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:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
MSB BANCORP, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
MSB BANCORP, INC.
35 MATTHEWS STREET
GOSHEN, NEW YORK 10924
(914) 294-8100
March 10, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Meeting") of MSB Bancorp, Inc. ("MSB Bancorp" or the "Company"), the
holding company for MSB Bank, Goshen, New York, which will be held on April 24,
1997, at 10:00 a.m., at the South Street Office of MSB Bank, 4 South Street,
Middletown, New York 10940.
The attached Notice of Annual Meeting of Stockholders and Proxy
Statement describe the formal business to be transacted at the Meeting.
Directors and officers of MSB Bancorp, as well as a representative of KPMG Peat
Marwick LLP, the accounting firm appointed by the Board of Directors to be the
Company's independent auditors for the fiscal year ending December 31, 1997,
will be present at the Meeting to respond to any questions that our stockholders
may have.
The Board of Directors of MSB Bancorp has determined that an
affirmative vote on each of matters 1, 2 and 3 to be considered at the Meeting
is in the best interests of the Company and its stockholders and unanimously
recommends a vote "FOR" each of these matters.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOUR
COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST BE
REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE
CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of MSB
Bancorp and MSB Bank, we wish to thank you for your continued support. We
appreciate your interest.
Sincerely yours,
William C. Myers
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
MSB BANCORP, INC.
35 MATTHEWS STREET
GOSHEN, NEW YORK 10924
(914) 294-8100
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of MSB Bancorp, Inc. ("MSB Bancorp" or the "Company") will be held on April 24,
1997, at 10:00 a.m., at the South Street Office of MSB Bank, 4 South Street,
Middletown, New York 10940.
The Meeting is for the purpose of considering and voting upon the
following matters:
1. The election of three directors for terms of three years each;
2. The amendment of the Company's Certificate of Incorporation to
eliminate the provisions that prohibit record owners of the
Company's common stock who beneficially own in excess of 10%
of the outstanding shares of common stock (the "Limit") from
voting any shares of common stock in excess of the Limit;
3. The ratification of the appointment of KPMG Peat Marwick LLP
as independent auditors of the Company for the year ending
December 31, 1997; and
4. Such other matters as may properly come before the Meeting or
any adjournment or postponement thereof.
The Board of Directors has established February 25, 1997 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting and at any adjournment or postponement thereof. Only holders of
record of the common stock of the Company as of the close of business on that
date will be entitled to vote at the Meeting or any adjournment or postponement
thereof. In the event there are not sufficient votes to approve or ratify any
one or more of the foregoing proposals at the time of the Meeting, the Meeting
may be adjourned or postponed in order to permit further solicitation of proxies
by the Company. A list of stockholders entitled to vote at the Meeting will be
available at MSB Bank, 35 Matthews Street, Goshen, New York 10924, for a period
of ten days prior to the Meeting and will also be available at the Meeting.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING,
IS REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY A STOCKHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED BY FILING WITH THE CORPORATE
SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A
LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY
AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU
ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL
NEED ADDITIONAL DOCUMENTATION FROM THE HOLDER OF RECORD OF YOUR SHARES TO VOTE
PERSONALLY AT THE MEETING.
By Order of the Board of Directors,
Karen DeLuca
Secretary
Goshen, New York
March 10, 1997
<PAGE>
MSB BANCORP, INC.
35 MATTHEWS STREET
GOSHEN, NEW YORK 10924
(914) 294-8100
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 1997
GENERAL INFORMATION
SOLICITATION AND VOTING OF PROXIES
This proxy statement is being furnished to stockholders of MSB Bancorp,
Inc. ("MSB Bancorp" or the "Company") in connection with the solicitation by the
Board of Directors of the Company (the "Board" or "Board of Directors") of
proxies to be used at the Annual Meeting of Stockholders (the "Meeting") to be
held at the South Street Office of MSB Bank, 4 South Street, Middletown, New
York 10940, on April 24, 1997 at 10:00 a.m., and at any adjournment or
postponement thereof. The Company's 1996 Annual Report to Stockholders, which
includes a copy of the Company's Form 10-K, as filed with the Securities and
Exchange Commission, and the Company's consolidated financial statements for the
fiscal year ended December 31, 1996, accompanies this proxy statement, which is
first being mailed to stockholders on or about March 10, 1997.
Regardless of the number of shares of common stock you own, it is
important that your shares be represented by proxy or in person at the Meeting.
Stockholders are requested to vote by completing, signing and dating the
enclosed proxy card and returning it 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 MSB BANCORP WILL BE
VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN. WHERE NO INSTRUCTIONS ARE
INDICATED, PROXIES WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 TO BE VOTED ON AT THE
MEETING AS PRESENTED IN THIS PROXY STATEMENT.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxyholders discretionary authority to vote the
shares in such a manner as shall be determined by a majority of the Board of
Directors on such other business, if any, that may properly come before the
Meeting or any adjournment or postponement thereof.
As to 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 withhold authority to vote for one or more
of the nominees being proposed. Under Delaware law and the Company's Certificate
of Incorporation and By-laws, directors are elected by a plurality of shares
voted, without regard to either (i) broker non-votes or (ii) proxies as to which
authority to vote for one or more of the nominees being proposed is withheld.
Concerning all other matters, by checking the appropriate box, you may:
(i) vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" with
respect to such item. Under the Company's Certificate of Incorporation and
By-laws, unless otherwise required by law, the affirmative vote of the holders
of at least 80% of the outstanding shares of the Company's common stock on
February 25, 1997 (after giving effect to the "Limit," as discussed below under
"Voting Securities") is required to adopt Proposal 2 to amend the Company's
Certificate of Incorporation to eliminate the "Limit." Under the Company's
Certificate of Incorporation and By-laws, unless otherwise required by law, all
other matters shall be determined by a majority of the votes cast affirmatively
or negatively, without regard to either (a) broker non-votes or (b) proxies
marked "ABSTAIN" as to that matter.
<PAGE>
Proxies solicited hereby will be returned to the Board and will be
tabulated by inspectors of election designated by the Board, who will not be
employed by, or be a director of, the Company or any of its affiliates.
A proxy may be revoked at any time prior to its exercise by the filing
of a 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 Meeting and voting in person. However, if you are a stockholder
whose shares are not registered in your own name, you will need appropriate
documentation from the holder of record of your shares to vote personally at the
Meeting.
The cost of solicitation of proxies on behalf of management will be
borne by the Company. In addition to the solicitation of proxies by mail, D.F.
King & Co., Inc., a proxy solicitation firm, will assist the Company in
soliciting proxies for the Meeting and will be paid a fee of $6,500, plus
out-of-pocket expenses. Proxies may also be solicited personally or by telephone
or telegraph by directors, officers and regular employees of the Company and MSB
Bank (the "Bank"), without additional compensation therefor. MSB Bancorp 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.
VOTING SECURITIES
The securities which may be voted at the Meeting consist of shares of
common stock of MSB Bancorp (the "Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Meeting, except as
described below. There is no cumulative voting for the election of directors.
The close of business on February 25, 1997 has been fixed by the Board of
Directors as the record date ("Record Date") for the determination of
stockholders entitled to notice of and to vote at the Meeting and any
adjournment or postponement thereof. The total number of shares of Common Stock
outstanding on the Record Date was 2,833,936 shares.
As provided in the Company's Certificate of Incorporation, record
owners of Common Stock who beneficially own in excess of 10% of the outstanding
shares of Common Stock (the "Limit") are not entitled to any vote in respect of
the shares held in excess of the Limit. A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as persons acting in
concert with, such person or entity. The Company's Certificate of Incorporation
authorizes the Board of Directors (i) to make all determinations necessary to
implement and apply the Limit, including determining whether persons or entities
are acting in concert and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit to supply information
to the Company to enable the Board to implement and apply the Limit. As
described under "Proposal 2. Amendment of Certificate of Incorporation to
Eliminate the "Limit,"" the Company is soliciting the vote of its stockholders
to eliminate the provisions regarding the Limit from its Certificate of
Incorporation.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit) is necessary to constitute a
quorum at the Meeting. In the event that a quorum is not obtained, or if fewer
shares of Common Stock are voted to approve or ratify any proposal than the
number required for approval or ratification, the Meeting may be adjourned or
postponed in order to permit the further solicitation of proxies. At any
subsequent reconvening of the Meeting, all proxies will be voted in the same
manner as such proxies would have been voted at the original convening of the
Meeting (except for any proxies which have theretofore effectively been revoked
or withdrawn).
2
<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
outstanding shares of Common Stock on February 1, 1997, as disclosed in certain
reports regarding such ownership filed with the Company or with the Securities
and Exchange Commission (the "SEC"), in accordance with Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), by such
persons and groups. Other than those persons listed below, the Company is not
aware of any person or group, as such term is defined in the Exchange Act, that
owns more than 5% of the Common Stock as of February 1, 1997.
NAME AND ADDRESS NUMBER PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OF SHARES CLASS(1)
- -------------- ------------------- --------- --------
Common Stock Middletown Savings Bank 163,557(2) 5.8%
Employee Stock Ownership
Plan and Trust ("ESOP")
35 Matthews Street
Goshen, New York 10924
Common Stock Kahn Brothers & Co., Inc. [ ](3) [ ]%
One Exchange Plaza
New York, New York 10006
- ---------------
(1) The total number of shares of Common Stock outstanding on February 1,
1997 was 2,833,936 shares.
(2) Shares of Common Stock were acquired by the ESOP in the conversion of
the Bank from mutual to stock form (the "Conversion"). A committee
consisting of non-employee members of the Board of Directors
administers the ESOP ("ESOP Committee"). An unrelated corporate trustee
for the ESOP ("ESOP Trustee") has been appointed by the Board of
Directors. The Committee instructs the ESOP Trustee regarding
investment of funds contributed to the ESOP. Each member of the
Committee disclaims beneficial ownership of the shares of Common Stock
held in the ESOP. Shares purchased by the ESOP are held in a suspense
account and released for allocation to participants' accounts annually.
The ESOP Trustee must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees.
Unallocated shares held in the suspense account will be voted by the
ESOP Trustee in a manner calculated to most accurately reflect the
instructions it has received from participants regarding the allocated
stock, provided such instructions do not conflict with the ESOP
Trustee's fiduciary obligations under ERISA. At February 1, 1997,
89,405 shares were allocated to participants and 74,152 shares were
unallocated.
(3) Information is based on a Schedule 13G dated February [ ], 1997, in
which Kahn Brothers & Company disclosed that it had shared dispositive
power over all of the shares and sole voting power over none of the
shares.
3
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the shares
of Common Stock beneficially owned by each director of the Company, by each
Named Executive Officer of the Company identified in the Summary Compensation
Table included elsewhere herein and all directors and executive officers of the
Company or the Company's wholly owned subsidiary, MSB Bank, as a group as of
February 1, 1997. For purposes of this table, an individual is considered to
"beneficially own" any securities (a) over which he or she exercises sole or
shared voting or investment power or (b) of which he or she has the right to
acquire beneficial ownership, including the right to acquire beneficial
ownership by the exercise of stock options, within 60 days after February 1,
1997. As used herein, "voting power" includes the power to vote, or direct the
voting of, such securities, and "investment power" includes the power to
dispose, or direct the disposition of, such securities.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF COMMON
BENEFICIAL STOCK
NAME TITLE OWNERSHIP(1) OUTSTANDING(9)
---- ----- ------------ --------------
<S> <C> <C> <C>
William C. Myers Chairman of the Board, 36,419(2)(3) 1.3%
President and Chief
Executive Officer,
Director
Gill Mackay Executive Vice 34,130(2)(3)(6) 1.2%
President and Chief
Operating Officer
Joan M. Costello Director 10,244(4)(5)(7) 0.4%
Ralph W. Decker Director 30,511(4)(5)(6)(7) 1.1%
Joseph R. Donovan Director 7,139(4)(5)(7) 0.2%
John L. Krause Director 14,403(4)(5)(7) 0.5%
John W. Norton Director 13,074(4)(5)(7) 0.5%
Douglas Porto Director 18,073(4)(5)(6)(7) 0.6%
Nicholas J. Scali Director 27,379(2)(3)(7) 1.0%
Daniel R. Snyder Director 15,094(4)(5)(6) 0.5%
Frederick B. Wildfoerster, Jr. Director 11,798(4)(5)(7) 0.4%
All directors and executive 226,063(7)(8) 8.0%
officers as a group
(14 persons)(7)
</TABLE>
- ------------------
(1) Except as otherwise noted, each person or relative of such person whose
shares are included herein exercises sole (or shared with spouse,
relative or affiliate) voting or dispositive power as to the shares
reported.
(2) Includes 4,416, 2,994 and 1,472 shares with respect to Messrs. Scali,
Myers and Mackay, respectively, awarded under the MSB Bank Recognition
and Retention Plans and Trusts ("BRPs") as to which they may exercise
voting, but not dispositive, power. Also includes 8,995 and 15,456
shares which may be acquired by Mr. Myers and Mr. Mackay, respectively,
pursuant to options granted under the MSB Bancorp, Inc. 1992 Incentive
Stock Option Plan (the "Incentive Stock Plan")
(NOTES CONTINUED ON FOLLOWING PAGE)
4
<PAGE>
which are presently exercisable. Excludes 6,440 and 3,864 shares
underlying options for Mr. Myers and Mr. Mackay, respectively, which
are not exercisable within 60 days.
(3) Includes 3,796 and 5,045 shares held by the MSB 401(k) Savings Plan
("401(k) Plan") trustee which are allocable to the accounts of Mr.
Myers and Mr. Mackay, respectively, and as to which each shares voting
and dispositive power. Mr. Myers has elected to periodically purchase
additional shares at fair market value through the 401(k) Plan trustee
for his 401(k) Plan account, which shares will be reported upon the
receipt of the 401(k) Plan annual account report. Also includes 5,848,
4,272, and 486 shares allocated to Mr. Myers, Mr. Mackay and Mr. Scali,
respectively, under the ESOP as to which each may exercise voting
power, but not dispositive power, except in limited circumstances. Does
not include 74,152 shares held in the trust established for the ESOP
that have not been allocated to any individual's account and as to
which the members of the Bank's ESOP Committee, which consists of Dr.
Decker, Dr. Krause and Mr. Porto, may be deemed to share dispositive
power. Each member of the ESOP Committee disclaims beneficial ownership
of such shares.
(4) Includes 5,603, 6,017, 7,497, 5,486, 6,128, 5,459, 8,997 and 4,113
shares which may be acquired by Drs. Decker and Krause, Messrs.
Wildfoerster and Donovan, Ms. Costello, Messrs. Norton, Porto and
Snyder, respectively, pursuant to options granted under the MSB
Bancorp, Inc. 1992 Stock Option Plan for Outside Directors ("Directors'
Option Plan") which are presently exercisable.
(5) Includes 460 shares awarded to each outside director under the BRPs as
to which each such director may exercise voting, but not dispositive,
power.
(6) Includes shares over which individuals share voting and investment
power (other than disclosed in notes 3, 4 and 5) as follows: Mr.
Mackay, 410 shares; Mr. Decker, 23,068 shares; Mr. Porto, 6,696 shares;
and Mr. Snyder, 400 shares.
(7) Does not include 6,137 shares of Common Stock held by the trust
established for the MSB Bank Directors' Deferred Compensation Plan and
the MSB Bank Officers' Deferred Compensation Plan as to which the
members of the Bank's Administrative Committee, which consists of all
of the members of the Board of Directors except Mr. Snyder and Mr.
Myers may be deemed to share dispositive power. Each member of the
Administrative Committee disclaims beneficial ownership of such shares.
(8) Excludes 10,304 shares with respect to all executive officers which may
be acquired pursuant to options granted under the Incentive Stock Plan,
which are not exercisable within 60 days. Includes 12,512 shares
awarded to directors and all executive officers under the BRPs, as to
which the directors and officers may exercise voting, but not
dispositive power, and excludes 3,860 shares held by the BRPs which
have not been allocated as to which executive officers may share
voting, but not dispositive, power. Includes 73,751 shares subject to
options awarded to directors and officers under the Directors' Option
Plan and Incentive Stock Plan which are presently exercisable. Includes
16,104 shares allocated to executive officers and to Mr. Scali under
the ESOP, as to which such individuals may exercise voting, but not
dispositive power, except in limited circumstances. Includes 10,631
shares held by the 401(k) Plan trustee which are allocable to the
accounts of the executive officers and as to which such officers shares
voting and dispositive power.
(9) Percentages with respect to each person or group of persons have been
calculated on the basis of 2,833,936 shares of Common Stock, the number
of shares of Common Stock outstanding as of February 1, 1997, plus the
number of shares of Common Stock which such person or group has the
right to acquire within 60 days after February 1, 1997 by the exercise
of stock options.
5
<PAGE>
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Company's By-laws, the number of directors of the
Company is set at ten (10) unless otherwise designated by the Board. The ten
members of the Board of Directors of the Company also presently serve as
directors of the Bank. Directors are divided into three classes, each elected
for a three year term, with a term of office of only one of the three classes of
directors expiring each year. Directors serve until their successors are elected
and qualified.
The three nominees proposed for election at the Meeting are John W.
Norton, Nicholas J. Scali and Daniel R. Snyder. All nominees named are presently
directors of the Company and the Bank.
In the event that any such nominee is unable to serve or declines to
serve for any reason, it is intended that proxies will be voted for the election
of all other nominees named and for such other person or persons as may be
designated by the present Board of Directors. The Board of Directors has no
reason to believe that any of the nominees named will be unable or unwilling to
serve. UNLESS AUTHORITY TO VOTE FOR ONE OR MORE OF THE DIRECTORS IS WITHHELD, IT
IS INTENDED THAT THE SHARES REPRESENTED BY THE ENCLOSED PROXY CARD WILL BE VOTED
FOR THE ELECTION OF ALL NOMINEES.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF ALL NOMINEES NAMED IN THIS PROXY STATEMENT.
INFORMATION WITH RESPECT TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth the names of the nominees and continuing
directors, their ages and the year in which each became a director of the
Company (including terms as a trustee of the Bank prior to 1992). There are no
arrangements or understandings between the Company and any director or nominee
pursuant to which such person was elected or nominated to be a director of the
Company. For information with respect to security ownership of directors, see
"General Information -- Stock Ownership of Management."
<TABLE>
<CAPTION>
END OF DIRECTOR
NAME AGE(1) TERM POSITION HELD WITH THE COMPANY SINCE
- ---- ------ ---- ------------------------------ -----
NOMINEES FOR A THREE-YEAR
TERM EXPIRING IN 2000
<S> <C> <C> <C> <C>
John W. Norton 68 1997 Director 1978
Nicholas J. Scali 69 1997 Director 1979
Daniel R. Snyder 47 1997 Director 1989
CONTINUING DIRECTORS
Joan M. Costello 71 1998 Director 1972
Ralph W. Decker 69 1996 Director 1982
Joseph R. Donovan 73 1998 Director 1983
John L. Krause 64 1996 Director 1980
William C. Myers 51 1998 Chairman of the Board, President and
Chief Executive Officer, Director 1992
Douglas Porto 66 1998 Director 1966
Frederick B. Wildfoerster, Jr. 72 1996 Director 1966
</TABLE>
- ------------------------
(1) At February 14, 1997.
6
<PAGE>
The principal occupation and business experience of each nominee for
election as director and of each continuing director is set forth below.
NOMINEES FOR ELECTION AS DIRECTORS
JOHN W. NORTON retired in 1989 as President and Chief Executive of
Horton Memorial Hospital, a position he had held for the previous 18 years.
NICHOLAS J. SCALI retired as the Bank's President and Chief Executive
Officer in August 1992. Effective September 30, 1993, Mr. Scali retired as
Chairman of the Board. Mr. Scali serves as a director of the Retirement System
Group, Inc.
DANIEL R. SNYDER is President and owner of Mid-City Transit Corp., a
school bus and transportation company.
CONTINUING DIRECTORS
JOAN M. COSTELLO retired as Executive Vice President of the Bank in
1991.
RALPH W. DECKER is a retired dentist.
JOSEPH R. DONOVAN is owner of Donovan Funeral Home, Goshen, New York.
Mr. Donovan also serves as a director of MSB Financial Services, Inc.
JOHN L. KRAUSE retired in 1994 as the Superintendent of Schools in the
Clarkstown, New York, Central School District.
WILLIAM C. MYERS is the Chairman of the Board, President and Chief
Executive Officer of the Company. Mr. Myers was named by the Bank's Board of
Directors as President and Chief Executive Officer of the Bank on September 1,
1992. Mr. Myers serves as President of MSB Financial Services, Inc. Effective
October 1, 1993, Mr. Myers became Chairman of the Board of Directors of the
Company and the Bank. Mr. Myers previously was Executive Vice President of the
Bank and has been employed by the Bank for 24 years.
DOUGLAS PORTO retired in 1989 after 30 years as President and Chief
Executive Officer of Wallace Oil Company, Inc. Mr. Porto also serves as a
director of MSB Travel, Inc.
FREDERICK B. WILDFOERSTER is self-employed as an architect.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
certain officers, and persons who own more than ten percent of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the SEC and the American Stock Exchange. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on a review of copies of such reports of ownership
furnished to the Company, or written representations that no forms were
necessary, the Company believes that, during the last fiscal year, all filing
requirements applicable to its officers, directors and greater than ten percent
stockholders were complied with.
7
<PAGE>
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
During fiscal 1996, the Board of Directors of the Company held 1
special meeting and 12 regular meetings. No director of the Company attended
fewer than 75% in the aggregate of the total number of the Company's board
meetings and committee meetings on which such director served. The Board of the
Company and the Bank maintain committees, the nature and composition of which
are described below.
The Executive Committee of the Company consists of all members of the
Company's Board. The Committee was established to discuss such matters delegated
to it by the Board and exercises such powers and authority as are, from time to
time, conferred upon it by the Board. The Committee met 1 time in 1996.
The Nominating Committee consists of Douglas Porto (Chairman), John W.
Norton and Nicholas J. Scali. It was recently established to discuss director
nominations prior to each Annual Meeting of the Bank and the Company. This
Committee met one time in fiscal 1996.
The Compensation Committee of the Bank consists of Ralph W. Decker
(Chairman), John L. Krause (Vice Chairman), Daniel R. Snyder, Douglas Porto and
John W. Norton. The Committee meets prior to the Bank's Annual Meeting to review
recommendations made by senior management concerning salary increases, officer
title changes, promotions and any contemplated changes to the Bank's medical
and/or retirement plans. The Committee met 4 times in fiscal 1996.
The Audit Committee consists of John W. Norton (Chairman), Nicholas J.
Scali (Vice Chairman), John L. Krause, Joseph R. Donovan, Ralph W. Decker, Joan
M. Costello and Daniel R. Snyder. It meets with the Bank's internal auditor to
review the Auditor's Report, which encompasses the findings and recommendations
made by the auditor during periodic audits of specific areas of the Bank. The
Committee also meets with the Independent Auditor of the Bank and the Company
annually. The Committee met 4 times in fiscal 1996.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Directors of the Company receive a $3,000 annual
retainer fee. Directors of the Bank, who are not officers of the Bank, receive a
$15,000 annual retainer fee. Members of the Committees receive $100 for each
meeting attended. Board members who perform property inspections receive $50 per
hour for their services. Directors may participate in the MSB Bank Directors'
Deferred Compensation Plan. See "Directors' Deferred Compensation Plan."
DIRECTORS' DEFERRED COMPENSATION PLAN. The Bank maintains the MSB Bank
Directors' Deferred Compensation Plan (the "Directors' Deferred Compensation
Plan"). Under the Directors' Deferred Compensation Plan, members of the Board of
Directors who have been directors for at least one year may elect, prior to the
time such fees are earned, to defer all or part of the fees payable to them for
their service as directors. The fees so deferred are recorded on the books of
the Bank as a liability in the year the fees are earned; however, the amount so
deferred is not specifically "funded" by the Bank. The Directors' Deferred
Compensation Plan was amended and restated effective as of June 1, 1995 to
provide that any deferred fees will be deemed to be invested, at the
participant's direction, among certain investment classifications established by
the Compensation Committee of the Board. The current investment classifications
for the Directors' Deferred Compensation Plan are based on the investment funds
under the Bank's 401(k) Plan. A participant's deferred fees, and any earnings or
losses attributable to such fees, generally are disbursed to a director, in
cash, not earlier than the time his or her service with the Board terminates due
to retirement or disability, or upon attainment of age 70. Upon a change of
control, as defined in the Directors' Deferred Compensation Plan, a director may
elect to receive an immediate lump sum payment of his deferred amounts. In the
year ended December 31, 1996, Mr. Snyder elected to defer $19,300 of his
director's fee.
8
<PAGE>
The Bank has established an irrevocable grantor trust to hold fees
deferred under the Directors' Deferred Compensation Plan. Pursuant to the terms
of the trust, in the event of the Bank's insolvency, trust assets will be
considered part of the general assets of the Bank, and the participants in the
Directors' Deferred Compensation Plan will have no rights with respect to the
trust's assets other than those of unsecured creditors. Marine Midland Bank has
been appointed to serve as the independent corporate trustee of the grantor
trust. This trust has been structured to comply with guidance issued from the
Internal Revenue Service ("IRS") such that the establishment of the trust should
not cause the Directors' Deferred Compensation Plan to be considered "funded" by
the Bank and, therefore, the directors who participate in the Directors'
Deferred Compensation Plan will not recognize income with respect to the
deferred fees until distributions are made from the Directors' Deferred
Compensation Plan. The Bank will include any trust earnings in its income.
OUTSIDE DIRECTORS' RETIREMENT PLAN. The Retirement Plan for Board
Members of MSB Bancorp, Inc. ("Directors' Retirement Plan") was adopted as of
October 21, 1994. The purpose of the Directors' Retirement Plan is to provide
retirement benefits to directors of the Company and the Bank who are neither
officers nor employees and to ensure that the Company and the Bank will have
their continued service and assistance in the conduct of the business in the
future. These directors have provided and will continue to provide expertise in
enabling the Company and the Bank to experience successful growth and
development.
The Director's Retirement Plan provides a normal retirement benefit for
each director who has attained age 65, who has completed 20 or more years of
"creditable service" and who agrees to provide consulting services to the
Company following retirement. "Creditable service" means service on the
Company's Board of Directors, or on the Board of Directors or board of trustees
of the Bank, excluding service while the director is a salaried officer or
employee of the Bank. In no event will periods of service on both Boards
simultaneously be counted more than once. The annual normal retirement benefit
is equal to the annual retainer being paid to the director for service on the
Board of Directors of the Bank or for service on the Board of Directors of the
Company (whichever is greater in the case of a member of both Boards), as in
effect in the month in which the director ceases to be a member of such Board.
The Directors' Retirement Plan also provides a vested retirement benefit for
directors who cease to be members of the Board and who agree to provide
consulting services: (1) after completing five or more years of "vesting
service," (2) after the Plan is terminated, (3) due to the disability of the
director, or (4) upon or after a change of control of the Company. "Vesting
service" means service on the Company's Board of Directors, or on the Board of
Directors or the board of trustees of the Bank, including service while the
director is a salaried officer or employee of the Bank or the Company. The
annual vested retirement benefit, when payable at or after age 65, is equal to
the annual normal retirement benefit multiplied by the lesser of 1.00 or the
quotient of the director's years of creditable service divided by 20. Payment of
a vested retirement benefit may commence after the later of the date the
director attains age 50 or ceases to be a director, but the amount of the
benefit otherwise payable will be reduced by 0.5% for each month that such
commencement date precedes the date on which the director would have attained
age 65.
In the event of a "Change of Control," as defined in the Directors'
Retirement Plan, each director would receive credit for three additional years
of service and the early retirement reduction factor would be 0.25% per month
rather than 0.5%. Additionally, a director may elect a lump sum payment after a
Change of Control. In the event a director's service terminates within the
period beginning three months prior to, and ending three years after, a Change
of Control, the director shall not be required to provide consulting services in
order to receive retirement benefits. The following table sets forth the
estimated annual benefits payable upon retirement at or after age 65 based on
the $15,000 annual retainer currently in effect for directors of the Bank and
the creditable service classifications specified.
YEARS OF CREDITABLE SERVICE
---------------------------
5 10 15 20
- -- -- --
$3,750 $7,500 $11,250 $15,000
9
<PAGE>
The Directors' Retirement Plan is unfunded. All benefits payable under
the Directors' Retirement Plan will be paid from the Company's current assets.
There are no tax consequences to either the director or the Company until
benefits are paid out to the director. At that time, the director will recognize
income in the amount of the payment and the Company will be entitled to an
offsetting deduction.
DIRECTORS' OPTION PLAN. Under the Directors' Option Plan, each outside
director at the time of the Conversion received an option to purchase shares of
Common Stock, the amount of which was determined by a formula based on years of
service on the Board, at a price of $10.00 per share. Any individual who becomes
an outside director will be granted a non-statutory stock option to purchase
3,375 shares of Common Stock at an exercise price equal to the fair market value
of the Common Stock at the date of grant. However, to the extent there are less
than 3,375 shares remaining for issuance under the Directors' Option Plan, such
outside director shall be granted a non-statutory stock option to purchase a
number of shares of Common Stock equal to the remaining shares available for
issuance. No options were granted or cancelled during fiscal 1996, and no
options were exercised during the year. Options for 49,390 shares of Common
Stock were exercisable as of December 31, 1996.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT. The Compensation Committee of the Bank
determines executive compensation and makes recommendations to the Board. The
Board approved all recommendations presented by the Compensation Committee for
1996. All compensation to executive officers is paid by the Bank; the Company
does not compensate its executive officers.
The Committee's philosophy is to compensate executive officers based on
the Company's ability to provide stockholders with a long-term investment
return. The Committee evaluates management's ability to determine appropriate
business strategies that provide for long-term growth and enhancement of
stockholder value. In addition, executive compensation is also based on the
executive's furtherance and support of the Company's role as a corporate citizen
by supporting the communities the Bank serves and by being a responsible
employer. The Committee has not established a policy with respect to qualifying
executive compensation for deductibility under section 162(m) of the Internal
Revenue Code of 1986 because the compensation paid to each of the executive
officers does not reach an amount which would prevent a deduction under such
provision.
Executive compensation is generally reviewed annually and is based on
various performance measures and industry comparisons. In evaluating executive
performance, consideration is given to, among other things, earnings, asset
quality, stock performance and customer service. These performance indicators
are also compared to the performance of other financial institutions in the
Bank's peer group. The Committee also considers progress made in achieving the
goals set in the Company's strategic plan. After assessing executive
performance, the Committee reviews compensation levels within the banking
industry for each executive officer. The factors the Committee considers when
determining executive compensation are not weighted in any particular manner.
Instead, compensation decisions are made subjectively based on a combination of
such factors.
The compensation of the Chief Executive Officer ("CEO") is determined
by the CEO's achievement of performance goals related to earnings, stock
performance, asset quality and customer service. In addition, the compensation
of the CEO is based on his performance in providing the vision necessary to
determine the Company's goals and strategic direction and the leadership
required to attain those goals. The Committee also considers the compensation
levels of CEOs at other financial institutions. The factors the Committee
considers when determining the compensation of the CEO are not weighted in any
particular manner. Instead, compensation decisions are made subjectively based
on a combination of such factors. In addition, the decision to award a bonus to
the CEO in 1996 was based on the attainment of certain financial goals that were
established at the beginning of the fiscal year. No stock options or shares of
restricted stock were awarded to the CEO in 1996.
10
<PAGE>
The Bank's compensation program consists primarily of cash
compensation. During 1994, the Bank established an incentive compensation
program that provides for a cash payment to its executive officers if certain
goals are met. These goals typically relate to financial performance measures
such as return on assets and operating expense levels.
In connection with the Conversion, the Bank adopted the Incentive Stock
Plan and the BRPs. The purpose of these plans is to provide additional
incentives to certain officers to perform in a superior manner and to encourage
such officers to remain with the Bank. The Incentive Stock Plan authorized the
granting of 128,800 shares of Common Stock. The BRPs provided for the award of
55,200 shares of Common Stock to certain officers. All of the stock options and
BRP awards were granted to executive officers during fiscal 1992 concurrent with
the Conversion. However, as a result of the forfeiture of certain awards during
fiscal 1993, there are 10,304 stock options that may be granted in the future as
well as 3,680 shares of Common Stock that may be awarded under the BRPs. No
stock options or shares of restricted stock were awarded to executive officers
in 1996.
COMPENSATION COMMITTEE
Ralph W. Decker (Chairman) John L. Krause (Vice Chairman)
Douglas Porto Daniel R. Snyder
John W. Norton
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. There are
no interlocks, as defined under the rules and regulations of the SEC, between
the Compensation Committee and corporate affiliates of members of the
Compensation Committee or otherwise.
11
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the Company's total cumulative stockholder
return from September 3, 1992, the date on which the Company's stock began
public trading, to December 31, 1996 to the total return for the Nasdaq National
Market or AMEX and the total return industry index for publicly traded companies
within the same Standard Industry Classification (SIC) code as the Bank. The
graph is based on an investment of $100 on September 3, 1992 at the initial
public offering price of $10.00 and assumes the reinvestment of all dividends
paid in additional shares of the same class of equity securities as those below.
[TO BE INSERTED]
THERE CAN BE NO ASSURANCE THAT STOCK PERFORMANCE WILL CONTINUE INTO THE
FUTURE WITH THE SAME OR SIMILAR TRENDS DEPICTED IN THE GRAPH ABOVE.
12
<PAGE>
SUMMARY COMPENSATION TABLE. The following table shows, for the fiscal
years ended December 31, 1996, December 31, 1995 and December 31, 1994, the cash
compensation paid by the Bank, as well as certain other compensation paid or
accrued for those years, to the CEO and the highest paid executive officer whose
base salary and bonus exceeded $100,000 in 1996 ("Named Executive Officers") of
the Company. MSB Bancorp has not paid any cash compensation to the Named
Executive Officers. No other officers received total compensation in excess of
$100,000 in fiscal 1996.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ----------------------- --------------------------
ALL
OTHER RESTRICTED OTHER
ANNUAL STOCK OPTIONS/ LTIP ANNUAL
NAME AND SALARY BONUS COMPENSATION(2) AWARDS(3) SARS(4) PAYOUTS COMPENSATION(5)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
------------------ ---- ------ ----- --------------- --------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William C. Myers(1)
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER................... 1996 162,490 17,262 -- -- -- -- 30,262
1995 142,934 6,365 -- -- -- -- 27,029
1994 135,399 -- -- -- -- -- 25,070
Gill Mackay
EXECUTIVE VICE PRESIDENT
AND CHIEF OPERATING
OFFICER................... 1996 117,192 12,475 -- -- -- -- 23,648
1995 99,164 4,500 -- -- -- -- 19,296
1994 93,392 -- -- -- -- -- 17,861
</TABLE>
- ----------------------------
(1) Salary includes director fees paid to Mr. Myers.
(2) Perquisites for the years ended December 31, 1996, December 31, 1995
and December 31, 1994 did not exceed the lesser of $50,000 or 10% of
the total of salary and bonus as reported for the Named Executive
Officer.
(3) The Bank maintains the BRP, a restricted stock award plan, for the
benefit of certain key officers. Awards under the BRPs vest in equal
installments at a rate of 20% per year. Awards will be vested 100% upon
termination of employment due to death, disability or retirement or
following a change in control. At December 31, 1996, Mr. Myers and Mr.
Mackay had unvested restricted shares of 2,944 and 1,472, respectively,
which had an aggregate market value of $57,776 and $28,888,
respectively, on that date. Dividends are paid on shares awarded under
the BRP to the same extent as paid on the Company's outstanding Common
Stock.
(4) The Company maintains the Incentive Stock Plan for the benefit of
officers and employees. Incentive stock options vest in equal
installments at a rate of 20% per year. Options will be vested 100%
upon termination of employment due to death, disability or retirement
or following a change in control. At December 31, 1996, 32,200 options
had been granted to Mr. Myers of which 4,000 were exercised in 1996 and
8,995 are presently exercisable. Mr. Mackay was granted 19,320 options,
of which 15,456 are presently exercisable. Mr. Mackay did not exercise
any options in 1996.
(5) Includes allocations of 1,542, 1,461 and 1,238 shares of Common Stock
for 1996, 1995 and 1994 with a total market value of $30,262, $27,029
and $25,070, respectively, as of December 31, 1996, 1995 and 1994,
under the Bank's ESOP for the account of Mr. Myers, and allocations of
1,205, 1,043 and 882 shares of Common Stock for 1996, 1995 and 1994
with a market value of $23,648, $19,296 and $17,861, respectively, as
of December 31, 1996, 1995 and 1994 under the ESOP for the account of
Mr. Mackay.
13
<PAGE>
EMPLOYMENT AGREEMENTS. The Company entered into employment agreements
with Messrs. Myers and Mackay, effective as of September 3, 1994, which were
subsequently amended effective as of September 3, 1995 and September 3, 1996.
These employment agreements supersede the prior employment agreements entered
into by the Bank and the Company with Messrs. Myers and Mackay and are intended
to ensure that the Bank and the Company will be able to maintain a stable and
competent management base. The continued success of the Bank and the Company
depends to a significant degree on the skills and competence of these officers.
The employment agreements between the Company and Messrs. Myers and
Mackay provide for initial five and three year terms, respectively, commencing
September 3, 1994. The amendments to the employment agreements, made effective
as of September 3, 1995 and September 3, 1996, each extend the initial term of
each employment agreement for one additional year. Commencing on the third
anniversary of the effective date of the amended employment agreement, in Mr.
Myers' case, and the second anniversary of the effective date, in Mr. Mackay's
case, the employment agreements extend for an additional day, each day, so that
the remaining terms shall always be three years for Mr. Myers and two years for
Mr. Mackay unless written notice is given by the Board of Directors or the
executive. In no event will the terms of the employment agreements extend beyond
the executive's 65th birthday. The employment agreements provide that the base
salary of the executive will be reviewed by the Board annually.
The employment agreements provide for minimum salaries of $135,300 and
$97,000 with respect to Messrs. Myers and Mackay, respectively. In addition to
the base salary, the employment agreements provide for, among other things,
disability pay, participation in stock and other employee benefit plans and
other fringe benefits applicable to executive personnel, and supplemental
retirement benefits to compensate the executive for the benefits that he cannot
receive under the Company's tax-qualified employee benefit plans due to the
limitations imposed under the Code. The employment agreements provide for
termination by the Company for cause at any time. In the event the Company
elects 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 a (i) failure to re-elect the executive to his current offices or, with
respect to Mr. Myers, failure to nominate the executive for board membership,
(ii) a material change in the executive's functions, duties, or
responsibilities, or relocation of his principal place of employment, (iii)
liquidation or dissolution of the Bank or the Company, or (iv) a breach of the
employment agreement by the Company, the executive or, in the event of his
death, his beneficiary, will be entitled to receive a severance payment equal to
the remaining salary payments due under the employment agreement, and the other
cash compensation and benefits that would have been received by the executive
during the remaining unexpired term of the employment agreement. The Bank and
the Company would also continue the executive's life, health, dental and
disability insurance coverage for the remaining unexpired term of the employment
agreement.
In the event of a change of control of the Bank or the Company, the
terms of the employment agreements will automatically be extended to the third
anniversary, in the case of Mr. Myers, and the second anniversary, in the case
of Mr. Mackay, of such change of control. If termination, voluntary (as defined
in the employment agreements) or involuntary, results from a change in control
of the Bank or the Company, the executive or, in the event of death, his
beneficiary, would be entitled to receive a severance payment equal to the
remaining salary payments due under the employment agreements and the other cash
compensation and benefits that would have been received by the executive during
the remaining unexpired term. The Bank and the Company would also continue the
executive's life, health, dental and disability coverage for the remaining
unexpired term of the employment agreement. A "change of control" is generally
defined to mean, during the term of the employment agreement, the acquisition of
the Company's or the Bank's stock that would require approval of the FRB under
the BHC Act or OTS approval under the Home Owners' Loan Act or the acquisition
by a person or group of persons having beneficial ownership of 20% or more of
the Bank's or the Company's common stock or a tender offer, exchange offer,
merger or other form of business combination, sale of assets, or contested
election of directors which results in a change of a majority of the Board of
Directors.
14
<PAGE>
On January 10, 1996, as a part of the Company's raising of additional
equity in connection with the acquisition of certain branches from First
Nationwide Bank, A Federal Savings Bank ("First Nationwide"), the Company sold
600,000 shares of 8.75% Cumulative Convertible Preferred Stock, Series A
("Series A Preferred Stock") to HUBCO, Inc., a New Jersey-based bank holding
company ("HUBCO"), pursuant to the terms and provisions of a Preferred Stock
Purchase Agreement (the "Preferred Stock Purchase Agreement"). (See Proposal 2 -
Amendment of Certificate of Incorporation to Eliminate the "Limit" - General).
In connection with HUBCO's purchase of the Series A Preferred Stock, each of
Messrs. Myers and Mackay has agreed that the Series A Preferred Stock sale, a
conversion of the Series A Preferred Stock to Common Stock by HUBCO and/or a
purchase by HUBCO of not more than 5.0% of the fully diluted outstanding shares
of Common Stock during the three years following the date of the Preferred Stock
Purchase Agreement shall not constitute a "change of control" for purposes of
their respective employment agreements. In the event that any amounts paid to
the executive following a change of control would constitute "excess parachute
payments" under section 280G of the Code, the employment agreements provide that
the executive will be indemnified for any excise taxes imposed due to such
excess parachute payments, and any additional income and employment taxes
imposed as a result of such indemnification of excise taxes. Any excess
parachute payments and indemnification amounts paid will not be deductible
compensation expenses for the Company or the Bank.
OPTION PLANS
The following table provides certain information with respect to the
number of shares of Common Stock acquired through the exercise of, or
represented by outstanding, stock options held by the Named Executive Officers
as of December 31, 1996. Also reported are the values for "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, which
was $19.625 per share.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUES OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS
ACQUIRED VALUE FISCAL YEAR-END AT FISCAL YEAR-END
ON EXERCISE REALIZED (#) ($)
(#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---------------- ------------ ------------------------------- ----------------------------
<S> <C> <C> <C> <C>
William C. Myers 4,000 26,000 8,995/6,440 86,577/61,985
Gill Mackay -- -- 15,456/3,864 148,764/37,191
</TABLE>
At December 31, 1996, 32,200 options had been granted to Mr. Myers, of which
4,000 were exercised in 1996 and 8,995 are presently exercisable. Mr. Mackay had
been granted 19,320 options, of which 15,456 are presently exercisable. Mr.
Mackay did not exercise any options in 1996.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
From time to time the Bank makes loans to its and the Company's
officers, which loans 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 collectibility or present other unfavorable
features. The Bank does not make loans to its directors or to the Company's
directors. The outstanding principal balance of such loans to executive officers
and family members of executive officers totaled $ as of December 31, 1996.
Non-executive officers and other employees of the Bank may obtain mortgage loans
without the payment of points or application fees.
15
<PAGE>
PROPOSAL 2
AMENDMENT OF CERTIFICATE OF
INCORPORATION TO ELIMINATE THE "LIMIT"
GENERAL
The Board of Directors recommends that the stockholders of the Company
consider and approve a proposal to amend the Certificate of Incorporation of the
Company to eliminate the provisions therein that provide that record owners of
Common Stock who beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote in respect of the shares
held in excess of the Limit.
The provisions relating to the Limit do not prohibit any stockholder
from owning more than 10% of the outstanding shares of Common Stock of the
Company but eliminate the voting power of shares held in excess of 10% of the
outstanding shares of Common Stock. These provisions were initially included in
the Company's Certificate of Incorporation as one of the antitakeover measures
adopted by the Company in connection with its formation as the holding company
for MSB Bank when MSB Bank converted from the mutual to stock form of ownership
in 1992, and these provisions are permissible for a Delaware corporation such as
the Company to include in its certificate of incorporation. However, for the
reasons described in the following paragraph, the Company is proposing to
eliminate the provisions relating to the Limit.
On January 10, 1996, as a part of the Company's raising of additional
equity in connection with the acquisition of certain branches from First
Nationwide, the Company sold 600,000 shares of the Series A Preferred Stock to
HUBCO, a New Jersey-based bank holding company, pursuant to the terms and
provisions of the Preferred Stock Purchase Agreement.
Each share of Series A Preferred Stock is convertible into one share of
Common Stock on or after January 10, 1999, subject to adjustment in certain
events. If HUBCO converted all of the 600,000 shares of Series A Preferred Stock
owned by it into shares of Common Stock, based on the number of shares of Common
Stock outstanding as of the Record Date, HUBCO would own approximately 21% of
the shares of the Company's Common Stock then outstanding. In addition, the
Preferred Stock Purchase Agreement permits HUBCO to purchase up to an additional
5% of the outstanding shares of Common Stock through January 4, 1999. Thus, it
is possible that, upon HUBCO's conversion of the shares of Series A Preferred
Stock into shares of Common Stock, HUBCO could own approximately 26% of the then
outstanding shares of Common Stock of the Company. However, if the Limit were
still in effect, HUBCO would not be permitted to vote any shares of Common Stock
owned in excess of the Limit. HUBCO was unwilling to make such an investment
unless the Company agreed to seek approval of the stockholders for the
elimination of the Limit. Therefore, in connection with the sale of Series A
Preferred Stock to HUBCO, the Company agreed to seek the approval of its
stockholders to eliminate the Limit and related provisions from the Company's
Certificate of Incorporation, because it believed that HUBCO's investment in the
shares of Series A Preferred Stock was necessary in order for the Company to be
able to raise sufficient equity in order to consummate the acquisition of
branches from First Nationwide.
The Preferred Stock Purchase Agreement requires the Company to (i)
include this Proposal 2 to eliminate the Limit in its 1997 Proxy Statement, as
well as to include a similar proposal in the proxy statement for the Company's
1998 annual meeting if this Proposal 2 is not approved by the stockholders; (ii)
retain a proxy solicitation firm to assist the Company in obtaining the
requisite vote of the stockholders to adopt Proposal 2; and (iii) provide its
stockholders with at least 45 days notice of any meeting at which a proposal to
eliminate the Limit is to be considered. The Company has complied with these
provisions by including this Proposal 2 in this Proxy Statement, by retaining
the firm of D.F. King & Co., Inc. as proxy solicitor for the Meeting and by
providing its stockholders with at least 45 days notice of the 1997 Annual
Meeting of Stockholders. In accordance with the Preferred Stock Purchase
Agreement, the Company included a proposal
16
<PAGE>
substantially identical to this Proposal 2 in its 1996 Proxy Statement. Such
proposal did not receive sufficient votes at the 1996 annual meeting to be
adopted by the Company's stockholders.
The effect of the adoption of Proposal 2 with respect to HUBCO's
investment in the Company would be to permit HUBCO to vote any and all of the
shares of Common Stock of the Company owned by it, even if such shares exceeded
10% of the outstanding shares, which could constitute a substantial voting block
of securities.
HUBCO would be required to obtain certain regulatory approvals prior to
owning 10% or more of the outstanding shares of Common Stock of the Company. In
addition, the actual percentage ownership by HUBCO upon its conversion of the
shares of Series A Preferred Stock into shares of Common Stock may be greater
if, for example, the Company repurchased shares of its Common Stock, or lower,
if the Company issued additional shares of Common Stock prior to such
conversion.
The provisions relating to the Limit are set forth in Article FOURTH,
Section C, Subsection 1, Subsection 4 and Subsection 7 of the Company's
Certificate of Incorporation. The text of the proposed revised Article FOURTH,
which is described in greater detail below, is set forth in Exhibit A to this
Proxy Statement.
EFFECT OF ELIMINATION OF THE LIMIT ON THE COMPANY'S RIGHTS PLAN AND STOCKHOLDERS
On September 16, 1994, the Company's Board of Directors adopted the
Rights Plan and declared a dividend of one preferred share purchase right
("Right") for each outstanding share of Common Stock, payable on October 7, 1994
to stockholders of record on that date. The Rights Plan is intended to protect
stockholders in the event an unsolicited offer or attempt to acquire control of
the Company is made, including a coercive or unfair offer or other takeover
attempt that could impair the ability of the Company's Board of Directors to
fully represent the interests of the Company's stockholders.
The Rights will be exercisable 20 business days after a person or group
of persons acquires 10% or more of the Common Stock ("Acquiring Person") or a
person or group of persons announces a tender offer the consummation of which
would result in ownership by a person or group of persons of 10% or more of the
Common Stock. If a person or group of persons becomes an Acquiring Person,
otherwise than pursuant to a cash tender offer for all shares in which such
person or group increases its stake to 80% of more of the outstanding shares of
Common Stock, each Right will entitle its holder (other than such person or
members of such group) to purchase, at the then-current exercise price of the
Right, a number of shares of Common Stock having a market value equal to twice
the exercise price of the Right. Additionally, if the Company is acquired in a
merger or other business combination transaction or 50% or more of its
consolidated assets or earning power is sold, each Right will entitle its holder
to purchase, at the then-current exercise price of the Right, a number of shares
of Common Stock of the acquiring company having a market value at that time
equal to twice the exercise price of the Right. Subject to certain limitations,
the Company's Board of Directors may reduce the 10% threshold. The Rights may be
redeemed by the Company under certain circumstances at a price of $.01 per
Right, and will expire on October 7, 2004 if not redeemed or exercised earlier.
In connection with the Preferred Stock Purchase Agreement, the Company
amended the Rights Plan to exclude from the definition of "Acquiring Person"
HUBCO or any affiliate as a result of HUBCO's acquisition of the Series A
Preferred Stock so long as HUBCO and any affiliate is not the beneficial owner
of any shares of Common Stock other than shares of Common Stock (A) beneficially
owned by HUBCO or any affiliate on the date of the Preferred Stock Purchase
Agreement or acquired by HUBCO or any affiliate subsequent to the date of the
Preferred Stock Purchase Agreement in compliance therewith, (B) of which HUBCO
or any affiliate is or becomes the beneficial owner by reason of the conversion
of shares of Series A Preferred Stock into shares of Common Stock, (C) of which
HUBCO or any affiliate inadvertently becomes the beneficial owner after the date
of the Preferred Stock Purchase Agreement, provided that the number of such
shares of Common Stock does not exceed 1.0% of the shares of Common Stock
outstanding on the date
17
<PAGE>
of the Preferred Stock Purchase Agreement and that HUBCO or any such affiliate,
as the case may be, divests such shares of Common Stock as soon as practicable
after it becomes aware of such acquisition of beneficial ownership and (D)
beneficially owned or otherwise held by HUBCO or any affiliate in a bona fide
fiduciary capacity or in satisfaction of debts previously contracted in good
faith, and in either case in the ordinary course of its banking business.
If the stockholders of the Company adopt this Proposal 2 to eliminate
the Limit, any stockholder who acquires 10% or more of the outstanding shares of
Common Stock would be entitled to vote all of such shares, including such shares
in excess of 10%. However, the elimination of the Limit is not likely to have a
practical effect on stockholders other than HUBCO, unless and until the Rights
expire in the year 2004 or the Board of Directors were to redeem the Rights or
amend the Rights Plan to permit an acquisition of shares of Common Stock in
excess of 10% without such acquisition causing the acquiror to become an
"Acquiring Person" for purposes of the Rights Plan. Until such time, the Rights
Plan would likely deter any such acquisition, because the provisions of the
Rights Plan would still be triggered thereby.
AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
The effect of deleting Section C, Subsection 1 of Article FOURTH would
be to remove the prohibition on voting any shares held in excess of 10% of the
outstanding shares of Common Stock, thus removing an antitakeover defense which
deters beneficial ownership of shares in excess of the Limit.
Section C, Subsection 4 of Article FOURTH provides that the Board of
Directors may demand and obtain information from stockholders who are reasonably
believed to own, or that own, shares in excess of the Limit. This subsection
provides a mechanism for the Board of Directors to implement the Limit. If the
Limit and related provisions are eliminated, the provisions of this subsection
would be unnecessary, and they would be deleted.
Section C, Subsection 7 of Article FOURTH provides that Section C
applies to all stockholders, including stockholders owning an amount of stock in
excess of the Limit. If the Limit and related provisions are eliminated, the
reference to the Limit in this subsection would be unnecessary and would be
deleted.
The Board of Directors approved the foregoing amendments of the
Company's Certificate of Incorporation on February 21, 1997.
The Certificate of Incorporation provides that Section C of Article
FOURTH may not be amended, changed or repealed except upon the affirmative vote
of the holders of at least 80% of the votes of then outstanding shares of stock
of the Company entitled to vote generally in the election of Directors.
ACCORDINGLY, YOUR VOTE ON THIS PROPOSAL 2 IS VERY IMPORTANT. BECAUSE
APPROVAL OF PROPOSAL 2 REQUIRES THE AFFIRMATIVE VOTE OF AT LEAST 80% OF THE
COMPANY'S OUTSTANDING SHARES OF COMMON STOCK, A NON-VOTE OR ABSTENTION WILL BE
EQUIVALENT TO A VOTE AGAINST THIS PROPOSAL.
UNLESS A PROXY IS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE
ENCLOSED PROXY WILL BE VOTED FOR THIS PROPOSAL 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR APPROVAL OF THESE AMENDMENTS TO THE CERTIFICATE
OF INCORPORATION.
18
<PAGE>
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP to act as
independent auditors for the Company and its affiliates, including the Bank, for
the fiscal 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 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 Meeting.
In connection with the acquisition by the Bank of seven branches of
First Nationwide during January 1996, and the resulting increase in the size of
the Company and the Bank, the Boards of Directors of the Company and the Bank
determined to replace Nugent & Haeussler, P.C., the Company's independent
auditors for the fiscal year ended December 31, 1995, with the firm of KPMG Peat
Marwick LLP. The Company's and the Bank's business relationship with Nugent &
Haeussler, P.C. had always been good, and none of the reports of Nugent &
Haeussler, P.C. on the financial statements of the Company for the two fiscal
years ended December 31, 1995 and December 31, 1996 contained an adverse opinion
or a disclaimer of opinion or was qualified or modified as to uncertainty, audit
scope or accounting principles. During the Company's fiscal years ended December
31, 1995 and December 31, 1996 there was no disagreement with Nugent &
Haeussler, P.C. on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Nugent & Haeussler, P.C., would have caused it
to make reference to the subject matter of the disagreement in connection with
its reports.
During the Company's fiscal years ended December 31, 1995 and De ember
31, 1996, neither the Company nor anyone on its behalf consulted KPMG Peat
Marwick LLP regarding the application of accounting principles to a specific
completed or contemplated transaction or the type of audit opinion that might be
rendered on the Company's financial statements, and no written or oral advice
concerning the same was provided to the Company that was an important factor
considered by the Company in reaching a decision as to any accounting, auditing
or financial reporting issue.
UNLESS A PROXY IS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE
ENCLOSED PROXY WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT 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.
19
<PAGE>
ADDITIONAL INFORMATION
STOCKHOLDER PROPOSALS
To be considered for inclusion in the proxy statement and proxy
relating to the Annual Meeting of Stockholders for the fiscal year ending
December 31, 1997, a stockholder's proposal must be received by the Secretary of
the Company at the address set forth on the first page of this Proxy Statement,
not later than December 6, 1997. Any such proposal will be subject to Rule 14a-8
of the Rules and Regulations of the SEC under the Exchange Act.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
The By-laws 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 date of
the Annual Meeting was mailed or such public disclosure was made. The notice
must include the stockholder's name and address, as it appears on the Company's
record of stockholders, a brief description of the proposed business, the reason
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. In the case of nominations to the Board, certain information regarding
the nominee must be provided. Nothing in this paragraph shall be deemed to
require the Company to include in its proxy statement and proxy relating to the
fiscal year ending December 31, 1997 Annual Meeting any stockholder proposal
which does not meet all of the requirements for inclusion established by the SEC
in effect at the time such proposal is received.
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 Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the 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 the Meeting, you are urged
to complete, sign and return your proxy promptly. If you are present at the
Meeting and wish to vote your shares in person, your proxy may be revoked by
voting at the Meeting.
20
<PAGE>
A COPY OF THE COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996,
AS FILED WITH THE SEC, IS INCLUDED IN THE COMPANY'S 1996 ANNUAL REPORT TO
STOCKHOLDERS, WHICH ACCOMPANIES THIS PROXY STATEMENT.
By Order of the Board of Directors,
Karen DeLuca
SECRETARY
Goshen, New York
March 10, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO COMPLETE, SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
21
<PAGE>
EXHIBIT A
MSB BANCORP, INC.
AMENDMENTS TO CERTIFICATE OF INCORPORATION
ELIMINATION OF THE "LIMIT"
--------------------------
I. RELEVANT PROVISIONS OF CERTIFICATE PRIOR TO AMENDMENT.
------------------------------------------------------
1. Article FOURTH, Section C, Subsection 1.
C. 1. Notwithstanding any other provision of this Certificate of
Incorporation, in no event shall any record owner of any outstanding Common
Stock which is beneficially owned, directly or indirectly, by a person who, as
of any record date for the determination of stockholders entitled to vote on any
matter, beneficially owns in excess of 10% of the then-outstanding shares of
Common Stock (the "Limit"), be entitled, or permitted to any vote in respect of
the shares held in excess of the Limit. The number of votes which may be cast by
any record owner by virtue of the provisions hereof in respect of Common Stock
beneficially owned by such person owning shares in excess of the Limit shall be
a number equal to the total number of votes which a single record owner of all
Common Stock owned by such person would be entitled to cast, multiplied by a
fraction, the numerator of which is the number of shares of such class or series
which are both beneficially owned by such person and owned of record by such
record owner and the denominator of which is the total number of shares of
Common Stock beneficially owned by such person owning shares in excess of the
Limit.
2. Article FOURTH, Section C, Subsection 4.
4. The Board of Directors shall have the right to demand that any
person who is reasonably believed to beneficially own Common Stock in excess of
the limit (or holds of record Common Stock beneficially owned by any person in
excess of the Limit) supply the Corporation with complete information as to (i)
the record owner(s) of all shares beneficially owned by such person who is
reasonably believed to own shares in excess of the Limit, (ii) any other factual
matter relating to the applicability or effect of this section as may reasonably
be requested of such person.
3. Article FOURTH, Section C, Subsection 7.
In the event any provision (or portion thereof) of this Section C shall
be found to be invalid, prohibited or unenforceable for any reason, the
remaining provisions (or portions thereof) of this Section shall remain in full
force and effect, and shall be construed as if such invalid, prohibited or
unenforceable provision had been stricken here from or otherwise rendered
inapplicable, it being the intent of this Corporation and its stockholders that
each such remaining provision (or portion thereof) of this Section C remain, to
the fullest extent permitted by law, applicable and enforceable as to all
stockholders, including stockholders owning an amount of stock over the Limit,
notwithstanding any such finding.
4. Article SIXTH, Section D.
D. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any Directors, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least 80 percent of the voting power of all of the
then-outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors (after giving effect to the provisions of
Article FOURTH of this Certificate of Incorporation ("Article FOURTH")), voting
together as a single class.
A-1
<PAGE>
5. Article SEVENTH.
SEVENTH: The Board of Directors is expressly empowered to adopt, amend
or repeal Bylaws of the Corporation. Any adoption, amendment or repeal of the
Bylaws of the corporation by the Board of Directors shall require the approval
of a majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the Bylaws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80 percent of the voting power of
all of the then-outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of Directors (after giving effect to
the provisions of Article FOURTH), voting together as a single class, shall be
required to adopt, amend or repeal any provisions of the Bylaws of the
Corporation.
6. Article EIGHTH, Section A.
EIGHTH: A. In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly provided in this
Section A:
1. any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (i) any Interested Stockholder (as hereinafter
defined) or (i ) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder, or any Affiliate of any Interested Stockholder, of any
assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) equaling or exceeding 25% or more of the combined
assets of the Corporation and its Subsidiaries; or
3. the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value (as hereinafter
defined) equaling or exceeding 25% of the combined Fair Market Value of the
outstanding common stock of the Corporation and its Subsidiaries, except for any
issuance or transfer pursuant to an employee benefit plan of the Corporation or
any Subsidiary thereof; or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or
5. any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of Directors (the "Voting Stock") (after giving effect to
the provisions of Article FOURTH), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or by any other
provisions of this Certificate of Incorporation or any Preferred Stock
Designation or in any agreement with any national securities exchange or
otherwise.
A-2
<PAGE>
The term "Business Combination" as used in this Article EIGHTH shall
mean any transaction which is referred to in any one or more of paragraphs 1
through 5 of Section A of this Article EIGHTH.
7. Article TWELFTH.
TWELFTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any vote of the holders of any class or series of
the stock of this corporation required by law or by this Certificate of
Incorporation, the affirmative vote of the holders of at least 80 percent of the
voting power of all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of Directors (after
giving effect to the provisions of Article FOURTH), voting together as a single
class, shall be required to amend or repeal this Article TWELFTH, Section C of
Article FOURTH, Sections C or D of Article FIFTH, Article SIXTH, Article
SEVENTH, Article EIGHTH or Article TENTH.
II. RELEVANT PROVISIONS OF CERTIFICATE INCLUDING AMENDMENT.
-------------------------------------------------------
(NOTE: MATERIAL TO BE DELETED IS INDICATED BY STRIKETHROUGH.)
1. Article FOURTH, Section C, Subsection 1, which reads as follows, is
deleted:
C. 1.
2. Article FOURTH, Section C, Subsection 4, which reads as follows, is
deleted:
4.
3. Article FOURTH, Section C, Subsection 7, is amended to read as follows:
In the event any provision (or portion thereof) of this Section C shall
be found to be invalid, prohibited or unenforceable for any reason, the
remaining provisions (or portions thereof) of this Section shall remain in full
force and effect, and shall be construed as if such invalid, prohibited or
unenforceable provision had been stricken here from or otherwise rendered
inapplicable, it being the intent of this Corporation and its stockholders that
each such remaining provision (or portion thereof) of this Section C remain, to
the fullest
A-3
<PAGE>
extent permitted by law, applicable and enforceable as to all stockholders.
4. Article FOURTH is renumbered to reflect the above deletions.
5. Article SIXTH, Section D, is amended to read as follows:
D. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any Directors, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least 80 percent of the voting power of all of the
then-outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors, voting together as a single class.
6. Article SEVENTH is amended to read as follows:
SEVENTH: The Board of Directors is expressly empowered to adopt, amend
or repeal Bylaws of the Corporation. Any adoption, amendment or repeal of the
Bylaws of the corporation by the Board of Directors shall require the approval
of a majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the Bylaws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80 percent of the voting power of
all of the then-outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of Directors, voting together as a
single class, shall be required to adopt, amend or repeal any provisions of the
Bylaws of the Corporation.
7. Article EIGHTH, Section A, is amended to read as follows:
EIGHTH: A. In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly provided in this
Section A:
1. any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (i) any Interested Stockholder (as hereinafter
defined) or (i ) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder, or any Affiliate of any Interested Stockholder, of any
assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) equaling or exceeding 25% or more of the combined
assets of the Corporation and its Subsidiaries; or
3. the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value (as hereinafter
defined) equaling or exceeding 25% of the combined Fair Market Value of the
outstanding common stock of the Corporation and its Subsidiaries, except for any
issuance or transfer pursuant to an employee benefit plan of the Corporation or
any Subsidiary thereof; or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or
A-4
<PAGE>
5. any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of Directors (the "Voting Stock"), voting together as a
single class. Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be specified, by
law or by any other provisions of this Certificate of Incorporation or any
Preferred Stock Designation or in any agreement with any national securities
exchange or otherwise.
The term "Business Combination" as used in this Article EIGHTH shall
mean any transaction which is referred to in any one or more of paragraphs 1
through 5 of Section A of this Article EIGHTH.
8. Article TWELFTH is amended to read as follows:
TWELFTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any vote of the holders of any class or series of
the stock of this corporation required by law or by this Certificate of
Incorporation, the affirmative vote of the holders of at least 80 percent of the
voting power of all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of Directors, voting
together as a single class, shall be required to amend or repeal this Article
TWELFTH, Section C of Article FOURTH, Sections C or D of Article FIFTH, Article
SIXTH, Article SEVENTH, Article EIGHTH or Article TENTH.
A-5
EXHIBIT 99
----------
Proxy Card
<PAGE>
REVOCABLE PROXY
MSB BANCORP, INC.
35 MATTHEWS STREET
GOSHEN, NEW YORK 10924
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MSB BANCORP, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 24, 1997
The undersigned stockholder of MSB Bancorp, Inc. hereby appoints
William C. Myers, Gill Mackay and Anthony J. Fabiano, or any of them, with full
powers of substitution, to represent and to vote as proxy, as designated, all
shares of common stock of MSB Bancorp, Inc. held of record by the undersigned on
February 24, 1997, at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held at 10:OO a.m., on April 24, 1997, or at any adjournment or
postponement thereof, upon the matters described in the accompanying Notice of
Annual Meeting and Proxy Statement and upon such other matters as may properly
come before the Annual Meeting. The undersigned hereby revokes all prior
proxies.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED IN ITEM 1 AND FOR
THE PROPOSALS LISTED IN ITEMS 2 AND 3.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
I WILL ATTEND THE ANNUAL MEETING |_| PLEASE MARK YOUR CHOICE LIKE THIS |X|
IN BLUE OR BLACK INK.
================================================================================
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES
NAMED IN ITEM 1 AND A VOTE "FOR" EACH OF THE PROPOSALS IN ITEMS 2 AND 3.
================================================================================
- --------------------------------------------------------------------------------
1. Election of Directors for a three year term. Nominees: John W. Norton,
Nicholas J. Scali and Daniel R. Snyder.
<TABLE>
<CAPTION>
INSTRUCTION: TO WITHHOLD AUTHORITY to
FOR All Nominees vote for any individual nominee, write that
(except as otherwise indicated) WITHHOLD for all Nominees nominee's name in the space provided:______
<S> <C> <C>
|_| |_| ___________________________________________
</TABLE>
- --------------------------------------------------------------------------------
2. Amendment of the Company's Certificate of Incorporation to eliminate
provisions prohibiting record holders of the Company's common stock owning in
excess of 10% of the outstanding shares of common stock (the "Limit") from
voting any shares of common stock in excess of the Limit.
For Against Abstain
|_| |_| |_|
- --------------------------------------------------------------------------------
3. Ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors for the Company.
For Against Abstain
|_| |_| |_|
4. If any other matters properly come before the Annual Meeting, including,
among other things, a motion to adjourn or postpone the Annual Meeting to
another time and/or place for the purpose of soliciting additional proxies or
otherwise, the persons named in this Proxy will vote on such matters in such
manner as shall be determined by a majority of the Board of Directors. As of
the date of the Proxy Statement for the Annual Meeting, management of the
Corporation is not aware of any other such business.
- --------------------------------------------------------------------------------
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and the Proxy Statement for the Annual Meeting.
__________________________________________________
__________________________________________________
Signature(s)
Dated:______________________________________, 1997
Please sign exactly as your name appears on this
proxy, Joint owners should each sign personally.
If signing as attorney, executor, administrator,
trustee or guardian, please include your full
title. Corporate or partnership proxies should be
signed by an authorized officer.
