SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
JSB Financial, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11
1) Title of each class of securities to which transactions applies:
................................................................
2) Aggregate number of securities to which transaction applies:
................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
................................................................
4) Proposed maximum aggregate value of transaction:
................................................................
5) Total fee paid: ...............................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0- 11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: .......................................
2) Form, Schedule or Registration Statement No.: .................
3) Filing Party: .................................................
4) Date Filed: ...................................................
<PAGE>
JSB Financial, Inc. Logo
303 Merrick Road
Lynbrook, New York 11563
(516) 887-7000
March 28, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of JSB Financial, Inc. (the "Company"), the holding
company for Jamaica Savings Bank FSB, which will be held on May 13, 1997 at
10:00 a.m., at the Long Island Marriott Hotel and Conference Center, 101 James
Doolittle Boulevard, Uniondale, New York 11553. (For directions see inside back
cover.)
The attached Notice of the Annual Meeting and the Proxy Statement
describe the formal business to be transacted at the Annual Meeting. Directors
and officers of JSB Financial, Inc. as well as a representative of KPMG Peat
Marwick LLP, the Company's independent auditors, will be present at the Annual
Meeting to respond to any questions that our stockholders may have.
There are three matters to be considered at the Annual Meeting. The
Board of Directors of JSB Financial, Inc. has determined that Proposal 1, the
election of the nominees for directors named in the Proxy Statement and Proposal
2, the ratification of the appointment of independent auditors, are in the best
interests of the Company and our stockholders and the Board unanimously
recommends a vote "FOR" each of these items. For the reasons set forth in the
Proxy Statement, the Board unanimously recommends a vote "AGAINST" Proposal 3,
the stockholder proposal.
YOUR VOTE IS IMPORTANT. You are urged to sign, date and mail the
enclosed proxy card promptly in the postage-paid envelope provided. If you
attend the Annual Meeting, you may vote in person even if you have already
mailed in your proxy card.
On behalf of the Board of Directors and our employees, I wish to thank
you for your continued support. We appreciate your interest.
Sincerely yours,
PARK T. ADIKES
Chairman of the Board
and Chief Executive Officer
<PAGE>
JSB FINANCIAL, INC.
303 Merrick Road
Lynbrook, New York 11563
(516) 887-7000
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 13, 1997
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of JSB Financial, Inc. ("JSB Financial" or the "Company") will
be held at the Long Island Marriott Hotel and Conference Center, 101 James
Doolittle Boulevard, Uniondale, New York 11553, on May 13, 1997, at 10:00 a.m.
The Annual Meeting is for the purpose of considering and voting upon the
following matters:
1. Election of three Directors for terms of three years each;
2. Ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for the year ending
December 31, 1997;
3. Stockholder proposal, opposed by the Board of Directors, as set
forth in this Proxy Statement; and
4. Such other matters as may properly come before the Annual Meeting
or any adjournment thereof.
Pursuant to the Bylaws of the Company, the Board of Directors has fixed
March 17, 1997, as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting and at any adjournments
thereof. Only record holders of the common stock of the Company as of the close
of business on that date will be entitled to vote at the Annual Meeting or any
adjournments thereof. A list of stockholders entitled to vote at the Annual
Meeting will be available at Jamaica Savings Bank FSB, 303 Merrick Road,
Lynbrook, New York, for a period of ten days prior to the Annual Meeting and
also will be available for inspection at the Annual Meeting.
By Order of the Board of Directors
JOANNE CORRIGAN
Secretary
Lynbrook, New York
March 28, 1997
<PAGE>
JSB FINANCIAL, INC.
303 Merrick Road
Lynbrook, New York 11563
(516) 887-7000
-------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 13, 1997
------------
Solicitation and Voting of Proxy
This Proxy Statement ("Proxy Statement") is being furnished to
stockholders of JSB Financial, Inc. ("JSB Financial" or the "Company") in
connection with the solicitation by the Board of Directors of proxies to be used
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at the
Long Island Marriott Hotel and Conference Center, 101 James Doolittle Boulevard,
Uniondale, New York 11553, on May 13, 1997, at 10:00 a.m., and at any
adjournments thereof. The 1996 Annual Report to Stockholders, including the
financial statements for the year ended December 31, 1996, accompanies this
Proxy Statement.
This Proxy Statement and the accompanying proxy card are initially being
mailed to stockholders on or about March 28, 1997.
Regardless of the number of shares of common stock owned, it is
important that stockholders be represented by proxy or present in person at the
Annual Meeting. Stockholders are requested to vote by completing the enclosed
proxy card and returning it, signed and dated, in the enclosed postage-paid
envelope. Stockholders are urged to indicate their vote in the spaces provided
on the proxy card. Proxies solicited by the Board of Directors of JSB Financial
will be voted in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted "FOR" the election of each of
the nominees for Director named in this Proxy Statement, "FOR" the ratification
of the appointment of KPMG Peat Marwick LLP as independent auditors of the
Company for the year ending December 31, 1997 and "AGAINST" the stockholder
proposal as discussed herein.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
A proxy may be revoked at any time prior to its exercise by the filing
of written notice of revocation with the Secretary of the Company, by delivering
to the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting, filing a notice of revocation with the Secretary and voting in
person. However, if you are a stockholder whose shares are not registered in
your own name, you will need additional documentation from your recordholder to
vote personally at the Annual Meeting.
The cost of solicitation of proxies in the form enclosed herewith will
be borne by JSB Financial. In addition to the solicitation of proxies by mail,
Morrow & Co., Inc., a proxy solicitation firm, will assist the Company in
soliciting proxies for the Annual Meeting and will be paid a fee estimated to be
$4,000, plus out-of-pocket expenses. Proxies may also be solicited personally or
by telephone or telegraph by Directors, officers and employees of the Company or
Jamaica Savings Bank FSB (the "Bank"), without additional compensation therefor.
JSB Financial will also request persons, firms and corporations holding shares
in their names, or in the name of their nominees, which are beneficially owned
by others, to send proxy material to and obtain proxies from such beneficial
owners, and will reimburse such holders for their reasonable expenses in doing
so.
<PAGE>
Voting Securities
The securities which may be voted at the Annual Meeting consist of
shares of common stock of JSB Financial (the "Common Stock"), with each share
entitling its owner to one vote on all matters to be voted on at the Annual
Meeting except as described below. The close of business on March 17, 1997 has
been fixed by the Board of Directors as the record date (the "Record Date") for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournments thereof. The total number of shares of
Common Stock outstanding on the Record Date was 9,824,884 shares.
Record holders of Common Stock that is beneficially owned by a person,
in excess of 10% of the outstanding shares of Common Stock (the "Limit") are not
entitled to vote any shares held in excess of the Limit, as determined in
accordance with the Company's Certificate of Incorporation. The presence, in
person or by proxy, of at least a majority of the total number of shares of
Common Stock, entitled to vote (after subtracting any shares held in excess of
the Limit pursuant to the provisions of Article Fourth of the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Annual
Meeting. In the event there are not sufficient votes for a quorum at the time of
the Annual Meeting, the Annual Meeting may be adjourned in order to permit the
further solicitation of proxies.
As to Proposal 1, the election of Directors, the proxy card being
provided by the Board of Directors enables a stockholder to vote, "FOR" the
election of the nominees proposed by the Board, or to have their "VOTE WITHHELD"
for one or more of the nominees being proposed. Under Delaware law and the
Company's Bylaws, Directors are elected by a plurality of votes cast, without
regard to either (i) broker non-votes, or (ii) proxies marked "VOTE WITHHELD".
As to Proposal 2, the ratification of independent auditors, and Proposal
3, the stockholder proposal and concerning all other matters that may properly
come before the Annual Meeting, by checking the appropriate box, a stockholder
may: (i) vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN"
from voting on such item. Under the Company's Bylaws, unless otherwise required
by law, all other matters shall be determined by a majority of the votes cast,
without regard to either (a) broker non-votes, or (b) proxies marked "ABSTAIN"
as to that matter.
Proxies solicited hereby will be returned to the proxy solicitors or the
Company's transfer agent, and will be tabulated by inspectors of election,
designated by the Board of Directors, who will not be employees or Directors of
the Company or any of its affiliates. After the Annual Meeting, the proxies will
be returned to the Company for safekeeping.
<PAGE>
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the Company's
outstanding shares of Common Stock on March 11, 1997. Persons and groups owning
in excess of 5% of the Company's Common Stock are required to file certain
reports regarding such ownership with the Company and with the Securities and
Exchange Commission ("SEC"), in accordance with the Securities Exchange Act of
1934 (the "Exchange Act"). Other than listed below, the Company is not aware of
any person or group that owned more than 5% of the Company's Common Stock as of
March 11, 1997.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
Title of Class of Beneficial Owner Beneficial Ownership Class(1)
- -------------- ------------------- -------------------- ----------
<S> <C> <C> <C>
Common Stock.......... Jamaica Savings Bank FSB 1,028,331(2) 10.5%
Employee Stock Ownership
Plan and Trust ("ESOP")
C/O Jamaica Savings Bank FSB
303 Merrick Road
Lynbrook, New York 11563
- ------------
<FN>
(1) The total number of shares of Common Stock outstanding on March 11, 1997
was 9,823,503 shares.
(2) An unrelated corporate trustee, Marine Midland Bank, has been appointed for
the ESOP. The ESOP trustee, subject to its fiduciary duty, must vote all
allocated shares held in the ESOP in accordance with the instructions of the
participating employees. As of March 11, 1997 1,014,165 shares have been
allocated to participants' accounts. Under the ESOP, unallocated shares held in
the suspense account will be voted in a manner calculated to most accurately
reflect the instructions it has received from participants regarding the
allocated stock, so long as such vote is in accordance with the provisions of
the Employee Retirement Income Security Act of 1974, as amended.
</FN>
</TABLE>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The number of Directors of JSB Financial is currently set at ten (10).
All ten members of the Board of Directors of JSB Financial also serve as
Directors of the Bank. Directors are elected for staggered terms of three years
each, with a term of office of only one class of Directors expiring in each
year. Directors serve until their successors are elected and qualified. No
person being nominated as a Director is being proposed for election pursuant to
any agreement or understanding between any person and JSB Financial, other than
as described under "Executive Compensation - Employment Agreements."
The three nominees proposed for election at the Annual Meeting are
Messrs. Alfred F. Kelly, Howard J. Dirkes, Jr. and Ms. Cynthia Gibbons, who have
been nominated for a three year term which will expire during the year 2000. All
three of the nominees named are also presently Directors of the Bank. It is
intended that the shares represented by the enclosed proxy, if executed and
returned, will be voted "FOR" the election of all three nominees, unless
otherwise indicated by marking "VOTE WITHHELD" on the proxy card. In the event
that any such nominee is unable or declines to serve for any reason, it is
intended that proxies will be voted "FOR" the election of the balance of those
nominees named and "FOR" such other persons as shall be designated by the Board
of Directors. The Board of Directors has no reason to believe that any of the
persons named will be unable or unwilling to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF ALL NOMINEES NAMED IN THE PROXY STATEMENT
<PAGE>
Information With Respect to Nominees and Continuing Directors
The following table sets forth the names of nominees and continuing
Directors, their ages, a brief description of their recent business experience,
including occupations and employment, certain directorships held by each and the
year in which each became a Director of the Company.
<TABLE>
<CAPTION>
Name and Principal Occupation at Expiration
Present and for the Past Five Years Director of Current Age at
Directorships Since Term 12/31/96
- ------------------------------------------------------------- -------- ---------- --------
<S> <C> <C> <C>
Nominees:
Alfred F. Kelly 1990 1997 66
Mr. Kelly is a Director of the Company and has
been a Director of the Bank since 1971. He retired as
President of Canada Life Insurance Company of New York
in 1992, where he continues as a director.
Howard J. Dirkes, Jr. 1990 1997 65
Mr. Dirkes is a Director of the Company and has
been a Director of the Bank since 1972. He is the
President of Lo Temp Sales Corporation, an importer
and marketing distributor of commercial refrigeration
equipment, a position he has held since 1956.
Cynthia Gibbons* 1997 1997 40
Ms. Gibbons is a Director of the Company and
the Bank. She is a Vice President of Koeppel Tener Real
Estate Services, Inc., a firm specializing in real estate
consulting, appraisal and due diligence services. Prior,
Ms. Gibbons was an Appraisal Associate for Chemical
Bank, a national commercial banking firm and Vice
President of J.A. Cowan & Associates, Inc., a real estate
valuation firm. Ms. Gibbons holds a MBA and a MAI
designation from the Appraisal Institute.
Continuing Directors:
Richard W. Meyer 1990 1998 77
Mr. Meyer is a Director of the Company and has
been a Director of the Bank since 1963. He retired as
a director of USLife Income Fund, Inc. during 1991.
Park T. Adikes 1990 1998 65
Mr. Adikes is Chairman of the Board and Chief
Executive Officer of the Company and the Bank. He
has been a Director of the Bank since 1964 and
Chairman of the Bank since 1975. Mr. Adikes joined
the Bank in 1954 and became the Chief Executive
Officer of the Bank in 1970.
Arnold B. Pritcher 1990 1998 71
Mr. Pritcher is a Director of the Company and
has been a Director of the Bank since 1971. He is
President of International Gem Corporation, a
position he has held since 1950.
<FN>
* Ms. Gibbons was elected by the Board on March 11, 1997 to replace Director
Joseph J. Blaine, who died on February 11, 1997. Ms. Gibbons is the daughter
of James E. Gibbons, Jr., a Director of the Company.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Occupation at Expiration
Present and for the Past Five Years Director of Current Age at
Directorships Since Term 12/31/96
- ------------------------------------------------------------- -------- ---------- --------
<S> <C> <C> <C>
James E. Gibbons, Jr. 1990 1999 79
Mr. Gibbons is a Director of the Company and
has been a Director of the Bank since 1963. He is
President of Sackman-Gibbons Associates, a real
estate consulting firm in East Meadow, New York.
He is also a Director of Eastern Realty Investment
Corporation.
Paul R. Screvane 1990 1999 82
Mr. Screvane is a Director of the Company
and has been a Director of the Bank since 1967. He
retired as Chairman and Chief Executive Officer of
Federal Metal Maintenance Inc. during 1992.
Edward P. Henson 1990 1999 57
Mr. Henson is President and a Director of the
Company and the Bank and has served in both these
capacities since 1990. Mr. Henson served as
Executive Vice President (Operations) from 1987
to 1990.
Joseph C. Cantwell 1996 1999 66
Mr. Cantwell has been a Director of the
Company and the Bank since 1996. He retired as
Vice President of Bankers Trust Company in 1988
after almost 40 years of service. Mr. Cantwell is
currently a consultant to a number of firms in the
financial services industry.
</TABLE>
Meetings of the Board and Committees of the Board
During 1996, the Board of Directors of the Company held twelve regular
meetings. The Board of Directors of the Company meets monthly and may have
additional special meetings upon the request of one third of the Directors or
the Chairman. The Board of Directors of the Company maintains various committees
either at the Bank or Company level, including, but not limited to, the
Executive Committee, Audit Committee, Nominating Committee and Compensation
Committee, which are discussed below. No Director of the Company attended fewer
than 75% of the aggregate of the total number of Board meetings held and the
total number of committee meetings on which such Director served during 1996.
Executive Committee - The Executive Committee, comprised of Directors
Gibbons, Meyer, Screvane, and Kelly, meets as needed and is authorized to act
for the Board between regular meetings with most powers of the Board. The
Executive Committee did not meet in 1996.
Audit Committee - The Audit Committee, comprised of Directors Kelly
(Chairman), Pritcher, Dirkes and Cantwell, meets on call and is responsible for
reviewing and reporting to the Board on the Company's financial condition,
reviewing the audit reports from its internal and independent auditors and
analyzing loan review reports. The Audit Committee held eight meetings during
1996.
Nominating Committee - The Nominating Committee for the 1997 Annual
Meeting, comprised of Directors Adikes, Meyer and Screvane, reviews any
nominations to the Board of Directors made by stockholders of the Company and
recommends to the Board of Directors, nominees for election to the Board. The
Company's Bylaws also provide for stockholder nominations of directors. The same
provisions require such nominations to be made pursuant to timely written notice
to the Secretary of the Company. Such notice must contain all
<PAGE>
information relating to the nominee required to be disclosed by the Company's
Bylaws and by the SEC. See "Additional Information - Notice of Business to be
Conducted at the Annual Meeting". The Nominating Committee met once for the
nominations discussed herein, for this Annual Meeting.
Compensation Committee - The Compensation Committee was comprised of all
seven of the Company's outside Directors for 1996, including, Directors; Gibbons
(Chairman), Meyer, Screvane, Kelly, Pritcher, Dirkes and Cantwell, who have
never been employed by the Company or the Bank. The Compensation Committee
presents to the Board for ratification, the compensation of the Company's Chief
Executive Officer, and approves the compensation paid to other senior
executives. The Compensation Committee met once in 1996. See "Report of the
Compensation Committee on Executive Compensation".
PROPOSAL 2. RATIFICATION OF INDEPENDENT AUDITORS
The Company's independent auditors for the year ended December 31, 1996,
were KPMG Peat Marwick LLP. The Company's Board of Directors has reappointed
KPMG Peat Marwick LLP to continue as independent auditors for JSB Financial for
the year ending December 31, 1997 subject to ratification of such appointment by
the stockholders. Representatives of KPMG Peat Marwick LLP are expected to
attend the Annual Meeting. They will be given an opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions from stockholders present at the Annual Meeting.
Unless marked to the contrary, the shares represented by the enclosed
Proxy will be voted "FOR" ratification of KPMG Peat Marwick LLP as the
independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP
AS THE INDEPENDENT AUDITORS OF THE COMPANY
PROPOSAL 3. STOCKHOLDER PROPOSAL
A stockholder has submitted the proposal set forth below. The name,
address and shareholdings of the proponent will be furnished upon request to the
Secretary of the Company.
RESOLVED: That it is recommended that the Board of Directors of JSB
Financial, Inc. engage the services of a leading investment banking firm
specializing in financial institutions, with particular expertise in thrift
institutions, to make recommendations to the Board of Directors as to specific
actions to be taken to enhance shareholder value. These recommendations could
include among others: a large share repurchase program; the sale or acquisitions
of branches or the active solicitation of merger overtures from other financial
institutions.
STOCKHOLDER'S STATEMENT IN SUPPORT OF PROPOSAL
Long-tenured directors and management of JSB Financial continue to miss
business opportunities. Some say that the institution has developed a reputation
as being unwilling to welcome necessary changes to enhance shareholder value.
During 1995 and the first 10 months of 1996, JSB Financial stock, including
dividends, has increased 37.4% and 16.6%, respectively while the Media General
S&L Peer Group Index has increased 58.4% and 22.2%. During the calendar year
1995 and the first three quarters of 1996 annualized, JSB Financial has produced
a return on equity of 6.7% and 7.7%. Notwithstanding the above, the directors
paid the CEO for 1995 a special year-end performance bonus of $250,000 on top of
a $700,000 salary. Annual plus long-term compensation for the CEO totaled
$1,249,672 for 1995. SNL, a bank reporting firm, ranks the compensation of Park
T. Adikes in the 99th percentile of their selected Peer Group. While the board
claims it is aware of its fiduciary and legal responsibilities, it seems
incapable of initiating actions independent of management. While management
"..has previously stated that it would consider opportunities.." to "..be
acquired by another institution, `if the price is right'", it has been unwilling
to initiate actions and has sent clear signals that it does not welcome being
approached. If the board were truly interested in "..the wishes of the majority
of our stockholders", it would retain an investment banker to provide the
initiative and expertise which it apparently lacks. A rising tide has lifted the
value of all New York thrifts. Managements that have been proactive in enhancing
shareholder value have seen their shares rise much more than JSB. All NY Thrifts
that have been public from 1991 - 1995, (exclusive of those acquired and
excluding dividends) rose 383.6%, while JSB increased only 79.4% during the same
period. There is a consequence to lack of strategy and laissez-faire management.
<PAGE>
Being well-capitalized and in sound financial condition are not accomplishments
for which a local thrift management should be rewarded given the current
favorable banking environment. Management can certainly continue to focus its
efforts on improved corporate performance while being sufficiently open to
entertain advice from outside knowledgeable consultants.
Unless marked to the contrary, the shares represented by the enclosed
proxy will be voted "AGAINST" the stockholder proposal.
OPPOSING STATEMENT OF THE JSB FINANCIAL, INC. BOARD OF DIRECTORS
TO STOCKHOLDER PROPOSAL
THE BOARD OF DIRECTORS BELIEVES THAT THE STOCKHOLDER'S PROPOSAL IS UNNECESSARY
AND THEREFORE CONTRARY TO THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS. THE BOARD ALSO BELIEVES THAT THE STOCKHOLDER'S STATEMENT IN
SUPPORT OF THE PROPOSAL IS MISLEADING.
Since its initial public offering in 1990, the Company has steadfastly
increased stockholder return. The Company has remained continuously profitable
while at the same time having increased dividends by 250% from 10 cents per
share per quarter in 1990 to 35 cents in the first quarter of 1997.
The proponent has drafted the proposal so that it might lead
stockholders to believe that the Company does not address the recommendations
made. The Board, in the exercise of its fiduciary duties, carefully considers
various strategic actions, including those recommended by the proponent, that it
believes would best serve the interests of the stockholders. Therefore, the
Board believes the proposal is unnecessary.
The Company's comparative performance as presented by the proponent and
the stock performance graph included on page 16 have certain limitations that we
wish to address. The performance of both the peer group and the Nasdaq National
Market (the "broad market") include the impact of stock price run-ups resulting
from acquisition activity. In addition, the significant volume of initial public
stock offerings made by financial institutions over the past five years and the
price escalations that generally followed, further skew the return data in favor
of the peer group and the broad market. While it is not practicable to eliminate
the impact of the acquisition activity, in an attempt to remove some of the
inequity, we have included an extended performance graph on page 17 which
presents the Company's performance in comparison to its peers and the broad
market from the time of the Company's initial stock offering. Based on this time
period, the Company's performance is substantially equal to that of its peers
and above that of the broad market.
The proponent failed to note the most recent performance of all New York
thrifts that were public from 1991 through 1995. Assuming an equal dollar amount
was invested in each company, the stock performance for year end 1995 to year
end 1996 of these New York thrifts increased by 20.6% while the Company's stock
value increased by 24.0%. This reflects the price increase at year end 1996 to
$38.00 per share from the year end 1995 price of $31.625, plus dividends. This
fact further supports the Board's contention that the proponent's statement in
support of the proposal is misleading.
The Board believes that compensation of the Chief Executive should take
into account both short-term and long-term corporate performance. Given the
consistent success of Jamaica Savings Bank over the many years that Mr. Adikes
has been the Chairman, the Board believes that his compensation package is
appropriate.
A more extreme proposal was made by the proponent at the Company's 1996
Annual Meeting and a relatively identical proposal was presented at the
Company's 1995 Annual Meeting. The Company's stockholders clearly rejected each
of these proposals with 78% of the votes cast against the 1996 proposal, and 84%
of the votes cast against the 1995 proposal.
This definitively indicates the will of a majority of our stockholders.
FOR THE REASONS STATED ABOVE, THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE "AGAINST" ADOPTION OF THIS PROPOSAL.
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 11, 1997, as to
shares of Common Stock beneficially owned by Directors, nominees named under
"Election of Directors" and "Named Executive Officers" (as defined on page 12,
herein) individually and by Executive Officers and Directors as a group.
Ownership information is based upon information furnished by the respective
individuals.
<TABLE>
<CAPTION>
Shares of Common Stock Percent of
Name Beneficially Owned (1) Class (2)
---- -------------------------- -----------
<S> <C> <C>
Directors:
Park T. Adikes ........................................ 400,920 (3) 4.1%
Edward P. Henson ...................................... 111,950 (3) 1.1
James E. Gibbons, Jr. ................................. 59,001 (4) - (5)
Richard W. Meyer ...................................... 40,701 (4) - (5)
Paul R. Screvane ...................................... 38,841 (4) - (5)
Alfred F. Kelly ....................................... 37,076 (4) - (5)
Arnold B. Pritcher .................................... 76,351 (4) - (5)
Howard J. Dirkes, Jr. ................................. 49,501 (4) - (5)
Joseph C. Cantwell .................................... 9,200 (6) - (5)
Cynthia Gibbons ....................................... 1,000 (7) - (5)
Named Executive Officers:
John F. Bennett ....................................... 75,428 (3) - (5)
Ronald C. Spielberger ................................. 67,506 (3) - (5)
Thomas R. Lehmann ..................................... 34,330 (3) - (5)
All Executive Officers and Directors of the
Company as a group (19 persons) ...................... 1,244,801 (8) 7.6(9)
- ------------
<FN>
Note: The above table does not include the 158,000 options granted to Executive
Officers and Directors pursuant to the 1996 Stock Option Plan (the "1996 Option
Plan"), on January 1, 1997, which shares are not exercisable until they vest on
July 1, 1997.
(1) Each person effectively exercises sole (or shared with spouse or other
immediate family member) voting and dispositive power as to shares reported.
Excluded are 166,848 shares held by a trust which was established for the
Benefit Restoration Plan (the "Restore Plan") in connection with the Company's
benefit plans. Shares held in this trust are voted at the direction of the
Employee Benefits Committee of the Bank's Board of Directors. The assets held by
the trust, including the Company's shares, are subject to the claims of the
general creditors of the Company and the Bank.
(2) The total number of shares of Common Stock outstanding on March 11, 1997
was 9,823,503.
(3) Includes 150,396, 16,000, 39,293, 10,000 and 16,400 shares for Messrs.
Adikes, Henson, Bennett, Spielberger and Lehmann, respectively, which may be
acquired through the exercise of stock options granted and exercisable under the
JSB Financial, Inc. 1990 and 1996 Stock Option Plans. Does not include 20,000,
16,000, 10,000, 10,000 and 10,000 options granted on January 1, 1997, to Messrs.
Adikes, Henson, Bennett, Spielberger and Lehmann, respectively, which vest on
July 1, 1997.
(4) Includes 25,000 shares subject to options granted and exercisable under the
1990 Stock Option Plan (the "1990 Option Plan") and 4,000 shares subject to
options granted under the 1996 Option Plan. Does not include 4,000 options
granted on January 1, 1997, which vest on July 1, 1997.
(5) Is less than 1.0% of the Company's voting securities, when rounded to the
nearest tenth.
(6) Includes 9,000 shares subject to options granted and exercisable under
the 1996 Option Plan. Does not include 4,000 options granted on January 1,
1997, which vest on July 1, 1997.
(7) Does not include 9,000 options granted to Ms. Gibbons on March 11, 1997,
which vest on September 12, 1997.
(8) Includes 499,965 shares subject to exercisable options.
(9) Percent calculated without regard to 499,965 shares subject to exercisable
options.
</FN>
</TABLE>
<PAGE>
DIRECTORS' COMPENSATION
Directors' Fees. All Directors and the Director Emeritus of the Bank
received a fee of $1,000 for each monthly Board meeting attended and for the
Annual Meeting. All Directors, except those who are officers of the Bank or the
Company and the Director Emeritus, received a flat fee of $6,000 per quarter.
The Chairman of the Audit Committee received a flat annual fee of $10,000 while
members of that committee received a flat annual fee of $7,000. In addition to
the Chairman of the Bank's Mortgage Committee receiving an annual fee of
$10,000, the Chairman and the Bank's Mortgage Committee members received a fee
of $750 for each meeting attended. All members of the Executive Committee,
Finance Committee and the Bank's Community Reinvestment Act Committee received a
fee of $750 for each meeting attended. The Chairman of the Bank's Employee
Benefits Committee received an annual fee of $2,500 while members received an
annual fee of $1,500. The Chairman of the Compensation Committee received a flat
annual fee of $2,500 while members of the Compensation Committee received a flat
annual fee of $1,500. Directors of the Bank also serve as Directors of the
Company but do not receive additional fees for service as Directors of the
Company.
Outside Directors' Consultation and Retirement Plan. Under the 1990
Jamaica Savings Bank FSB Outside Directors' Consultation and Retirement Plan
(the "Consultation Plan"), any Director who has served as an outside Director of
the Company or the Bank for 15 years is a participant in the Consultation Plan.
A consulting Director shall be paid his/her annual benefit under the
Consultation Plan in equal monthly installments for the lesser of (a) the number
of months which such participant has agreed to act as a consulting Director or
(b) one-half of the number of months such participant has served as an outside
Director for the Bank up to a maximum of 120 months. The annual benefit shall be
an amount equal to the Director's retainer fee and the fees payable for
attendance at 12 regular Directors' meetings determined as of the participant's
termination date.
The 1990 Stock Option Plan for Outside Directors. Under the JSB
Financial, Inc. 1990 Stock Option Plan for Outside Directors (the "1990
Directors' Option Plan"), certain outside Directors were granted, effective June
27, 1990, non-statutory stock options to purchase 25,000 shares of Common Stock.
In addition, the active Director Emeritus was granted non-statutory stock
options to purchase 10,000 shares of Common Stock. The exercise price per share
of each option granted under the 1990 Directors' Option Plan is $10.00 per
share. The remaining 153,000 unexercised options granted under the 1990
Directors' Option Plan were exercisable at December 31, 1996. There were no
options available for grant under the 1990 Directors' Option Plan during 1996.
The 1996 Option Plan. Under the 1996 Option Plan, on an annual basis,
each member of the Board of Directors, who is not an officer or employee of the
Company or the Bank, is granted nonstatutory common stock options to purchase
4,000 shares of the common stock, each active Director Emeritus is granted 2,000
options and individuals who become directors are granted 5,000 options. On
January 1, 1996, members of the Board of Directors and the active Director
Emeritus of the Company were granted options to purchase an aggregate of 39,000
shares (with dividend equivalent rights ("DERs") discussed below) at an exercise
price of $31.625, (the market closing price of the Company's common stock on the
business day prior to grant). See Stock Ownership of Management, on page 8,
herein. These options became exercisable on November 14, 1996. Simultaneously
with the grant of options, "limited rights" with respect to the shares covered
by the options were granted. These limited rights are subject to terms and
conditions and can be exercised only in the event of a change in control, as
defined in the 1996 Option Plan, of the Company. Upon the exercise of a limited
right, the holder shall receive from the Company a cash payment equal to the
difference between the exercise price of the option and the fair market value of
the underlying shares of common stock. The Company amended the 1996 Option Plan,
as originally adopted, to allow for the cash payment for the DER to option
holders rather than have the DER reduce the exercise price of the option. This
change separated the cost of the DER from the cost of the option, and is
expected to result in less expense volatility. The option period for each option
grant will expire no later than ten years from the date of the grant.
EXECUTIVE COMPENSATION
Under rules established by the SEC, the Company is required to provide
certain data and information in regard to the compensation and benefits provided
to the Company's Chief Executive Officer and other Executive Officers of the
Company. The disclosure requirements for the Chief Executive Officer and other
Executive Officers include the use of tables and a report explaining the
rationale and considerations that led to fundamental compensation decisions
affecting those individuals. In fulfillment of this requirement, the executive
compensation committee of the Bank (the "Compensation Committee"), at the
direction of the Board of Directors has prepared the following report for
inclusion in this Proxy Statement.
Report of the Compensation Committee on Executive Compensation
Cash compensation to the Executive Officers of the Company is paid by
the Bank; therefore, the Compensation Committee of the Board of Directors of the
Bank fulfills this function and is responsible for establishing the compensation
levels and benefits for Executive Officers of the Bank, who also serve as
Executive Officers of the Company. All independent outside Directors are members
<PAGE>
of the Compensation Committee of the Bank. The Compensation Committee annually
reviews and determines the compensation of the Chief Executive Officer and
approves the compensation paid to the other executives. The Compensation
Committee is also responsible for establishing the policies which govern
employee annual compensation and stock ownership programs. The compensation
structure is aimed at establishing levels of compensation designed to reward
performance and to retain and provide incentive to the Company's Executive
Officers. The Compensation Committee believes that any compensation in excess of
$1.0 million to Executive Officers is not expected to result in any significant
loss of tax benefits to the Company.
Each Executive Officer has an employment agreement with the Bank, that
has been guaranteed by the Company. See "Employment Agreements." The
Compensation Committee approves any perquisites to Executive Officers.
Base Salaries and Performance Bonuses. In determining salary levels of
the Executive Officers, the Compensation Committee considers the entire
compensation package, including stock plans. Rather than establishing specific
performance goals, salary levels and performance bonuses are aimed at reflecting
the overall financial performance of the Company and the performance of each
Executive Officer over time, which evaluation is subjective. The Compensation
Committee reviews various published surveys of compensation paid to executives
performing similar duties for financial institutions and their holding
companies, with focus placed on financial institutions in the Bank's market
area. Thus, the peer group utilized for comparison of compensation includes
some, but not all, of the companies included in the peer group for the Stock
Performance Graph. While salary levels are not targeted to correspond to any
high, median or low end of the companies surveyed, these surveys serve as a
guide for the Compensation Committee in determining salary levels. In December
of each year, the Compensation Committee determines the level of salary
adjustment, if any, to take effect on January 1 of the following year for all
officers of the Bank.
Performance bonuses, if any, are based on a combination of a percentage
of salary and dollar amounts, and at the discretion of the Compensation
Committee, may vary. The Compensation Committee granted a midyear performance
bonus to all employees, including Executive Officers based on 5.0% of annual
salary. In addition, a year end performance bonus was granted to all employees,
including Executive Officers, except Mr. Adikes and Mr. Henson, based on 15.0%
of annual salary. Mr. Adikes received a year-end performance bonus of $250,000
or 35.7% of his 1996 salary and Mr. Henson received a year-end performance bonus
of $60,000 or 17.1% of his 1996 salary.
Stock Programs. The Board of Directors of JSB Financial, Inc., the
Compensation Committee and management believe that significant employee stock
ownership is a major incentive in maximizing Company profitability and
therefore, aligning the interests of employees and stockholders. Therefore, the
Company sponsors an ESOP and has implemented stockholder approved Option Plans.
The remaining options granted pursuant to the 1990 Option Plan vested during
1995. Contributions to the ESOP are currently based on approximately 6% of
employees' base salary.
During 1996, the Company's stockholders approved the 1996 Option Plan,
under which 126,000 options were granted to all executive officers as a group.
Stock options under such plan were allocated by the Employee Benefits Committee
of the Bank, on a discretionary basis, after considering the practices of other
financial institutions, as verified by external surveys, and reviewing the
executive officers' level of responsibility and contributions to the Company and
the Bank. See "Option/SAR Grants in 1996". Such options were granted at the
closing market price of the Common Stock, as of December 31, 1995, of $31.625.
<PAGE>
These options became exercisable on November 14, 1996, six months from the date
of stockholder approval. All options granted under the 1996 Option Plan will
expire no later than ten years from the date on which the option was granted.
The Compensation Committee considers prior grants when determining stock
compensation.
The Company amended the 1996 Option Plan, as originally adopted, to
allow for the cash payment for the DER to option holders; rather than have the
DER reduce the exercise price of the option. This change separated the cost of
the DER from the cost of the option, and is expected to result in less expense
volatility.
Compensation. In determining salary level and performance bonuses for
Mr. Adikes, the Compensation Committee reviews indicators of the Company's
financial strength, efficiency, and profitability. The Compensation Committee
exercises its judgment and discretion, rather than attempting to set absolute
targets for any of the ratios reviewed in connection with the above indicators,
in determining salary and/or performance bonus.
Mr. Adikes' 1996 salary continued at its 1995 and 1994 level of
$700,000. Total performance bonuses paid to Mr. Adikes during 1996 were
$285,000, which equaled his 1995 and 1994 bonuses. Mr. Adikes 1996 total bonuses
were comprised of a $250,000 special year-end performance bonus and a $35,000
midyear performance bonus. The Compensation Committee determined Mr. Adikes
performance bonus based on the criteria discussed above which encompassed his
overall performance. The Compensation Committee believes the placement of Mr.
Adikes' salary and performance bonus at the high end of salaries of the
companies surveyed, as supported by evaluation of his services and performance,
is clearly appropriate and in the best interest of our stockholders.
The Compensation Committee:
James E. Gibbons, Jr. - Chairman
Paul R. Screvane
Richard W. Meyer
Alfred F. Kelly
Arnold B. Pritcher
Howard J. Dirkes, Jr.
Joseph C. Cantwell
<PAGE>
Summary Compensation Table
The following table sets forth the compensation paid by the Bank for
services rendered during the three years ended December 31, 1996, 1995 and 1994,
respectively, to the Chief Executive Officer and the four highest paid Executive
Officers who received more than $100,000 in salary and bonus (the "Named
Executive Officers"). JSB Financial has not paid any compensation other than
through the Bank.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Securities
Restricted Underlying All Other
Stock Options/ Compensa-
Name and Principal Position Year Salary Bonus Awards(1) SARs(#)(2) tion(3)
- --------------------------- ---- ------ ----- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Park T. Adikes 1996 $700,000 $285,000 - 20,000 $263,932
Chairman of the Board, Chief 1995 700,000 285,000 $54,622 - 210,050
Executive Officer and Director 1994 700,000 285,000 - - 362,014
Edward P. Henson 1996 350,000 77,500 - 16,000 61,584
President and Director 1995 325,000 76,250 9,223 - 55,101
1994 300,000 75,000 - - 105,041
John F. Bennett 1996 115,000 23,000 - 10,000 15,102
Senior Vice President 1995 110,000 22,000 7,992 - 14,230
1994 105,000 21,000 - - 38,359
Ronald C. Spielberger 1996 115,000 23,000 - 10,000 13,738
Senior Vice President 1995 110,000 22,000 7,687 - 13,061
1994 105,000 21,000 - - 36,924
Thomas R. Lehmann 1996 97,000 19,400 - 10,000 7,476
Senior Vice President 1995 87,000 17,400 2,597 - 7,448
1994 75,000 15,000 - - 23,081
<FN>
(1) On April 11, 1995, awards were made from the Bank Recognition and Retention
Plans and Trusts ("BRRPs") consisting primarily of forfeited shares. The value
of shares awarded and immediately vested during 1995 under the BRRPs plus
accrued dividends and interest totaled $55,222, $9,325, $8,080, $7,771 and
$2,626 for Messers. Adikes, Henson, Bennett, Spielberger and Lehmann,
respectively, at December 31, 1995. At December 31, 1995, all shares awarded
pursuant to the BRRPs were vested. The BRRPs were terminated during 1995.
(2) Reflects options granted on January 1, 1996 which became exercisable
November 14, 1996.
(3) Items included in other compensation for 1996 pertain to the following
items: (i) ESOP; $7,486, $10,792, $8,284, $8,284 and $6,954 for Messrs. Adikes,
Henson, Bennett, Spielberger and Lehmann, respectively, (ii) the Restore Plan in
connection with the ESOP; $215,574, $36,442, $4,712 and $4,104 for Messrs.
Adikes, Henson, Bennett and Spielberger, respectively, (iii) the Restore Plan in
connection with the Incentive Savings Plan ("ISP"); $24,092 for Mr. Adikes, (iv)
life insurance premiums; $3,780, $1,350, $2,106, $1,350 and $522 for Messrs.
Adikes, Henson, Bennett, Spielberger and Lehmann, respectively, and (v)
Director's Fees; $13,000 each to Messrs. Adikes and Henson.
</FN>
</TABLE>
<PAGE>
Employment Agreements. The Bank and the Company maintain employment
agreements with Messrs. Adikes, Henson and Spielberger and the Bank maintains
employment agreements with Messrs. Bennett and Lehmann. The original employment
agreements each provided for a three-year term. Commencing on the first
anniversary date and continuing each anniversary date thereafter, the agreements
extend for an additional year so that the remaining terms shall be three years,
provided, however, that the Board of Directors has determined to renew the
agreements. The agreements provide that the base salary of the executive will be
reviewed annually. In addition to the base salary, the agreements provide for,
among other things, disability pay, participation in stock benefit plans and
other fringe benefits applicable to executive personnel. The agreements provide
for termination by the Bank or the Company for cause at any time. In the event
the Bank or the Company chooses to terminate the executive's employment for
reasons other than for cause, or in the event of the executive's resignation
from the Bank and the Company upon (i) failure to reelect the executive to
his/her current office or board membership, (ii) a material change in the
executive's functions, duties or responsibilities, or relocation of his/her
principal place of employment, (iii) liquidation or dissolution of the Bank or
the Company, or (iv) a breach of the agreement by the Bank or the Company, or if
termination, voluntary or involuntary, results from a change in control, as
defined in the employment agreements ("Change in Control"), of the Bank or the
Company, the executive or, in the event of death, his/her beneficiary, would be
entitled to a severance payment equal to the greater of the payments due for the
remaining term of the agreement or three times his/her average annual
compensation over the past three years of employment with the Bank. The
agreements also provide for a lump sum cash payment for the executive's life,
medical, dental and disability coverage for the remaining unexpired term of the
agreements, however, if termination is due to a Change in Control, then the
executive is entitled to a lump sum cash payment for the benefits covering 36
months. Payments to the executive under the Bank's agreements are
guaranteed by the Company.
These agreements provide for an annual base salary to be paid in 1997 by
the Bank or the Company in lieu of the Bank of $700,000, $375,000, $119,000,
$122,000 and $103,000 to Messrs. Adikes, Henson, Bennett, Spielberger and
Lehmann, respectively. In the event of a Change in Control, based upon current
compensation which includes salary, bonus and benefits received under any
employee benefit plan pursuant to the agreements, payments pursuant to these
agreements would be approximately $3,496,486, $2,189,387, $789,419, $807,115 and
$647,662 to Messrs. Adikes, Henson, Bennett, Spielberger and Lehmann,
respectively.
Payments under the employment agreements, in the event of a Change in
Control, including other payments that might be made as a result of a Change in
Control, may constitute an excess parachute payment under Section 280G of the
Internal Revenue Code (the "Code") of 1986, as amended, resulting in the
imposition of an excise tax on the recipient and denial of a tax deduction for
such excess amounts to the Company and the Bank. If any amounts payable in
connection with any change in control are determined to be "excess parachute
payments" under Section 280G of the Code resulting in the imposition of the 20%
excise tax on such payments under Section 4999 of the Code, each officer will
receive from the Company an additional amount such that the effect of the
imposition of that excise tax is effectively eliminated.
Stock Option Plans. The Company maintains two option plans, the 1990
Option Plan and the 1996 Option Plan. During 1996, the Company's stockholders
approved the 1996 Option Plan. No awards were granted under the 1990 Option Plan
during 1996.
<PAGE>
OPTION/SAR* GRANTS IN 1996
The following table shows all grants of options under the JSB Financial,
Inc. 1996 Option Plan to the Named Executive Officers during 1996 and contains
certain information about the present value of the option on the date of grant.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Options/SARs Employees in Base price Expiration Present
Name Granted (1) Calendar 1996 (2) Per Share Date Value(3)
- ---- ------------- ------------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Park T. Adikes 20,000 15.87% $31.625 12/31/05 $152,600
Edward P. Henson 16,000 12.70 31.625 12/31/05 122,080
John F. Bennett 10,000 7.94 31.625 12/31/05 76,300
Ronald C. Spielberger 10,000 7.94 31.625 12/31/05 76,300
Thomas R. Lehmann 10,000 7.94 31.625 12/31/05 76,300
- ------------
<FN>
*SAR - Stock appreciation rights.
(1) All options granted on January 1, 1996, were granted at an exercise price of
$31.625, the market closing price of the Company's common stock on the business
day before grant. The option period during which an individual granted options
may exercise such option will generally commence six months after the date of
grant and will expire no later than ten years from the date of the grant.
Options granted during 1996 provide for limited rights and DERs, as fully
discussed under Directors' Compensation - The 1996 Option Plan on page 9,
herein.
(2) Based upon a total of 126,000 options granted to employees during 1996.
(3) In accordance with SEC rules, the Black-Scholes option pricing model was
chosen to estimate the grant date present value of the options set forth in this
table. The stock option value of $7.63 was determined using the following
assumptions: volatility rate of 21.9%; risk-free interest rate of 5.44%;
historic annual dividend yield on underlying stock of 3.63%; estimated option
term of six years.
</FN>
</TABLE>
<PAGE>
The following table shows options exercised by Named Executive Officers
during 1996, including the aggregate value of gains on the date of exercise and
certain information with respect to the number of shares of Common Stock
represented by outstanding options held by such persons as of December 31, 1996.
Also reported are the values of "in-the-money" options which represent the
positive spread between the exercise price of any such existing stock options
and the year end price of the Common Stock of $38.00.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES DURING THE YEAR
ENDED DECEMBER 31, 1996 AND YEAR-END OPTION/SAR VALUES
Number of Value of Unexercised In-the-
Underlying Securities Money Options/SARS
Shares Options/SARs at Year-End(#) at Year-End (1)
Acquired Value ---------------------------- ----------------------------
Name on Exercise(#) Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Park T. Adikes - $ - 150,396 - $3,778,588 $ -
Edward P. Henson - - 16,000 - 102,000 -
John F. Bennett - - 39,293 - 883,954 -
Ronald C. Spielberger - - 10,000 - 63,750 -
Thomas R. Lehmann 3,183 83,554 16,400 - 242,950 -
- ------------
<FN>
(1) Options are subject to limited rights pursuant to which the options, to the
extent outstanding for at least six months, may be exercised in the event of a
change in control of the Company or the Bank. Upon the exercise of limited
rights, the optionee would receive cash payments equal to the difference between
the exercise price of the related option on the date of the grant and the fair
market value of the underlying shares of Common Stock on the date the limited
rights are exercised.
(2) Market value of underlying securities at exercise, minus the exercise price
of $10.00 per share pursuant to the 1990 Option Plan. No options granted
pursuant to the 1996 Option Plan were exercised.
</FN>
</TABLE>
<PAGE>
Stock Performance Graph
The following graph, which is required by the SEC, compares the
Company's five-year cumulative return to stockholders (stock price appreciation
plus dividends) from December 31, 1991 through December 31, 1996 with the return
for the Nasdaq Stock Market and an index of performance for peer group
companies, as compiled by Media General Financial Services. According to this
graph, JSB Financial had a return lower than the peer group for the specified
five year period. However, certain limitations affect the comparability of the
data. The performance of both the peer group and the Nasdaq National Market
include the impact of stock price run-ups resulting from acquisition activity.
In addition, the significant volume of initial public stock offerings made by
financial institutions over the past five years and the price escalations that
generally followed, further skew the return data in favor of the peer group and
the broad market. While it is not practicable to eliminate the impact of the
acquisition activity, in an attempt to remove some of the inequity, we have
presented an extended performance graph on page 17 which presents the Company's
performance in comparison to its peers and the broad market from the time of the
Company's initial stock offering. Based on this time period, the Company's
performance is substantially equal to that of its peers and above that of the
broad market.
JSB FINANCIAL, INC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
JSB Financial, Inc., The Nasdaq Stock Market Index, and Peer Group Index
(Performance Graph)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Dec. 31, 1991* Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
JSB Financial Inc. 100.00 122.62 138.47 146.53 201.85 251.26
The Nasdaq Stock
Market Index 100.00 100.98 121.13 127.17 164.96 204.98
Media General S&L
Peer Group Index (1) 100.00 132.76 164.62 157.68 249.75 325.95
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
*Assumes $100.00 invested on December 31, 1991.
(1) The peer group, as compiled by Media General Financial Services, consists of
all thrifts publicly traded on the New York Stock Exchange, American Stock
Exchange and the Nasdaq Stock Market at December 31, 1996.
</FN>
</TABLE>
<PAGE>
We have presented the following performance graph using a base date of
June 27, 1990, as this was the date that the Company's stock began trading.
Management believes that this graph provides a more reflective picture of the
Company's stock performance compared with the peer group and the Nasdaq Stock
Market Index than the five year stock performance graph presented on the
previous page.
JSB FINANCIAL, INC.
COMPARISON OF CUMULATIVE TOTAL RETURN
JSB Financial, Inc., The Nasdaq Stock Market Index, and Peer Group Index
(Performance Graph)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
June 27, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1990* 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JSB Financial Inc. 100.00 101.63 144.34 176.99 199.87 211.50 291.35 362.67
The Nasdaq Stock
Market Index 100.00 83.32 106.97 108.02 129.57 136.03 176.45 203.28
Media General S&L
Peer Group Index (1) 100.00 72.90 117.74 156.31 193.82 185.66 294.06 365.40
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
*Assumes $100.00 invested on June 27, 1990, at $12.75, the closing price of JSB
Financial stock.
(1) The peer group, as compiled by Media General Financial Services, consists of
all thrifts publicly traded on the New York Stock Exchange, American Stock
Exchange and the Nasdaq Stock Market at December 31, 1996.
</FN>
</TABLE>
<PAGE>
Pension and Pension Restoration Plan. The Bank maintains the Retirement
Plan of Jamaica Savings Bank FSB (the "Retirement Plan"), a defined benefit plan
for eligible employees of the Bank. In addition, the Bank maintains the Restore
Plan, an unfunded non-qualified plan, to compensate participants in any of the
Bank's qualified plans for benefits which would have accrued under such plans
absent the limitations of Sections 415 and 401(a)(17) of the Code. As of
December 31, 1996 all of the Named Executive Officers were eligible to
participate in the Restore Plan, but only Messrs. Adikes and Henson had accrued
supplemental pension benefits thereunder. Estimated annual benefits payable
under the Retirement Plan and the supplemental retirement benefits payable
pursuant to the Restore Plan, are reflected in the following table. The
supplemental retirement benefit payable under the Restore Plan is determined
upon the participant's retirement and will be paid in the manner designated by
the retiree.
The following table sets forth, in straight life annuity amounts, the
estimated annual benefits payable upon retirement at age 65 in calendar year
1996, expressed in the form of a single life annuity, in the final average
salary and creditable service classifications specified.
<TABLE>
<CAPTION>
PENSION AND PENSION RESTORATION PLAN TABLE
Years of Service
----------------
Remuneration 15 20 25 30 35(1)
- ------------ ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 5,300 $ 7,200 $ 9,700 $ 12,200 $ 14,700
50,000 12,600 17,000 22,000 27,000 30,000
75,000 20,100 27,000 34,500 42,000 45,000
100,000 27,600 37,000 47,000 57,000 60,000
150,000(3) 42,600 57,000 72,000 87,000 90,000
200,000(3) 57,600 77,000 97,000 117,000 120,000(2)
250,000(3) 72,600 97,000 122,000(2) 147,000(2) 150,000(2)
300,000(3) 87,600 117,000 147,000(2) 177,000(2) 180,000(2)
350,000(3) 102,600 137,000(2) 172,000(2) 207,000(2) 210,000(2)
400,000(3) 117,600 157,000(2) 197,000(2) 237,000(2) 240,000(2)
500,000(3) 147,600(2) 197,000(2) 247,000(2) 297,000(2) 300,000(2)
600,000(3) 177,600(2) 237,000(2) 297,000(2) 357,000(2) 360,000(2)
700,000(3) 207,600(2) 277,000(2) 347,000(2) 417,000(2) 420,000(2)
800,000(3) 237,600(2) 317,000(2) 397,000(2) 477,000(2) 480,000(2)
- ------------
<FN>
(1) The maximum benefit under the Retirement Plan's formula is 60% of final
average salary.
(2) These are hypothetical benefits based upon the Retirement Plan's normal
benefit formula. The maximum annual benefit permitted under Section 415 of the
Code for 1996 was $120,000, or, if higher, a participant's current accrued
benefit as of December 31, 1982 (but not more than $136,425). The $120,000
ceiling will be adjusted for increases in the cost of living in $10,000
increments in 1997 and succeeding years. The Bank maintains a non-qualified
Restore Plan for the purpose of providing the benefits that would normally be
paid under the Retirement Plan, but are precluded from being paid due to this
limitation.
(3) The maximum annual salary permitted under the Code for 1996 is $150,000.
Benefits accrued as of December 31, 1993 on the basis of compensation limits
prior to 1994 are preserved. The $150,000 compensation limitation will be
adjusted for increases in the cost of living in $10,000 increments in 1997 and
succeeding years. The Bank maintains a non-qualified Restore Plan for the
purpose of providing the benefits that would normally be paid under the
Retirement Plan, but are precluded from being paid due to this limitation.
</FN>
</TABLE>
<PAGE>
Compensation utilized for the pension formula is the average of the highest
salaried three consecutive years of creditable service. For 1996, the final
average annual salary for the Named Executive Officers was based on the salaries
presented in the "Summary Compensation Table" for 1996, 1995 and 1994. The
resulting average salaries are as follows: Mr. Adikes, $700,000; Mr. Henson,
$325,000; Mr. Bennett, $110,000; Mr. Spielberger, $110,000 and Mr. Lehmann,
$86,333. Benefit amounts are not subject to any deduction for Social Security
benefits or other offset amounts.
The following table sets forth the years of creditable service as of
December 31, 1996 for each of the individuals named in the compensation table.
Creditable Service
-------------------
Years Months
-------------------
Park T. Adikes ......................... 42 1
Edward P. Henson .................. 36 7
John F. Bennett ........................ 36 11
Ronald C. Spielberger ............. 37 7
Thomas R. Lehmann ............... 27 3
Indebtedness of Management and Transactions With Certain Related Persons
All loans or extensions of credit to Executive Officers and Directors
are made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral as those prevailing at the time, for
comparable transactions with other persons and do not involve more than the
normal risk of repayment or present other unfavorable features.
ADDITIONAL INFORMATION
Stockholder Proposals for 1998 Annual Meeting
To be considered for inclusion in the Proxy Statement and proxy relating
to the Annual Meeting of Stockholders to be held in 1998, a stockholder proposal
must be received by the Secretary of the Company at the address set forth on the
first page of the Proxy Statement, not later than November 28, 1997. Any such
proposal will be subject to 17 C.F.R.
Section 240.14a-8 of the Rules and Regulations of the SEC.
Notice of Business to be Conducted at the Annual Meeting
The Bylaws of the Company provide an advance notice procedure for
certain business to be brought before an annual meeting. In order for a
stockholder to properly bring business before an annual meeting, the stockholder
must give written notice to the Secretary of the Company not less than ninety
(90) days before the time originally fixed for such meeting; provided, however,
that in the event that less than one hundred (100) days notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be received not later than the close of
business on the tenth day following the day on which such notice of the annual
meeting was mailed or such public disclosure was made. The notice must include
the stockholders' name and address, as it appears on the Company's record of
stockholders, a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, the class and number of shares of the Company's capital stock that are
beneficially owned by such stockholder and any material interest of such
stockholder in the proposed business.
<PAGE>
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
Whether or not you intend to be present at this Annual Meeting, you are
urged to return your proxy promptly. If you are present at this Annual Meeting
and wish to vote your shares in person, your proxy may be revoked upon request.
A COPY OF THE FORM 10-K FOR THE PERIOD ENDED DECEMBER 31, 1996, AS FILED
WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD
DATE UPON WRITTEN REQUEST TO THE SECRETARY, JSB FINANCIAL, INC., 303 MERRICK
ROAD, LYNBROOK, NEW YORK 11563.
By Order of the Board of Directors
JOANNE CORRIGAN
Secretary
Lynbrook, New York
March 28, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU HAD PLANNED TO ATTEND THE ANNUAL MEETING, YOU
ARE REQUESTED TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY
IN THE ENCLOSED POSTAGE PAID ENVELOPE.
<PAGE>
LONG ISLAND MARRIOTT
HOTEL AND CONFERENCE CENTER
101 JAMES DOOLITTLE BOULEVARD
UNIONDALE, NEW YORK 11553
(516) 794-3800
From Manhattan and Points West:
Midtown Tunnel to Long Island Expressway (Route 495) East to Exit 38
Northern State Parkway to Exit 31A Meadowbrook Parkway South to Exit M4 West,
Hempstead Turnpike (Route 24W) continue 100 yards to Hotel on right.
From Eastern Long Island (North Shore):
Long Island Expressway (Route 495) West to Exit 42 Northern State Parkway
to Exit 31A Meadowbrook Parkway South to Exit M4 West, Hempstead Turnpike (Route
24W) continue 100 yards to Hotel on right.
or alternatively:
Long Island Expressway (Route 495) West to Exit 39 Glen Cove Road South to Old
Country Road. Turn left (East) one mile to Merrick Avenue. Turn right to
Hempstead Turnpike (Route 24). Turn right, Hotel is 200 yards on the right.
From Eastern Long Island (South Shore):
Sunrise Highway to Southern State Parkway to Exit 22N. Meadowbrook Parkway
North to Exit M4 Hempstead Turnpike West(Route 24W). Follow road to Hempstead
Turnpike, Hotel is 100 yards on the right.
From Kennedy Airport:
JFK Expressway East to Belt Parkway East (becomes Southern State Parkway at
Nassau County border) Southern State Parkway East to Exit 22N Meadowbrook
Parkway North to Exit M4 Hempstead Turnpike West (Route 24). Follow road to
Hempstead Turnpike, Hotel is 100 yards on the right.
From Laguardia Airport:
Grand Central Parkway (Eastern L.I.) becomes the Northern State Parkway at
Nassau County border to Exit 31A Meadowbrook Parkway South to Exit M4 West,
Hempstead Turnpike (Route 24W) continue 100 yards to Hotel on right.
From Hempstead Turnpike (West to East):
Just past Hofstra University, make a left onto Earl Ovington Boulevard.
Follow road around the Nassau Coliseum, right onto James Doolittle Boulevard.
Hotel will be on the right.
<PAGE>
JSB FINANCIAL, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MAY 13,1997
10:00 A.M.
The undersigned hereby appoints the official proxy committee of the
Board of Directors of JSB Financial, Inc. (the "Company") consisting of Richard
W. Meyer, James E. Gibbons, Jr. and Edward P. Henson each with full power of
substitution, to act as attorneys and proxies for the undersigned, and to vote
all shares of Common Stock of the Company which the undersigned is entitled to
vote only at the Annual Meeting of Stockholders ("the Annual Meeting"), to be
held at the Long Island Marriott Hotel and Conference Center, 101 James
Doolittle Boulevard, Uniondale, New York 11553, on May 13, 1997 at 10:00 a.m.,
and at any and all adjournments thereof.
This proxy is continued on the reverse side.
Please sign on the reverse side and return promptly.
This proxy is revocable and will be voted as directed, but if no instructions
are specified, this proxy will be voted FOR Proposals 1 and 2 and AGAINST
Proposal 3. If any other business is presented at the Annual Meeting, this proxy
will be voted by those named in this proxy in their best judgment. At the
present time, the Board of Directors knows of no other business to be presented
at the Annual Meeting.
Please mark your votes as indicated in this example X
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
VOTE
FOR WITHHELD
Proposal 1. Election as directors of all nominees
listed (except as marked to the contrary below). --- ---
Alfred F. Kelly
Howard J. Dirkes, Jr.
Cynthia Gibbons
Instruction: To withhold your vote for any individual nominee,
write that nominee's name on the line provided below.
- -------------------------------
Proposal 2. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for the year ending December 31, 1997.
FOR AGAINST ABSTAIN
--- --- ---
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
Proposal 3. The stockholder proposal as set forth in the proxy statement.
FOR AGAINST ABSTAIN
--- --- ---
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE
PAID ENVELOPE.
The undersigned acknowledges receipt from the Company prior to the execution of
this proxy of a Notice of Annual Meeting and of a Proxy Statement dated March
28, 1997.
WILL ATTEND MEETING ___
Signature(s) __________________________________________ Date _____________
NOTE: Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one
signature is required.
