SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant |X|
Filed by a party other than the registrant | |
Check the appropriate box:
| | Preliminary proxy statement
|X| Definitive proxy statement
| | Definitive additional materials
| | Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MERCHANTS NEW YORK BANCORP, INC.
(Name of Registrant as Specified in Charter)
Karen L. Deitz, Corporate Secretary
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on the table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
--------------------------------------------------------------------
(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>
Merchants New York Bancorp
275 Madison Avenue
New York, New York 10016
(212) 973-6600
March 19, 1999
To Our Shareholders:
On behalf of our Directors, I cordially invite you to attend the Annual
Meeting of Stockholders of Merchants New York Bancorp. This Annual Meeting will
be held at 12:00 o'clock, local time, on Tuesday, April 27, 1999, at The
Harmonie Club, 4 East 60th Street, New York, N.Y. 10022. The formal notice of
the meeting is attached hereto.
The Proxy Statement describes matters that we expect will be acted upon at
the meeting. The shareholders who are present will have the opportunity to ask
questions.
Our Company has performed very well having shown record results for the
past twenty-five consecutive quarters and five years in a row of record
earnings.
Dividends paid to our stockholders have kept pace with our performance.
"The Good Old Bank" has paid 262 consecutive quarterly cash dividends since they
commenced in 1932. We also have increased our payout 45 times since 1950, most
recently in 1997. This is a record very few companies in America can match.
We are gratified by our shareholders' continued interest in the Company
and pleased that in the past so many of you have voted your shares in person or
by proxy. We hope you will continue to do so and urge you to return your proxy
card as soon as possible.
Cordially yours,
Spencer B. Witty
Chairman of the Board
<PAGE>
Merchants New York Bancorp
275 Madison Avenue
New York, New York 10016
(212) 973-6600
--------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1999
--------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Merchants New York Bancorp, Inc. (the "Company"), the holding
company for The Merchants Bank of New York (the "Bank"), will be held on
Tuesday, April 27, 1999, at 12 o'clock Noon, local time.
The location of the Meeting will be The Harmonie Club, 4 East 60th Street,
New York, 10022. The Meeting will be held for the following purposes:
1. To elect thirteen directors to serve until the next Annual
Meeting of Stockholders and/or until their successors are elected and
qualified; and
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
The Board of Directors has fixed March 19, 1999, as the record date for the
determination of the stockholders entitled to notice of, and to vote at, the
Meeting and any adjournments thereof. Only those stockholders of record of the
Company as of the close of business on that date will be entitled to vote at the
Meeting or any adjournments or postponements thereof.
By order of the Board of Directors
Spencer B. Witty=
Chairman of the Board
James G. Lawrence
President and Chief Executive Officer
Karen L. Deitz
Corporate Secretary
NEW YORK, NEW YORK
March 19, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THIS MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. IF YOU WILL BE
UNABLE TO BE PRESENT AT THE MEETING OR EVEN IF YOU ANTICIPATE THAT YOU WILL
ATTEND, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE WITHOUT DELAY. YOU WILL BE MOST WELCOME AT THE MEETING AND
MAY THEN VOTE IN PERSON IF YOU SO DESIRE, EVEN THOUGH YOU MAY HAVE EXECUTED AND
RETURNED THE PROXY. ANY STOCKHOLDER WHO EXECUTES SUCH A PROXY MAY REVOKE IT AT
ANY TIME BEFORE IT IS EXERCISED. YOUR PROMPT RETURN OF YOUR PROXY WILL HELP
AVOID THE COST OF FURTHER SOLICITATIONS. FOR CERTAIN ADDITIONAL FINANCIAL
INFORMATION, AVAILABLE WITHOUT CHARGE, YOU MAY CONTACT KAREN L. DEITZ AT THE
COMPANY OR CALL (212) 973-6600.
<PAGE>
Merchants New York Bancorp
275 Madison Avenue
New York, New York 10016
(212) 973-6600
--------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1999
--------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
General
This statement is furnished in connection with the solicitation by the
Board of Directors of Merchants New York Bancorp, Inc. (the "Company"), holding
company for The Merchants Bank of New York (the "Bank"), of proxies to be used
at the Annual Meeting of Stockholders (the "Meeting") of the Company on Tuesday,
April 27, 1999, and any adjournments or postponements thereof.
The location and time of the Meeting will be The Harmonie Club, 4 East
60th Street, New York, New York 10022, at 12 o'clock Noon, local time. The
Meeting will be held for the following purposes:
1. To elect thirteen directors to serve until the next Annual
Meeting of Stockholders and/or until their successors are elected and
qualified; and
2. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
This proxy statement, the accompanying notice of annual meeting and proxy
and the Company's annual report to stockholders containing the Company's
financial statements for the year ended December 31, 1998 are being mailed to
stockholders on or about March 24, 1999.
Record Date and Principal Stockholders
Stockholders of record at the close of business on March 19, 1999 (the
"Record Date") are entitled to notice of, and to vote at, the Meeting and any
adjournments or postponements thereof. On the Record Date, the Company had
outstanding entitled to vote 9,695,737 shares of common stock, par value $.001
per share (the "Common Stock"). For information regarding security ownership by
management and certain other holders of the Company's Common Stock, see
"Security Ownership of Certain Beneficial Owners and Management."
<PAGE>
Revocability of Proxies
A proxy is enclosed for use at the Meeting. Each stockholder is urged to
complete and return the enclosed proxy immediately, even if attendance in person
at the Meeting is anticipated. The proxy may be revoked by the stockholder at
any time before it is voted by delivering to the Secretary of the Company a
notice of revocation or a duly executed proxy bearing a later date. Any proxy
may also be revoked by (i) the stockholder's attendance at the Meeting, (ii)
filing a written notice of revocation with the Secretary of the Meeting, and
(iii) voting in person. The presence of a stockholder at the Meeting will not
automatically revoke that stockholder's proxy. All notices of revocation should
be sent to the attention of the Company's Corporate Secretary Karen L. Deitz,
Merchants New York Bancorp, Inc., 275 Madison Avenue, New York, New York 10016.
Voting and Solicitation
Proxies properly executed and received in time to be duly presented at the
Meeting will be voted in accordance with the stockholder's directions. Properly
executed proxies not marked to indicate any desired vote will be voted FOR the
election of the nominees for directors named below. If any other matters are
properly brought before the Meeting, the persons named in the accompanying
proxies will vote the shares represented by such proxies on such matters as
instructed by the Board of Directors of the Company, who have instructed the
proxies to vote in accordance with the proxies' own best judgment in the absence
of express instruction from the Board.
The expense of preparing, printing, and mailing this proxy statement and
the proxies will be borne by the Company. In addition to the use of the mail,
proxies may be solicited by directors and officers of the Bank in person or by
telephone or telegram. The Company will also reimburse brokerage houses and
other custodians, nominees and fiduciaries for their expenses, in accordance
with Securities and Exchange Commission (the "SEC") regulations, in sending this
proxy statement and proxies to the beneficial owners of its Common Stock.
Quorum, Abstentions and Broker Non-Votes
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of the Company's Common Stock is necessary to
constitute a quorum. Shares of Common Stock represented by a properly signed and
returned proxy will be counted as present at the Annual Meeting for purposes of
determining a quorum, without regard to whether the proxy is marked as casting a
vote or abstaining. Shares of Common Stock held by nominees that are voted on at
least one matter coming before the Annual Meeting will also be counted as
present for purposes of determining a quorum, even if the beneficial owner's
discretion has been withheld (a "broker non-vote") for voting on some or all
other matters.
Each share of Common Stock is entitled to one vote on all matters that may
properly come before the Annual Meeting other than the election of directors. In
the election of directors, each share is entitled to cast one vote for each
director to be elected. Directors of the Company shall be elected by a plurality
of votes cast at the Meeting. The holders of Common Stock may not vote their
shares cumulatively for election of directors. For purposes of the election of
directors, abstentions and broker non-votes are not considered to be votes cast
and do not affect the plurality vote required for the election of directors. All
other matters to come before the Annual Meeting require the approval of a
majority of the shares of Common Stock present, in person or by proxy, at the
Annual Meeting and entitled to vote. Therefore, abstentions will have the same
effect as votes against the proposals on such matters. Broker non-votes,
however, will be deemed shares not present to vote on such matters, and
therefore will not count as votes
-2-
<PAGE>
for or against the proposals, and will not be included in calculating the number
of votes necessary for approval of such matters.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company's Board of Directors met on twelve occasions in 1998. The
Bank's Board of Directors generally meets monthly at the same time as the
Company's Board of Directors. Each Director of the Company attended at least 92%
of the aggregate of the total number of meetings of the Board and the total
number of meetings held by all committees on which each served. The Board of
Directors has standing executive, nominating, audit, and compensation and option
committees described below.
Executive Committee. The Executive Committee consists of the following
directors: Charles J. Baum (Chairman), Spencer B. Witty, Rudolf H. Hertz, James
G. Lawrence, William J. Cardew, Isidore Karten, Charles I. Silberman and
Robinson Markel. The Executive Committee is empowered to act for the full Board
in intervals between Board meetings, with the exception of certain matters that
by law may not be delegated. The Executive Committee meets as necessary, and all
actions of the Executive Committee are reported at the next Board of Directors
meeting.
Nominating Committee. The Nominating Committee consists of the following
directors: Robinson Markel (Chairman), Spencer B. Witty and Rudolf H. Hertz. The
Nominating Committee meets annually to interview and recommend nominees for
election as Directors of the Company. The Nominating Committee will consider
nominees for the Board recommended by stockholders in accordance with the
Company's By-laws.
Audit Committee. The Audit Committee consists of the following directors:
Alan Mirken (Chairman), Charles J. Baum, and Robinson Markel. The Audit
Committee recommends outside auditors, approves overall audit scope, reviews
adequacy of internal control systems, reviews annual financial statements and
audit reports thereon and directs special investigations for the Board. The
Audit Committee met ten times during 1998 with respect to the Bank.
Compensation and Option Committee. The Compensation and Option Committee
consists of Charles J. Baum, (Chairman), Isidore Karten, Robinson Markel, Paul
Meyrowitz, Alan Mirken, Mitchell J. Nelson, Leonard Schlussel and Charles I.
Silberman. The Compensation and Option Committee reviews and determines the
compensation of the Bank's executive officers, and recommends the granting of
options on Company Common Stock to eligible employees pursuant to the Company's
Stock Option Plan. See "Compensation and Option Committee Report on Executive
Officer Compensation," below.
Planning Committee. The Planning Committee consists of the following
directors: Charles I. Silberman (Chairman), Charles J. Baum, Isidore Karten,
Robinson Markel, Paul Meyrowitz, Alan Mirken, Mitchell J. Nelson and Leonard
Schlussel. The Planning Committee has been formed to address, with the
assistance of senior management as required, strategic planning issues for
growth of the Bank and expansion of its business opportunities.
In addition to executive and audit committees with the same members and
purposes as described above, the Board of Directors of the Bank has additional
standing committees, with the functions and membership described below:
Community Reinvestment Act Committee. The Community Reinvestment Act
Committee consists of the following directors: Leonard Schlussel (Chairman),
Spencer B. Witty, and William J.
-3-
<PAGE>
Cardew. The Community Reinvestment Act Committee is responsible for monitoring
the Bank's compliance with its Community Reinvestment Act responsibilities.
Directors' Examining Committee. The Directors' Examining Committee
consists of the following directors: Isidore Karten (Chairman), Leonard
Schlussel and Charles I. Silberman. The Directors Examining Committee meets with
the Bank's auditors to discuss and review the condition of the Bank's loan
portfolio and other matters as required by the New York State Banking
Department.
Conflict of Interest Committee. The Conflict of Interest Committee
consists of the following directors: Paul Meyrowitz (Chairman), Robinson Markel,
Rudolf H. Hertz, Charles J. Baum and Spencer B. Witty. The Conflict of Interest
Committee resolves actual or potential conflicts of interest between the
interests of the Bank's employees and those of the Bank.
Investment Committee. The Investment Committee consists of the following
directors: Spencer B. Witty (Chairman), Rudolf H. Hertz, James G. Lawrence,
William J. Cardew and Eric W. Gould. The Investment Committee formulates
investment strategies and programs for the Bank that are then presented to the
Board for approval.
Asset and Liability Committee. The Asset and Liability Committee consists
of the following directors: William J. Cardew (Chairman), Spencer B. Witty,
James G. Lawrence, Rudolf H. Hertz, Eric W. Gould and Charles I. Silberman
(alternate: Mitchell J. Nelson). The Asset and Liability Committee is
responsible for managing the interest rate risk between the Bank's assets and
liabilities to maximize income, as well as providing for adequate liquidity to
meet loan demand and deposit withdrawals.
Directors' Compensation
During 1998, the Company paid Directors' fees of $1,000 per Board meeting
attended to each director. Outside directors serving on the Executive Committee,
the Audit Committee and the Community Reinvestment Act Committee each received
$2,000 per year per committee. In addition, outside directors serving on the
Directors' Examining Committee and the Compensation and Option Committee
received $1,000 per year per committee. In addition to the foregoing fees each
outside director who attended a minimum of ten meetings of the Board in the
prior year also received a stipend of $10,000. The outside directors of the
Company include all directors other than Messrs. Witty, Hertz, Lawrence, Cardew
and Gould. Each of the outside directors received the stipend in 1998. In
addition, Mr. Silberman, who served during part of 1998 as Vice Chairman of the
Company, received $4,000 per month during the time he served for his performance
of certain consulting services, which amounted to $16,000.
In February 1997, the Company adopted a pension plan for members of the
Board of Directors (the "Directors' Plan"). Under the Directors' Plan, all
Directors of the Company are eligible to receive an annual benefit commencing
upon termination of service as a Director. The annual benefit is equal to 80% of
the average annual compensation the Director received from the Company over the
two complete years prior to retirement. The annual benefit will be payable
commencing at retirement and continuing for fifteen years (increased from ten
years during 1998) or for the length of time the Director had served on the
Board prior to retirement, whichever is less.
-4-
<PAGE>
ELECTION OF DIRECTORS
The Directors are elected annually by the stockholders. At the Meeting,
thirteen directors are to be elected to serve until the next Annual Meeting of
Stockholders and/or until their successors are elected and qualified. Unless
otherwise directed, proxies will be voted FOR the nominees listed in this Proxy
Statement; or, if any of the nominees should be unable or unwilling to serve as
a director, an event which is not anticipated, proxies will be voted FOR
substitute nominees designated by the Board of Directors.
Each nominee is presently a Director of the Company. On July 1, 1993, the
Bank became a subsidiary of the Company; information below includes information
as to each nominee's position with the Bank and the Company. For each nominee
there follows certain biographical information, including age as of the date of
this proxy statement and a brief listing of principal occupation or employment
of each during the past five years. For detailed information with respect to the
Common Stock ownership of each of the nominees, see the table in the section of
this Proxy Statement captioned "Security Ownership of Certain Beneficial Owners
and Management."
CHARLES J. BAUM
Age: 70
Mr. Baum has been a Director of the Bank since 1976 and a Director of the
Company since it became the Bank's holding company. He has been the President of
Baum Brothers Imports, Inc., importers of porcelain dinnerware, for
approximately 20 years, and President of Essex Manufacturing Co., Inc.,
manufacturers and importers of rainwear and umbrellas, since 1978. He has also
been the President of Azal Sales Corp., import agents of general merchandise,
since 1958.
WILLIAM J. CARDEW
Age: 72
Mr. Cardew has been the Vice Chairman of the Board of Directors of the
Company and the Bank since 1997, Chief Operating Officer of the Bank from 1985
to 1996 and Chief Operating Officer of the Company since it became the Bank's
holding company. He was also the Executive Vice President of the Bank from 1985
to 1996 and of the Company since it became the Bank's holding company.
ERIC W. GOULD
Age: 30
Mr. Gould has served as a director of the Company since 1997 and of the
Bank since the following year. He has been employed by the Bank since 1990. He
became Assistant Treasurer of the Bank in 1993, Treasurer of the Bank and the
holding company in 1996, Vice President in 1997 and Senior Vice President in
1998.
-5-
<PAGE>
RUDOLF H. HERTZ
Age: 82
Mr. Hertz has been the Vice Chairman of the Board of Directors of the
Company since 1985. He served as a Director of the Bank from 1962 until
September 1998. He has been a Director of the Company since it became the Bank's
holding company. From 1978 to 1985 he served as President and Chief Executive
Officer of the Bank.
ISIDORE KARTEN
Age: 84
Mr. Karten has been a Director of the Bank since 1976 and of the Company
since it became the Bank's holding company. He has been a general partner in 990
Avamericas Associates, a real estate partnership, for approximately twelve
years, and has been President of I. Karten, Inc., d/b/a Bermaha Textile Co.,
exporters of textiles, since 1961.
JAMES G. LAWRENCE
Age: 56
Mr. Lawrence has been the President and Chief Executive Officer of the
Bank since 1985, a Director of the Bank since 1984 and a Director of the Company
since it became the Bank's holding company.
ROBINSON MARKEL
Age: 64
Mr. Markel has been a Director of the Bank since 1974 and of the Company
since it became the Bank's holding company. He is an attorney and has been a
member of the law firm of Rosenman & Colin LLP since February 1998. From May
1995 to February 1998 he was a member of the law firm of Piper & Marbury L.L.P,
and for more than twenty-one years prior to that time he was a member of the law
firm of Milgrim Thomajan & Lee P.C. and its successor firms Varet Marcus & Fink
P.C. and Marcus Montgomery Wolfson P.C.
PAUL MEYROWITZ
Age: 82
Mr. Meyrowitz has been a Director of the Bank since 1981 and of the
Company since it became the Bank's holding company. He is an attorney and has
been a senior partner of the law firm Simon, Meyrowitz and Meyrowitz LLP and its
predecessor firm for over fifty years and has been counsel to the Bank for over
35 years.
-6-
<PAGE>
ALAN MIRKEN
Age: 69
Mr. Mirken has been a Director of the Bank since 1984 and of the Company
since it became the Bank's holding company. From 1979 until 1988, Mr. Mirken was
the President of Crown Publishing Group. From October 1988 until January 1990,
he was the Vice Chairman of Random House Inc., and from March 1990 to December
1994 he was the Executive Vice President--Associate Publisher for Abbeville
Press. Since January 1995, Mr. Mirken has been President of Aaron Publishing
Group, Inc.
MITCHELL J. NELSON
Age: 51
Mr. Nelson has been a Director of the Bank since 1992 and of the Company
since it became the Bank's holding company. He is an attorney presently of
counsel to the law firm of Salans, Hertzfeld, Heilbrunn, Christy & Viener having
formerly been of counsel to Proskauer Rose Goetz & Mendelsohn from May 1992 to
June 1994, and previously a partner with the law firm of Wien, Malkin & Bettex
for more than ten years. He is also a principal in Atlas Partners, L.P., a real
estate consulting firm, and President of Atlas Real Estate Funds, Inc., a
private investment firm.
LEONARD SCHLUSSEL
Age: 69
Mr. Schlussel has been a Director of the Bank since 1981 and of the
Company since it became the Bank's holding company. He has been President of
Wellbilt Equipment Corp., builders of restaurants, since 1990, and its Secretary
for over twenty years. Mr. Schlussel is also a partner in several real estate
ventures and has been a partner in Keybro Enterprises, a financial enterprise,
for over thirty years.
CHARLES I. SILBERMAN
Age: 50
Mr. Silberman has been a Director of the Bank since 1989 and of the
Company since it became the Bank's holding company. He has also served as Vice
Chairman of the Company since May 1995. He has been the President and Chairman
of the Board of S. Parker Hardware Manufacturing Corp., importer and
manufacturer of builders' hardware, since June 1989.
SPENCER B. WITTY
Age: 84
Mr. Witty has been the Chairman of the Board of Directors of the Bank
since 1976, a Director of the Bank since 1967 and the Chairman of the Board of
Directors and a Director of the Company since it became the Bank's holding
company.
-7-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding each person or group known or reasonably believed by
management of the Company to be the beneficial owner of more than 5% of the
Company's outstanding Common Stock as of February 1, 1999, and information
regarding the beneficial ownership of the Company's directors, and all directors
and executive officers of the Company as a group, is shown in the following
table.
Number of Shares Number of
beneficially owned Shares which Percentage of
as of may be acquired outstanding
Name(1) February 1, 1999 within 60 days(2) Shares(3)
------- ---------------- ----------------- ---------
Charles J. Baum ............. 62,184(4) 0 *
William J. Cardew ........... 58,820(5) 0 *
Eric W. Gould ............... 118,888(6) 0 1.22
Rudolf H. Hertz ............. 206,140(7) 3,228 2.15
Isidore Karten .............. 288,452(8) 0 2.96
James G. Lawrence ........... 132,128(9) 14,500 1.50
Robinson Markel ............. 245,055(10) 0 2.52
Paul Meyrowitz .............. 21,000(11) 0 *
Alan Mirken ................. 61,456(12) 0 *
Mitchell J. Nelson .......... 6,800 0 *
Leonard Schlussel ........... 197,840(13) 0 2.03
Charles I. Silberman ........ 260,000(14) 0 2.67
Spencer B. Witty ............ 880,626(15) 24,000 9.26
All Directors and Executive
Officers as a Group
(13 persons)................ 2,304,437(16) 41,728 23.98
- ------------
*Less than 1%. Numbered footnotes appear on the next page.
-8-
<PAGE>
(1) The address of each beneficial owner is c/o The Merchants Bank of New
York, 275 Madison Avenue, New York, New York 10016.
(2) Represents shares subject to options granted under the Company Option
Plan.
(3) Percentage computations are made as follows: The sum of each nominee's
shares beneficially owned plus shares which may be acquired (if any) is
divided by the sum of the 9,741,330 shares outstanding on February 1, 1999
plus shares to be acquired by that nominee (if any). Except as otherwise
noted below, each owner has sole voting and investment power over the
shares listed above.
(4) Includes (i) 25,700 shares owned directly by Mr. Baum, (ii) 11,544 shares
owned by Azal Sales Corp., of which Mr. Baum is the sole shareholder,
(iii) 22,272 shares owned by Azal Sales Corp.'s Retirement Pension Plan,
of which Mr. Baum is a trustee, and (iv) 2,668 shares owned by Mr. Baum's
spouse. Mr. Baum disclaims beneficial ownership of the shares owned by his
spouse.
(5) Includes 41,748 shares owned directly by Mr. Cardew and 17,072 shares
owned by Mr. Cardew's spouse. Mr. Cardew disclaims beneficial ownership of
the shares owned by his spouse.
(6) Includes (i) 200 shares owned directly by Mr. Gould, (ii) 200 shares owned
by him as custodian for his minor child, (iii) 66,632 shares owned by
trusts for which Mr. Gould is a co-trustee with Mr. Witty, (iv) 35,176
shares held by the Employees' Retirement Plan of the Bank for which Mr.
Gould is a co-trustee with Messrs. Hertz and Witty, and (v) 16,680 shares
owned by Mr. Gould's mother which he votes pursuant to a power of
attorney. Mr. Gould disclaims beneficial ownership of the shares held by
the trusts and the shares held by the Employees' Retirement Plan (other
than those attributable to him as a result of his interest in the Plan),
as well as the shares owned by his mother.
(7) Includes (i) 32,592 shares owned directly by Mr. Hertz, (ii) 144 shares
owned by Mr. Hertz jointly with his spouse, (iii) 7,472 shares owned by
Mr. Hertz's spouse, (iv) 32,788 shares owned by trusts for which Mr.
Hertz, is trustee, (v) 97,968 shares owned by trusts for which Mr. Hertz
is a co-trustee with Mr. Witty, and (vi) 35,176 shares owned by the
Employees' Retirement Plan of the Bank for which Mr. Hertz is a co-trustee
with Messrs. Witty and Gould. Mr. Hertz disclaims beneficial ownership of
the shares owned by his spouse, the shares held by the trusts and the
shares held by the Employees' Retirement Plan (other than those
attributable to him as a result of his interest in the Plan).
(8) Includes (i) 120,528 shares owned directly by Mr. Karten, (ii) 128,856
shares owned by Mr. Karten's spouse, and (iii) 39,068 shares owned by
trusts for members of Mr. Karten's family. Mr. Karten disclaims beneficial
ownership of the shares owned by his spouse.
(9) Includes (i) 83,816 shares owned directly by Mr. Lawrence, (ii) 36,112
shares owned by family members which Mr. Lawrence has the power to vote
pursuant to a proxy, and (iii) 12,200 shares owned by an estate which Mr.
Lawrence has sole voting and investment power over as executor of the
estate. Mr. Lawrence disclaims beneficial ownership of the shares owned by
the estate.
(10) Includes (i) 34,148 shares owned directly by Mr. Markel, (ii) 5,563 shares
owned by Mr. Markel's spouse (1,740 directly by her and 3,823 as custodian
for their minor child), (iii) 29,444 shares held by Mr. Markel's
Individual Retirement Account, and (iv) 175,900 shares owned by his sister
which Mr. Markel has power to vote pursuant to a power of attorney. Mr.
Markel disclaims beneficial ownership of the shares owned by his spouse
and his sister.
(11) Includes 13,950 shares owned directly by Mr. Meyrowitz and 7,050 shares
owned by Mr. Meyrowitz's spouse. Mr. Meyrowitz disclaims beneficial
ownership of the shares owned by his spouse.
(12) Includes 58,120 shares owned directly by Mr. Mirken and 3,336 shares owned
by Mr. Mirken's spouse. Mr. Mirken disclaims beneficial ownership of the
shares owned by his spouse.
(13) Includes (i) 74,200 shares owned directly by Mr. Schlussel, (ii) 120,288
shares owned by Mr. Schlussel jointly with his brother, and (iii) 3,352
shares owned by Mr. Schlussel jointly with his spouse. Mr. Schlussel has
sole voting and investment power over all of these shares.
(14) Includes (i) 204,596 shares owned directly by Mr. Silberman, (ii) 49,888
shares owned by Mr. Silberman's spouse, and (iii) 5,516 shares held in
custodial accounts for which Mr. Silberman is the custodian. Mr. Silberman
disclaims beneficial ownership of the shares owned by his spouse.
(15) Includes (i) 308,716 shares owned directly by Mr. Witty, (ii) 3,100 shares
owned by Mr. Witty's spouse, (iii) 366,034 shares owned by trusts for
which Mr. Witty is trustee, (iv) 35,176 shares held by the Employees'
Retirement Plan of the Bank for which Mr. Witty is a co-trustee with
Messrs. Hertz and Gould, and (v) 167,600 shares owned by trusts for which
Mr. Witty is co-trustee with Mr. Gould or Mr. Hertz. Mr. Witty has shared
voting and investment power over the shares owned by the trust for which
he is a co-trustee and the shares held by the Employees' Retirement Plan.
Mr. Witty disclaims beneficial ownership of the shares owned by his
spouse, the shares owned by the trusts, and the shares held by the
Employees' Retirement Plan (other than those attributable to him as a
result of his interest in the Plan).
(16) Includes shares subject to stock options as described in the preceding
footnotes. Shares reported by more than one person are counted only once.
-9-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The Summary Compensation Table shows the compensation for the past three
years of each of the Company's five most highly compensated executive officers,
including the Chief Executive Officer (the "named executive officers"). The
named executive officers have received no compensation for their services to the
Company; in each case the reported compensation has been paid by, and with
respect to the services provided to, the Bank.
Annual Compensation
----------------------------------------
Name and Principal Position Year Salary Bonus(1)
- --------------------------- ---- ------ --------
James G. Lawrence .................... 1998 310,000 121,932
President and 1997 310,000 121,932
Chief Executive Officer 1996 310,000 113,750
Spencer B. Witty ..................... 1998 275,000 117,557
Chairman of the Board 1997 275,000 119,245
1996 275,000 109,375
William J. Cardew .................... 1998 225,000 111,307
Vice Chairman of the Board 1997 225,000 113,117
and Chief Operating Officer 1996 225,000 103,125
-10-
<PAGE>
Rudolf H. Hertz...................... 1998 160,000 70,455
Vice Chairman of the Board 1997 160,000 72,183
1996 160,000 65,000
Stephen A. Barrow2.................... 1998 149,692 47,778
Executive Vice President and 1997 143,717 44,500
Chief Credit Officer 1996 136,000 41,375
- ----------------
(1) Includes (i) bonuses under the incentive compensation bonus plan for senior
executives in 1998 and (ii) regular bonus of approximately 12.5% of salary. The
regular bonus is paid to all officers of the Bank (approximately 79 persons in
1998) and historically has been a part of management compensation. The incentive
compensation bonus for each of the named executive officers in 1998 was as
follows: Mr. Lawrence - $83,182; Mr. Witty - $83,182; Mr. Cardew - $83,182; Mr.
Hertz - $50,455; and Mr. Barrow $30,000. See "Compensation and Option Committee
Report on Executive Officer Compensation."
(2) Mr. Barrow is not an executive officer but is included in the Summary
Compensation Table as one of the Company's most highly compensated non-executive
officers pursuant to the rules of the Commission.
Pension Plans
Employees' Retirement Plan. The Bank maintains a non-contributory, defined
benefit Retirement Plan administered by the Bank for employees. The estimated
annual pension benefits payable upon retirement at a normal retirement age (65)
for the named executive officers are as follows:
James G. Lawrence......................................... $74,868
Spencer B. Witty.......................................... 59,190
Rudolf H. Hertz........................................... 125,526
William J. Cardew......................................... 42,310
Stephen A. Barrow......................................... 27,496
Under the Retirement Plan, the normal annual benefit payable to qualifying
employees upon their retirement is based upon a formula of 1.8% of the initial
$160,000 of a participant's annual compensation for each year of participation.
Normal retirement age under the Retirement Plan is 65. The Retirement Plan also
provides for reduced benefit payments for early retirement following age 55.
Covered remuneration under the Retirement Plan is an employee's salaries, wages,
or other regular payments from the Bank, including commissions, overtime pay,
bonuses and any other taxable compensation.
The estimated annual pension benefits for the Bank's executive officers
are based upon continuation of employment from December 31, 1997, at the salary
then in effect, to retirement date. In addition, Non-Retirement Plan benefits
are payable to Messrs. Witty and Hertz (under Board resolutions of November 17,
1981, March 24, 1987 and April 28, 1988, which specified respective base dollar
amounts to be increased annually by 9%) in the amount of $125,710 and $32,454,
respectively, and Non-Retirement Plan benefits are payable to James G. Lawrence
and William J. Cardew in the amount of $100,000 each per year for 15 years
guaranteed after retirement. Further, each of Messrs. Witty, Hertz,
-11-
<PAGE>
Lawrence and Cardew would receive an annual benefit of $9,600 under the
Directors' Plan, upon termination of their service as a Director.
Stock Option Grants. The Company maintains an incentive and non-qualified
Employees' Stock Option Plan within the meaning of the Internal Revenue Code of
1986, as amended (the "Company Option Plan"). No options were granted to the
named executive officers in 1998.
Option Value Table. The following table shows information concerning (i)
options exercised during 1998 and (i) the value at December 31, 1998 of
unexercised stock options granted to the named executive officers.
Aggregated Option Exercises in Last Fiscal Year
and December 31, 1998 Option Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares December 31, 1998 December 31, 1998 (1)
Acquired Value --------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James G. Lawrence.... 80,000 $2,239,600 14,500 0 $381,495 0
Spencer B. Witty..... 4,000 117,980 24,000 0 631,440 0
William J. Cardew.... 46,884(2) 1,181,607 0 0 0 0
Rudolf H. Hertz...... 3,800 104,506 5,728 0 150,704 0
Stephen A. Barrow.... 4,800 136,851 11,000 0 278,410 0
</TABLE>
- -------------
(1) Computed by deducting option exercise price from the $36.19 market price of
the Common Stock at December 31, 1998. Except for the options owned by Mr.
Barrow which have an exercise price of $10.88 per share, all of the options in
the table have an exercise price of $9.88 per share.
(2) Includes options exercised by Mr. Cardew's spouse. Mr. Cardew disclaims
beneficial ownership of those options and the shares.
-12-
<PAGE>
COMPENSATION AND OPTION COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION
Objectives
The Bank's compensation policies and procedures have historically been
aligned with the Bank's conservative traditions. The Bank seeks to compensate
its executive officers (including the named executive officers) in a manner
which is:
(i) consistent with the Bank's conservative traditions and cost
structure;
(ii) sufficient to attract and retain key executives critical to the
success of the Bank;
(iii) reflective of current performance of both the individual officer and
the Bank; and
(iv) remuneration of successful long-term strategic management and
enhancement of shareholder values.
Components of Compensation
The Compensation and Option Committee (the "Committee") approves the
design of, assesses the effectiveness of, and administers the executive
compensation programs of the Bank in support of stockholder interests. The key
elements of the Bank's executive compensation program are base salary, annual
incentives and long-term incentive compensation. These key elements are
addressed separately below. In determining each component of compensation, the
Committee considers all elements of an executive's total compensation package.
Base Salary
The Committee regularly reviews each executive's base salary. Base
salaries are not necessarily compared to other institutions, although market
rates for comparable executives with comparable responsibilities are considered
in some cases. Base salaries are adjusted by the Committee to recognize varying
levels of responsibility, experience, breadth of knowledge, internal equity
issues, as well as external pay practices. Increases to base salaries are driven
primarily by individual performance. Individual performance is evaluated based
on sustained levels of individual contribution to the Bank.
Mr. Lawrence, Chief Executive Officer of the Bank, received a base salary
of $310,000 for fiscal 1998. This represents no increase over 1997. Salaries of
the other named executive officers were not increased over 1997.
Annual Incentives
The annual incentive program promotes the Bank's pay-for-performance
philosophy by providing the Chief Executive Officer and other executive officers
with direct financial incentives in the form of annual cash bonuses to achieve
corporate and, in some cases, individual performance goals. Annual bonus
opportunities allow the Bank to communicate specific goals that are of primary
importance during the coming year and motivate executives to achieve these
goals.
A bonus in the amount of 12.5% of annual average salary was paid to all
officers of the Bank (a total of 79 persons) in 1998. This percentage has
remained the same for many years. In addition, the
-13-
<PAGE>
Bank has an incentive compensation bonus plan for the named executive officers
which provides additional compensation at pre-determined levels if the Bank's
pre-tax earnings (excluding securities gains) exceed certain targets. At the
beginning of 1998, the Committee established specific corporate goals relating
to the Bank's pre-tax earnings (excluding securities gains). Eligible executives
were assigned threshold, target and maximum bonus levels based on a percentage
of base salary. The incentive compensation bonus for each of the named officers
is shown in under "EXECUTIVE COMPENSATION - Summary Compensation Table - Annual
Compensation - Bonus" above.
Long-Term Incentives
In keeping with the Bank's commitment to provide a total compensation
package which includes at-risk components of pay, long-term incentive
compensation comprises a significant portion of the value of an executive's
total compensation package. When awarding long-term grants, the Committee
considers an executive's level of responsibility, prior compensation experience,
historical award data, and individual performance criteria. Long-term incentives
are in the form of stock options awards under the Bank's Option Plan.
Stock options are granted at an option price which is the fair market
value of the Common Stock on the date of grant. Accordingly, stock options have
value only if the stock price appreciates. This design focuses executives on the
creation of stockholder value over the long term. The size of stock option
grants is based on competitive practice, individual performance factors and
historical award data. No stock option grants were made to the named executive
officers in fiscal 1998.
Conclusion
The Committee believes these executive compensation policies and programs
serve the interests of the Bank and its stockholders effectively. The various
compensation vehicles offered are appropriately balanced to provide increased
motivation for executives to contribute to the Bank's overall future success,
thereby enhancing the value of the Bank for the stockholders' benefit.
We will continue to monitor the effectiveness of the Bank's total
compensation program to meet the current and future needs of the Bank.
Members of the Compensation and Option Committee:
Charles J. Baum, (Chairman)
Isidore Karten, Robinson Markel,
Paul Meyrowitz, Alan Mirken, Mitchell J. Nelson,
Leonard Schlussel and Charles I. Silberman
-14-
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth following this paragraph is a line graph comparing the total
stockholder return in the Company Common Stock, based on the market price of the
Common Stock and assuming reinvestment of dividends, and adjusted for stock
splits, with the cumulative total return of the NASDAQ Stock Market Index (US
Companies) and NASDAQ Bank Stocks for the last five years, as prepared for the
Company by the Center for Research in Security Prices of the University of
Chicago in accordance with the SEC regulations.
Comparison of Five Year Cumulative Total Returns
Merchants New York Bancorp, Inc.
NASDAQ Stock Market and NASDAQ Bank Stocks
[The following information was depicted as a line graph in the printed material]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Legend
Symbol Index Description: 12/31/93 12/30/94 12/29/95 12/31/96 12/31/97 12/31/98
- ------ ------------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
- ---- / / MERCHANTS NEW YORK BANCORP 100.0 97.3 125.0 134.4 358.8 316.0
- -- -- -- o Nasdaq Stock Market (US Companies) 100.0 97.8 138.3 170.0 208.6 293.2
- --
. . . . n Nasdaq Bank Stocks 100.0 100.0 148.4 195.9 328.0 324.9
SIC 6020-6029, 6710-6719 US & Foreign
</TABLE>
Notes:
A. The lines represent index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading days is used.
D. The index level for all series was set to $100.00 on 12/31/93.
- --------------------------------------------------------------------------------
-15-
<PAGE>
There can be no assurance as to future trends in the cumulative total
return of the Company's Common stock or of the foregoing indices. The Company
does not make or endorse any predictions as to future stock performance.
From the inception of the Company's share repurchase program in August,
1996 through December 31, 1998, a total of 426,473 shares of Common Stock had
been repurchased under the program, at a total cost of approximately
$10,112,000. Of these, 185,966 shares were reissued upon exercise of employee
stock options, and the Company received a total of approximately $3,811,000 in
payment of option exercise prices. Under the program, the Company is authorized
to repurchase up to approximately 1,000,000 shares of Common Stock. Unless
reissued, repurchased shares are held in the Company's treasury and appear on
the Company's financial statements as a reduction of stockholder equity.
Treasury shares do not receive any dividends and are not voted at meetings of
stockholders.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Any directors, officers or their associates or business affiliates who
have loans outstanding with the Bank have these extensions of credit in the
ordinary course of the Bank's business and on substantially the same terms as
those prevailing at the time for comparable transactions with members of the
general public, including interest rates and collateral. Such loans did not
involve more than the normal risk of collectibility or present other unfavorable
features.
Robinson Markel, a director of the Company, is a partner in Rosenman &
Colin LLP, which rendered legal services to the Company. Fees paid by the
Company for these services did not exceed five percent of that firm's gross
income. Paul Meyrowitz, a director of the Company, is a partner in Simon,
Meyrowitz and Meyrowitz LLP, which rendered legal services to the Company. The
Company paid that firm a retainer of $5,000 per month in 1998 and expects to do
the same in 1999.
There are no family relationships among the nominees for directors, except
that Messrs. Witty and Gould are grandfather and grandson.
OTHER MATTERS
The Board of Directors of the Company does not know of any matters other
than those described in this proxy statement that will be presented for action
at the meeting. If any other matters are properly brought before the Meeting,
the persons named in the accompanying proxies will vote the shares represented
by such proxies on such matters as instructed by the Board of Directors of the
Company, who have instructed the proxies to vote in accordance with the proxies'
own best judgment in the absence of express instruction from the Board.
Independent Auditors and Accountants of the Company
KPMG LLP are the Company's independent auditors and have been the Bank's
auditors since 1982. Freeman, Davis, Furgatch & Co. prepares the Bank's and the
Company's corporate income tax returns and have been with the Bank since 1975.
It is the Company's intent to continue the services of both accounting firms for
1999. Representatives of both accounting firms will be present at the Meeting
and will have the opportunity to make a statement, if they wish, and to respond
to appropriate questions from stockholders.
-16-
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934, as
amended.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who beneficially own 10% of
the Company's Common Stock (the "Reporting Persons"), to file reports regarding
their Company Common Stock ownership and changes in ownership with the SEC.
Based solely on a review of the copies of such forms furnished to the Company
and written representations from certain of the Reporting Persons, the Company
believes that during 1998, the Reporting Persons complied with all Section 16(a)
reporting requirements applicable to them, except as follows: Spencer B. Witty
and Eric W. Gould each failed to timely file a monthly report on Form 4 with
respect to a single transaction. Each subsequently filed Form 5 reporting the
transaction.
Stockholder Proposals
Any stockholder who wishes to submit a proposal for the 2000 Annual
Meeting of Stockholders of the Company should submit the proposal to the Company
by November 27, 1999.
By the order of the Board of Directors
Spencer B. Witty
Chairman of the Board
James G. Lawrence
President and Chief Executive Officer
NEW YORK, NEW YORK
March 19, 1999
-17-
<PAGE>
PROXY MERCHANTS NEW YORK BANCORP PROXY
ANNUAL MEETING OF STOCKHOLDERS--APRIL 27, 1999
This Proxy is solicited on behalf of the Board of Directors. The undersigned
hereby appoints Harold N. London and David H. Meyrowitz, or either of them,
attorneys and proxies with full power of substitution in each of them, in the
name, place and stead of the undersigned to vote as proxy all the stock of the
undersigned in Merchants New York Bancorp, Inc. (the Company) at the Annual
Meeting of Stockholders or any adjournment thereof, as instructed below:
Proposal One: Election of Directors
Nominees
Charles J. Baum, William J. Cardew, Eric W. Gould, Rudolf H. Hertz, Isidore
Karten, James G. Lawrence, Robinson Markel, Paul Meyrowitz, Alan Mirken,
Mitchell J. Nelson, Leonard Schlussel, Charles I. Silberman and Spencer B.
Witty.
Instructions: Mark one of the boxes below. If withholding authority to vote for
any individual nominee, place an x in the appropriate box and place a line
through the relevant nominees name above.
|_| FOR ALL NOMINEES |_| TO WITHHOLD ALL |_| FOR ALL NOMINEES,
NOMINEES EXCEPT AS NOTED
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES AND
AS THE PROXIES DEEM ADVISABLE ON OTHER MATTERS THAT MAY COME BEFORE THE MEETING
IF NO INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO INSTRUCTION IS GIVEN.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF MEETING AND PROXY
STATEMENT, EACH DATED MARCH 19, 1999.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE
ENCLOSED ENVELOPE.
DATED:_________________________________________, 1999
_________________________________________________L.S.
_________________________________________________L.S.
(NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS
HEREON. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC.
SHOULD SO INDICATE WHEN SIGNING, GIVING FULL TITLE AS
SUCH. IF SIGNER IS A CORPORATION, EXECUTE IN FULL
CORPORATE NAME BY AUTHORIZED OFFICER. IF SHARES ARE
HELD IN THE NAME OF TWO OR MORE PERSONS, ALL SHOULD
SIGN.)
