PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Check the appropriate box:
[X] Definitive Proxy Statement
REPUBLIC NEW YORK CORPORATION
(Name of Registrant as Specifies in it Charter)
William F. Rosenblum, Jr., Esq.
Senior Vice President, Deputy General Counsel and Secretary
Republic New York Corporation
(Name of Person(s) Filing Proxy Statement)
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REPUBLIC NEW YORK CORPORATION
452 Fifth Avenue
New York, New York 10018
March 31, 1997
DEAR STOCKHOLDER:
The Directors and Officers of Republic New York Corporation cordially
invite you to attend the Annual Meeting of Stockholders of the Corporation
to be held on Wednesday, May 28, 1997 at 11:00 A.M., New York time. The
meeting will be held at the office of the Corporation at 452 Fifth Avenue,
New York, New York. Notice of the Annual Meeting and Proxy Statement are
enclosed.
You are urged to mark, sign, date and mail the enclosed proxy immediately.
By mailing your proxy now you will not be precluded from attending the
meeting. Your proxy is revocable; in the event you find it convenient to
attend the meeting, you may, if you wish, withdraw your proxy and vote in
person.
For your information, enclosed is the 1996 Annual Report of Republic New
York Corporation.
Very truly yours,
WALTER H. WEINER,
Chairman of the Board
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REPUBLIC NEW YORK CORPORATION
452 Fifth Avenue
New York, New York 10018
----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 28, 1997
----------------------
NOTICE IS HEREBY GIVEN THAT, pursuant to the call of the Board of
Directors of Republic New York Corporation ("Republic Corporation"), the
Annual Meeting of Stockholders of Republic Corporation will be held on
Wednesday, May 28, 1997 at 11:00 A.M., New York time, at 452 Fifth
Avenue, Borough of Manhattan, City and State of New York, for the purpose
of considering and voting upon the following matters described in the
attached Proxy Statement:
1. Election of directors;
2. Approval of the increase of shares available for awards
pursuant to the 1995 Long Term Incentive Stock Plan;
3. Approval of the extension of the curation of the Restricted
Stock Election Plan;
4. Approval of selection of auditors; and
5. Any other business which may properly be brought before the
meeting or any adjournment thereof.
The record date and hour for determining stockholders entitled to notice of
and to vote at the meeting, including any adjournment thereof, have been
fixed as of the close of business on March 13, 1997.
By Order of the Board of Directors,
WILLIAM F. ROSENBLUM, JR.,
Senior Vice President and
Corporate Secretary
March 31, 1997
YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON. IF YOU ATTEND THE MEETING, YOU MAY
NEVERTHELESS, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE IN PERSON.
<PAGE>
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REPUBLIC NEW YORK CORPORATION
452 Fifth Avenue
New York, New York 10018
-----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 28, 1997
-----------------
This Proxy Statement is furnished to the stockholders of Republic New York
Corporation ("Republic Corporation") in connection with the solicitation of
proxies by the Board of Directors of Republic Corporation for the Annual
Meeting of Stockholders to be held on May 28, 1997.
The record date and hour for determining the stockholders of Republic
Corporation entitled to notice of and to vote at the meeting have been
fixed as of the close of business on March 13, 1997. At such date,
54,775,947 shares of Republic Corporation Common Stock were outstanding and
entitled to vote. Each share of Republic Corporation Common Stock held on
the record date entitles the holder thereof to one vote for each director
being elected (with no cumulative voting permitted) and to one vote on each
other matter. This Proxy Statement and the form of proxy furnished herewith
were first sent or given to Republic Corporation stockholders on March 31,
1997.
For Employees of Republic Corporation, Republic Bank and Subsidiaries. If
you are a participant in the Profit Sharing and Savings Plan of Republic
National Bank of New York, you will receive a separate proxy card for all
the shares of Republic Corporation Common Stock you own through such Plan
that will serve as your voting instructions card for Republic National Bank
of New York as Plan Trustee. Your instructions to the Plan Trustee will be
held in strict confidence and will be made available only to the inspectors
of election at the Annual Meeting, none of whom is an employee of Republic
Corporation or any of its subsidiaries. Pursuant to the terms of such Plan,
any shares held by the Plan Trustee as to which it has not received voting
instructions by May 21, 1997 will be voted in the same manner,
proportionately, as the shares as to which voting instructions have been
received.
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ELECTION OF DIRECTORS
In accordance with the By-Laws of Republic Corporation, the number of
directors of Republic Corporation to be elected at the Annual Meeting has
been established at twenty-three. If elected, each nominee will serve until
the next Annual Meeting of Stockholders and until the election and
qualification of his or her successor. With the exception of Robert A.
Cohen, Thomas F. Robards and George T. Wendler, each of the nominees named
below is presently a director of Republic Corporation and was elected to
such office at last year's Annual Meeting. Mr. Cohen was elected a director
on March 5, 1997 at a special meeting of the Board of Directors of Republic
Corporation.
A plurality of the votes cast at the meeting is required for the election
of directors. Neither abstentions nor broker non-votes have any effect on
the election of directors. If any nominee becomes unwilling or unable to
accept nomination or election, which is not anticipated, it is intended
that the persons acting under the proxy will vote for the election in his
or her stead of such other person as the Nominating Committee of the Board
of Directors may recommend.
Listed below are the names and ages of the nominees, the year in which each
first became a director, their principal occupations for the past five
years (including, where applicable, positions with Republic National Bank
of New York ("Republic Bank"), Republic Corporation's principal subsidiary)
and the number of shares of Republic Corporation's Common Stock
beneficially owned by each, as of December 31, 1996.
<TABLE>
<CAPTION>
Beneficial
Director Ownership of
Nominee and Age Since Principal Occupation Shares (1)<F1>
- --------------- -------- -------------------- -----------
<S> <C> <C> <C>
Kurt Andersen . . . . . . . . 1988 Vice Chairman of the Board of Republic 38,275 shs.
52 years Bank, since June 1995, and Regional General (2)<F2>
Manager of Republic Bank's
operations throughout the
Asia Pacific region.
Executive Vice President of
Republic Bank, Regional (Far
East) General Manager of
Republic Bank's Hong Kong
Branch and Manager of
Republic Bank's wholly-owned
subsidiary in Singapore
through June 1995. Director
of Republic Bank since 1991.
Robert A. Cohen . . . . . . . 1997 Vice Chairman of the Board of Republic Bank and -----
48 years Vice Chairman of Republic Corporation since
March 1997. Formerly,
Executive Vice President,
General Manager and Chief
Executive Officer of Credit
Lyonnais Americas for over
five years.
Cyril S. Dwek . . . . . . . . . 1974 Vice Chairman of the Board of Republic 64,894 shs.
60 years Bank and Vice Chairman of Republic
Corporation. Director of Republic Bank.
Ernest Ginsberg . . . . . . . 1985 Vice Chairman of the Board of Republic 32,662 shs.
65 years Bank and Vice Chairman (and General (2)<F2>(3)<F3>
Counsel until April 1994) of Republic
Corporation. Director of Republic Bank.
Nathan Hasson . . . . . . . 1993 Vice Chairman of the Board and Treasurer 30,401 shs.
51 years of Republic Bank and Vice Chairman (2)<F2>(4)<F4>
of Republic Corporation since January
1993. Director of Republic Bank.
Peter Kimmelman . . . . . . 1979 A private investor. Director of Republic 2,362 shs.
52 years Bank. (5)<F5>
(table continued on next page)
2
<PAGE>
<CAPTION>
Beneficial
Director Ownership of
Nominee and Age Since Principal Occupation Shares (1)<F1>
- --------------- -------- -------------------- -----------
<S> <C> <C> <C>
Richard A. Kraemer . . . . 1996 Vice Chairman of the Board of Republic Bank 1,000 shs.
52 years since March 1996 and Vice Chairman of Republic
Corporation since April
1996. Formerly, Chairman of
the Board and Chief
Executive Officer of
Brooklyn Bancorp, Inc.,
corporate parent to
CrossLand Federal Savings
Bank, from August 1993 until
its acquisition by Republic
Corporation in February
1996. President, CEO and
Chairman of the Executive
Committee of CrossLand
Federal Savings Bank from
January 1992 to August 1993.
Prior to January 1992,
Chairman and CEO of The
Bowery Savings Bank and Home
Savings Bank.
Leonard Lieberman . . . . . . 1990 Director of Republic Bank. Also a director 750 shs.
67 years of various companies, including Celestial
Seasonings, Inc., Sonic Corp., and
La Petite Academy, Inc.
William C. MacMillen, Jr. . 1974 President of William C. MacMillen & Co., 6,702 shs.
83 years Inc., an investment firm. Also a
director of Financial Federal Corporation.
Director of Republic Bank.
Peter J. Mansbach . . . . . . . . 1994 Chairman of the Executive Committee of the 21,100 shs.
57 years Board of Directors of Republic Corporation (2)<F2>
since July 1994, and of
Republic Bank since June
1994. Previously, a partner
at the law firm of Kronish,
Lieb, Weiner & Hellman.
Martin F. Mertz . . . . . . . . . 1987 Director of Republic Bank. Formerly, Chairman of 7,500 shs.
71 years the Executive Committee of Republic Bank for
Savings, from May 1990 until January 1996.
James L. Morice . . . . . . . . 1987 Partner, Mirtz Morice, Inc., a management 1,027 shs.
59 years consulting firm. Director of Republic Bank. (6)<F6>
E. Daniel Morris. . . . . . . . 1993 President of Corsair Capital Corporation, a 1,000 shs.
55 years private investment firm, since October 1992,
having been a private
investor for over one year
prior thereto, and President
and Chief Executive Officer
of the U.S. investment
banking affiliate of
Barclays Bank from January
1989 to July 1991. Formerly,
Chairman of the Board of
Republic New York Trust
Company of Florida, N.A., a
wholly-owned subsidiary of
Republic Corporation, from
January 1995 to April 1996.
Also, a Director and the
Chief Executive Officer of
Republic New York Securities
Corporation, Republic
Corporation's wholly-owned
broker-dealer subsidiary,
from April to December 1994.
(table continued on next page)
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<PAGE>
<CAPTION>
Beneficial
Director Ownership of
Nominee and Age Since Principal Occupation Shares (1)<F1>
- --------------- -------- -------------------- -----------
<S> <C> <C> <C>
Janet L. Norwood . . . . . . . 1992 Senior Fellow of The Urban Institute, a research 750 shs.
73 years organization in Washington, D.C., since
January 1992. Commissioner
of the Bureau of Labor
Statistics of the U.S.
Department of Labor for over
three years prior thereto.
Director of Republic Bank
since 1992.
John A. Pancetti . . . . . . . . 1990 Chairman of the Board and Chief Executive Officer 40,150 shs.
67 years of Republic Bank for Savings from May 1990 (7)<F7>
until January 1996 (and
President from May 1990 to
March 1991). Vice Chairman
of the Board of Republic
Bank from March 1991 until
January 1996, and Vice
Chairman of Republic
Corporation from April 1991
until January 1996. Director
of Republic Bank.
Vito S. Portera . . . . . . . . 1986 Vice Chairman of Republic Corporation and 15,115 shs.
54 years Vice Chairman of the Board of Republic (2)<F2>(8)<F8>
Bank. Director of Republic Bank. Also,
Chairman of the Board of Republic Inter-
national Bank of New York Miami, the
Florida Edge Act subsidiary of Republic Bank.
Thomas F. Robards . . . . . . . ----- Executive Vice President, Treasurer and Chief 23,510 shs.
50 years Financial Officer - Financial Planning and (2)<F2>
Treasury of Republic Corporation since July
1995. Prior thereto, Executive Vice President
and Treasurer of Republic Corporation for
over four years.
William P. Rogers . . . . . . 1989 Senior Partner, Rogers & Wells, attorneys. 30,000 shs.
83 years Director of Republic Bank.
Elias Saal . . . . . . . . . . 1995 Vice Chairman of Republic Corporation since 24,000 shs.
44 years July 1995 and Vice Chairman of the Board,
since June 1995, and Chief Trading Officer,
since July 1995, of Republic Bank. Executive
Vice President of Republic Bank prior to June
1995. Director of Republic Bank since
October 1995.
Dov C. Schlein . . . . . . . . 1987 President of Republic Bank and Vice Chair- 35,145 shs.
49 years man of Republic Corporation. Director of (2)<F2>(9)<F9>
Republic Bank.
George T. Wendler ----- Executive Vice President and Chairman of the 17,297 shs.
52 years Credit Committee of Republic Corporation (2)<F2>(10)<F10>
since October 1994 and a
director and Vice Chairman
of the Board of Republic
Bank since June 1995. Prior
thereto, Executive Vice
President of Republic Bank
for over four years.
Walter H. Weiner . . . . . . 1978 Chairman of the Board and Chief Executive 55,988 shs.
66 years Officer of Republic Bank and Republic (2)<F2>(11)<F11>(12)<F12>
Corporation. Director of Republic Bank.
Peter White . . . . . . . . . 1974 Senior Consultant to Republic Bank. 33,256 shs.
94 years Director Emeritus of Republic Bank.
- -----------
(footnotes on next page)
4
<PAGE>
(footnotes from table on previous page)
<FN>
<F1>(1) As of December 31, 1996, no nominee's ownership of shares of Common
Stock exceeded one percent (1%) of the outstanding shares of such
class.
<F2>(2) Includes 6,334 shares for Kurt Andersen, 13,600 shares for Ernest
Ginsberg, 16,000 shares for Nathan Hasson, 21,000 for Peter J.
Mansbach, 15,000 shares for Vito S. Portera, 16,250 shares for Thomas
F. Robards, 20,300 shares for Dov C. Schlein, 11,375 shares for George
T. Wendler and 18,483 shares for Walter H. Weiner which were awarded
pursuant to Republic Corporation's 1985 Restricted Stock Plan and 1995
Long Term Incentive Stock Plan, and which are subject to a substantial
risk of forfeiture for various restricted periods, the latest of which
expires on January 15, 2001.
<F3>(3) Includes 19,062 shares which Mr. Ginsberg owns jointly with his wife.
<F4>(4) Includes 14,401 shares which Mr. Hasson owns jointly with his wife.
<F5>(5) Includes 337 shares owned by Mr. Kimmelman's wife in which he
disclaims any beneficial interest.
<F6>(6) Includes 300 shares which Mr. Morice owns jointly with his wife, 627
shares in a company profit sharing plan, 70 shares in a company
pension trust account, and 30 shares owned by Mr. Morice's son, in
which 30 shares Mr. Morice disclaims any beneficial interest.
<F7>(7) Includes 40,000 shares which Mr. Pancetti owns jointly with his wife.
<F8>(8) Includes 75 shares held by a trust controlled by Mr. Portera.
<F9>(9) Includes 13,395 shares which Mr. Schlein owns jointly with his wife,
and 1,450 shares owned by Mr. Schlein's children, in which 1,450
shares Mr. Schlein disclaims any beneficial interest.
<F10>(10) Includes 5,922 shares which Mr. Wendler owns jointly with his wife.
<F11>(11) Includes 27,324 shares for Walter H. Weiner which were issued
pursuant to Republic Corporation's Restricted Stock Election Plan and
which are subject to a substantial risk of forfeiture until December
31, 1997.
<F12>(12) Includes 3,105 shares owned by a Keogh Plan pension trust of which
Mr. Weiner is the beneficiary and 2,100 shares owned by Mr. Weiner's wife
in which he disclaims any beneficial interest.
</FN>
</TABLE>
As of December 31, 1996, all nominees as a group beneficially owned 482,884
shares of Republic Corporation's Common Stock or approximately .9% of the
outstanding shares.
For certain information concerning business relationships and transactions
between Republic Corporation, its subsidiaries and affiliates and certain
nominees, see "Transactions with Management and Related Persons" below.
Section 16(a) Beneficial Ownership Reporting Compliance. All Forms 3, 4 and
5 were filed in a timely fashion and in compliance with the applicable
securities laws and regulatory requirements, with the exception of the Form
4 filed in March 1997 by Richard Spikerman for one sale of shares in
October 1996 and one sale of shares in December 1996.
Directors' Committees
The Board of Directors of Republic Corporation has established Audit,
Community Reinvestment Act, Credit Review, Executive, Finance, Human
Resources, Investment, Nominating, Public Responsibility and Risk
Assessment Committees.
5
<PAGE>
The Audit Committee of the Board of Directors of Republic Corporation,
consisting of Peter Kimmelman, Leonard Lieberman, William C. MacMillen, Jr.
(Chairman), Janet L. Norwood and William P. Rogers, recommends the
selection of the independent auditors, reviews the plan for the current
year's audit and the results of the prior year's audit, approves the
non-audit professional services provided by such auditors, and reviews and
supervises the scope and adequacy of Republic Corporation's internal audit
and internal accounting controls. No member of the Committee is an officer
or employee of Republic Corporation. During 1996, the Audit Committee held
seven meetings.
The Community Reinvestment Act Committee, consisting of Martin F. Mertz,
James L. Morice (Chairman), John A. Pancetti, Walter H. Weiner and Peter
White, is responsible for, and coordinates at the holding company level,
the Community Reinvestment Act activities of Republic Bank, including the
review and supervision of Republic Corporation's compliance with the
Community Reinvestment Act of the federal government. During 1996, the
Community Reinvestment Act Committee held eight meetings.
The Credit Review Committee, consisting of Peter Kimmelman (Chairman),
Leonard Lieberman, William C. MacMillen, Jr., E. Daniel Morris, Janet L.
Norwood, John A. Pancetti, Walter H. Weiner and Peter White, reviews and
monitors Republic Corporation's Credit Policy Statement and the net debit
cap levels. During 1996, the Credit Review Committee held seven meetings.
The Executive Committee, consisting of Jeffrey C. Keil (who is not standing
for re-election), Peter Kimmelman, William C. MacMillen, Jr., Peter J.
Mansbach (Chairman), Dov C. Schlein and Walter H. Weiner, meets, when
necessary, between meetings of the Board of Directors with the authority to
exercise all the powers of the Board of Directors to the extent permitted
by law and Republic Corporation's By-Laws. During 1996, the Executive
Committee held six meetings and took action seven times by Unanimous
Written Consent.
The Finance Committee, consisting of Jeffrey C. Keil (Chairman) (who is not
standing for re-election), E. Daniel Morris, Dov C. Schlein and Walter H.
Weiner, is charged with monitoring the capital adequacy of Republic
Corporation and developing and supervising programs to fund the capital
requirements of Republic Corporation and its subsidiaries and recommending
to the Board of Directors the means necessary to carry out such programs.
Pursuant to delegated authority from the Board of Directors, the Finance
Committee establishes the price and related terms of certain securities
publicly offered by Republic Corporation. During 1996, the Finance
Committee did not hold any meetings but instead took action once by
Unanimous Written Consent.
The Human Resources Committee (formerly the Employee Compensation and
Benefits Committee), composed of three outside directors, Peter Kimmelman,
Leonard Lieberman and James L. Morice (Chairman), oversees Republic
Corporation's human resources management policies and practices and the
compensation and benefits of its officers and employees. The Committee
considers and recommends to the Board of Directors compensation plans and
benefit programs in which officers and employees of Republic Corporation
and its subsidiaries are eligible to participate and administers such plans
and programs, with the authority to grant any awards or benefits
thereunder. During 1996, the Human Resources Committee held eleven
meetings.
The Investment Committee, consisting of Peter Kimmelman, Leonard Lieberman
(Chairman), E. Daniel Morris, Janet L. Norwood and John A. Pancetti, and
Mr. Hasson as ex officio member, authorizes and
6
<PAGE>
supervises Republic Corporation's investments in securities and other
property. During 1996, the Investment Committee held four meetings.
The Nominating Committee consists of E. Daniel Morris, Dov C. Schlein and
Walter H. Weiner (Chairman). Its principal function is to consider and
propose to the Board of Directors a slate of nominees for election to the
Board of Directors each year at the Annual Meeting of Stockholders. Such
Committee will consider candidates suggested by stockholders by a letter
directed to the Corporate Secretary of Republic Corporation. The Nominating
Committee acted by consent in March 1997 to recommend the slate of nominees
presented to the 1997 Annual Meeting of Stockholders.
The Public Responsibility Committee consists of Ernest Ginsberg, Leonard
Lieberman, William P. Rogers (Chairman), and Walter H. Weiner. This
Committee assists Republic Corporation in endeavoring to maintain the
highest legal and ethical standards as well as assists in evaluating other
aspects of Republic Corporation's activities and proposed activities in
relation to its overall public responsibility and public image. During
1996, the Public Responsibility Committee held seven meetings.
The Risk Assessment Committee consists of Peter Kimmelman, Leonard
Lieberman, William C. MacMillen, Jr., E. Daniel Morris, Janet L. Norwood
(Chairwoman) and William P. Rogers, with Messrs. Schlein and Weiner as ex
officio members. The Committee, established in July 1993, was created to
identify, measure and monitor risk relating to all activities of, and
products offered by, Republic Corporation, including evaluating the
methodology employed by management in determining the nature of risk
inherent in a particular activity or product. During 1996, the Risk
Assessment Committee held eight meetings.
During 1996, Republic Corporation's Board of Directors held six meetings.
With the exception of Messrs. Andersen, Portera and White, each director
attended 75 percent or more of the aggregate number of meetings held during
1996 of the Board of Directors of Republic Corporation and the committees
thereof, if any, on which he or she served.
Compensation of Directors and Executive Officers
Directors Compensation
Directors of Republic Corporation who are also officers of Republic
Corporation or any of its subsidiaries do not receive compensation for
their services as directors.
Other directors of Republic Corporation, who are not officers of Republic
Corporation or any of its subsidiaries and who are not otherwise
compensated through additional arrangements with any such entities,
generally are paid a quarterly retainer of $1,500 to attend directors'
meetings of Republic Corporation and $500 for each meeting they attend of
the Board and $400 for each meeting they attend of a committee of the Board
of which they are a member (except that the Chairman of a committee
receives an attendance fee of $750). Other directors of Republic
Corporation, who are not officers of Republic Corporation or any of its
subsidiaries and who are otherwise compensated through additional
arrangements with any such entities, generally are paid a quarterly
retainer of $800 to attend directors' meetings of Republic Corporation and
$300 for each meeting they attend of the Board and $250 for each meeting
they
7
<PAGE>
attend of a committee of the Board of which they are a member (except that
the Chairman of a committee receives an attendance fee of $400).
For the fiscal year ended December 31, 1996, directors of Republic
Corporation who were not officers received meeting fees from Republic
Corporation aggregating $82,525. In addition, in connection with services
provided as a director, fees were paid in 1996 to each of Peter Kimmelman,
Leonard Lieberman, William MacMillen and James Morice in the amount of
$45,500, and to Janet L. Norwood in the amount of $50,000.
In lieu of directors' fees, William P. Rogers received an aggregate of
$150,000 for the fiscal year ended December 31, 1996 as compensation for
serving as a director of Republic Corporation as well as for serving as a
director of and a senior consultant to Republic Bank.
Executive Compensation
Human Resources Committee Report
Responsibilities and Composition of the Committee. The Human Resources
Committee of the Board of Directors of Republic Corporation (the
"Committee") reviews and approves the compensation levels for Republic
Corporation's executive officers and oversees and administers Republic
Corporation's compensation and benefits programs. All the members of the
Committee are independent, non-employee directors who are not eligible to
participate in the programs that the Committee oversees. The following
report describes the actions of the Committee regarding compensation paid
to the Chief Executive Officer and the named executive officers for 1996.
Compensation Policies and Strategy. The main components of total
compensation for Republic Corporation's executive officers are base salary
and annual incentive awards. A portion of the annual incentive awards may
be awarded in the form of restricted stock. Republic Corporation has a
policy of maintaining base salaries for executive officers at a constant
level and using annual incentive awards to reflect each executive officer's
contribution to Republic Corporation's performance.
Republic Corporation established a practice of linking executive
compensation to corporate performance long before the current widespread
application of the concept. Since 1980, when Walter H. Weiner became Chief
Executive Officer, Republic Corporation has developed an overall
compensation strategy that provides for the determination of a significant
portion of executive officer compensation in relation to Republic
Corporation's performance as measured by the increase in its fully diluted
earnings per common share ("earnings per share") for the year over a base
year of 1979, adjusted for stock splits. This strategy has been
incorporated into the awards granted to the Chief Executive Officer and the
named executive officers under the 1994 Performance Based Incentive
Compensation Plan (the "Performance Based Plan"), discussed below. The
Committee believes that an increase in earnings per share is a more
accurate measure of executive performance than an increase in cumulative
total shareholder return (see the stock performance graphs on pages 16 and
18 of this Proxy Statement). Management has a more direct impact on
earnings, by being able to increase productivity and control expenses, than
it does on shareholder return, which is also subject to changes in market
conditions that are beyond management's control.
8
<PAGE>
During 1995, Republic Corporation began an intensive corporate-wide review
of its operations, called "Project Excellence Plus", to strengthen its
customer focus and to improve productivity and operating efficiency. The
implementation phase of this Project commenced in the second quarter of
1995 and was completed in the first half of 1996. Project Excellence Plus
has resulted in substantial operating efficiencies and cost savings to
Republic Corporation which began to be realized in 1996. In 1995, at the
time of the implementation of such Project, the Chief Executive Officer and
certain other executive officers each voluntarily reduced their annual base
salaries by $20,000. In 1996, when the benefits of the Project began to be
realized, such reductions were restored.
Stock Performance Graphs. The five-year comparative stock performance graph
on page 16 is included as required by Securities and Exchange Commission
rules. As explained in the preceding section, the Committee believes that
executive compensation should be related to earnings per share rather than
to cumulative total return, and that cumulative total return over five
years is not necessarily a meaningful indicator of management's
performance.
Because Republic Corporation's compensation policies are designed to
encourage executive officers to manage for the long term rather than the
short-term, the Committee's view is that the graph on page 18 of the
twenty-five year comparative stock performance presents a more meaningful
picture of the relationship between Republic Corporation's management
philosophy and its stock's market performance than does the five-year
graph.
Performance Based Plan. As noted above, Republic Corporation's established
strategy of linking a significant portion of executive officer compensation
to increased productivity and cost control, as measured by the increase in
its earnings per share, was incorporated into the Performance Based Plan.
The Performance Based Plan was adopted by the Board of Directors and
approved by the stockholders in 1994 and complies with Section 162(m) of
the Internal Revenue Code governing the deductibility of annual executive
officer compensation in excess of $1 million. In addition to adopting the
Plan, Republic Corporation has a policy of entering into agreements with
its executive officers to defer future annual compensation in excess of the
$1 million limitation, should it become necessary to do so.
Prior to the beginning of each Plan Year, the Committee considers awards
for the Chief Executive Officer and the other executive officers. The
Committee determines who will participate in the Plan for the upcoming
year, the Base Year (which may not be prior to 1979) and the notional
number of shares ("Award Multiple") of Republic Corporation's Common Stock
to be used solely for the purpose of calculating the maximum amount payable
to each participant ("Award"). Following the completion of the Plan Year,
the maximum amount payable to each participant is determined by multiplying
(i) the amount by which the earnings per share for the Plan Year (adjusted
to eliminate the effect of amounts paid or accrued with respect to any
Award) exceeds the earnings per share for the Base Year (adjusted as is
necessary to preserve inter-period comparability between earnings per share
for the Base Year and the Plan Year for any Award), by (ii) the Award
Multiple for each participant. The Committee has the discretion to reduce
the amount payable pursuant to such Awards and to distribute a portion of
the final amount payable in the form of restricted stock. It is also
possible for the Committee to award the Chief Executive Officer and the
other named executive officers compensation in excess of the Plan awards
but any such amounts must be included in the calculation of the $1 million
annual limitation on the deductibility of any such officer's compensation.
9
<PAGE>
Chief Executive Officer's Compensation for 1996. Since becoming Chief
Executive Officer of Republic Corporation in January 1980, Mr. Weiner's
base salary has not increased and his annual bonus has been related to the
amount by which the earnings per share for the year exceeds the earnings
per share for the base year of 1979, multiplied by an attributed notional
amount of shares used solely for the purpose of calculating Mr. Weiner's
bonus. This method of determining Mr. Weiner's annual bonus, originally
based on certain provisions in his employment agreement (which
expired by its terms on December 31, 1989), has been effectively continued
through the Performance Based Plan, as described above. For 1996, the
Committee granted Mr. Weiner an award under the Performance Based Plan
pursuant to which he was eligible to receive a performance-based bonus of
$1,358,437 determined by multiplying $5.75 (the amount by which the
earnings per share for 1996 exceeded the earnings per share in 1979, as
adjusted pursuant to the Performance Based Plan) by 236,250 (the notional
amount of shares awarded by the Committee). This notional amount of shares
is based on the amount that was used in the formula under Mr. Weiner's
original employment agreement and reflects all stock splits since the 1979
base year. In certifying Mr. Weiner's award pursuant to the Performance
Based Plan, the Committee determined that $1,328,937 of such amount would
be distributed in the form of cash and the remaining portion in the form of
300 shares of restricted stock under the 1995 Long Term Incentive Stock
Plan.
In considering Mr. Weiner's individual performance in 1996, the Committee
awarded him an additional 5,000 shares of restricted stock pursuant to the
terms of the 1995 Long Term Incentive Stock Plan. The decision to grant
these shares was based on the Committee's subjective evaluation of Mr.
Weiner's contribution toward Republic Corporation's overall performance in
1996, particularly its success in increasing revenues and enhancing client
relationships.
Named Executive Officers' Compensation for 1996. The Performance Based Plan
also provides for the determination of the maximum amount of the
performance-based bonus compensation of the named executive officers. By
using the increase in earnings per share as the basis of determining this
portion of the incentive compensation for such executive officers, Republic
Corporation is giving recognition to the fact that management is shared by
the Chief Executive Officer and the named executive officers as a team and,
therefore, the performance of Republic Corporation, as measured by the
increase in earnings per share, reflects the joint efforts of the group.
Accordingly, each executive officer's award under the Performance Based
Plan reflects such officer's responsibilities in relation to those of the
Chief Executive Officer and to the overall management of Republic
Corporation.
For 1996, the Committee set a different Award Multiple for each of the
named executive officers which took into consideration each such
relationship, which was then multiplied by the increase in earnings per
share in 1996 over the base year established by the Committee (i.e., 1979)
to determine the maximum amount payable to each such officer pursuant to
the Plan. The final bonus payments which the Committee certified for such
executive officers for 1996 pursuant to the Performance Based Plan were in
keeping with the amounts called for by the Plan formula.
The Committee considered the recommendations of the Chief Executive Officer
in deciding to supplement the cash bonuses of Messrs. Schlein, Saal and
Dwek and to award shares of restricted stock to Messrs. Schlein, Saal and
Portera pursuant to the 1995 Long Term Incentive Stock Plan. The decision
to grant such awards was primarily based on the subjective evaluation by
the Chief Executive Officer and the Committee of each such officer's
individual performance and contribution in 1996 to Republic Corporation's
10
<PAGE>
successful efforts at revenue enhancement and cost control. A portion of
the restricted stock award granted to Mr. Portera was made in connection
with the amount payable pursuant to his Performance Based Plan award for
1996.
Conclusion. Through the programs described above, a significant portion of
Republic Corporation's executive officer compensation is based on corporate
performance and an evaluation of the results of each officer's individual
performance. For 1996, approximately 85% of the total compensation of the
Chief Executive Officer and the other named executive officers consisted of
these variable performance-related elements. The Committee intends to
continue its policy of relating executive compensation to corporate
performance, as measured by the increase in earnings per share, as well as
to individual performance.
Taking into account Republic Corporation's overall performance during 1996,
the Committee determined that it was appropriate that Mr. Weiner's and each
of the other executive officer's total compensation be increased for 1996
compared to 1995 levels. Based on the approximately 34% increase in
earnings per share and each individual's contribution to Republic
Corporation's continued success in increasing revenues and enhancing client
relationships in 1996, Mr. Weiner's total compensation for 1996 increased
approximately 44% from 1995 levels and the other named executive officers'
aggregate total compensation for 1996 increased approximately 47% from 1995
levels.
JAMES L. MORICE, Chairman
PETER KIMMELMAN
LEONARD LIEBERMAN
11
<PAGE>
Summary Compensation Table
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer and the four other most highly compensated executive officers of
Republic Corporation.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
Restricted Stock All Other
Name and Principal Position Year 1<F1> Salary ($) 2<F2> Bonus ($) Awards ($) 3,<F3>4,<F4>5<F5> Compensation ($) 6<F6>
- --------------------------- ----- ------------ --------- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
Walter H. Weiner 1996 220,750 1,328,937 471,700 7,736
Chairman of the Board and 1995 207,673 755,000 176,250 5,725
Chief Executive Officer of 1994 220,750 1,035,000 240,625 7,763
Republic Corporation and
of Republic Bank
Dov C. Schlein 1996 200,000 1,310,000 462,800 7,736
Vice Chairman of Republic 1995 186,923 570,000 135,125 5,725
Corporation and President 1994 200,000 730,000 240,625 7,763
of Republic Bank
Elias Saal 1996 200,000 1,200,000 436,100 98,136
Vice Chairman of Republic 1995 200,000 712,500 ------- 47,114
Corporation and Vice
Chairman of the Board
of Republic Bank
Cyril S. Dwek 1996 250,000 1,045,000 ------- 7,736
Vice Chairman of Republic 1995 236,923 515,000 ------- 5,725
Corporation and Vice 1994 250,000 700,000 ------- 7,763
Chairman of the Board
of Republic Bank
Vito S. Portera 1996 300,000 635,000 225,500 7,736
Vice Chairman of Republic 1995 286,923 465,000 ------- 5,725
Corporation and Vice 1994 300,000 450,000 192,500 7,763
Chairman of the Board
of Republic Bank
- ---------------------------
<FN>
<F1>(1) In accordance with the rules of the Securities and Exchange
Commission, compensation information is provided for the last three
fiscal years, except with respect to Mr. Saal who became an executive
officer of Republic Corporation in 1995.
<F2>(2) The amounts of base salary represent the dollar value earned by the
named executive officers during the last three fiscal years.
<F3>(3) Awards of restricted stock for performance in 1996 were made on March
27, 1997 pursuant to the terms of Republic Corporation's 1995 Long
Term Incentive Stock Plan to Mr. Weiner (5,300 restricted shares), Mr.
Schlein (5,200 restricted shares), Mr. Saal (4,900 restricted shares)
and Mr. Portera (2,500 restricted shares). A portion of Messrs.
Weiner's, Schlein's and Portera's restricted stock award constituted
part of their Performance Based Plan compensation for 1996. Awards of
restricted stock for performance in 1994 and 1995 were made on March
6, 1995 and March 20, 1996, respectively, pursuant to the terms of
Republic Corporation's 1985 Restricted Stock Plan and 1995 Long Term
Incentive Stock Plan, respectively, to Messrs. Weiner, Schlein and
Portera.
(footnotes continued on next page)
12
<PAGE>
(footnotes continued from previous page)
For 1994, a portion of Mr. Schlein's and Mr. Portera's restricted
stock award constituted part of their Performance Based Plan
compensation for such year. For 1995, a portion of Mr. Schlein's
restricted stock award constituted part of his Performance Based Plan
compensation for such year. The value of each restricted stock award
was calculated by multiplying the closing market price of Republic
Corporation's Common Stock on the date of the award by the number of
shares awarded.
<F4>(4) As of December 31, 1996, Mr. Weiner owned an aggregate of 18,483
restricted shares (3,000 of which were awarded for 1995 performance
and 5,000 of which were awarded for 1994 performance), Mr. Schlein
owned an aggregate of 20,300 restricted shares (including 2,300 shares
awarded for 1995 performance and 5,000 shares awarded for 1994
performance) and Mr. Portera owned an aggregate of 15,000 restricted
(of which 4,000 shares were awarded for 1994 performance). At December
31, 1996, such shares of restricted stock held by Messrs. Weiner,
Schlein and Portera had an aggregate value of $1,508,675, $1,656,988
and $1,224,375, respectively.
<F5>(5) Pursuant to the terms of Republic Corporation's 1985 Restricted Stock
Plan, which expired as of December 31, 1995, participants in such Plan
received all dividends paid on their shares of restricted stock or
were given the option by the Human Resources Committee to elect to
receive additional restricted shares in lieu of such dividend
payments. Under the 1995 Long Term Incentive Stock Plan, participants
continue to receive all dividends paid on their restricted shares, or
may be given the option by the Human Resources Committee to elect to
receive additional restricted shares in lieu of such dividend
payments.
<F6>(6) The compensation reported represents the amount of the annual company
allocations under the Profit Sharing and Savings Plan. Each executive
officer is fully vested in such amounts under the Plan. In addition,
the amounts reported for Mr. Saal represent the value of annual lease
payments made by Republic Bank for Mr. Saal's temporary residence.
</FN>
</TABLE>
Pension Plan
The following table sets forth the estimated annual benefits payable upon
retirement at age 65 in 1997 pursuant to Republic Bank's Retirement Plan
(which is a defined benefit plan) in relation to specified classifications
of average base salary for the highest paid five consecutive years during
the last ten years of employment (excluding bonuses, overtime and other
adjustments to base salary) and years of creditable service:
<TABLE>
<CAPTION>
Average Annual Salary
for Five Highest Paid Years of Service
Consecutive Years
During Last Ten Years 15*<F1> 20*<F1> 25*<F1> 30*<F1> 35*<F1>
- ----------------------- --- --- --- --- ---
<S> <C> <C> <C> <C> <C>
$125,000 . . . . . . . . . . . . . . $ 29,680 $ 39,570 $ 49,460 $ 59,350 $ 62,480
150,000 . . . . . . . . . . . . . . 36,050 48,070 60,090 72,100 75,850
175,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
200,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
225,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
250,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
300,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
400,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
450,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
500,000 **<F2> . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200
- -----------
<FN>
<F1>* During 1997, the maximum annual benefit as a result of the Tax
Reform Act of 1986 is $125,000.
<F2>** These figures have been limited by the annual compensation cap of
$160,000 in 1997 resulting from the Omnibus Budget and Reconciliation
Act of 1993.
</FN>
</TABLE>
13
<PAGE>
The amounts in the foregoing table do not reflect various survivorship
options which part icipants may elect under the Retirement Plan and,
depending on the survivorship arrangement chosen, such amounts could be
substantially reduced.
The following table presents (a) the credited years of service pursuant to
the Retirement Plan and (b) the current remuneration covered by the Plan
(i.e., base salary) for each of the five most highly compensated executive
officers of Republic Corporation.
<TABLE>
<CAPTION>
Credited Years Covered By
Name of Service Retirement Plan (1)<F1>
<S> <C> <C>
Walter H. Weiner . . . . . . 17 $220,750
Dov C. Schlein . . . . . . . 20 200,000
Elias Saal . . . . . . . . 14 200,000
Cyril S. Dwek . . . . . . . 31 250,000
Vito S. Portera . . . . . . 29 300,000
- --------------------
<FN>
<F1>(1) Such amounts are subject to an annual compensation cap of $160,000
for 1997 in accordance with the Omnibus Budget and Reconciliation Act of 1993.
</FN>
</TABLE>
Benefits under the Retirement Plan are based on the participant's base
salary (which does not include bonuses, expense allowances, profit sharing
contributions, fees, overtime and other special payments) and length of
employment. The Retirement Plan provides that, in general, the normal
benefit to which a participant is entitled at or after age 65 or after
completion of at least 30 years of service is an annual amount equal to
1.2% of average annual compensation (as defined) up to covered compensation
(as defined) plus 1.7% of average annual compensation in excess of covered
compensation, times years of service up to 30, plus .5% of average annual
compensation times the number of years of service in excess of 30 years of
service. For purposes of the Plan, average annual compensation means the
participant's average compensation during the participant's highest paid
five consecutive years of employment during the participant's last ten
years of employment and covered compensation means the average of the
Social Security wage bases for the 35 years ending with the participant's
Social Security retirement age (which is between ages 65 and 67 depending
on the year the participant was born). For example, the covered
compensation amount for a participant attaining age 65 in 1997 is $29,304.
Employment Agreements
Vito S. Portera, a director and executive officer of Republic Corporation,
had an employment agreement with Republic Corporation and Republic Bank
dated as of May 27, 1988 (as amended March 7, 1989) which terminated
pursuant to its terms on December 31, 1996. The agreement provided for a
base annual salary of $300,000 ($100,000 of which was for Mr. Portera's
continuing service as Chairman of the Board of Republic International Bank
of New York (Miami), Republic Bank's Miami, Florida Edge Act subsidiary)
and an annual bonus of not less than $200,000. For the fiscal year ended
December 31, 1996, Mr. Portera received a cash bonus of $635,000 (which
amount is included in the Summary Compensation
14
<PAGE>
Table above). At the time he entered into his agreement, Mr. Portera
received a twenty-three year residential first mortgage loan from
Republic Corporation to finance the purchase of his relocated residence
in New York State in the amount of $1,000,000 at an annual interest rate
of 10% with principal payments commencing in the ninth year. In February
1994, Republic Corporation and Mr. Portera agreed to a modification of
the rate payable on the mortgage to 6.125%, adjustable every three years
until maturity on May 1, 2023. As of December 31, 1996, the outstanding
principal amount of Mr. Portera's mortgage had been reduced to
approximately $475,000. In January 1997, Mr. Portera prepaid the mortgage
in full. The agreement also provided that Republic Corporation and
Republic Bank would buy Mr. Portera's house at any time during the term
of the agreement upon Mr. Portera's election. Republic Corporation and
Republic Bank have agreed to extend such option beyond December 31, 1996
for so long as Mr. Portera remains in their employ, plus six months
after termination of his employment, subject to termination of such
option by Republic Corporation and Republic Bank upon twelve months'
prior written notice.
15
<PAGE>
Five-Year Comparative Stock Performance
The following graph compares the cumulative total shareholder return on the
Common Stock of Republic Corporation for the last five fiscal years with
the cumulative total return on the Standard & Poor's 500 Stock Index and
the Standard & Poor's Money Center Bank Index over the same period
(assuming the investment of $100 in the Common Stock of Republic
Corporation, the S&P 500 and the S&P Money Center Banks on December 31,
1991, and reinvestment of all dividends as indicated
below the graph).
[GRAPH - Comparison of Five-Year Cumulative Total Return Among Republic
New York Corporation, S&P 500 Stock Index and S&P Money Center Banks Index -
has been omitted. The information set forth in such graph is found in the
table "Comparison of Five-Year Cumulative Total Return..." below.]
<TABLE>
Comparison of Five-Year Cumulative Total Return
Among Republic New York Corporation, S&P 500 Stock Index and S&P
Money Center Banks Index
<CAPTION>
Measurement Period Republic Corporation S&P Money Center Banks
(Fiscal Year Covered) (formerly Republic Bank) S&P 500 Index (formerly S&P Banks NYC)
----------------------- ------------------------ ------------- ------------------------
<S> <C> <C> <C>
Measurement Point:
12/31/91 $ 100 $ 100 $ 100
FYE 12/31/92 103 108 136
FYE 12/31/93 104 118 167
FYE 12/31/94 104 120 163
FYE 12/31/95 146 165 265
FYE 12/31/96 196 202 397
</TABLE>
16
<PAGE>
Twenty-Five Year Comparative Stock Performance
Generally, Republic Corporation's Common Stock is viewed as a long-term
investment. The following table of the values at the relevant year end
accompanies the graph on the next page to provide a comparison of the
cumulative total shareholder return on the Common Stock of Republic
Corporation, since its issuance in July 1974 (when Republic Corporation
became the holding company for Republic Bank) and prior thereto on the
Common Stock of Republic Bank, since 1971, with the cumulative total return
on the Standard & Poor's 500 Stock Index and the Standard & Poor's Money
Center Bank Index (the Standard & Poor's Banks New York City Index prior to
April 1987) over the same period (assuming the investment of $100 in the
Common Stock of Republic Corporation's predecessor, Republic Bank, the S&P
500 and the S&P Money Center Banks' predecessor, the S&P Banks New York
City, on December 31, 1971, and reinvestment of all dividends as indicated
below the graph).
<TABLE>
<CAPTION>
Measurement Period Republic Corporation S&P Money Center Banks
(Fiscal Year Covered) (formerly Republic Bank) S&P 500 Index (formerly S&P Banks NYC)
----------------------- ------------------------ ------------- ------------------------
<S> <C> <C> <C>
Measurement Point:
12/31/71 $ 100 $ 100 $ 100
FYE 12/31/72 183 119 130
FYE 12/31/73 105 102 146
FYE 12/31/74 64 75 99
FYE 12/31/75 72 103 108
FYE 12/31/76 107 127 128
FYE 12/31/77 107 118 107
FYE 12/31/78 148 126 115
FYE 12/31/79 172 149 129
FYE 12/31/80 425 197 155
FYE 12/31/81 544 188 178
FYE 12/31/82 570 228 223
FYE 12/31/83 569 278 249
FYE 12/31/84 643 296 290
FYE 12/31/85 856 389 426
FYE 12/31/86 1,481 460 493
FYE 12/31/87 1,175 485 363
FYE 12/31/88 1,163 564 479
FYE 12/31/89 1,430 741 588
FYE 12/31/90 1,419 718 406
FYE 12/31/91 2,058 935 592
FYE 12/31/92 2,113 1,005 806
FYE 12/31/93 2,148 1,106 991
FYE 12/31/94 2,140 1,121 967
FYE 12/31/95 3,009 1,538 1,570
FYE 12/31/96 4,038 1,888 2,350
</TABLE>
17
<PAGE>
[GRAPH - Comparison of Twenty-Five-Year Cumulative Total Return Among Republic
New York Corporation, S&P 500 Stock Index and S&P Money Center Banks Index -
has been omitted. The information set forth in such graph is found in the
table "Comparison of Twenty-Five-Year Cumulative Total Return..." above.]
18
<PAGE>
Transactions with Management
and Related Persons
During 1996, certain directors and executive officers of Republic
Corporation or persons related to them were customers of, and had
transactions with, Republic Corporation and its subsidiaries, including
Republic Bank, in the ordinary course of business; additional transactions
may be expected to take place in the ordinary course of business in the
future. In most cases, all such outstanding loans and commitments were made
upon substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other
persons and did not involve more than normal risks of collectibility or
present other unfavorable features. In addition, Republic Corporation
carries mortgage loans made to seven executive officers (all of whom are
also directors of Republic Corporation), outstanding in the aggregate
principal amount of $2,233,545 as of December 31, 1996, and, as of the date
hereof, Mr. Robert A. Cohen has a $900,000 30-year mortgage at market rates
secured by his residence, and an $800,000 5-year unsecured loan at market
rates. Such loans were made at more favorable effective rates, including
the waiver of "points", than were available to customers of Republic Bank
generally, although no more favorable than the terms available to other
employees of Republic Corporation and its subsidiaries who are not
executive officers.
Safra Republic Holdings S.A. ("Safra Republic"), a Luxembourg holding
company established by Republic Corporation in 1988, owns five European
banks; its stock is held, as of December 31, 1996, by Republic Bank
(49.1%), by Saban S.A. ("Saban"), a Panamanian corporation wholly-owned by
Edmond J. Safra (20.8%), and by international investors (30.1%). Safra
Republic and Republic Bank, although independently managed, cooperate
closely and have formulated their policies based on certain common
principles. Each of Safra Republic's banks and Republic Bank also acts as
principal correspondent bank to each other's respective locations around
the world. At December 31, 1996, Safra Republic had total assets of $17.2
billion, total deposits of $13.3 billion and total stockholders' equity of
approximately $1.6 billion.
In addition, Republic National Bank of New York (Suisse) S.A. ("RNB
Suisse"), the Geneva-based banking subsidiary of Safra Republic and an
affiliate of Republic Bank, leases office space in various locations in
Geneva, Switzerland for use in its banking business from Edmond J. Safra
and several real estate companies owned by Mr. Safra. Such transactions
involved aggregate rental payments for 1996 of approximately $9,503,295.
The rents pursuant to all such leases are based on independent appraisals
of the fair rental value of such properties. Such transactions were
conducted in the normal course of business on substantially the same terms
as those prevailing for comparable transactions with other persons and do
not involve more than the normal risk of collectibility nor present other
unfavorable features.
Messrs. Dwek and Weiner, who are directors and/or executive officers of
Republic Corporation and Republic Bank, are also directors of Safra
Republic. Accordingly, situations will arise from time to time in which
potential conflicts of interest could be present for such persons. In
addition, the nature of the businesses of Safra Republic's banks and
Republic Bank is such that competing interests among such companies may
also arise with respect to, among other things, areas of business in
which such companies compete, business dealings among such companies,
the election of directors, issuances of capital stock, declaration of
dividends and similar corporate matters, corporate opportunities in
which such companies have an interest and other matters involving the
use of Republic Bank's trade name and trademarks and Republic Bank's
legal and regulatory status.
19
<PAGE>
There are no agreements or arrangements that restrict or otherwise govern
competition between the two organizations in markets where both are
entitled or wish to act, nor is either of them obligated to advise the
other of particular business opportunities. All business transactions
between Safra Republic's banks and Republic Bank are conducted on an
arm's-length basis, and it is their intention to resolve all such conflicts
described above consistent with each organization's responsibilities to its
stockholders.
As of December 31, 1996, approximately 27.7% of Republic Corporation's
Common Stock was beneficially owned, through three wholly-owned
corporations, by Edmond J. Safra. See "Ownership of Voting Securities --
Certain Beneficial Owners" below. Mr. Safra, in addition to being the
principal stockholder of Republic Corporation, is Honorary Chairman of the
Boards of Directors of Republic Corporation and Republic Bank. Mr. Safra is
also Chairman of the Board of Safra Republic and of RNB Suisse. As Chairman
of the Board of RNB Suisse, Mr. Safra earned approximately $814,000 during
1996 for services performed for RNB Suisse. The advice of Mr. Safra, as
Republic Corporation's principal stockholder, is often sought by Republic
Corporation with respect to major policy decisions and other significant
matters.
In addition, Republic Corporation and its subsidiaries, principally
Republic Bank and its subsidiaries, have a broad range of business
relationships with Banco Safra S.A., a Brazilian banking corporation, and
its United States national bank subsidiary, Safra National Bank of New
York, and Banque Safra-Luxembourg S.A., a Luxembourg banking corporation,
all of which are associated through family members with Edmond J. Safra.
Such relationships include credit transactions, deposit relationships,
foreign exchange dealings, precious metals dealings, and securities
clearing transactions and custodial services. Such transactions have been
conducted in the normal course of Republic Corporation's business on
substantially the same terms as those prevailing for comparable
transactions with other customers or suppliers and have not involved more
than normal risks of collectibility or any other unfavorable features.
Republic New York (U.K.) Limited, a wholly-owned subsidiary of Republic
Bank, has also entered into a number of relationships with Banco Safra S.A.
and its subsidiaries as an underwriter or dealer involved in the issuance
of securities by them. In December 1996, Republic New York (U.K.) Limited
became a Joint Lead Manager and Dealer on the U.S.$250,000,000 Global
Medium Term Note Program established by Globex Utilidades S.A., a Brazilian
corporation which is approximately 38.5% owned by Mrs. Lily Safra, the wife
of Mr. Safra. The first issuance off the Program of U.S.$100,000,000
aggregate principal amount of notes, on terms then prevailing in the market
as established among the Managers, was consummated in December 1996, and
Republic New York (U.K.) Limited received fees and commission of
approximately U.S.$140,000 in connection therewith.
20
<PAGE>
Ownership of Voting Securities
Certain Beneficial Owners
Set forth below is certain information as of December 31, 1996 as to the
persons who are known by Republic Corporation to own beneficially more than
five percent of the outstanding Common Stock of Republic Corporation.
Amount and Nature Percent
Name and Address of Beneficial Ownership of Class
----------------------- --------
Edmond J. Safra . . . . . . .. . . . . . . 15,258,812 (a) 27.7%
2, Place du Lac
Geneva, Switzerland
- -------------------
(a) Mr. Safra is the principal stockholder of Republic Corporation through
his ownership of all the outstanding shares of Saban, which owns
15,229,036 shares of Republic Corporation (including 14,699,958 shares
through its wholly-owned subsidiary, RNYC Holdings Limited, a
Gibraltar bank holding company), and of another corporation which owns
29,776 shares of Republic Corporation.
On October 28, 1994, Mr. Safra, through Saban and RNYC Holdings
Limited, received approval from the Board of Governors of the Federal
Reserve System to acquire up to two million additional shares of
Republic Corporation Common Stock, which approval, as extended, lapses
on April 28, 1997, unless further extended. If the remaining 1,730,400
shares of Common Stock covered by the approval were acquired, Mr.
Safra would increase his ownership to approximately 30.9% of the
Corporation's outstanding Common Stock. Mr. Safra has acquired no
additional shares since December 31, 1996.
Management
Information concerning the beneficial ownership of Republic Corporation's
Common Stock by each director is set forth in the table under "Election of
Directors" above. The following table shows, as of December 31, 1996, the
beneficial ownership of Republic Corporation's Common Stock by all
directors and executive officers of Republic Corporation as a group.
Amount and Nature Percent
of Beneficial Ownership of Class
----------------------- --------
All directors and executive officers
as a group (27 persons) . . . . . . . 550,991 shs. 1.0%
21
<PAGE>
APPROVAL OF INCREASE OF SHARES AWARDABLE UNDER THE
1995 LONG TERM INCENTIVE STOCK PLAN
The Board of Directors proposes to amend the 1995 Long Term Incentive Stock
Plan (the "LTISP") to increase by 1,500,000 the number of shares available
for awards pursuant to the LTISP.
The following description of the LTISP is a summary, does not purport to be
detailed and is qualified in its entirety by reference to the provisions of
the LTISP itself. A copy of the LTISP may be obtained by writing to the
Corporate Secretary, Republic New York Corporation, 452 Fifth Avenue, New
York, New York 10018.
General. The LTISP was approved by the stockholders at the 1995 Annual
Meeting. The LTISP provides for stock-based awards as incentive compensation
to officers and employees of Republic Corporation and its subsidiaries.
These awards may take the form of Restricted Stock, Incentive Stock Options,
Non-Qualified Stock Options, Phantom Stock and Stock Appreciation Rights(as
such terms are defined below) and other stock-based awards tied to shares
of Republic Corporation's Common Stock (each, an "Award"), all on a
stand-alone, combination or tandem basis, to eligible persons. The LTISP
provides that it shall terminate on the tenth anniversary of its approval.
When initially approved, the LTISP had 1,140,800 shares available for
awards; however, as of March 13, 1997, there were approximately 166,000
shares remaining authorized but not yet awarded under the LTISP. The Board
of Directors recommends that the total number of shares available for award
pursuant to the LTISP be increased by 1,500,000 shares to 2,640,800 shares,
and considers it appropriate pursuant to Section 10 of the LTISP to submit
such increase for approval by the stockholders.
Class of Persons Eligible to Receive Awards. The LTISP is designed to
attract and retain officers and employees of Republic Corporation and its
subsidiaries who make a material contribution to the successful operation
of Republic Corporation and its subsidiaries. Presently, there are
approximately 5,500 persons who are eligible to participate in the LTISP.
Participants in the LTISP are also eligible to participate in Republic
Corporation's other incentive compensation and bonus plans.
Administration. The LTISP is administered by the Human Resources
Committee (the "Committee") of the Board of Directors of Republic
Corporation, the members of which consist solely of members of the
Board of Directors who are "non-employee directors" within the meaning of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and are "outside directors" for purposes of
Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the
"Code"). No member of the Committee (see "Directors' Committees" above
under "Election of Directors") may be granted an award under the LTISP.
The LTISP provides that the Committee shall have full authority to (i)
designate from among those eligible the persons who will participate in the
LTISP ("Participants"); (ii) determine the type or types of Awards to be
granted to each Participant under the LTISP; (iii) determine the number of
shares of Republic Corporation's Common Stock ("Shares") to be covered by
(or with respect to which payments, rights or other matters are to be
calculated in connection with) Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under
what circumstances Awards may be settled or exercised in cash, Shares,
other securities, or other property, or cancelled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash,
Shares, other securities, other
22
<PAGE>
Awards, or other property, and other amounts payable with respect to an
Award under the LTISP shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (vii) interpret and
administer the LTISP and any instrument or agreement relating to, or Award
made under, the LTISP; (viii) establish, amend, suspend, or waive such
rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the LTISP; and (ix) make any other
determination and take any other action that the Committee deems necessary
or desirable for the administration of the LTISP. The Committee will have
the power to vary or waive any provision of the LTISP in respect of a
Participant and his Award in order to satisfy the terms of such
Participant's employment contract with the Republic Corporation or a
subsidiary and to eliminate any conflict between such contract and the
provisions of the LTISP, subject to Section 162(m) of the Code and the
rules and regulations promulgated thereunder.
Material Features of the LTISP. An Award of restricted stock ("Restricted
Stock") is an award of Shares which is subject to such restrictions as the
Committee deems appropriate, including forfeiture conditions and
restrictions on transfer for a period specified by the Committee. In the
case of Restricted Stock, if a Participant's employment with Republic
Corporation or any of its subsidiaries or affiliates is terminated by
reason of the Participant's death or disability, the Participant or the
Participant's legal representative, beneficiary, heir or transferee, as
the case may be, shall be entitled to the Shares of Restricted Stock of
such Participant, free of any and all restrictions imposed at the time of
grant, and Republic Corporation will deliver such Shares to such person
within sixty days of receipt by the Committee of evidence satisfactory to
establish such death or disability and, if applicable, the right of such
legal representative, beneficiary, heir or transferee to receive such
Shares. The Committee will establish rules regarding the right of
Participants to elect to receive additional Shares of Restricted Stock
in lieu of any dividends which would otherwise be payable on account of
Shares of Restricted Stock held by such a Participant. If a Participant's
employment is terminated for any reason other than death or disability,
all shares of Restricted Stock will be forfeited.
Options (each, an "Option") to purchase Shares, which may be non-qualified
or incentive stock options, may be granted under the LTISP at an exercise
price determined by the Committee at the time the Option is granted;
provided, however, that in the case of (i) an Option granted to a "covered
employee" within the meaning of Section 162(m)(3) of the Code and (ii) an
incentive stock option, the exercise price will be at least 100% of the
fair market value of a Share determined on the date of grant (110% of fair
market value in the case of an incentive stock option granted to a ten
percent stockholder).
In the case of Options, if a Participant's employment with Republic
Corporation or any of its subsidiaries or affiliates is terminated by
reason of the Participant's death or disability, or if the Participant dies
within three months of the date of retirement from such employment, all
outstanding Options of such Participant shall become exercisable by the
Participant or the Participant's legal representative, beneficiary, heir or
transferee, as the case may be, within one year from the date of such death
or disability, except to the extent that such Options expire by their terms
during such one-year period prior to the exercise thereof. Upon Retirement
from such employment (as defined in the LTISP), a Participant's outstanding
Options become immediately exercisable in full for the three-month period
following such retirement; any Options not exercised during that period, or
which expire by their terms during that period prior to the exercise
thereof, shall terminate. If a Participant's employment with Republic
Corporation or any of its subsidiaries or affiliates is terminated by
reason of (i) discharge by Republic Corporation or such subsidiary or
affiliate for cause or (ii) voluntary separation on the part of the
Participant, unless Republic Corporation or his employing company or
companies otherwise consents, any outstanding Option, whether exercisable
or unexercisable, will be forfeited. A Participant who leaves such
employment for a reason other than death, disability, Retirement,
termination for cause or voluntary separation on the part of the
Participant without
23
<PAGE>
the consent of Republic Corporation or his employing company or companies,
may exercise his or her outstanding Options during the three-month period
following such departure, subject to the expiration of Options which by
their terms expire during such period prior to exercise thereof.
An Award of phantom stock ("Phantom Stock") entitles the recipient, upon
lapse of any restrictions, to the fair market value (in cash or shares of
Common Stock) of one share of Republic Corporation's Common Stock for each
Phantom Stock share. An Award of Stock Appreciation Rights ("SARs")
entitles the recipient to receive (in cash or shares of Common Stock) the
difference between the fair market value of a share of Common Stock on the
date of exercise of the SAR and the exercise price (which shall not be less
than the fair market value of such share of Common Stock on the date of
grant). In the case of Phantom Stock and SARs, the grant price, term,
methods of exercise, methods of settlement, risk of forfeiture and any
other terms and conditions of an Award shall be determined by the Committee
at the time of the grant, reflected in the Award notification and subject
to the terms of the LTISP and any applicable Award Agreement.
The Committee may also grant to Participants such other Awards that are
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares and deemed by the Committee to be
consistent with the purposes of the LTISP. Subject to the terms of the
LTISP, the Committee shall determine the terms and conditions of such
Awards at the time of grant.
A Participant's rights and interests under the LTISP (including the right
to payment of any unpaid Award) may not be assigned or transferred except
in the case of the Participant's death to the Participant's designated
beneficiary or, in the absence of such designation, by will or the laws of
descent and distribution. Notwithstanding the foregoing, the Committee may
approve the transfer of Options by a Participant to one or more members of
the Participant's immediate family or to a trust (including a revocable
trust) for the benefit thereof. No Award shall be subject to execution,
attachment or other process.
Number of Shares. Assuming stockholder approval of the subject proposal, an
aggregate of 2,640,800 shares of Common Stock of Republic Corporation will
be available for awards pursuant to the LTISP. Such number of Shares is
subject to adjustment in the event of a reorganization, recapitalization,
merger, consolidation, spin-off, extraordinary dividend or other
distribution or similar transaction. Each Award, including Awards of
Phantom Stock and SARs, reduces the number of shares remaining, with the
exception that any Shares which are forfeited by the Participant in
accordance with the terms of the LTISP, and any shares underlying an Award
of Options, Phantom Stock or SARs which are allowed to lapse or expire or
are forfeited in accordance with the terms of the Award are added back to
the number of shares available for Awards.
The maximum number of Shares that may be awarded to any single Participant
during any one-year period pursuant to one or more awards of Options or
SARs under the LTISP is 100,000 Shares in total.
Amendment and Termination. The LTISP may be terminated at any time, or
modified or amended from time to time, in any case by the affirmative vote
of the holders of a majority of the outstanding shares of the Common Stock
of Republic Corporation present or represented and entitled to vote at a
duly held stockholders' meeting. The Board of Directors may at any time
terminate the LTISP or, from time to time, modify or amend the LTISP as it
may deem advisable; provided, however, that the Board of Directors may not
make any amendments to the LTISP without stockholder approval where such
approval is required to comply with any applicable law, regulation or stock
exchange rule; provided, further, however, that no such
24
<PAGE>
amendment or termination may affect the rights of a Participant under an
outstanding Award without the consent of the Participant.
Awards. Since its inception in 1995, awards made pursuant to the LTISP have
been solely in the form of Restricted Stock. On March 27, 1997,
approximately 398,000 shares of Restricted Stock were awarded to officers
and employees of Republic Corporation and its subsidiaries in recognition
of 1996 performance, as set forth in the table below. The issuance of
approximately 231,000 of the shares awarded is subject to stockholder
approval of the proposed increase in shares available for awards pursuant
to the LTISP.
<TABLE>
PLAN BENEFITS
1995 Long Term Incentive Stock Plan
<CAPTION>
Name and Position Dollar Value ($)1<F1> Number of Units
----------------- ---------------- ---------------
<S> <C> <C>
Walter H. Weiner . . . . . . . . . . . . . $ 471,700 5,300
Dov C. Schlein . . . . . . . . . . . . . . 462,800 5,200
Elias Saal . . . . . . . . . . . . . . . . 436,100 4,900
Cyril S. Dwek . . . . . . . . . . . . . . . 0 0
Vito S. Portera . . . . . . . . . . . . . 225,500 2,500
All Executive Officers . . . . . . . . . . 2,513,004 28,236
Non-Executive Officer Directors Group . . . 0 0
Non-Executive Officer Employee Group . . . 32,878,914 369,426
<FN>
<F1> 1 The value of the Restricted Stock was calculated by multiplying the closing market price
of Republic Corporation's Common Stock on the date of the award by the number of shares
awarded.
</FN>
</TABLE>
Certain Federal Income Tax Consequences of Options. Certain of the federal
income tax consequences to optionees and Republic Corporation of Options
granted under the LTISP should generally be as set forth in the following
summary.
An employee to whom an incentive stock option (an "Incentive Stock Option")
which qualifies under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") is granted will not recognize income at the time of
grant or exercise of such Option. No federal income tax deduction will be
allowable to the employee's employer upon the grant or exercise of such
Incentive Stock Option. However, upon the exercise of an Incentive Stock
Option, any excess in the fair market value of the Common Stock over the
exercise price generally will be included in the employee's alternative
minimum taxable income. When the employee sells such shares more than one
year after the date of transfer of such shares and more than two years
after the date of grant of such Incentive Stock Option, the employee will
normally recognize a long-term capital gain or loss equivalent to the
difference, if any, between the sale prices of such shares and the exercise
price. If the employee does not hold such shares for the required period,
when the employee sells such shares, the employee will recognize ordinary
compensation income (unless the amount realized on the sale of such shares
is less than or equal to the aggregate Option exercise price for such shares)
and possibly capital gain or loss, in such amounts as are prescribed by the
Code and the regulations thereunder, and the employee's employer will
generally be entitled to a federal income tax deduction in the amount of
the ordinary compensation income.
An employee to whom an Option which does not qualify under Section 422 of
the Code (a "Non-Qualified Option") is granted will not recognize income at
the time of the grant of such Option. When such employee
25
<PAGE>
exercises such Non-Qualified Option, the employee will recognize ordinary
compensation income equal to the difference, if any, between the exercise
price paid and the fair market value, as of the date of Option exercise,
of the shares the employee receives. The tax basis of such shares to such
employee will be equal to the exercise price paid plus the amount includible
in the employee's gross income, and the employee's holding period for such
shares will commence on the date on which the employee recognized taxable
income in respect of such shares. Subject to the applicable provisions of
the Code and regulations thereunder, the employee's employer will generally
be entitled to a federal income tax deduction in respect of a Non-Qualified
Option in an amount equal to the ordinary compensation income recognized by
the employee.
Stockholder Approval
The Board of Directors recommends a vote FOR the increase of shares
available for awards under the 1995 Long Term Incentive Stock Plan. Approval
of the increase requires the affirmative vote of a majority of the shares of
Common Stock present in person or represented by proxy and entitled to
vote. For purposes of determining such number of shares present or
represented and entitled to vote with respect to the LTISP, abstentions
will be counted (and will therefore be the equivalent of a "No" vote), but
broker non-votes will not be counted. Edmond J. Safra, who owns
approximately 27.7% of the outstanding Common Stock (see "Ownership of
Voting Securities" above), has indicated his intention to vote his shares
in favor of such approval.
APPROVAL OF EXTENSION OF RESTRICTED STOCK ELECTION PLAN
The Board of Directors proposes to amend the Restricted Stock Election Plan
(the "RSEP") to extend the operation of the RSEP by five years until
December 31, 2002.
The following description of the RSEP is a summary, does not purport to be
detailed and is qualified in its entirety by reference to the provisions of
the RSEP itself. A copy of the RSEP may be obtained by writing to the
Corporate Secretary, Republic New York Corporation, 452 Fifth Avenue, New
York, New York 10018.
General. The RSEP was approved by the stockholders at the 1988 Annual
Meeting. The purpose of the RSEP is to provide an additional incentive to
Participants who contribute materially to the enhancement of the
performance of Republic Corporation and its subsidiaries by giving them an
equity interest which will benefit from any enhanced performance. The RSEP
is administered by the Human Resources Committee (the "Committee") of the
Board of Directors of Republic Corporation and allows selected employees,
who are entitled to and have elected to receive deferred cash compensation
("Deferred Compensation") from Republic Corporation, to elect to receive
Restricted Stock in lieu of all or a portion of such Deferred
Compensation.
The Committee has the exclusive power to select the Participants in the
RSEP solely from those employees of Republic Corporation and its
subsidiaries who are entitled to receive Deferred Compensation. Presently,
there are approximately twelve persons who qualify as Participants under
the RSEP. The basis of participation and a brief description of the RSEP
are set forth below. Participants in the RSEP may also be entitled to
participate in Republic Corporation's other incentive compensation and
bonus plans, including the LTISP.
26
<PAGE>
Administration. The Committee has the exclusive power to select the
employees who will be Participants and to determine the Restricted Period
applicable to each issuance of Restricted Stock under the RSEP. The
Committee has the power to adopt such rules and regulations as it deems
appropriate for administration of the RSEP and has full authority to
interpret the RSEP in its exclusive discretion. No member of the Committee
(see "Directors' Committees" above) is eligible to participate in the
RSEP. All members of the Committee shall at all times be "non-employee
directors" as that term is defined in Rule 16b-3 under Section 16 of the
Securities Exchange Act of 1934, as amended.
Selection of Participants and Elections. During each calendar year that
the RSEP is in existence, the Committee has the exclusive power to (i)
select the Participants in the RSEP and (ii) determine the Restricted
Period and its application to the shares issued to each Participant.
Assuming stockholder approval of the subject proposal, no more than an
aggregate of 375,000 shares of Common Stock, subject to adjustment as
described below, may be issued pursuant to the RSEP during the period
ending on December 31, 2002.
Within fifteen days after the receipt by a Participant of a notice from
Republic Corporation setting forth the amount of such Participant's
Deferred Compensation in any year, such Participant must notify the
Committee in writing of the portion of the Participant's Deferred
Compensation which the Participant elects to receive in the form of
Restricted Stock. A Participant who has made such an Election shall
receive the number of shares of Restricted Stock equal to the quotient of
(i) the dollar value of the Deferred Compensation elected to be received
in the form of Restricted Stock, divided by (ii) the Market Value of
Republic Corporation's Common Stock as of the date of the Participant's
Election. Market Value is defined under the RSEP as the average closing
price of Republic Corporation's Common Stock on the New York Stock
Exchange for a period of five trading days commencing with the date on
which Market Value is to be determined. At the same time, the Participant
shall also elect either (i) to reinvest cash dividends to be received in
Restricted Stock or (ii) to be paid such cash dividends.
If a Participant elects to receive a portion of his Deferred Compensation
in the form of Restricted Stock, the Participant will not be entitled to
sell, assign, transfer, pledge or otherwise encumber the Restricted Stock
during a period (the "Restricted Period") which will be determined by the
Committee for each issuance of Restricted Stock. The Restricted Period may
vary by Participant, except that a Participant whose right to Deferred
Compensation remains contingent at the time of any election will have a
Restricted Period expiring when such contingency does. Except for such
restrictions on alienation of his interest in the Restricted Stock, a
Participant will have all other rights of a stockholder, including the
right to receive dividends and the right to vote his shares of Restricted
Stock. In connection with the issuance of his Restricted Stock, a
Participant is required to enter into an agreement (the "Participant's
Agreement") with Republic Corporation relating to the Restricted Stock.
If, prior to the expiration of the Restricted Period, a Participant ceases
to be employed by Republic Corporation or a subsidiary for any reason,
other than death or disability, he will forfeit any Restricted Stock of
which he is the beneficial owner and, pursuant to the Participant's
Agreement, will transfer such shares back to Republic Corporation. If the
Participant ceases to be employed during the Restricted Period due to his
death or disability, all Restricted Stock issued to him will immediately
become free of all restrictions, and the certificates representing such
shares will be delivered to the Participant (or the Participant's estate)
within 60 days of the event giving rise to such termination of employment.
In the event of a change in the number of outstanding shares of Common
Stock by reason of a stock dividend or stock split, recapitalization,
merger, consolidation, combination or exchange of shares, the
27
<PAGE>
maximum aggregate number and class of shares which may be issued
pursuant to the RSEP may be adjusted by the Committee, whose determination
will be conclusive.
Amendment and Termination. The Board of Directors may amend the RSEP from
time to time without approval by the stockholders of Republic Corporation,
but no such amendment may (i) without the stockholders' approval, extend
the RSEP's duration or increase the maximum number of shares of Restricted
Stock that may be issued pursuant to the RSEP (except as provided in the
preceding paragraph) or (ii) without a Participant's consent, impair the
rights of any Participant in the Restricted Stock. Additionally, the Board
of Directors has the right to terminate the RSEP at any time. Assuming
stockholder approval, the RSEP will terminate on December 31, 2002, unless
further extended by the Board of Directors, subject to stockholder
approval.
Awards. Restricted Stock is expected to be issued to the current
participants in the RSEP during 1997 pursuant to such participants'
election to reinvest their cash dividends in additional shares of
Restricted Stock. Such amounts are not currently determinable, however, due
to the unforseeability of the market price of Republic Corporation's Common
Stock on the relevant dividend dates. Set forth in the table below are the
amounts of Restricted Stock issued pursuant to the RSEP in respect of awards
and reinvested dividends for 1996.
<TABLE>
PLAN BENEFITS
Restricted Stock Election Plan
-----------------------------------
<CAPTION>
Name and Position Dollar Value ($)1<F1> Number of Units
----------------- ---------------- ---------------
<S> <C> <C>
Walter H. Weiner . . . . . . . . . . . . $ 40,324 641
Dov C. Schlein . . . . . . . . . . . . . 0 0
Elias Saal . . . . . . . . . . . . . . . 0 0
Cyril S. Dwek . . . . . . . . . . . . . . 0 0
Vito S. Portera . . . . . . . . . . . . . 0 0
All Executive Officers . . . . . . . . . . 40,324 641
Non-Executive Officer Directors Group . . 0 0
Non-Executive Officer Employee Group . . . 101,241 1,726
- ------------
<FN>
<F1> 1 The value of the Restricted Stock is the sum of the applicable market values (as
determined in accordance with the RSEP) of Republic Corporation's Common Stock on the
relevant dates of the awards and reinvested dividends.
</FN>
</TABLE>
Stockholder Approval
The Board of Directors recommends a vote FOR the extension of the
Restricted Stock Election Plan. Approval of the extension requires the
affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy and entitled to vote. For purposes of
determining such number of shares present or represented and entitled to
vote with respect to the RSEP, abstentions will be counted (and will
therefore be the equivalent of a "No" vote), but broker non-votes will not
be counted. Edmond J. Safra, who owns approximately 27.7% of the
outstanding Common Stock (see "Ownership of Voting Securities" above),
has indicated his intention to vote his shares in favor of such
approval.
28
<PAGE>
APPROVAL OF SELECTION OF AUDITORS
The Board of Directors considers it appropriate to submit for approval by
the stockholders its selection of KPMG Peat Marwick LLP, as auditors of the
financial statements of Republic Corporation for the current fiscal year.
KPMG Peat Marwick LLP, independent certified public accountants, have
examined the financial statements of Republic Corporation since it
commenced operations in 1974. Such firm has also examined the financial
statements of Republic Bank since 1966.
The appointment of the firm was recommended to the Board of Directors of
Republic Corporation by its Audit Committee. No member of the Audit
Committee is an officer or employee of Republic Corporation. A
representative of the firm will be present at the meeting to make a
statement, if he desires to do so, and to respond to appropriate questions
by stockholders.
The Board of Directors recommends a vote FOR the approval of the selection
of auditors.
MISCELLANEOUS
Other Matters
As of the date hereof, Republic Corporation has not been informed of any
matters to be presented by or on behalf of Republic Corporation or its
Board of Directors for action at the meeting other than those listed in the
notice of meeting and referred to herein. If any other matters come before
the meeting or any adjournment thereof, it is intended that the proxies
will be voted in respect thereof in accordance with the judgment of the
person or persons voting the proxies.
Stockholders' Proposals
If any stockholder intends to present a proposal for inclusion in the proxy
material for the 1998 Annual Meeting, such stockholder's proposal must be
received by November 30, 1997 at Republic Corporation's executive offices
at 452 Fifth Avenue, New York, New York 10018, Attention: the Corporate
Secretary. The submission must also meet the other requirements of Rule
14a-8 of the Securities and Exchange Commission applicable to stockholder
proposals.
Solicitation of Proxies
The cost of solicitation of proxies will be borne by Republic Corporation.
In addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegraph. Banks, brokerage houses and other
institutions, nominees or fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorizations for
the execution of proxies. Directors, officers and regular employees of
Republic Corporation and Republic Bank may also solicit proxies by such
methods without additional remuneration therefor. Republic Corporation
will, upon request, reimburse banks, brokerage houses and other
institutions, nominees and fiduciaries for expenses in forwarding proxy
solicitation material to their principals.
29
<PAGE>
General
Only stockholders of record at the close of business on March 13, 1997 will
be entitled to notice of and to vote at the meeting. Stockholders are urged
to mark, date and sign the enclosed form of proxy, solicited on behalf of
the Board of Directors, and return it at once in the envelope enclosed for
that purpose. Unless instructed otherwise, proxies will be voted for the
election of directors, for the increase in shares available for awards
pursuant to the 1995 Long Term Incentive Stock Plan, for the extension of
the duration of the Restricted Stock Election Plan and for approval of the
selection of auditors. On any such matter generally a vote of a majority of
the votes cast on the matter will be required for approval. Broker non-votes
and abstentions will not be counted for purposes of determining the number
of votes cast. The proxy does not affect the right to vote in person at the
meeting and may be revoked prior to its exercise by appropriate notice to
the undersigned.
Dated: March 31, 1997
New York, New York
By Order of the Board of Directors,
WILLIAM F. ROSENBLUM, JR.,
Senior Vice President and Corporate Secretary
30
<PAGE>
[Front Side]
REPUBLIC NEW YORK CORPORATION
PROXY
Annual Meeting of Stockholders
May 28, 1997
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints, jointly and severally, Peter Kimmelman,
William C. MacMillen, Jr., and James L. Morice, each with the power to
appoint his substitute, and hereby authorizes them to vote all shares of
Republic New York Corporation Common Stock that the undersigned is entitled
to vote, at the Annual Meeting of Stockholders of the Corporation to be
held at 452 Fifth Avenue, City and State of New York, on May 28, 1997, at
11:00 A.M., or any adjournment thereof, in accordance with the instructions
on the reverse side hereof and in their discretion upon such other business
as may properly come before the meeting.
Unless instructions are given on the reverse side, this Proxy will be voted
FOR the election of nominees for director, FOR Item 2, FOR Item 3 and FOR
Item 4 listed on the reverse side hereof. With respect to matters as to
which discretionary authority is granted above, this Proxy will be voted in
accordance with the best judgment of the proxies hereinabove appointed.
Please mark, date and sign this Proxy on the reverse side hereof and return
it promptly whether or not you expect to attend the meeting. You may
nevertheless vote in person if you do attend.
(Continued and to be signed on other side)
[Back Side]
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
The Board of Directors recommends a vote "FOR ALL NOMINEES" in Item 1, and
"FOR" Items 2, 3, and 4.
FOR ALL WITHHOLD FOR Director Nominees:
Item 1-- Election of K. Andersen J. Morice
the following [ ] [ ] R. Cohen E. Daniel Morice
nominees as C. Dwek J. Norwood
Directors: E. Ginsberg J. Pancetti
N. Hasson V. Portera
P. Kimmelman T. Robards
R. Kraemer W. Rogers
L. Lieberman E. Saal
W. MacMillen W. Weiner
P. Mansbach G. Wendler
P. White
Withhold for the following only: (Write the name of the
nominee(s) in the space below)
- ---------------------------------------------
FOR AGAINST ABSTAIN
Item 2 - Approval of increase of [ ] [ ] [ ]
shares in the 1995 Long-Term
Incentive Stock Plan
Item 3 - Approval of extension of the [ ] [ ] [ ]
Restricted Stock Election Plan
Item 4 - Approval of selection of [ ] [ ] [ ]
auditors
I PLAN TO ATTEND MEETING [ ]
Receipt is hereby acknowledged of the Republic New York
Corporation Notice of Meeting and Proxy Statement.
Signature(s)______________________________________ Date _________1997
NOTE: Please sign as name appears hereon. Joint owners should each sign. If
signer is a corporation, please sign the full corporate name by duly
authorized officer. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
<PAGE>
Appendix A
Republic New York Corporation
Proxy Statement
Annual Meeting of Stockholders
May 28, 1997
Graphic Image Material Cross-Reference Index
Information Conveyed by
Omitted Graphic Image Omitted Graphic Image
- --------------------- ---------------------
Graphs:
Comparison of Five-Year Cumulative The information presented graphically
Total Return Among Republic New York has been replaced in this filing by a
Corporation, S&P 500 Stock Index and tabular presentation of such infor-
S&P Money Center Banks Index, omitted mation inserted where the graph would
from page 16. appear.
Comparison of Twenty-Five Year The information presented graphically
Cumulative Total Return Among is presented in this filing by the
Republic New York Corporation, S&P tabular presentation found immediately
Stock Index and S&P Money Center preceding where the graph would
Banks Index, omitted from page 18. appear.
<PAGE>
Proxy Statement
Dated March 31, 1997
Republic New York Corporation
EXHIBIT INDEX
No. Exhibit Description
99.1 Long Term Incentive Stock Plan
99.2 Restricted Stock Election Plan
LONG TERM INCENTIVE STOCK PLAN
OF
REPUBLIC NEW YORK CORPORATION AND ITS SUBSIDIARIES
Section 1. Purpose.
The Long Term Incentive Stock Plan (the "Plan") is designed to
attract and retain the services of selected employees who are in a position
to make a material contribution to the successful operation of the business
of Republic New York Corporation and its subsidiaries. The Plan provides
for the granting of stock options, stock appreciation rights, restricted
stock, phantom stock, other stock-based awards or any combination of the
foregoing to eligible participants.
Section 2. Definitions.
For the purpose of the Plan, the following terms shall have the
meanings set forth below:
(a) "Affiliate" means any related entity designated by the Committee.
(b) "Award" means an Incentive Stock Option, Non-Qualified Stock
Option, Stock Appreciation Right, Restricted Stock, Phantom Stock or Other
Stock-Based Award.
(c) "Award Agreement" means a written agreement setting forth the
terms and conditions of each Award made under the Plan.
(d) "Board of Directors" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(f) "Committee" means the Employee Compensation and Benefits
Committee of the Board of Directors or such other committee of the Board of
Directors as may be designated by the Board of Directors from time to time
to administer the Plan. The members of the Committee shall consist solely
of two or more members of the Board of Directors who are "non-employee
directors" within the meaning of Rule l6b-3 and are "outside directors" for
purposes of Section 162(m) of the Code. To the extent that no Committee
exists which has the authority to administer the Plan, the functions of the
Committee shall be exercised by the Board of Directors. If for any reason
the appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance with the requirements of
Rule 16b-3 or Section 162(m) of the Code shall not affect the validity of
the awards, grants, interpretations or other actions of the Committee.
(g) "Company" means Republic New York Corporation.
(h) "Employee" means an employee of the Company or a Subsidiary.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means, with respect to a Share, the average of
the high and low sales prices of a Share as reported on the New York Stock
Exchange Composite Tape on the valuation date, or, if there were no sales
reported on the valuation date, on the next preceding date on which such
prices were reported.
(k) "Incentive Stock Option" means an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.
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(l) "Non-Qualified Stock Option" means an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
(m) "Option" means an Incentive Stock Option or a Non-Qualified
Stock Option.
(n) "Other Stock-Based Award" means any right granted under
Section 6(e) of the Plan.
(o) "Participant" means a person who has been selected by the
Committee to receive an Award under the Plan.
(p) "Phantom Stock" means any rights granted under Section 6(d) of
the Plan.
(q) "Plan Year" means the calendar year.
(r) "Restricted Period" means the period or periods designated by
the Committee in respect of any Award of Restricted Stock or any part or
parts of such Award.
(s) "Restricted Stock" means the Shares that have been granted to
a Participant subject to the restrictions referred to in Section 6(c)(ii),
so long as such restrictions are in effect.
(t) "Retirement" means retirement under the Company's, a
Subsidiary's or an Affiliate's retirement plan and shall include early
retirement if available under such retirement plan.
(u) "Rule l6b-3" means Rule l6b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act or any successor rule or
regulation thereto.
(v) "Shares" means shares of common stock, par value $5.00 per
share, of the Company.
(w) "Stock Appreciation Right" means any right granted under
Section 6(b) of the Plan.
(x) "Subsidiary" means any corporation or other legal entity,
domestic or foreign, more than 50% of the voting equity of which is owned
or controlled, directly or indirectly, by the Company.
Section 3. Plan Administration.
(a) The Plan shall be administered by the Committee. Subject to
the terms of the Plan, the Committee shall have full authority to (i)
designate Participants from among those eligible, (ii) determine the type
or types of Awards to be granted to each Participant under the Plan; (iii)
determine the number of Shares to be covered by (or with respect to which
payments, rights, or other matters are to be calculated in connection with)
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances (taking into
consideration, among other things, the avoidance of liability under Section
16(b) of the Exchange Act) Awards may be settled or exercised in cash,
Shares, other securities, or other property, or canceled, forfeited, or
suspended; (vi) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Awards, or other
property, and other amounts payable with respect to an Award under the Plan
shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (vii) interpret and administer the Plan and
any instrument or agreement relating to, or Award made under, the Plan;
(viii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take
any other
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<PAGE>
action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time, and shall be
final, conclusive, and binding upon all persons, including the Company, any
Subsidiary, any Participant, any holder or beneficiary of any Award, any
Share owner, and any Employee.
(b) The Committee shall have the power to vary or waive any
provision of the Plan in respect of a Participant and his Award in order to
satisfy the terms of such Participant's employment contract with the
Company or a Subsidiary and to eliminate any conflict between such contract
and the provisions of the Plan, subject to Section 162(m) of the Code and
the rules and regulations promulgated thereunder.
(c) The Committee shall have the power to vary or waive any terms
or conditions under any Award (other than an Option or Stock Appreciation
Right granted to a "covered employee" within the meaning of Section 162(m)
of the Code and the rules and regulations promulgated thereunder)
theretofore granted, prospectively or retroactively.
(d) No waiver or variance of any provision of the Plan or an Award
pursuant to this Section 3 may materially adversely affect the rights
conferred by an Award without the consent of the recipient thereof.
Section 4. Capital Stock Subject to the Provisions of the Plan.
(a) The Shares awarded under the Plan may be authorized but
unissued Shares as the Board of Directors may from time to time determine.
Subject to adjustment pursuant to Section 11 hereof, the total number of
Shares available and reserved for the grant of Awards under the Plan
(including as to Awards that are denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Shares,
such number of Shares) shall be 2,640,800 Shares.
(b) Subject to Section 4(a) hereof and to the restrictions imposed
by Section 422 of the Code, there shall be available for Awards under the
Plan: (i) Shares represented by Options to the extent such Options are
canceled, forfeited, surrendered, terminated or expire unexercised; (ii)
the excess number of Shares subject to variable Awards that become fixed at
less than the maximum number of Shares subject to such Awards; and (iii)
Shares of Restricted Stock that have been forfeited.
Section 5. Eligibility.
Any Employee or officer of the Company or any Subsidiary selected by the
Committee is eligible to receive an Award.
Section 6. Awards.
(a) Options. The Committee is hereby authorized to grant Options
to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of
the Plan as the Committee shall determine:
(i) Exercise Price. The exercise price per Share
purchasable under an option shall be determined by the Committee
at the time the Option is granted; provided, however, in the case
of an Option granted to a "covered employee" within the meaning of
Section 162(m)(3) of the Code and the regulations issued
thereunder, the exercise price per Share
3
<PAGE>
shall be at least 100% of the Fair Market Value of a Share,
determined at the time the Option is granted.
(ii) Option Term. The term of each Option shall be fixed
by the Committee at the time the Option is granted, but such term
shall not exceed ten years from the date of grant.
-----------
(iii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, and the method or methods by which, and the form
or forms, including, without limitation, cash, Shares, or any
combination thereof, having a fair market value on the exercise
date equal to the relevant exercise price, in which payment of the
exercise price with respect thereto may be made or deemed to have
been made.
(iv) Effect of Termination of Employment. Death or
Disability.
A. In the event of termination of the employment or other
relationship of a Participant with the Company, a
Subsidiary or an Affiliate following the date of issuance
of an Option to him either by reason of (i) a discharge
by the Company, a Subsidiary or an Affiliate for cause or
(ii) voluntary separation on the part of the Participant
and without the written consent of the Company or his
employing company or companies, any outstanding Option,
whether exercisable or unexercisable, shall be canceled
and terminated forthwith.
B. In the event of termination of the employment or other
relationship of a Participant with the Company, a
Subsidiary or an Affiliate (otherwise than by reason of
his death, disability or Retirement or pursuant to
Section 6(a)(iv)(A)), such Participant (or any person or
entity that acquired such Option by gift or otherwise)
may exercise, within three months after such termination,
any outstanding Option but only to the extent that the
Option is otherwise exercisable at the time of such
termination and only to the extent that the Option does
not by its terms expire prior to the exercise thereof.
Any Option to the extent that it is unexercisable at the
time of such termination shall be canceled and terminated
forthwith. After such three-month period, such Option to
the extent otherwise outstanding shall be deemed canceled
and terminated forthwith.
C. Subject to Section 6(a)(iv)(D), if the employment of a
Participant with the Company, a Subsidiary or an
Affiliate shall be terminated by reason of the
Participant's Retirement, any outstanding Option held by
a Participant shall thereupon become immediately
exercisable in full and the Participant or such person or
entity that acquired such Option by gift or otherwise
shall have the right, at any time within three months
after such Retirement, to exercise such Option to the
extent that such Option does not by its terms expire
prior to the exercise thereof. After such three-month
period, such Option to the extent otherwise outstanding
shall be deemed canceled and terminated forthwith.
D. If a Participant dies while employed by, or engaged in
such other relationship with, the Company, any Subsidiary
or any Affiliate or shall die within three months after
his Retirement, any outstanding Option shall become
immediately exercisable in full and the estate of the
Participant or any person or entity that acquired such
Option by bequest or inheritance or any person or entity
that acquired such Option by gift or otherwise shall have
the right at any time within one year after the death of
the Participant to exercise such Option, but only to the
extent that the Option by
4
<PAGE>
its terms does not expire prior to the exercise
thereof. After such one-year period, such Option to the
extent otherwise outstanding shall be deemed canceled
and terminated forthwith. The Committee in its
discretion may, at any time before or after the grant
of an Option, extend the one-year period for exercise
provided in the first and second preceding sentences by
a period of up to two additional years.
E. In the event of the termination of employment or other
relationship of a Participant by reason of the
Participant's disability, any outstanding Option held by
the Participant or any person or entity that acquired
such Option by gift or otherwise shall thereupon become
immediately exercisable in full and the Participant or
such person or entity that acquired such Option by gift
or otherwise shall have the right to exercise such Option
held by him or it at any time within one year after such
termination, but only to the extent the Option by its
terms does not expire prior to the exercise thereof.
After such one-year period, such Option to the extent
otherwise outstanding shall be deemed canceled and
terminated forthwith. For purposes of the Plan, a
Participant is "disabled" if he or she is unable to
engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment
which can be expected to result in death or which has
lasted or can be expected to last for a continuous period
of not less than 12 months. The Committee shall determine
the form and manner of proof acceptable to establish the
fact of disability.
(v) Incentive Stock Options. The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with
the provisions of Section 422 of the Code, as amended from time to
time, or any successor provision thereto, and any regulations
promulgated thereunder. To the extent Section 422 of the Code, as
amended from time to time, requires certain provisions to be set
forth in a written plan, said provisions are incorporated herein
by reference and, to the extent inconsistent with the Plan, such
provisions shall control. In addition to any other terms and
provisions required by Section 422 of the Code and by Sections
6(a)(i) through (iv), Incentive Stock Options shall be subject to
the following conditions:
A. Incentive Stock Options shall be granted only to
Employees.
B. Except as provided in Section 6(a)(v)(C), the
exercise price of each Share subject to an Incentive
Stock Option shall be at least 100% of the Fair Market
Value of a Share, determined at the time the Option is
granted.
C. A Participant shall not, immediately before an
Incentive Stock Option is granted, own stock representing
more than 10% of the voting power or value of all classes
of stock of the Company or a Subsidiary. This requirement
shall not be applicable if (i) the exercise price of each
Share subject to the Incentive Stock Option to be granted
is at least 110% of the Fair Market Value of a Share,
determined at the time the Option is granted, and (ii)
the Option is not exercisable after the expiration of
five years from the date such Option is granted.
D. To the extent that the aggregate Fair Market Value
(determined at the time(s) of the grant of the Option(s))
of the stock with respect to which Incentive Stock
Options are exercisable for the first time by the
Participant during any calendar year exceeds $100,000,
such Options shall be treated as Non-Qualified Stock
Options.
E. Up to the maximum number of Shares available for the
grant of Awards shall be
5
<PAGE>
available for the grant of Incentive Stock Options.
(b) Stock Appreciation Rights. The Committee is hereby authorized
to grant Stock Appreciation Rights to Participants. Subject to the terms of
the Plan and any applicable Award Agreement, a Stock Appreciation Right
granted under the Plan shall confer on the holder thereof a right to
receive, upon exercise thereof, as determined by the Committee, cash in an
amount of, or Shares having a Fair Market Value equal to, the excess of (i)
the Fair Market Value of one Share on the date of exercise over (ii) the
grant price of the Stock Appreciation Right as specified by the Committee,
which shall not be less than the Fair Market Value of one Share on the date
of the grant of the Stock Appreciation Right. Subject to the terms of the
Plan, the grant price, term, methods of exercise, methods of settlement,
the rights (if any) upon termination of employment or other relationship
and any other terms and conditions of any Stock Appreciation Right shall be
as determined by the Committee at the time of grant and set forth in the
Award Agreement, but in no event shall a Stock Appreciation Right have a
term in excess of ten years. If granted in connection with an Option, such
Stock Appreciation Rights shall be subject to the same terms and conditions
as the related Option. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.
(c) Restricted Stock. The Committee is hereby authorized to grant
Awards of Restricted Stock to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent
with the provisions of the Plan as the Committee shall determine.
(i) Restricted Period. The Restricted Period with respect
to each award of Restricted Stock shall be determined by the
Committee at the time the Restricted Stock is awarded.
(ii) Transferability. Shares of Restricted Stock awarded
to Participants may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Restricted Period applicable to
such Shares, except as hereinafter provided. Except for such
restrictions, the Participant, as owner of such Shares, shall have
all the rights of a stockholder, including (but not limited to)
the right to receive all dividends paid on such Shares (subject to
the provisions of Section 6(c)(iii)) and the right to vote such
Shares.
(iii) Reinvestment of Cash Dividends.
A. Subject to the terms, conditions and
guidelines provided or to be provided by the Committee,
Participants who have been awarded Shares of Restricted
Stock and who have been selected by the Committee
(whether before or after the grant) to be eligible under
this Section 6(c)(iii) shall be entitled to elect in
writing to receive, in lieu of the cash dividends, if
any, that would otherwise be paid on such Shares,
additional Shares of Restricted Stock, which shall be
subject to such restrictions and other terms and
conditions as are established by the Committee in
accordance with Section 3 hereof.
B. The Committee may, in its sole discretion, permit
persons holding shares of Restricted Stock granted
pursuant to plans other than the Plan to elect in writing
to receive, in lieu of the cash dividends, if any, that
would otherwise be paid on such shares, Shares of
Restricted Stock which shall be subject to such
restrictions and other terms and conditions as are
established by the Committee in accordance with Section 3
hereof.
(iv) Registration. Any Restricted Stock granted under the
Plan may be evidenced
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<PAGE>
in such manner as the Committee may deem appropriate, including,
without limitation, book-entry registration or issuance of a
stock certificate or certificates. If any stock certificate is
issued in respect of Shares of Restricted Stock granted under the
Plan, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such Restricted
Stock.
(v) Termination of Employment. Unless the Committee
determines otherwise, if the employment or other relationship of a
Participant with the Company, a Subsidiary or an Affiliate
terminates for any reason (other than death or disability), all
Shares of Restricted Stock theretofore awarded to him shall, upon
such termination, be forfeited and returned to the Company. If a
Participant's employment or other relationship terminates by
reason of death or disability, then any Shares of Restricted Stock
owned by such Participant shall become free of the restrictions
imposed by Section 6(c)(ii), and the Company will deliver such
Shares to him or his legal representative, beneficiary, heir or
transferee within 60 days of the Committee's receipt of evidence
satisfactory to establish such death or disability and, if
applicable, the right of such legal representative, beneficiary,
heir or transferee to receive such Shares.
(vi) Issuance of Shares. As soon as practicable after the
restrictions imposed by Section 6(c)(ii) expire, the Company shall
deliver to the Participant (or his legal representative,
beneficiary, heir or transferee) a certificate, without a legend
referred to in Section 6(c)(iv) hereof, representing the number of
Shares equal to the number of Shares of Restricted Stock as to
which the restrictions have expired.
(d) Phantom Stock. The Committee is hereby authorized to grant
shares of Phantom Stock to Participants. Subject to the terms of the Plan
and any applicable Award Agreement, a share of Phantom Stock granted under
the Plan shall confer on the Participant a right to receive, upon
redemption thereof, as determined by the Committee, cash in an amount of,
or Shares having a Fair Market Value equal to, the Fair Market Value of one
Share on the date of redemption. Subject to the terms of the Plan, the
Committee shall determine at the time of grant the term, methods of
redemption, methods of settlement, the rights (if any) upon termination of
employment or other relationship, whether and on what terms a Participant
shall be entitled to a cash dividend paid with respect to a Share during
the period a share of Phantom Stock is outstanding, and any other terms and
conditions of any share of Phantom Stock. The Committee may impose such
conditions or restrictions on the redemption of any share of Phantom Stock
as it may deem appropriate.
(e) Other Stock-Based Awards. The Committee is hereby authorized
to grant to Participants such other Awards that are denominated or payable
in, valued in whole or in part by reference to, or otherwise based on or
related to, Shares, as are deemed by the Committee to be consistent with
the purposes of the Plan. Subject to the terms of the Plan, the Committee
shall determine the terms and conditions of such Awards at the time of
grant.
Section 7. Award Agreements.
Each Award under the Plan shall be evidenced by an Award Agreement
setting forth the terms and conditions of the Award and executed by the
Company and the Participant.
Section 8. Assignability.
Each Award granted under the Plan shall be transferable only by
will or the laws of descent and distribution. An Award granted under the
Plan shall be exercisable or redeemable, during the lifetime of the
Participant only by the Participant to whom the Award is granted.
Notwithstanding
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<PAGE>
the foregoing, the Committee, in its discretion, may at any time permit,
subject to such terms and conditions as the Committee may impose, the
transfer by gift of an Option by any Participant solely to one or more
members of the Participant's immediate family or to a trust (including a
revocable trust) for the benefit thereof; it being understood that such
Option shall continue to be subject to termination upon the death,
disability or termination of employment of such Participant pursuant to
Sections 6(a)(iv)(A) through (E). Notwithstanding the foregoing, an Option
transferred in accordance with the provisions of this Section 8 by a
Participant to a revocable trust shall be reacquired by the Participant
upon the revocation of such trust.
Except as otherwise provided in this Section 8, no Award granted
under the Plan or any of the rights and privileges thereby conferred shall
be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and no such Award, right, or privilege shall
be subject to execution, attachments or similar process. Upon any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of the Award,
or of any right or privilege conferred thereby, contrary to the provisions
hereof, or upon the levy of any attachment or similar process upon such
Award, right or privilege, the Award and such rights and privileges shall
immediately become null and void.
Section 9. Other Terms and Conditions.
(a) Rights as a Stockholder. A Participant shall have no rights
as a stockholder with respect to Shares covered by an Award until the date
the Participant is the holder of record of such Shares. No adjustment
will be made for dividends or other rights for which the record date is
prior to such date.
(b) No Obligation to Exercise. The grant of an Award shall impose
no obligation upon the Participant to exercise the Award.
(c) Withholding. The Company and any Subsidiary shall be
authorized to withhold from any Award granted or any payment due or
transfer made under any Award or under the Plan, or from any other payment
due to the Participant, the amount (in cash or Shares or any combination
thereof) of withholding taxes due in respect of an Award, its exercise, or
any payment or transfer under such Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company or
Subsidiary to satisfy all obligations for the payment of such taxes.
(d) Transfers to and from the Company, a Subsidiary or an
Affiliate. So long as the Participant remains (or immediately thereafter
becomes) an employee, officer or director of, or a consultant to, the
Company, any Subsidiary or any Affiliate, the termination of such
Participant's employment or other relationship with the Company or any
Subsidiary or any Affiliate shall not be deemed to constitute a termination
of employment or of such other relationship for purposes of the Plan.
(e) Maximum Awards. The maximum number of Shares that may be
issued to any single Participant during any one-year period during the
term of the Plan pursuant to any one or more grants of Options and
Stock Appreciation Rights under the Plan is 100,000 Shares in total.
Section 10. Termination, Modification and Amendments.
(a) The Plan may be terminated at any time or may be modified or
amended from time to time by the affirmative vote of the holders of a
majority of the outstanding shares of the capital stock of the Company
present or represented and entitled to vote at a duly held stockholders'
meeting.
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<PAGE>
(b) The Board of Directors may at any time terminate the Plan or
from time to time make such modifications or amendments of the Plan as it
may deem advisable; provided, however, that the Board of Directors shall
not make any amendments to the Plan without the approval of at least the
affirmative vote of the holders of a majority of the outstanding shares of
the capital stock of the Company present or represented and entitled to
vote at a duly held stockholders' meeting where such approval is required
to comply with Section 162(m) or any other applicable law, regulation or
stock exchange rule.
(c) No termination, modification or amendment of the Plan may
materially adversely affect the rights conferred by an Award without the
consent of the recipient thereof.
Section 11. Recapitalization
The aggregate number of Shares as to which Awards may be granted
to Participants, the number of Shares thereof covered by each outstanding
Award, and the price per share thereof in each such Award, shall all be
proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a subdivision or consolidation of Shares or
other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such Shares, effected without receipt of
consideration by the Company, or other change in corporate or capital
structure; provided, however, that any fractional shares resulting from any
such adjustment shall be eliminated. The Committee may also make the
foregoing changes and any other changes, including changes in the classes
of securities available, to the extent it is deemed necessary or desirable
to preserve the intended benefits of the Plan for the Company and the
Participants in the event of any other reorganization, recapitalization,
merger, consolidation, spin-off, extraordinary dividend or other
distribution or similar transaction, to the extent permitted by Section 422
of the Code.
Section 12. Miscellaneous.
(a) No Right to Employment. No person shall have any claim or
right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ
of, or in any other relationship with, the Company, a Subsidiary or an
Affiliate. Further, the Company, each Subsidiary and each Affiliate
expressly reserves the right at any time to dismiss a Participant free from
any liability or any claim under the Plan, except as provided herein or in
any Award Agreement issued hereunder.
(b) Governing Law . To the extent that federal laws do not
otherwise control, the Plan shall be construed in accordance with and
governed by the laws of the State of New York.
(c) Savings Clause. The Plan is intended to comply in all respects
with applicable laws and regulations,. If any one or more of the provisions
of the Plan shall be held invalid, illegal or unenforceable in any respect
under applicable law and regulation, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and the invalid, illegal or unenforceable provision
shall be deemed null and void; however, to the extent permissible by law,
any provision which could be deemed null and void shall first be construed,
interpreted or revised retroactively to permit the Plan to be construed in
compliance with all applicable laws so as to foster the intent of the Plan.
(d) Allocation of Awards. The Committee shall from time to time
make such allocations of the expense of Awards among the Company and its
Subsidiaries as it shall deem appropriate.
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<PAGE>
(e) Effect on Other Employee Compensation. The Plan shall not be
deemed an exclusive method of providing incentive compensation for the
Employees, nor shall it preclude the Board of Directors from authorizing or
approving other forms of incentive compensation. No Award under the Plan
shall be taken into account in determining a Participant's compensation for
the purposes of any group life insurance or other employee benefit plan.
(f) Deductibility Under Section 162(m) of the Code. Awards granted
under the Plan to Participants whom the Committee reasonably believes may
be subject to Section 162(m) of the Code shall not be exercisable, and
payment under the Plan in connection with such an Award shall not be made,
unless and until the Committee has determined in its sole discretion that
such exercise or payment would not be subject to Section 162(m) of the
Code.
Section 13. Effective Date and Term.
The Plan shall become effective in the Plan Year in which it is
first approved by the holders of a majority of the Shares having voting
power present in person or represented by proxy at a duly constituted
meeting of the stockholders at which a quorum is present. With respect to
the first Plan Year, and any subsequent Plan Years in which stockholder
approval is required to amend the Plan, the Committee may make awards
subject to approval of the holders of the Common Stock at the next Annual
Meeting thereof. The Plan shall terminate on the tenth anniversary of the
effective date of the Plan. No Awards shall be granted after the
termination of the Plan.
10
RESTRICTED STOCK ELECTION PLAN
OF
REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES
(As amended effective March 5, 1997, subject to stockholder approval)
Section 1 - Purpose
This Restricted Stock Election Plan (the "Plan") is designed to
attract and retain the services of selected employees who are in a position
to make a material contribution to the successful operation of the business
of Republic New York Corporation. The Plan provides an election pursuant to
which selected employees who are entitled to and have elected to receive
deferred cash compensation from the Corporation shall be, in addition,
entitled to elect to receive Restricted Stock in lieu of all or a portion
of such deferred compensation.
Section 2 - Definitions
2.1 "Adoption Date" shall mean the date on which this Plan is
adopted by the Board of Directors.
2.2 "Board of Directors" shall mean the Board of Directors of
the Corporation.
2.3 "Cash Portion" shall have the meaning assigned to it in
Section 3.2 hereof.
2.4 "Committee" shall mean the Employee Compensation and Benefits
Committee of the Board of Directors.
2.5 "Corporation" shall mean RNYC or any Subsidiary.
2.6 "Deferred Compensation" shall mean the right, pursuant to a
Participant's Plan, to receive cash compensation in a given year with
respect to a Participant's performance in a prior year.
2.7 "Election" shall have the meaning assigned to it in
Section 3.2 hereof.
2.8 "Market Value" of Stock as of any date shall mean the average
closing price of Stock on the New York Stock Exchange for the period of
five (5) Trading Days commencing with the date on which the Market Value is
to be determined or, if such a day is not a Trading Day, on the first
Trading Day thereafter; provided, however, that the Market Value shall not
be less than the par value per share.
2.9 "Participant" shall mean an employee of the Corporation
selected by the Committee pursuant to Section 7.2 hereof.
2.10 "Participant's Plan" shall mean a bonus or incentive plan,
agreement, arrangement or grant in existence on the Adoption Date or
thereafter created, other than a qualified cash or deferred arrangement
pursuant to Section 401(k) of the Internal Revenue Code, pursuant to which
a Participant is entitled to Deferred Compensation.
2.11 "Plan" shall mean this Restricted Stock Election Plan of Republic
New York Corporation and Subsidiaries.
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2.12 "Plan Year" shall mean each twelve month period beginning
January 1 and ending on December 31.
2.13 "Restricted Period" shall mean the period or periods
designated by the Committee in respect of any shares of Restricted Stock,
or any part or parts thereof issued with respect to any Participant.
2.14 "Restricted Stock" shall mean the shares of Stock which have
been issued to a Participant pursuant to Section 5.1 and 5.5 and subject to
the restrictions referred to in Section 5.3, so long as such restrictions
are in effect.
2.15 "RNYC" shall mean Republic New York Corporation.
2.16 "Stock" shall mean the Common Stock, $5.00 par value per
share, of RNYC.
2.17 "Stock Portion" shall have the meaning assigned to it in
Section 3.2 hereof.
2.18 "Subsidiary" shall mean any corporation or other legal entity,
domestic or foreign, more than 50% of the voting stock of which is owned or
controlled, directly or indirectly, by RNYC.
2.19 "Trading Day" shall mean any day on which the New York
Stock Exchange is open for trading.
Section 3 - Restricted Stock Elections
3.1 Under the Plan, elections to receive Restricted Stock, as
described in Section 3.2 below, may be made by any Participant.
3.2 Within the periods described below, any Participant may inform
the Corporation in writing (the "Election") of the portion of the
Participant's Deferred Compensation which the Participant elects to be
treated as though constituted of cash (the "Cash Portion") and the portion
of such Deferred Compensation with respect to which the Participant elects
to receive in the form of Restricted Stock under Section 5.1 (the "Stock
Portion"). The Participant must make an Election (a) within thirty (30)
days of the Adoption Date, with respect to any Deferred Compensation the
Participant is entitled to on the Adoption Date, and (b) with respect to
Deferred Compensation the Participant shall become entitled to after the
Adoption Date, within fifteen (15) days after the Participant's receipt of
notice from the Corporation setting forth the amount of the Participant's
Deferred Compensation in respect of the most recent period under the
Participant's Plan (or, in the event the Participant shall object in
conformity with the provisions of the Participant's Plan to the information
in such notice, within fifteen (15) days after the final determination of
such amount). The Election, once made by the Participant, shall be
irrevocable. The Election to receive Restricted Stock shall be deemed to
represent the Participant's relinquishment of his rights to the payment in
cash of such Deferred Compensation as consideration for the issuance of the
Restricted Stock.
3.3 Notwithstanding the foregoing, no Election may be made
pursuant to Sections 3.1 and 3.2 if the number of shares to be issued under
Section 5.1 pursuant to such Election would be in excess of the number of
shares of Stock remaining available under Section 6.
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Section 4 - Increases and Decreases of Stock and Cash Portions
After an Election
4.1 After an Election, the Cash Portion shall be increased if, and
to the extent, then provided by the Participant's Plan. After an Election,
the Stock Portion shall be subject to the provisions of the Plan and,
except as provided in Section 4.2, shall not be subject to the provisions
of the Participant's Plan.
4.2 Any decrease in accrued Deferred Compensation pursuant to the
Participant's Plan for any period following an Election shall be allocated
between the Cash Portion and the Stock Portion in proportion to their
relative values, resulting in a reduction in the amount of the deemed cash
in the Cash Portion and a reduction in the number of shares of Restricted
Stock in the Stock Portion. If a fraction of a share would result from any
such reduction in the number of shares, the number of shares shall be
revised to the next lower whole number of shares and an appropriate
adjustment shall be made to the Cash Portion. The value of the Stock
Portion for this purpose shall be equal to the product of (a) the number of
shares of Restricted Stock in the Stock Portion, multiplied by (b) the
Market Value of the Stock on the last day of the period under the
Participant's Plan in which the decrease in Deferred Compensation occurred.
In the case of any reduction in the number of shares of Restricted Stock in
the Stock Portion pursuant to this Section 4.2, the amount of shares
represented by the reduction shall be forfeited by Participant and
cancelled by the Corporation.
Section 5 - Restricted Stock
5.1 (a) A Participant who has made an Election shall receive that
number of shares of Restricted Stock equal to the quotient of (i) the
dollar value of the Stock Portion, divided by (ii) the Market Value of the
Stock as of the date of the Participant's Election. If a fraction of a
share would result from such computation, the number of shares shall be
revised to the next lower whole number of shares and, if there is a Cash
Portion, an appropriate adjustment shall be made to the Cash Portion.
(b) For the purposes of the computations under this Section
5.1, if a Participant shall be issued a share of Restricted Stock which the
Committee determines is a share acquired by the Corporation during the
three week period prior to such issuance, the Market Value of such share
shall mean the Corporation's purchase price (including any applicable
commissions and other such costs for such share). Notwithstanding the
foregoing or the definition of Market Value under Section 2.8, the Market
Value for purposes of the computations under this Section 5.1 shall not be
less that one hundred and thirty percent (130%) of the book value per share
of Stock (determined in accordance with RNYC's generally utilized
accounting principles) as of the end of the quarter prior to the date in
which the Market Value is to be determined.
5.2 Prior to the issuance of Restricted Stock by the Corporation,
the Participant shall, subject to the terms of this Plan, enter into an
agreement with the Corporation in a form specified by the Committee,
agreeing to the terms and conditions of the issuance and to such other
matters as the Committee shall have determined in its sole discretion.
5.3 Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Restricted Period
applicable to such shares, except as hereinafter provided. Except for such
restrictions, the Participant, as owner of such shares, shall have all the
rights of a stockholder, including (but not limited to) the right to vote
such shares. Notwithstanding the foregoing, the Participant's right to
receive dividends declared with respect to such shares shall be subject to
the provisions of Sections 5.5 and 5.10.
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5.4 Shares of Restricted Stock shall be deemed issued on the close
of business on the fifth Trading Day commencing with the date on which the
Market Value of such shares is determined or, if such day is not a Trading
Day, on the first Trading Day thereafter. Any Restricted Stock granted
under this Plan may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration or
issuance of a stock certificate or certificates. If any stock certificate
is issued in respect of shares of Restricted Stock granted under this Plan,
such certificate shall be registered in the name of the Participant, shall
be deposited by him with the Corporation together with a stock power
endorsed in blank and shall bear the following (or a similar legend):
"The transferability of the shares of stock represented hereby is
subject to the terms and conditions (including forfeiture)
contained in Section 5 of the Restricted Stock Election Plan of
Republic New York Corporation and Subsidiaries and an Agreement
entered into between the registered owner and Republic New York
Corporation. A copy of such Plan and Agreement is on file in the
Office of the Secretary of Republic New York Corporation at the
principal office of such Corporation in New York."
5.5 (a) At the time a Participant makes an Election, the
Participant shall also elect either (i) to reinvest cash dividends with
respect to the Restricted Stock to be received pursuant to that Election or
(ii) to be paid such cash dividends. The election under this Section
5.5(a), once made, shall be irrevocable.
(b) A Participant who elects under Section 5.5(a) to
reinvest cash dividends shall receive upon such reinvestment that number of
shares of Restricted Stock equal to the quotient of (i) the cash dividends
declared with respect to the Participant's then outstanding Restricted
Stock, divided by (ii) the Market Value of the Stock as of the ex-dividend
date. If a fraction of a share would result from such computation, the
number of shares shall be revised to the next lower whole number of shares
and, if there is a Cash Portion, an appropriate adjustment shall be made to
the Cash Portion. Restricted Stock issued under this Section 5.5 shall be
subject to the same restrictions as the underlying Restricted Stock and
shall, if represented by a certificate, be deposited with the Corporation
pursuant to Section 5.4.
(c) If a Participant shall be issued a share of Restricted
Stock under this Section 5.5 which the Committee determines is a share
acquired by the Corporation during the three week period prior to such
issuance, the Market Value of such share for purposes of computations under
Section 5.5(b) shall mean the Corporation's purchase price (including any
applicable commissions and other such costs for such share), and an
appropriate adjustment shall be made to the number of Shares of Restricted
Stock to be received under this Section 5.5.
5.6 If a Participant ceases to be an employee of the Corporation
for any reason other than death or disability, all shares of Restricted
Stock theretofore issued to him shall, upon such cessation of employment,
be forfeited and cancelled by the Corporation.
5.7 If a Participant ceases to be an employee of the Corporation
by reason of death or disability, and the period, if any, during which
there may be a decrease in the Participant's accrued Deferred Compensation
under the Participant's Plan has expired, then any shares of Restricted
Stock owned by such Participant shall become free of the restrictions
imposed by Section 5.3, and the Corporation will deliver to him (or his
legal representative, beneficiary or heir) pursuant to Section 5.8, within
60 days after cessation of employment, shares of Stock. If any period
during which there may be a decrease in the Participant's accrued Deferred
Compensation has not expired,
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then any shares of Restricted Stock owned by such Participant shall become
free of the restrictions imposed by Section 5.3 upon the expiration of such
period, and the Corporation will deliver to him (or his legal
representative, beneficiary or heir) pursuant to Section 5.8, within 60
days after expiration of such period, shares of Stock.
5.8 As and when the Restricted Period expires, the Corporation
shall deliver to the Participant (or his legal representative, beneficiary
or heir) a certificate, without the legend referred to in Section 5.4,
representing the number of shares of Stock equal to the number of shares of
Restricted Stock deposited with it by the Participant pursuant to Section
5.4, as to which the Restricted Period has expired. When all restrictions
have expired, the agreement referred to in Section 5.2 shall be terminated.
5.9 The shares of Restricted Stock issued under the Plan shall be
shares of Stock and may be authorized but unissued shares, authorized and
unissued shares reserved for issuance or shares acquired by the Corporation
and held in its treasury, as the Committee may from time to time determine.
5.10 In the event of any change in the outstanding shares of Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares which may be
issued under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of Stock or other
securities received by a Participant with respect to shares of Restricted
Stock will be subject to the same restrictions and shall, if represented by
a certificate, be deposited with the Corporation.
5.11 If the Corporation shall be reorganized with or into another
corporation, each Participant who has received Restricted Stock shall be
required to deposit with the surviving corporation the stock, securities or
other property that he is entitled to receive by reason of his ownership of
Restricted Stock, and such stock, securities or other property shall become
subject to the restrictions imposed by Section 5.3 and shall, if
represented by a certificate, bear an appropriate legend similar in form
and substance to the legend set forth in Section 5.4.
Section 6 - Amount of Shares
Subject to the provisions of Section 5.10, no more than 375,000
shares of Stock may be issued under Section 5.1 during the period ending on
December 31, 2002; provided that any shares of Restricted Stock that have
been forfeited pursuant to Section 5.6 or 5.7 shall be restored to the
status of authorized and unissued shares reserved for issuance pursuant to
the Plan. The number of shares of Stock that may be issued under Section
5.5 shall not be limited.
Section 7 - Administration
7.1 The Plan shall be administered by the Committee. A member of
the Committee shall not participate in any decision directly related to
such member's participation in the Plan. Any member of the Committee may
resign at any time. The Board of Directors may remove any member of the
Committee at any time and may fill any vacancy in the Committee.
7.2 The Committee shall have the exclusive power to select the
Participants in the Plan solely from those employees of the Corporation who
are on the Adoption Date or who thereafter become entitled to receive
Deferred Compensation. The Committee shall notify each Participant in
writing of his status as a Participant within a reasonable time after his
selection.
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7.3 The Committee also shall have the exclusive power to determine
the Restricted Stock; provided, however, that if a Participant's Plan
provides for a decrease or adjustment in the accrued Deferred Compensation
of a Participant for any period following an Election, the Restricted
Period for Restricted Stock issued to such Participant shall not be less
than the period during which such decrease or adjustment may occur. The
Committee shall notify a Participant in writing of the Restricted Period
within the period during which the Participant is entitled to make an
Election hereunder.
7.4 The Committee's interpretation of the Plan shall be final and
binding on each and every Participant.
7.5 The Committee shall have the authority to establish, adopt or
revise such rules or regulations relating to the Plan as it may deem
necessary or advisable for the administration of the Plan.
7.6 All determinations by the Committee as to the Market Value and
number of shares issued from time to time pursuant to this Plan shall be,
in the absence of manifest error, binding on the Participants.
Section 8 - Allocation of Expenses
The Committee shall from time to time make such allocations of the
expense of Restricted Stock issued pursuant to the Plan among RNYC and its
Subsidiaries as it shall deem appropriate.
Section 9 - Effective Date of Plan; Amendment or Termination
9.1 The Plan shall become effective upon adoption by the Board of
Directors. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of Stock within one
year following adoption of the Plan by the Board of Directors, and all
Restricted Stock issued prior to such approval shall be subject thereto. In
the event such approval is withheld, all shares of Restricted Stock which
may have been issued hereunder shall be forfeited by the Participant and
cancelled by the Corporation, and the Plan and all Elections shall become
null and void. In addition, in the event such approval is withheld, a
Participant's Deferred Compensation shall be treated as if it had been
continuously subject to the Participant's Plan.
9.2 The Board of Directors may amend any provision of the Plan at
any time; provided, however, that without the approval of holders of the
Common Stock, no amendment may be made that would increase the maximum
number of shares to be issued under the Plan during the period ending on
December 31, 1997 or extend such period. The Board of Directors shall also
have the right to terminate the Plan at any time. Except with the consent
of the Participant, no amendment, suspension or termination shall impair
the rights of any Participant in any Stock or Restricted Stock issued to
such Participant under the Plan.
Section 10 - Miscellaneous
10.1 The fact that an employee is a Participant shall not confer on
him any right to be retained in the employ of the Corporation.
10.2 No issuance of Stock under this Plan shall be taken into
account in determining a Participant's compensation for the purpose of any
group life insurance or other employee benefit plan.
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10.3 This Plan shall not be deemed an exclusive method of providing
incentive compensation for the employees of the Corporation, nor shall it
preclude the Board of Directors from authorizing or approving other forms
of incentive compensation.
10.4 All expenses and costs in connection with the operation of the
Plan shall be borne by the Corporation.
10.5 The Corporation shall have the right to collect the amount of
any taxes required by law to be withheld by the Corporation under
applicable income tax laws from a Participant by reason of such
Participant's election to receive Restricted Stock in lieu of Deferred
Compensation under the Plan. If directed by a Participant, the Corporation
may withhold and collect the amount of any additional taxes in excess of
the rate mandated by law which the Participant may be obligated to pay in
respect of any such election under the Plan. The Committee, in its sole
discretion, may allow an eligible Participant (or such Participant's legal
representative, beneficiary or heir) to elect to satisfy such obligation in
whole or in part by electing (1) to have the Corporation withhold a portion
of the Stock that would otherwise be delivered to the Participant (or to
the Participant's legal representative, beneficiary or heir) or (2) to
unconditionally agree to deliver Stock already owned by such Participant
having a fair market value equal to the amount of such taxes. The fair
market value of the shares to be withheld or delivered, as the case may be,
shall be the average of the highest and lowest sale price of the Stock on
the New York Stock Exchange Composite Tape on the date that the amount of
the tax to be withheld shall be determined.
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