctuate based on
factors beyond the control of management, the Compensation
Committee believes that over the long term, the performance of
the Common Stock will reflect the Company's operating performance
as reflected in its ROE.
The Management Compensation Plan's short-term focus on
annual pre-tax profitability is counterbalanced by the long-term
focus resulting from the substantial ownership of Common Stock
and CAP Units by the members of the Executive Committee and other
senior executives as described in the paragraph "Equity Ownership
and Capital Accumulation Plan" below.
The Compensation Committee has concluded that the Management
Compensation Plan has served the Company well, has provided
appropriate incentives to senior management of the Company, and
is a fair and reasonable method upon which to base the
compensation of the members of the Executive Committee.
Section 162(m) of the Internal Revenue Code limits
deductibility for federal income tax purposes of compensation
paid to individual executive officers named in the Summary
Compensation Table unless certain exceptions, including
compensation based on performance goals, are satisfied. The
Management Compensation Plan for both fiscal year 1995 and fiscal
year 1996 (subject to shareholder approval of the performance
goals applicable to such year, as described in "Approval of the
Fiscal Year 1996 Performance Goals Under the Management
Compensation Plan") have been established in an effort to comply
with the performance-based exception to limits on deductibility
of executive officer compensation.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The total compensation of Mr. Cayne, the Company's CEO,
along with other members of the Executive Committee, is
determined in all material respects by the Management
Compensation Plan. Pursuant to the terms of the Management
Compensation Plan, for fiscal year 1995 Mr. Cayne received a base
salary of $200,000 and shared in a bonus fund based on the
Company's fiscal year 1995 ROE. Mr. Cayne's share of the fiscal
year 1995 bonus fund (as well as that of the other members of the
Executive Committee) was determined by the Compensation Committee
in August 1994, based on the recommendation of the Executive
Committee as to how the bonus fund should be allocated among the
members of the Executive Committee. The Executive Committee's
recommendations were based on the same criteria established by
the Compensation Committee for determining the total compensation
of Senior Managing Directors who were not members of the
Executive Committee for fiscal year 1994.
The Company's fiscal 1995 financial performance was
substantially lower than in fiscal year 1994. Under the terms of
the Management Compensation Plan and reflecting the shares of the
bonus fund allocated to Mr. Cayne, the total salary and bonus
compensation of Mr. Cayne decreased by 47.2% from fiscal 1994.
Of the total fiscal year 1995 compensation of Mr. Cayne,
approximately 45% was deferred under the Capital Accumulation
Plan, with the result that the ultimate realization of a
substantial portion of Mr. Cayne's benefit from his current
compensation will depend on the future performance of the Company
and its Common Stock.
EQUITY OWNERSHIP AND CAPITAL ACCUMULATION PLAN
A focus on long-term performance and growth and a direct
alignment of employee and stockholder interests results from the
substantial ownership of Common Stock and equivalents (including
CAP Units) by senior executives of the Company. As shown under
"Security Ownership of Management," the six current members of
the Executive Committee beneficially own approximately 8.38% of
the Common Stock and equivalents outstanding
<PAGE>
<PAGE>
while all directors, nominees and executive officers as a group
beneficially own approximately 14.82% of the outstanding Common Stock
and equivalents, as of September 1, 1995.
The Capital Accumulation Plan has been and will continue to
be a major contributor to equity ownership by senior executives.
During fiscal year 1995, over 90% of the more than 250 Senior
Managing Directors of Bear Stearns (including all employee
directors, employee director nominees and executive officers of
the Company) participated in the Capital Accumulation Plan. For
fiscal years 1993, 1994 and 1995 participants in the Capital
Accumulation Plan have deferred a total of approximately
$319,800,000 in compensation. Furthermore, for fiscal year 1995,
38.33% of the salary and bonus compensation (including amounts
deferred pursuant to the Capital Accumulation Plan) of the
current members of the Executive Committee was deferred in the
Capital Accumulation Plan while 35.55% of such compensation was
deferred by all executive officers, employee directors and
employee director nominees as a group. These deferrals were or
will be credited to participants' accounts in the form of CAP
Units which entitle the participants to share in the pre-tax
income of the Company and eventually to receive shares of Common
Stock of the Company. The Capital Accumulation Plan is described
in detail below under "Approval of Amendment to the Capital
Accumulation Plan."
Since shares for the Capital Accumulation Plan are purchased
from existing stockholders and not from the Company, employee
stock ownership is increased without substantial dilution to
earnings per share or book value per common share. Consistent
with the Company's goal of avoiding compensation plans which
cause significant dilution of existing stockholders, the Company
does not use stock options as a significant component of employee
compensation and has granted no stock options since August 1989.
Compensation Committee
Carl D. Glickman, Chairman
Grace J. Fippinger
Thomas R. Green
Frank T. Nickell
Frederic V. Salerno
* * *
<PAGE>
<PAGE>
COMPENSATION TABLES AND OTHER INFORMATION
The following tables set forth information with respect to
the Chief Executive Officer and the five most highly compensated
executive officers of the Company (other than the CEO) for the
three fiscal years ended June 30, 1995:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
----------------------- ------------
FISCAL RESTRICTED STOCK ALL OTHER
NAME & PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(2)(3) COMPENSATION(3)(4)
------------------------- ------ ------ ------------ ----------------- -------------------
<S> <C> <C> <C> <C> <C>
James E. Cayne . . . . . . . . 1995 200,000 $4,030,066 $3,470,827 $1,303,122
CEO and President 1994 200,000 7,465,620 6,906,380 1,075,670
1993 200,000 8,136,970 7,577,977 546,692
Alan C. Greenberg . . . . . . . 1995 200,000 5,627,980 1,872,913 679,659
Chairman of the Board 1994 200,000 10,781,310 3,590,690 580,739
1993 200,000 11,788,459 3,926,488 325,045
Warren J. Spector . . . . . . . 1995 200,000 3,725,976 3,166,737 1,374,499
Executive Vice President 1994 200,000 6,834,000 6,284,000 1,121,083
1993 200,000 2,683,994 8,830,397 481,650
John C. Sites, Jr. (5) . . . . 1995 200,000 3,735,356 3,157,357 1,340,953
Executive Vice President 1994 200,000 6,952,000 6,359,000 1,075,735
1993 200,000 5,175,000 8,444,620 446,842
Vincent J. Mattone (6) . . . . 1995 200,000 2,352,229 1,752,990 667,798
Executive Vice President 1994 200,000 3,961,120 3,369,880 570,958
1993 200,000 4,590,915 3,999,922 291,832
Alan D. Schwartz . . . . . . . 1995 200,000 2,332,229 1,772,990 778,533
Executive Vice President 1994 200,000 3,948,870 3,382,130 689,714
1993 200,000 3,521,731 5,069,106 338,065
<FN>
For each of the above-named officers, compensation
information is provided for the full fiscal years during which he
served as an executive officer of the Company.
(1) Includes for the years indicated amounts contributed to the
Bear Stearns Companies Inc. Cash or Deferred Compensation
Plan by the executive officers.
(2) Represents amounts deferred pursuant to the Capital
Accumulation Plan. See "Approval of Amendment to the
Capital Accumulation Plan." In accordance with the Capital
Accumulation Plan, all amounts are immediately vested but,
generally, are not payable for a minimum of five years. For
the fiscal year ended June 30, 1995, the following number of
CAP Units were credited to such persons' Capital
Accumulation Accounts as a result of their fiscal year 1995
deferrals: Mr. Cayne - 193,997; Mr. Greenberg - 104,684;
Mr. Spector - 177,001; Mr. Sites - 176,476; Mr. Mattone -
97,981; and Mr. Schwartz - 99,099.
<PAGE>
<PAGE>
(3) As of June 30, 1995, the value and number of the aggregate
CAP Units held by such persons (based on the closing price
of the Common Stock on the Consolidated Transaction
Reporting System on such date) was: Mr. Cayne - $25,408,166
(1,188,686 units); Mr. Greenberg - $13,322,778 (623,287
units); Mr. Spector - $26,231,988 (1,227,227 units); Mr.
Sites - $25,670,597 (1,200,963 units); Mr. Mattone -
$12,990,139 (607,725 units); and Mr. Schwartz - $14,833,738
(693,976 units).
(4) Includes preferential earnings in the form of CAP Units
credited pursuant to the Capital Accumulation Plan. For a
description of the Capital Accumulation Plan, see "Approval
of Amendment to the Capital Accumulation Plan." For fiscal
year 1994 and fiscal year 1993, includes preferential
earnings in the form of Earnings Units (as hereinafter
defined) credited pursuant to the Performance Unit Plan for
Senior Managing Directors. The Performance Unit Plan was
adopted effective as of January 1, 1993 following the
termination of the Capital Accumulation Plan in respect of
Plan Years 1991 and 1992 in order to compensate participants
in the Capital Accumulation Plan (in the form of "Earnings
Units" representing shares of Common Stock) for certain
adverse consequences resulting from such termination by
approximating the economics of the Capital Accumulation Plan
in respect of shares of Common Stock distributed from the
Capital Accumulation Plan. The Performance Unit Plan
terminated effective June 30, 1994, and shares of Common
Stock issued thereunder were distributed to participants in
October 1994.
(5) Effective July 17, 1995, Mr. Sites resigned as Executive
Vice President of the Company.
(6) Effective September 6, 1995, Mr. Mattone resigned as
Executive Vice President of the Company.
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
SHARES ACQUIRED VALUE
NAME & PRINCIPAL POSITION ON EXERCISE REALIZED(2)
-------------------------- ------------ ------------
<S> <C> <C>
James E. Cayne . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,584 $912,637
CEO and President
Alan C. Greenberg . . . . . . . . . . . . . . . . . . . . . . . . . . 89,584 639,893
Chairman of the Board
Warren J. Spector . . . . . . . . . . . . . . . . . . . . . . . . . . 79,009 620,799
Executive Vice President
John C. Sites, Jr.(3) . . . . . . . . . . . . . . . . . . . . . . . . 88,652 580,463
Executive Vice President
Vincent J. Mattone(4) . . . . . . . . . . . . . . . . . . . . . . . . 76,935 745,308
Executive Vice President
Alan D. Schwartz . . . . . . . . . . . . . . . . . . . . . . . . . . 66,897 668,970
Executive Vice President
<FN>
----------
(1) The chart relates to options granted in August 1989 under
the Stock Option Plan. All options held by the above-named
officers have been exercised.
(2) This valuation represents the difference between the average
of the high and the low price of the Common Stock on the New
York Stock Exchange on the date of exercise, and the
exercise price of the options exercised.
(3) Effective July 17, 1995, Mr. Sites resigned as Executive
Vice President of the Company.
(4) Effective September 6, 1995, Mr. Mattone resigned as
Executive Vice President of the Company.
/TABLE
<PAGE>
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of
an investment in the Company's Common Stock for the last five
fiscal years to that of the S&P 500 Index, the S&P Financial
Miscellaneous Index and the Company's peers (consisting of
Merrill Lynch & Co., Inc., Morgan Stanley Group Inc., Paine
Webber Group Inc. and Salomon Inc). The graph assumes the value
of the investment in the Company's Common Stock and each index
was $100 on June 30, 1990 and that all dividends were reinvested.
There can be no assurance that future stock performance will
correlate with past stock performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
GRAPHIC MATERIAL (2) OMITTED
Assumes $100 invested on June 30, 1990
in the Company's Common Stock, S&P 500 Index,
S&P Financial Miscellaneous Index and Peer Group Index
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
The Bear Stearns Companies Inc. 100 117 162 250 205 280
S & P 500 Index 100 107 122 138 140 171
S & P Financial Miscellaneous Index 100 103 124 180 180 220
Peer Group 100 136 172 257 232 355
</TABLE>
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company receives
an annual retainer of $25,000, plus $800 for each meeting of the
Board of Directors attended, and reasonable expenses relating to
attendance at such meetings. Directors who are members of the
Audit Committee and directors who are members of the Compensation
Committee receive additional compensation at the rate of $1,500
for each meeting of the Audit Committee or Compensation Committee
attended and $200 for participation in a telephone conference
meeting.
<PAGE>
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company, in the ordinary course of business, has
extended credit to certain of its directors, officers and
employees in connection with their purchase of securities. Such
extensions of credit have been made on substantially the same
terms, including interest rates and collateral requirements, as
those prevailing at the time for comparable transactions with
non-affiliated persons, and did not involve more than the normal
risk of collectibility or have other unfavorable features
present. To the extent officers and employees of the Company and
members of their immediate families wish to purchase securities
in brokerage transactions, they ordinarily are required to do so
through Bear Stearns, which offers them a discount from its
standard commission rates in connection therewith which could be
substantial depending on various factors, including the size of
the transaction. Bear Stearns also, from time to time and in the
ordinary course of its business, has entered into transactions
involving the purchase or sale of securities and commercial paper
(including different forms of repurchase transactions) from or to
directors, officers and employees of the Company and members of
their immediate families, as principal. Such purchases and sales
of securities or commercial paper on a principal basis were
effected on substantially the same terms as similar transactions
with unaffiliated third parties.
The Company, from time to time, has made loans to its
officers and other employees against commissions and other
compensation which would otherwise be payable to them in the
ordinary course of business. Interest is generally charged by
the Company on such loans at the same rate of interest charged by
Bear Stearns on loans to purchase securities. The Company
currently requires that any such loan in excess of $7,500 made to
officers and other employees against commissions or other
compensation be approved by the affirmative vote of a majority of
the members of the Management and Compensation Committee (with
any interested member abstaining). During the fiscal year ended
June 30, 1995, the maximum aggregate amount of loans against
commissions and other compensation at month-end was approximately
$3,333,090.
Other than as described in this Proxy Statement, no director
or executive officer of the Company was indebted to the Company
during the last fiscal year for any amount in excess of $60,000.
Bear Stearns acted as the exclusive financial advisor for
Cross Country Wireless Inc. ("Cross Country") in connection with
the sale of Cross Country to Pacific Telesis Group in July 1995,
for which Bear Stearns received fees aggregating $1 million.
Prior to the sale, Vincent Tese was Chairman of Cross Country and
Mr. Tese and his family were the owners of approximately 20% of
its outstanding common stock.
Sterling BSC Inc. ("Sterling BSC") and Hines Interests
Limited Partnership ("Hines"), as a joint venture (the "Joint
Venture"), are acting as a consultant to the Company on certain
real estate matters. In April 1995, the Company paid the Joint
Venture $225,000 for consulting services provided to the Company.
Fred Wilpon, a director of the Company, is Chairman of Sterling
BSC and the owner of a substantial portion of the outstanding
common stock of Sterling BSC which has a majority interest in the
Joint Venture.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Company's Compensation Committee
are Messrs. Glickman, Green, Nickell and Salerno and Ms.
Fippinger, none of whom is or has been an officer or employee of
the Company. There were no "Compensation Committee Interlocks"
during fiscal year 1995.
<PAGE>
<PAGE>
II. APPROVAL OF THE FISCAL YEAR 1996 PERFORMANCE
GOALS UNDER THE MANAGEMENT COMPENSATION PLAN
The Board of Directors proposes that the stockholders
approve the fiscal year 1996 performance goals under the
Management Compensation Plan.
On July 25, 1994, the Compensation Committee adopted the
Management Compensation Plan, which is effective July 1, 1994,
subject to annual approval of the performance goals contained
therein by stockholders at the Company's Annual Meeting.
The salary and bonus compensation of the CEO and other
members of the Executive Committee is determined by the
Management Compensation Plan in fiscal year 1995 and thereafter.
Under the Management Compensation Plan, each of the members of
the Executive Committee will receive a base salary of $200,000
per annum and share in a bonus fund established pursuant to the
Management Compensation Plan. On September 7, 1995, the
Compensation Committee established the formula for computing the
bonus fund in fiscal 1996, subject to stockholder approval at the
Company's Annual Meeting. Based upon the Company achieving the
following ranges of ROE, the total amount of the bonus fund for
fiscal year 1996 will be in the following ranges (with the
precise amount determined pro rata):
<TABLE>
<CAPTION>
RANGE OF
--------
RANGE OF ROE BONUS FUND
------------ ----------
<S> <C>
up to 2% . . . . . . . . . . . . . . . -0-
over 2% but not exceeding 5% . . . . . up to $4.6 million
over 5% but not exceeding 10% . . . . . $4.6 million to $12.4 million
over 10% but not exceeding 15% . . . . $12.4 million to $20.72 million
over 15% but not exceeding 20% . . . . $20.72 million to $29.16 million
over 20% but not exceeding 30% . . . . $29.16 million to $46.188 million
over 30% . . . . . . . . . . . . . . . $46.188 million plus the
incremental rate of $1.738 million
for each percent of ROE in excess
of 30%.
</TABLE>
The fiscal year 1995 performance goals under the Management
Compensation Plan and the definitions of "ROE" and "Adjusted
Annual Pre-Tax Income" under the Management Compensation Plan are
described under "Executive Compensation - Compensation Committee
Report - Management Compensation Plan."
The impact of the change in the formula for calculating the
bonus fund in fiscal year 1996 from that in effect for fiscal
year 1995 is that the Company must generate more Adjusted Annual
Pre-Tax Income in fiscal year 1996 than in the previous year in
order to produce the same bonus fund as in fiscal year 1995. The
percentage increase in Adjusted Annual Pre-Tax Income required to
produce the same bonus fund, however, is less than the increase
in Consolidated Common Stockholders' Equity from fiscal year 1994
to fiscal year 1995. Changes made in the formulas for computing
the bonus fund under the Management Compensation Plan in the
fiscal year 1995 plan and the fiscal year 1994 plan had similarly
required a year-over-year increase in Adjusted Annual Pre-Tax
Income, and also included a year-over-year percentage increase in
Adjusted Annual Pre-Tax Income less than the percentage increase
in Consolidated Common Stockholders' Equity, in order for the
size of the bonus fund to remain the same. In addition to the
adjustments made at all levels of Adjusted Annual Pre-Tax Income,
the formula for calculating the bonus fund in fiscal year 1996
was revised to further reduce the bonus
<PAGE>
<PAGE>
fund at lower levels of ROE. The change in the formula
also reflects a reduction in the aggregate size of the bonus fund
due to the resignations of two members of the Executive Committee
and the addition of Mr. Lehman to the Executive Committee.
The share of the bonus fund to be allocated to each member
of the Executive Committee is determined by the Compensation
Committee based on the recommendation of the Executive Committee.
The Compensation Committee may allocate up to 100% of the entire
bonus fund in any fiscal year. The determination of each
participant's share of the fund is made not later than 90 days
after the beginning of each fiscal year. The share of the bonus
fund that may be allocated to a participant in any fiscal year
may not exceed 25% of such fund. The Management Compensation
Plan may be amended by the Compensation Committee provided that
no such action shall retroactively impair or otherwise adversely
affect the rights of any person prior to the date of any action.
Section 162(m) of the Internal Revenue Code denies the
deduction for certain compensation in excess of $1 million per
year paid by a publicly traded corporation to the chief executive
officer and the four other most highly compensated officers.
Certain types of compensation, including compensation based on
performance goals, are excluded from this deduction limit. In
order for compensation to qualify for this exception (i) it must
be paid solely on account of the attainment of one or more
performance goals, (ii) the performance goals must be established
by a compensation committee consisting solely of two or more
outside directors, (iii) the material terms under which the
compensation is to be paid, including the performance goals, must
be disclosed to and approved by stockholders in a separate vote
prior to payment and (iv) prior to payment, the compensation
committee must certify that the performance goals and any other
material terms were in fact satisfied (the "Certification
Requirement"). In addition, satisfaction of the requirements set
forth in (iii) and (iv) above must be made conditions to the
right of the executive to receive the performance-based
compensation. In an effort to comply with the provisions of the
Internal Revenue Code to qualify the compensation payable to
certain executives under the Management Compensation Plan as
performance-based compensation eligible for exclusion from the
deduction limit, the performance standards contained in the
Management Compensation Plan are being submitted to the
stockholders for approval at the 1995 Annual Meeting. The
approval by stockholders and the satisfaction of the
Certification Requirement shall be conditions to the rights of a
participant to receive any benefits under the Management
Compensation Plan.
<PAGE>
<PAGE>
The following table reflects the amounts that would have
been paid for the fiscal year ended June 30, 1995 if the fiscal
year 1996 formula for computing the bonus fund under the
Management Compensation Plan had been in effect for such year:
<TABLE>
<CAPTION>
MANAGEMENT COMPENSATION PLAN (1)
NAME AND POSITION DOLLAR VALUE ($)(2)
----------------- ----------------
<S> <C>
James E. Cayne, CEO and President . . . . . . . . . $ 7,154,410
Alan C. Greenberg,
Chairman of the Board . . . . . . . . . . . . . . 7,154,410
Warren J. Spector,
Executive Vice President . . . . . . . . . . . . 6,574,323
John C. Sites, Jr. (3)
Executive Vice President . . . . . . . . . . . . 0
Vincent J. Mattone(4)
Executive Vice President . . . . . . . . . . . . 0
Alan D. Schwartz
Executive Vice President . . . . . . . . . . . . 3,915,589
Executive Group . . . . . . . . . . . . . . . . . . 30,937,990
Non-Executive Director Group . . . . . . . . . . . 0
Other Employee Group(5) . . . . . . . . . . . . . . 0
<FN>
_________________________
(1) This calculation (i) utilizes the fiscal year 1995 Adjusted
Annual Pre-Tax Income and the Consolidated Common
Stockholders' Equity as of June 30, 1995 and (ii) assumes
the percentage of the bonus fund allocated to each member of
the Executive Committee was the same as under the Management
Compensation Plan in effect for fiscal year 1995, as
adjusted for the resignations of Messrs. Sites and Mattone.
(2) Includes amounts that would have been deferred pursuant to
the Capital Accumulation Plan. See "Summary Compensation
Table."
(3) Effective July 17, 1995, Mr. Sites resigned as Executive
Vice President of the Company and pursuant to the Management
Compensation Plan will not participate in the bonus fund in
fiscal year 1996.
(4) Effective September 6, 1995, Mr. Mattone resigned as
Executive Vice President of the Company and pursuant to the
Management Compensation Plan will not participate in the
bonus fund in fiscal year 1996.
(5) Excluding those employees included in the categories
entitled "Executive Group" and "Non-executive Director
Group."
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL
OF THE PERFORMANCE STANDARDS CONTAINED IN THE MANAGEMENT
COMPENSATION PLAN.
<PAGE>
<PAGE>
III. APPROVAL OF AMENDMENT TO THE CAPITAL ACCUMULATION PLAN
The Board of Directors recommends approval of the amendment
to the Capital Accumulation Plan.
GENERAL
The Capital Accumulation Plan was adopted initially by the
Board of Directors and approved by stockholders as of September
6, 1990. The Plan was amended thereafter on a number of
occasions by the Compensation Committee, both with and without
stockholder approval, as required. The last amendment to the
Plan, prior to the proposed amendment being considered at the
Annual Meeting, was adopted on September 1, 1994 and approved by
stockholders on October 24, 1994, as reflected in the Exhibits to
the Company's Annual Report on Form 10-K for fiscal year 1994.
Under the Capital Accumulation Plan, all Senior Managing
Directors of Bear Stearns (including employee directors and
executive officers of the Company) are eligible to participate on
an elective basis. Participants in the Plan are entitled to
defer a portion of their compensation earned during each fiscal
year. Participants are generally required to commit to defer
compensation during each of the three fiscal years following
their initial election to participate in the Plan. Thereafter,
to the extent that the Compensation Committee decides to allow
employees who newly become Senior Managing Directors to defer
compensation for three years and thereby extends the duration of
the Plan, existing Plan participants will be permitted to defer
compensation for the additional fiscal year or years. The Plan
has been made available to participants with respect to each of
Bear Stearns' fiscal years from 1991 through 1998.
There are approximately 280 Senior Managing Directors,
including 32 newly elected Senior Managing Directors, who are
eligible to participate in the Plan. Participants in any fiscal
year will generally be required to defer the following
percentages of that portion of their total compensation for such
fiscal year (after deducting any amounts deferred under other
plans sponsored by the Company) which exceeds $200,000 (or the
then prevailing annual base salary of Senior Managing Directors):
<TABLE>
<S> <C>
25% of the first . . . . . . $ 300,000
30% of the next . . . . . . 500,000
40% of the next . . . . . . 1,000,000
50% of compensation exceeding 2,000,000
</TABLE>
In lieu of the foregoing amounts, Senior Managing Directors
over the age of 55 may elect to defer only 25% of their aggregate
compensation in excess of $200,000 and all participants may elect
to defer all or any portion of their compensation in excess of
$200,000 in addition to the minimum amount set forth in the table
above ("Additional Deferral Amounts"), subject, in the case of
Additional Deferral Amounts to the approval of the Management and
Compensation Committee, or in the case of persons subject to the
reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended ("Reporting Persons"), to the
approval of the Compensation Committee.
Participants' compensation will be deferred for a period (a
"Deferral Period") of five years after the end of the fiscal year
for which it was otherwise payable, which period may be extended
or reduced under certain circumstances, including the financial
hardship of the participant. Participants over the age of 55 may
elect a shorter deferral period. A participant's compensation
deferred pursuant to the Plan will be credited to such
participant's deferred compensation account (the "Capital
Accumulation Account") in the form of units ("CAP Units"). The
number of CAP Units to be so credited generally will be
determined by dividing the amount of each participant's
compensation deferred in respect of such fiscal year by the
average cost per share of Common Stock acquired for purposes of
the Plan.
<PAGE>
<PAGE>
Each CAP Unit credited to a participant's Capital
Accumulation Account will entitle the participant to receive, on
an annual basis, a Net Earnings Adjustment generally equal to the
Company's pre-tax earnings per share (as determined in accordance
with the Plan) for such fiscal year divided by the average cost
per share of Common Stock acquired by the Company for purposes of
the Plan, less an adjustment for changes in the Company's book
value per share of the Common Stock during such year resulting
from increases or decreases in the Company's retained earnings
attributable to net income or loss, after deducting dividends
declared with respect to any capital stock of the Company, during
such year. The Net Earnings Adjustment generally will be
credited to participants' Capital Accumulation Accounts on an
annual basis in the form of a number of additional CAP Units.
Notwithstanding the foregoing, the aggregate number of CAP
Units that may be credited pursuant to the Plan in respect of any
fiscal year may not exceed the number of Available Shares (as
defined in the Plan) acquired for the Plan with respect to such
fiscal year. If, because of this limitation, the Company is not
able to credit CAP Units in respect of all compensation deferred
for any fiscal year, or to make any required Net Earnings
Adjustments in full, then the amount of compensation for which no
CAP Units were awarded will be credited instead to an interest-
bearing "cash balance account" maintained for each participant.
In subsequent fiscal years, to the extent the Company acquires
shares of Common Stock for the Plan, it will credit at the end of
each fiscal quarter a number of CAP Units corresponding to such
shares first to participants having positive cash balances before
making any other credits of CAP Units in respect of that year.
The price at which CAP Units will be so credited in respect of
deferred cash balances will be the average cost per share of the
corresponding shares of Common Stock acquired by the Company
during such fiscal quarter.
Upon the termination of a participant's Deferral Period
under the Plan, the participant will be entitled to receive from
the Company a number of freely transferable shares of Common
Stock equal to the number of CAP Units then credited to his
Capital Accumulation Account plus cash in the amount, if any, of
his cash balance account at the end of such period. If a
participant dies or becomes disabled, the participant's estate
(or the designated beneficiary) will receive the number of shares
of Common Stock corresponding to the CAP Units then credited to
such participant's account as of the first day of the fiscal year
following the date of death or disability plus cash in the
amount, if any, of the participant's cash balance account. If a
participant's employment is terminated for any reason prior to
the end of the Deferral Period (other than by reason of death or
disability), the Management and Compensation Committee or, in the
case of a Reporting Person, the Compensation Committee (the
"Appropriate Committee") has the discretion, among other things,
to accelerate the distribution of CAP Units in the form of shares
of Common Stock for all Plan Years, plus cash in the amount, if
any, of his cash balance account, and/or void any deferral
elections for which CAP Units have not yet been credited and
distribute cash in lieu of shares with respect thereto.
The maximum number of CAP Units that may be credited to all
Plan participants' Capital Accumulation Accounts under the Plan
for any Plan Year shall not exceed the equivalent number of
shares of Common Stock equal to the sum of 15% of the outstanding
shares of Common Stock (as defined in the Plan) as of the last
day of such Plan Year (the "Base Shares") and the number, if any,
by which the sum of the Base Shares in all prior fiscal years
beginning on or after July 1, 1993 exceeds the number of shares
credited to participants' Capital Accumulation Accounts under
this Plan in all such prior fiscal years.
The Company reserves the right to terminate the entire Plan
or any portion of the Plan representing a particular fiscal
year's deferred compensation at any time in its sole discretion.
The Plan also provides for acceleration of deferrals in the event
of certain defined events constituting a "change in control" of
the Company. In the event of a "change in control" the Plan will
be deemed to be terminated immediately and shares of
<PAGE>
<PAGE>
Common Stock will be issued within 60 days thereafter. The
Plan may be amended by the Compensation Committee provided
that no such action shall retroactively impair or otherwise
adversely affect the rights of any person prior to the date of
any action.
A participant may not assign, pledge or otherwise transfer
his interest in his Capital Accumulation Account except by
designating a beneficiary who shall be entitled to receive any
amounts payable under the Plan upon the participant's death. The
Company is not required to establish a special or separate fund
or otherwise segregate any assets to assure any payments under
the Plan and has no obligation to invest all or any portion of
the participants' Capital Accumulation Accounts in Common Stock.
The Plan provides that the rights of each participant shall be no
greater than the rights of a general unsecured creditor of the
Company.
PROPOSED AMENDMENT
The following amendment to the Capital Accumulation Plan was
approved by the Compensation Committee, effective as of July 1,
1995, subject to stockholder approval at the 1995 Annual Meeting.
There are a number of provisions of the Plan that govern the
payment of benefits to participants upon termination of
employment, including provisions for the acceleration of
distributions under certain circumstances, as determined by the
Appropriate Committee. As the Plan presently is constituted, in
order to distribute shares of Common Stock underlying CAP Units
to a participant promptly following the termination of
employment, rather than at the expiration of the participant's
Deferral Periods, the Appropriate Committee generally would be
required to accelerate the Termination Dates with respect to all
---
Plan Years for which CAP Units were credited, subject to the
authority of the Appropriate Committee to distribute cash in lieu
of shares with respect to a Plan Year for which CAP Units have
not yet been credited. However, it is unclear whether the
Appropriate Committee would have the authority to accelerate the
Termination Date of one or more Plan Years but permit the
continued deferral of the payment of benefits with respect to
other Plan Years, including a Plan Year as to which CAP Units
have not yet been credited (which generally occurs within three
months following the end of the fiscal year). In order to
provide maximum flexibility to the Appropriate Committee to
accelerate the Termination Dates for the prompt distribution of
shares with respect to one or more Plan Years but require the
deferral of the distribution of shares with respect to other Plan
Years to the end of subsequent fiscal years of the Company, the
Compensation Committee has approved the amendment and restatement
of Section 6.2(c)(ii) of the Plan to read as set forth below
(marked to show changes):
EDGAR NOTE: DUE TO THE NATURE OF ASCII TEXT, MARKED CHANGES APPEAR AS FOLLOWS:
-DELETIONS APPEAR IN BRACKETS
-ADDITIONS APPEAR AS DOUBLE UNDERLINED CAPITALS
(ii) the Appropriate Committee shall have the right
in its sole discretion to accelerate [the] ANY
===
Termination Date with respect to [all] ANY Plan
===
[Years] YEAR of a Participant whose employment with
====
the Company and its Affiliates terminates to the
last day of the Fiscal Year in which such
employment terminates or to the last day of any
subsequent Fiscal Year, in which case the date so
determined by the Appropriate Committee WITH
====
RESPECT TO EACH SUCH PLAN YEAR shall be the
==============================
Participant's Termination Date for all purposes of
this Plan WITH RESPECT TO EACH SUCH PLAN YEAR.
===================================<PAGE>
The Appropriate Committee shall give notice of any
such determination to the Participant at least ten
days prior to THE EARLIEST OF such accelerated
===============
Termination [Date] DATES. In addition, if a
=====
Participant whose employment with the Company has
terminated shall request the Appropriate Committee
to accelerate the Termination Date with respect to
[all] ANY Plan [Years] YEAR of such Participant to the
=== ====
last day of the Fiscal
<PAGE>
<PAGE>
Year immediately preceding the Fiscal Year
in which such Participant's employment
terminates, the Appropriate Committee may in its
sole discretion so accelerate the Termination Date
with respect to [all] ANY SUCH Plan [Years] YEAR of
======== ====
such Participant. If the Appropriate Committee
takes such action, such Participant's distribution
from the Plan FOR ANY PLAN YEAR THE TERMINATION
=================================
DATE OF WHICH IS SO ACCELERATED shall be based on
===============================
[his] THE Total CAP Units and his Cash Balance at
===
the end of such prior Fiscal Year FOR EACH SUCH
=============
PLAN YEAR, without giving effect to any
==========
adjustments otherwise required to be made during
the Fiscal Year in which his employment
terminates, including, without limitation, for Net
=
Earnings Adjustments, dividends on the Common
Stock, or interest, and the distributions called
for in Section 6.1 of the Plan shall be made as
soon as practicable after such action is taken by
the Appropriate Committee;
The foregoing amendment would have provided no benefits to
Participants if it had been in effect in fiscal year 1995.
On July 17, 1995, John C. Sites, Jr. resigned as an officer,
director and employee of the Company. As of the date of his
resignation, 578,862.858 Cap Units had been credited to his
account for Plan Year 1993 and 379,643.891 Cap Units had been
credited for Plan Year 1994. With respect to Plan Year 1995, Mr.
Sites had elected to defer $3,157,357 of compensation pursuant to
the Capital Accumulation Plan and, as a result, 176,476.773 Cap
Units were to be credited to his account, subject to the
necessary certification by the Compensation Committee (exclusive
of an aggregate of 76,108.777 Cap Units relating to Net Earnings
Adjustments). As a result of a request made by Mr. Sites, the
Compensation Committee determined to accelerate the Termination
Dates for Plan Years 1993 and 1994 to the end of Fiscal Year 1995
(thereby resulting in the current receipt by Mr. Sites of
958,506.749 shares of Common Stock), but concluded that the
Termination Date of Plan Year 1995 should not be accelerated,
subject to approval by the stockholders of the proposed amendment
to the Capital Accumulation Plan described above. Thus, if the
stockholders approve the proposed amendment to the Capital
Accumulation Plan, Mr. Sites will not receive the additional
252,585.55 shares of Common Stock (plus such additional shares as
represent adjustments pursuant to the Plan) until July 1, 2000 or
such earlier date as provided in the Plan; if the stockholders do
not approve the amendment, Mr. Sites will receive such shares
promptly following the 1995 Annual Meeting of Stockholders.
Although the Compensation Committee has taken no other
action that would be affected by the proposed amendment, this
amendment to the Capital Accumulation Plan may in the future
affect other participants in the Capital Accumulation Plan who
may resign, including Vincent Mattone who resigned on September
6, 1995.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF
THE AMENDMENT TO THE CAPITAL ACCUMULATION PLAN.
<PAGE>
<PAGE>
INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP
as the Company's independent auditors to conduct the audit of the
Company's books and records for the fiscal year ended June 30,
1996. Deloitte & Touche LLP also served as the Company's
independent auditors for the previous fiscal year.
Representatives of Deloitte & Touche LLP are expected to be
present at the Annual Meeting to respond to questions and to make
a statement should they so desire.
OTHER MATTERS
At the date of this Proxy Statement, the Company has no
knowledge of any business other than that described above that
will be presented at the Annual Meeting. If any other business
should come before the Annual Meeting, it is intended that the
persons named in the enclosed proxy will have discretionary
authority to vote the shares which they represent.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1996 ANNUAL MEETING
In accordance with rules promulgated by the Securities and
Exchange Commission, any stockholder who wishes to submit a
proposal for inclusion in the proxy material to be distributed by
the Company in connection with the 1996 Annual Meeting must do so
no later than May 31, 1996.
In addition, in accordance with Article VI, Section 2 of the
Certificate of Incorporation, in order to be properly brought
before the 1996 Annual Meeting, a matter must have been
(i) specified in a written notice of such meeting (or any
supplement thereto) given to stockholders by or at the direction
of the Board of Directors (which would be accomplished if a
stockholder proposal were received by the Secretary of the
Company as set forth in the preceding paragraph), (ii) brought
before such meeting at the direction of the Board of Directors or
the Chairman of the meeting, or (iii) specified in a written
notice given by or on behalf of a stockholder of record on the
record date for such meeting or a duly authorized proxy for such
stockholder, which conforms to the requirements of Article VI,
Section 2 of the Certificate of Incorporation and is delivered
personally to, or mailed to and received by, the Secretary of the
Company at the address below not less than 10 days prior to the
first anniversary of the date of the notice accompanying this
Proxy Statement; provided, however, that such notice need not be
given more than 75 days prior to the 1996 Annual Meeting.
REPORTS
The Company will furnish without charge to each person whose
proxy is being solicited, upon the written request of any such
person, a copy of the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1995, as filed with the Securities
and Exchange Commission, including the financial statements and
schedules thereto. Requests for copies of such Annual Report on
Form 10-K should be directed to the Corporate Communications
Department of the Company at the address below.
By order of the Board of Directors
Kenneth L. Edlow,
Secretary
The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
September 28, 1995
<PAGE>
<PAGE>
THE BEAR STEARNS COMPANIES INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS - OCTOBER 30, 1995 AT 5:00 P.M.
The undersigned stockholder of The Bear Stearns Companies
Inc. (the "Company") hereby appoints Alan C. Greenberg, James E.
Cayne and E. John Rosenwald, Jr., and each of them, as attorneys
and proxies, each with power of substitution and revocation, to
represent the undersigned at the Annual Meeting of Stockholders
of the Company to be held on October 30, 1995, and at any
adjournments or postponements thereof, with authority to vote all
shares of Common Stock of the Company held or owned by the
undersigned on September 20, 1995 in accordance with the
directions indicated herein.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. UNLESS
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2, 3
AND PURSUANT TO ITEM 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE
NOMINEES NAMED HEREIN, "FOR" APPROVAL OF THE FISCAL YEAR 1996
PERFORMANCE GOALS UNDER THE MANAGEMENT COMPENSATION PLAN AND
"FOR" APPROVAL OF AMENDMENT TO THE CAPITAL ACCUMULATION PLAN.
Item 1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to vote
at right for all nominees listed at right
(except as marked to
the contrary at right)
Nominees for Directors: E. Garrett Bewkes, III, Denis A. Bovin,
James E. Cayne, Peter D. Cherasia, Barry S. Cohen, Stephen M.
Cunningham, Wendy L. de Monchaux, Kevin J. Finnerty, Grace J.
Fippinger, Bruce E. Geismar, Carl D. Glickman, Thomas R. Green,
Alan C. Greenberg, Donald J. Harrington, C.M., Richard Harriton,
Daniel L. Keating, John W. Kluge, Mark E. Lehman, David A.
Liebowitz, Bruce M. Lisman, Roland N. Livney, Michael Minikes,
William J. Montgoris, Donald R. Mullen, Jr., Frank T. Nickell,
Craig M. Overlander, Stephen E. Raphael, E. John Rosenwald, Jr.,
Lewis A. Sachs, Frederic V. Salerno, Alan D. Schwartz, David M.
Solomon, Warren J. Spector, Robert M. Steinberg, Michael L.
Tarnopol, Vincent Tese, Fred Wilpon and Uzi Zucker.
(Instruction: To withhold authority to vote for any individual
nominee named above, strike a line through that nominee's name)
Item 2. APPROVAL OF THE FISCAL YEAR 1996 PERFORMANCE GOALS
UNDER THE MANAGEMENT COMPENSATION PLAN:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Item 3. APPROVAL OF AMENDMENT TO CAPITAL ACCUMULATION
PLAN:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Item 4. In their discretion, the proxies are authorized to vote
upon such other business as may properly be presented
at the meeting or any adjournments or postponements
thereof.
(Please date and sign exactly as name appears hereon. When
signing as attorney, administrator, trustee, custodian or
guardian, give full title as such. Where more than one owner,
all should sign. Proxies executed by a partnership or
corporation should be signed in the full partnership or corporate
name by a partner or authorized officer.)
-----------------------------------
(Signature)
-----------------------------------
(Signature if held jointly)
Dated , 1995
---------------------------<PAGE>
<PAGE>
APPENDIX
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DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING
(Pursuant to Item 304(a) of Regulation S-T)
GRAPHIC MATERIAL (1) -
In the paper-format version of this Proxy Statement, a line-graph,
titled "PRE-TAX RETURN ON EQUITY - The Bear Stearns Companies Inc. v. Peer
Group Average", appears in the section "EXECUTIVE COMPENSATION - COMPENSATION
COMMITTEE REPORT - Compensation Policies". The sixth paragraph of this
section describes the graph and the composition of the "Peer Group" used in
the graph. The same data presented in the graph is presented in a chart that
appears in both the paper-format and EDGAR versions of this Proxy Statement
at the same point as the forementioned graph.
GRAPHIC MATERIAL (2) -
In the paper-format version of this Proxy Statement, a line-graph,
titled "COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN", appears in the
section "PERFORMANCE GRAPH". The first paragraph of this section describes
the graph and the composition of the "Peer Group" used in the graph. The same
data presented in the graph is presented in a chart that appears in both the
paper-format and EDGAR versions of this Proxy Statement at the same point as
the forementioned graph.
