LOGO
1122 FRANKLIN AVENUE
GARDEN CITY, NEW YORK 11530
(516) 742-9300
March __, 1998
Dear Stockholder:
You are invited to attend the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of T R Financial Corp. (the "Company"), which will be held on
Monday, April 27, 1998 at 9:30 a.m. New York time at the Westbury Manor, Jericho
Turnpike, Westbury, New York. Enclosed are a Notice of the 1998 Annual Meeting
of Stockholders, Proxy Statement for the Annual Meeting, Proxy Card and 1997
Annual Report to Stockholders.
At the Annual Meeting you will be asked to consider and vote upon: (1)
the election of three directors, each to serve for a three-year term expiring in
2001; (2) the ratification of the appointment of the firm of KPMG Peat Marwick
LLP as independent auditors for the Company for the year ending December 31,
1998; and (3) the approval of the amendment to the Certificate of Incorporation
of the Company to increase the number of shares of common stock that the Company
is authorized to issue. In addition, management will report on the operations
and activities of the Company, and there will be an opportunity for you to ask
questions about the Company's business.
The Board of Directors of the Company has determined that an
affirmative vote on each proposal to be considered at the Annual Meeting is in
the best interests of the Company and unanimously recommends a vote "FOR" each
proposal.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, THE BOARD OF DIRECTORS
URGES YOU TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS
POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THIS WILL NOT PREVENT YOU FROM
VOTING IN PERSON AT THE ANNUAL MEETING, BUT WILL ASSURE THAT YOUR VOTE IS
COUNTED IF YOU ARE UNABLE TO ATTEND. IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE
NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER IN ORDER TO BE ADMITTED TO THE ANNUAL MEETING AND TO VOTE AT
THE ANNUAL MEETING. Examples of such documentation include a broker's statement,
letter or other document confirming your ownership of shares of the Company.
On behalf of the Board of Directors and the employees of T R Financial
Corp. and Roosevelt Savings Bank, thank you for your continued support.
Sincerely,
[Facsimile signature]
John M. Tsimbinos
Chairman of the Board and
Chief Executive Officer
<PAGE>
LOGO
1122 FRANKLIN AVENUE
GARDEN CITY, NEW YORK 11530
(516) 742-9300
NOTICE OF THE 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1998
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders
(the "Annual Meeting") of T R Financial Corp. (the "Company") will be held on
Monday, April 27, 1998 at 9:30 a.m. New York time at the Westbury Manor, Jericho
Turnpike, Westbury, New York for the following purposes:
1. To elect three directors, each to serve for a three-year term
expiring at the 2001 annual meeting and until their respective
successors have been duly elected and qualified;
2. To ratify the appointment of the firm of KPMG Peat Marwick LLP
as independent auditors for the Company for the year ending
December 31, 1998;
3. To approve the amendment to the Certificate of Incorporation
of the Company to increase the number of shares of common
stock that the Company is authorized to issue; and
4. To transact such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
As of the date hereof, the Board of Directors of the Company
is not aware of any such other business.
Pursuant to the Bylaws of the Company, the Board of Directors has fixed
the close of business on March 12, 1998 as the record date for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting and at
any adjournment or postponement thereof. A list of stockholders entitled to vote
at the Annual Meeting will be available for inspection at 1122 Franklin Avenue,
Garden City, New York, for a period of ten days prior to the Annual Meeting and
will also be available at the Annual Meeting.
A copy of the 1997 Annual Report to Stockholders of the Company, which
for purposes of the regulations of the Federal Deposit Insurance Corporation
serves as the Annual Disclosure Statement of Roosevelt Savings Bank, a wholly
owned subsidiary of the Company, accompanies this Notice of the 1998 Annual
Meeting of Stockholders. Stockholders may obtain, free of charge, an additional
copy of the Annual Report by writing to Theodore S. Ayvas, Vice President,
Roosevelt Savings Bank, 1122 Franklin Avenue, Garden City, New York 11530, or
calling (516) 739-4219.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, THE BOARD OF DIRECTORS
URGES YOU TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS
POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
By Order of the Board of Directors,
[Facsimile signature]
Ira H. Kramer
Corporate Secretary
Garden City, New York
March __, 1998
<PAGE>
LOGO
1122 FRANKLIN AVENUE
GARDEN CITY, NEW YORK 11530
(516) 742-9300
------------------------
PROXY STATEMENT FOR THE
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, APRIL 27, 1998
GENERAL INFORMATION
GENERAL
This Proxy Statement and the accompanying Proxy Card and 1997 Annual
Report to Stockholders are being mailed to stockholders of T R Financial Corp.
("T R Financial" or the "Company") on or about March __, 1998 in connection with
the solicitation of proxies by the Board of Directors of the Company to be used
at the 1998 Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Monday, April 27, 1998 at 9:30 a.m. New York time at the Westbury Manor, Jericho
Turnpike, Westbury, New York, and at any adjournment or postponement thereof.
As more fully described in this Proxy Statement, the purpose of the
Annual Meeting is (1) to elect three directors, each to serve for a three-year
term expiring at the 2001 annual meeting and until their respective successors
have been duly elected and qualified; (2) to ratify the appointment of the firm
of KPMG Peat Marwick LLP as independent auditors for the Company for the year
ending December 31, 1998; (3) to approve the amendment to the Certificate of
Incorporation of the Company to increase the number of shares of common stock
that the Company is authorized to issue; and (4) to transact such other business
as may properly come before the Annual Meeting or any adjournment or
postponement thereof. As of the date hereof, the Board of Directors of the
Company is not aware of any such other business.
RECORD DATE AND VOTING
The Board of Directors of the Company has fixed the close of business
on March 12, 1998 as the record date (the "Record Date") for the determination
of the holders of the Company's issued and outstanding common stock, par value
$.01 per share (the "Common Stock") entitled to receive notice of and to vote at
the Annual Meeting. Only holders of Common Stock at the close of business on the
Record Date will be entitled to vote at the Annual Meeting and at any
adjournment or postponement thereof. At the close of business on the Record
Date, there were 17,529,929 shares of Common Stock outstanding. The presence, in
person or by proxy, of the holders of at least a majority of the total number of
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum thereat.
Each holder of shares of Common Stock outstanding on the Record Date
will be entitled to one vote for each share held of record (except for shares
held in excess of the Limit, as defined below) upon each matter
<PAGE>
properly submitted at the Annual Meeting and at any adjournment or postponement
thereof. As provided in the Company's Certificate of Incorporation, record
holders 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 with respect
to the shares held in excess of the Limit. A person or entity is deemed to
beneficially own shares owned by an affiliate 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 Common Stock in excess of the Limit supply
information to the Company to enable the Board of Directors to implement and
apply the Limit.
If the enclosed Proxy Card is properly executed and received by the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions indicated thereon. IF
NO INSTRUCTIONS ARE GIVEN, EXECUTED PROXIES WILL BE VOTED FOR ELECTION OF EACH
OF THE THREE NOMINEES FOR DIRECTOR, AND FOR EACH OF THE OTHER PROPOSALS SET
FORTH IN THE ACCOMPANYING NOTICE OF THE 1998 ANNUAL MEETING OF STOCKHOLDERS.
Management is not aware of any matters other than those set forth in
the Notice of the 1998 Annual Meeting of Stockholders that may be brought before
the Annual Meeting. If any other matters properly come before the Annual
Meeting, the persons named in the accompanying Proxy Card will vote the shares
represented by all properly executed proxies on such matters in such manner as
shall be determined by a majority of the Board of Directors of the Company.
VOTE REQUIRED
Directors are elected by a plurality of the votes cast in person or by
proxy at the Annual Meeting. The holders of Common Stock may not vote their
shares cumulatively for the election of directors. Ratification of the
appointment of KPMG Peat Marwick LLP as the Company's independent auditors
requires the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock represented in person or by proxy at the Annual Meeting
and entitled to vote thereon. ACCORDINGLY, SHARES AS TO WHICH THE "ABSTAIN" BOX
HAS BEEN SELECTED ON THE PROXY CARD WITH RESPECT TO THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS INDEPENDENT AUDITORS FOR THE COMPANY WILL BE COUNTED AS PRESENT
AND ENTITLED TO VOTE AND WILL HAVE THE EFFECT OF A VOTE AGAINST THAT PROPOSAL.
IN CONTRAST, SHARES UNDERLYING BROKER NON-VOTES OR HELD IN EXCESS OF THE LIMIT
WILL NOT BE COUNTED AS PRESENT AND ENTITLED TO VOTE AND WILL HAVE NO EFFECT ON
THE VOTE FOR SUCH PROPOSAL.
The approval of the amendment to the Certificate of Incorporation of
the Company requires the affirmative vote of the holders of a majority of the
issued and outstanding shares of Common Stock entitled to vote at the Annual
Meeting. ACCORDINGLY, ABSTENTIONS FROM VOTING AND SHARES AS TO WHICH THE
"ABSTAIN" BOX HAS BEEN SELECTED ON THE PROXY CARD WITH RESPECT TO THE APPROVAL
OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION WILL HAVE THE EFFECT OF A
VOTE AGAINST SUCH PROPOSAL. SHARES UNDERLYING BROKER NON-VOTES OR HELD IN EXCESS
OF THE LIMIT WILL ALSO BE COUNTED AS VOTES AGAINST SUCH PROPOSAL.
REVOCABILITY OF PROXIES
The presence of a stockholder at the Annual Meeting will not
automatically revoke such stockholder's proxy. However, a stockholder may revoke
a proxy at any time prior to its exercise by (1) filing a written notice of
revocation with the Corporate Secretary of the Company, (2) delivering to the
Corporate Secretary of the Company prior to the Annual Meeting a duly executed
proxy bearing a later date or (3) attending the Annual Meeting, filing a written
notice of revocation with the secretary of the meeting and voting in person.
2
<PAGE>
IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU
WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN ORDER TO BE
ADMITTED TO THE ANNUAL MEETING AND TO VOTE AT THE ANNUAL MEETING. Examples of
such documentation include a broker's statement, letter or other document
confirming your ownership of shares of the Company.
SOLICITATION OF PROXIES
The Company will bear the cost of soliciting proxies from its
stockholders. 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 Annual Meeting and will be paid a fee estimated to be $4,500,
plus out-of-pocket expenses. Proxies may also be solicited personally, by
telephone, facsimile or other means by directors, officers and employees of the
Company or its subsidiaries, without additional compensation. The Company 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 forward
proxy materials to and obtain proxies from such beneficial owners, and will
reimburse such record holders for their reasonable expenses incurred in
connection therewith.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the Company's
outstanding shares of Common Stock as of February 28, 1998. Other than those
persons listed below, the Company is not aware of any person who is the
beneficial owner of more than 5% of the Company's outstanding shares of Common
Stock as of February 28, 1998. For the purposes of the following table and the
table set forth under "Stock Ownership of Management," in accordance with Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), a person is deemed to "beneficially own" any shares of Common Stock (a)
over which such person has, directly or indirectly, sole or shared voting or
investment power, or (b) of which such person 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 28, 1998. As used
herein, "voting power" includes the power to vote, or direct the voting of, such
shares, and "investment power" includes the power to dispose, or direct the
disposition of, such shares.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT
NATURE OF OWNERSHIP OF
TITLE OF CLASS NAME AND ADDRESS BENEFICIAL COMMON STOCK
OF SECURITY OF BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING(2)
----------- ------------------- ------------ --------------
<S> <C> <C> <C>
Common Stock T R Financial Corp. 2,073,462(3) 11.8%
Employee Stock Ownership Plan
and Trust (the "ESOP")
1122 Franklin Avenue
Garden City, New York 11530
Common Stock John M. Tsimbinos 1,207,537(4) 6.7%
Chairman of the Board and
Chief Executive Officer
T R Financial Corp.
1122 Franklin Avenue
Garden City, New York 11530
(TABLE CONTINUED AND FOOTNOTES ON NEXT PAGE)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND PERCENT
NATURE OF OWNERSHIP OF
TITLE OF CLASS NAME AND ADDRESS BENEFICIAL COMMON STOCK
OF SECURITY OF BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING(2)
<S> <C> <C> <C>
Common Stock Thomson Horstmann & Bryant, Inc. 1,156,500(5) 6.6%
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
</TABLE>
- ---------------------------
(1) Share amounts have been adjusted to reflect the stock split in the form
of a 100% stock dividend of one share of Common Stock for each share of
Common Stock outstanding paid on May 14, 1997 to all stockholders of
record at the close of business on May 1, 1997 ("Stock Split").
(2) Calculated based upon 17,529,621 shares of Common Stock outstanding as
of February 28, 1998, except that the percentage with respect to Mr.
Tsimbinos has been calculated on the basis of such number of shares
outstanding, plus 522,360 shares which Mr. Tsimbinos has the right to
acquire within 60 days after February 28, 1998 by the exercise of stock
options granted pursuant to the T R Financial Corp. 1993 Incentive
Stock Option Plan, as amended and restated effective as of January 23,
1997 (the "Option Plan").
(3) The Administrative Committee of the Company, consisting of Messrs.
Eisen, Galgano, Genovese, Kowatch, Loser, Orr and Voutsinas, all of
whom are non-employee directors, administers the ESOP as a committee.
The Administrative Committee has delegated authority over routine
administrative matters concerning the ESOP to the Roosevelt Savings
Bank (the "Bank") Employee Benefits Committee, which consists of four
officers of the Bank. An unrelated third party, State Street Bank and
Trust Company, is the trustee for the ESOP (the "ESOP Trustee"). The
Administrative Committee may instruct the ESOP Trustee regarding
investment of funds contributed to the ESOP. Each member of the
Administrative Committee disclaims beneficial ownership of the shares
of Common Stock held in the ESOP. Common Stock purchased by the ESOP is
released from a suspense account and allocated to participants annually
based on contributions made to the ESOP by the Company. Shares released
from the suspense account are allocated among participants in
proportion to their compensation, as defined in the ESOP, for the year
the contributions are made, up to the limits permitted under the
Internal Revenue Code of 1986, as amended (the "Code"). The ESOP
Trustee must vote all allocated shares held in the ESOP in accordance
with the instructions of participants. Shares of Common Stock are
allocated to participants under the ESOP as of December 31st of each
year. As of December 31, 1997, 1,050,368 shares of Common Stock in the
ESOP had been allocated, but not distributed, to the accounts of
participants, former participants and beneficiaries thereof. Under the
ESOP, unallocated shares will be voted by the ESOP Trustee in a manner
calculated to most accurately reflect the voting instructions received
from participants regarding the allocated shares so long as such vote
is in accordance with the requirements of the Employee Retirement
Income Security Act of 1974, as amended.
(4) Includes 522,360 shares which Mr. Tsimbinos has the right to acquire
beneficial ownership of by the exercise of stock options granted
pursuant to the Option Plan at the time of the Company's initial public
offering in 1993 and on January 23, 1997. Also includes (a) 18,524
shares held in trust pursuant to the ESOP that have been allocated to
Mr. Tsimbinos's account and as to which he has sole voting power but no
investment power, except in limited circumstances, (b) 57,650 shares
held in the Employer Stock Fund of the Roosevelt Savings Bank Salary
Reduction Plan in RSI Retirement Trust (the "401(k) Plan") as to which
he has shared voting and investment power, (c) 77,543 shares held in
the Supplemental Executive Retirement Plan of Roosevelt Savings Bank
(the "SERP") as to which he has sole investment but no voting power and
(d) 51,300 shares as to which he otherwise shares voting and investment
power. See "Election of Directors -- Executive Compensation -- 1993
INCENTIVE STOCK OPTION PLAN," "-- 401(K) PLAN" and "-- EMPLOYEE STOCK
OWNERSHIP PLAN" and "-- Retirement Plan and Supplemental Executive
Retirement Plan -- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN."
(5) Based upon information in a Schedule 13G, dated January 28, 1998.
Thomson Horstmann & Bryant, Inc. is an investment advisor registered
under Section 203 of the Investment Advisors Act of 1940, as amended.
The figure shown includes 743,600 shares with respect to which Thomson
Horstmann & Bryant, Inc. has sole voting power, 15,600 shares as to
which it has shared voting power and 1,156,500 shares as to which it
has sole dispositive power.
4
<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 on page 15 of this Proxy Statement and all directors and
executive officers of the Company as a group as of February 28, 1998. Except as
otherwise indicated, each person and each group shown in the table has sole
voting and investment power with respect to the shares of Common Stock
indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OWNERSHIP
BENEFICIAL OWNERSHIP OF COMMON
NAME TITLE(1) (2)(3)(4)(5)(6)(7)(8) STOCK OUTSTANDING (9)
---- -------- --------------------- ---------------------
<S> <C> <C> <C>
John M. Tsimbinos Chairman of the Board and Chief 1,207,537 6.7%
Executive Officer, Director
A. Gordon Nutt President and Chief Administrative 267,076 1.5%
Officer, Director
Maureen E. Clancy Director 67,484 *
Robert F. Eisen, Sr. Director 83,944 *
Michael P. Galgano Director 99,448 *
Leonard Genovese Director 65,270 *
Edward J. Kowatch Director 17,738 *
Ernest L. Loser Director 63,102 *
John C. Mesloh Director 66,104 *
James E. Orr, Jr. Director 108,670 *
Spiros J. Voutsinas Director 75,772 *
William R. Kuhn Executive Vice President and 221,291 1.3%
Chief Real Estate Lending Officer
Dennis E. Henchy Executive Vice President and 220,476 1.2%
Chief Financial Officer
Ira H. Kramer Senior Vice President and 105,696 *
Corporate Secretary
John J. DeRusso Senior Vice President 21,818 *
All directors and executive officers as a group
(15 persons) 2,691,426(10) 14.3%
</TABLE>
- ---------------------------
* Less than 1% of outstanding Common Stock.
(1) Titles are for both the Company and the Bank.
(2) Share amounts have been adjusted to reflect the Stock Split.
(3) The figures shown include shares which individuals have the right to
acquire beneficial ownership of by the exercise of stock options
pursuant to the Option Plan or the T R Financial Corp. 1993 Stock
Option Plan for Outside Directors, as amended and restated as of
January 23, 1997 (the "Directors' Option Plan"), as follows: Mr.
Tsimbinos, 522,360 shares; Mr. Nutt, 141,432 shares; Ms. Clancy, 41,770
shares; Mr. Eisen, 41,694 shares; Mr. Galgano, 51,494 shares; Mr.
Genovese, 41,770 shares; Mr. Kowatch, 12,300 shares; Mr. Loser, 41,770
shares; Mr. Mesloh, 41,770 shares; Mr. Orr, 64,080 shares; Mr.
Voutsinas, 800 shares; Mr. Kuhn, 135,766 shares; Mr. Henchy, 135,766
shares; Mr. Kramer, 62,462 shares; Mr. DeRusso, 6,666 shares; and all
directors and executive officers as a group, 1,341,900 shares. See
"Election of Directors -- Directors' Compensation -- DIRECTORS' OPTION
PLAN" and "-- Executive Compensation -- 1993 INCENTIVE STOCK OPTION
PLAN."
(FOOTNOTES CONTINUED ON NEXT PAGE)
5
<PAGE>
(4) The figures shown include shares held in trust pursuant to the ESOP
that have been allocated as of December 31, 1997 to individual accounts
as follows: Mr. Tsimbinos, 18,524 shares; Mr. Nutt, 18,524 shares; Mr.
Kuhn, 18,313 shares; Mr. Henchy, 18,126 shares; Mr. Kramer, 16,530
shares; Mr. DeRusso, 6,912; and all executive officers as a group,
96,929 shares. Such persons have sole voting power but no investment
power, except in limited circumstances, as to such shares. The figures
shown do not include 1,023,094 shares held in trust pursuant to the
ESOP that have not been allocated to any individual's account and as to
which the members of the Company's Administrative Committee (consisting
of Messrs. Eisen, Galgano, Genovese, Kowatch, Loser, Orr and Voutsinas)
may be deemed to share investment power, and as to which each of the
participants identified in the table may be deemed to share voting
power, thereby causing each such person to be deemed a beneficial owner
of such shares. Each of the members of the Administrative Committee and
the participants included in the table disclaims beneficial ownership
of the unallocated shares in the ESOP. See "Election of Directors --
Executive Compensation -- EMPLOYEE STOCK OWNERSHIP PLAN."
(5) The figures shown include shares held in the Employer Stock Fund of the
401(k) Plan as to which each person identified has shared voting and
investment power as follows: Mr. Tsimbinos, 57,650 shares; Mr. Nutt,
28,260 shares; Mr. Kuhn, 25,764 shares; Mr. Henchy, 25,898 shares; Mr.
Kramer, 9,828 shares; Mr. DeRusso, 1,568 shares; and all executive
officers as a group, 148,968 shares. See "Election of Directors --
Executive Compensation -- 401(K) PLAN."
(6) The figures shown include shares held in the SERP as to which each
person identified has sole investment but no voting power as follows:
Mr. Tsimbinos, 77,543 shares; Mr. Nutt, 12,048 shares; Mr. Kuhn, 8,256
shares; Mr. Henchy, 7,706 shares; Mr. Kramer, 523 shares; Mr. DeRusso,
672; and all executive officers as a group, 106,748 shares. See
"Election of Directors-- Retirement Plan and Supplemental Executive
Retirement Plan-- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN."
(7) The figures shown include shares held under the Roosevelt Savings Bank
Recognition and Retention Plan for Officers (the "Officers' RRP"), over
which each individual has sole voting power but no investment power, as
follows: Mr. Kramer, 7,100 shares. See "Election of Directors --
Executive Compensation -- BANK RECOGNITION AND RETENTION PLAN FOR
OFFICERS."
(8) The figures shown include shares over which individuals share voting
and investment power (other than as disclosed in notes 4, 5, 6 and 7)
as follows: Mr. Tsimbinos, 51,300 shares; Mr. Nutt, 10,000 shares; Ms.
Clancy, 10,214 shares; Mr. Eisen, 8,757 shares; Mr. Galgano, 16,600
shares; Mr. Loser, 5,832 shares; Mr. Orr, 12,950 shares; Mr. Voutsinas,
3,032 shares; Mr. Kuhn, 33,191 shares; Mr. Henchy, 17,240 shares; Mr.
Kramer, 1,394 shares; and all directors and executive officers as a
group, 170,510 shares.
(9) Percentages with respect to each person or group of persons have been
calculated on the basis of 17,529,621 shares of Common Stock, the
number of shares of Common Stock outstanding as of February 28, 1998,
plus the number of shares of Common Stock which such person or group of
persons has the right to acquire within 60 days after February 28, 1998
by the exercise of stock options.
(10) The figure shown includes 170,510 shares over which the Company's
directors and executive officers share voting and investment power
(other than as disclosed in notes 4, 5 and 6). The figure shown also
includes 7,100 shares allocated to Mr. Kramer and held in trust
pursuant to the Officers' RRP, as to which such executive officer has
sole voting power but no investment power. The figure shown does not
include 11,580 shares of unallocated stock held in trust pursuant to
the Officers' RRP, as to which the officers with unvested restricted
stock awards have shared voting power but no investment power, thereby
causing each such person to be deemed a beneficial owner of such
unallocated shares. Each of the directors and executive officers
included in the table disclaims beneficial ownership of the unallocated
shares under the Officers' RRP. See "Election of Directors -- Executive
Compensation -- BANK RECOGNITION AND RETENTION PLAN FOR OFFICERS."
6
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Certificate of Incorporation and Bylaws of the Company provide that
the Board of Directors shall be divided into three classes. The directors of
each class serve for a term of three years, with one class elected each year. In
all cases, directors serve until their successors are elected and qualified.
Currently, the Board of Directors of the Company consists of 11 members.
The terms of three directors expire at the Annual Meeting. Each of the
three incumbent directors, A. Gordon Nutt, Michael P. Galgano and John C.
Mesloh, has been nominated by the Board of Directors, acting as the Nominating
Committee, to be re-elected at the Annual Meeting, each to serve for a
three-year term expiring at the 2001 annual meeting and until their successors
are otherwise duly elected and qualified. Each nominee has consented to being
named in this Proxy Statement and to serve if elected. However, if any nominee
should become unable to serve, the proxies received in response to this
solicitation that were voted in favor of such nominee will be voted for the
election of such other person as shall be designated by the Board of Directors
of the Company, unless the Board of Directors shall determine to further reduce
the number of directors pursuant to the Bylaws of the Company. In any event,
proxies cannot be voted for a greater number of persons than the three nominees
named.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to each
nominee for election as a director and each continuing director whose term does
not expire at the Annual Meeting. 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(2)
---- ------ ---- ------------------------------ --------
NOMINEES FOR A THREE-YEAR
TERM EXPIRING IN 2001
<S> <C> <C> <C> <C>
A. Gordon Nutt 63 1998 President, Chief Administrative 1991
Officer and Director
Michael P. Galgano 72 1998 Director 1986
John C. Mesloh 63 1998 Director 1992
CONTINUING DIRECTORS
John M. Tsimbinos 60 2000 Chairman of the Board, Chief 1982
Executive Officer and Director
Maureen E. Clancy 65 1999 Director 1993
Robert F. Eisen, Sr. 77 1999 Director 1987
Leonard Genovese 63 1999 Director 1992
Edward J. Kowatch 73 2000 Director 1988
Ernest L. Loser 72 1999 Director 1992
James E. Orr, Jr. 74 2000 Director 1978
Spiros J. Voutsinas 64 2000 Director 1992
(FOOTNOTES ON NEXT PAGE)
</TABLE>
7
<PAGE>
- ---------------------------
(1) At February 28, 1998.
(2) Includes terms as trustee of the Bank and of predecessor affiliated
institutions prior to the incorporation of the Company on February 12,
1993.
The principal occupation and business experience of each nominee for
election as director and each continuing director are set forth below.
NOMINEES FOR ELECTION AS DIRECTORS
A. GORDON NUTT, President and Chief Administrative Officer of the
Company, has been a Director of the Bank since May 21, 1991, and was elected
President and Chief Administrative Officer of the Bank on December 15, 1992. In
1983, Mr. Nutt joined the Bank as a Senior Vice President and Chief
Administrative Officer. Mr. Nutt has over 35 years experience in the banking
industry and has held a variety of senior level management positions. He has a
B.A. from Brooklyn College and has completed the Graduate School of Savings
Banking program at Brown University.
MICHAEL P. GALGANO has been a Director of the Bank since February 18,
1986. Mr. Galgano was a principal with Dorman & Wilson, Inc., a mortgage banking
firm, and retired as a Senior Vice President and regional manager of the Long
Island office after having been employed at such company for over 24 years. He
currently has his own real estate financial consulting practice. He is an MAI
designated member of the Appraisal Institute and has the designation of CRE in
the American Society of Real Estate Counselors. Mr. Galgano is a past Chairman
of the Real Estate Practitioners' Institute at Long Island University and also
served as mayor of the Incorporated Village of Brookville, New York for over 15
years.
JOHN C. MESLOH has been a Director of the Bank since July 21, 1992. Mr.
Mesloh currently serves as Chairperson of the Planning Committee of the Bank. He
retired as a Vice President from the New York City office of Pfizer, Inc., a
pharmaceutical manufacturer, after 23 years of service. Mr. Mesloh is a
certified public accountant and is a member of the Financial Executives
Institute. He is a past President of the board of the Lutheran Church of
Resurrection, Garden City. He is currently President of T&C Restorations, Inc.
in Mineola, a board member of Wartburg Lutheran Services, Treasurer and a board
member of the Atlantic District of the Lutheran Church, Missouri Synod and
liaison between the Lutheran Church, Missouri Synod (the parent body located in
St. Louis) and the Nehemiah project in Brooklyn, a community housing project.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" THE NOMINEES FOR ELECTION AS DIRECTORS.
CONTINUING DIRECTORS
JOHN M. TSIMBINOS, Chairman of the Board and Chief Executive Officer of
the Company, has been a Director of the Bank since July 20, 1982, having
commenced his employment with the Bank on February 24, 1982. On April 1, 1983,
he became President and Chief Executive Officer, serving in such capacity until
December 15, 1992, when he was elected Chairman of the Board and Chief Executive
Officer of the Bank. Mr. Tsimbinos has over 35 years of experience in the
banking industry. He serves on various committees of the Community Bankers
Association of New York State. Mr. Tsimbinos is a director of Institutional
Investors Capital Appreciation Fund, Inc., which is a registered investment
company under the Investment Company Act of 1940, as amended. He also serves on
the boards of various other business, professional, community and philanthropic
organizations, such as Golden Eagle Sales Corp., a wholly owned subsidiary of
Columbian Mutual Life Insurance Company, and the Advisory Board of the
Neighborhood Housing Services of New York City, Inc. Mr. Tsimbinos is a former
director and Vice Chairman of the Federal Home Loan Bank of New York and a
former Chairman of its Executive Committee. Mr. Tsimbinos was an adjunct
professor at Queens College and taught evening and Saturday courses in money and
banking, corporate finance and economics from 1964 to 1972. He has a B.A. from
The City College of New York, and an M.B.A. in Finance and Investments from the
Baruch School of Business and Public Administration. He has also completed the
Graduate School of
8
<PAGE>
Savings Banking program at Brown University and the Program for Management
Development at the Harvard Business School.
MAUREEN E. CLANCY has been a Director of the Bank since May 18, 1993.
She has been a licensed insurance broker since 1959. Ms. Clancy is the
Secretary-Treasurer of Clancy & Clancy Brokerage Ltd., an insurance agency
established in 1956. Ms. Clancy served as Trustee of the Village of Garden City
from 1986 to 1990 and was deputy mayor from 1989 to 1990. She is a past
President of the Mineola-Garden City Rotary Club and served as President of the
Garden City Chamber of Commerce for the 1995-1997 term.
ROBERT F. EISEN, SR. has been a Director of the Bank since June 16,
1987. He serves as Chairperson of the Audit Committee of the Company and the
Bank. Mr. Eisen retired as President of Greenwood Mills, Inc., a textile
manufacturer and was a registered lobbyist representing the textile industry in
Washington, D.C. Mr. Eisen served as a trustee for a major savings institution
and also as a director of Londontown Manufacturing Company before joining the
Board of Roosevelt Savings Bank. He holds an Honorary Doctorate Degree in
Commercial Science from St. John's University.
LEONARD GENOVESE has been a Director of the Bank since June 16, 1992.
He is currently Chairman, President and Chief Executive Officer of Genovese Drug
Stores, Inc. At the present time, he is a board member of St.
Christopher-Ottilie Services for Children and Families, the National Association
of Chain Drug Stores, Kellwood Company, AID Auto Stores, The Stephan Company and
the National Center for Disability Services.
EDWARD J. KOWATCH has been a Director of the Bank since February 16,
1988. Mr. Kowatch currently serves as Chairperson of the Loan and Investment
Committee of the Bank. Mr. Kowatch retired as Chief Executive Officer of the
Retirement System for Savings Institutions. He is presently a director of and
consultant for Retirement System Group, Inc., which provides retirement and
investment related services. Mr. Kowatch is a former director of Ban Ser Corp.,
which provides insurance products and services.
ERNEST L. LOSER has been a Director of the Bank since March 17, 1992.
Mr. Loser serves as Chairperson of the Human Resources Committee and the
Compensation Committee of the Company and the Bank. He retired as a Senior Vice
President in charge of the Institutional Trust Group for The Chase Manhattan
Bank, N.A., where he had been employed for 35 years.
JAMES E. ORR, JR. has been a Director of the Bank since June 14, 1978.
Mr. Orr currently serves as Chairperson of the Executive Committee of the Bank.
He is the retired Chairman and Chief Executive Officer of Busby Metals, Inc. of
Hauppauge, New York, a distributor of metal products. He continues as a director
and consultant to Busby Metals. He is a former Trustee of the Copper and Brass
Servicenter Association, and a former Chairman of Zoning Appeals of the
Incorporated Village of Garden City, New York.
SPIROS J. VOUTSINAS has been a Director of the Bank since February 18,
1992. He is currently President of Omega Capital, Inc., a real estate
development and syndication firm, and a general partner of Omega Partners LP, a
money management firm specializing in bank stocks. He is a member of the board
of the Hellenic American Chamber of Commerce. Mr. Voutsinas retired in 1988 as
an executive vice president and director of a major New York savings institution
with over 28 years of experience in the banking industry.
BOARD AND COMMITTEE MEETINGS
The Company's Board of Directors met five times during 1997. The Board
of Directors has appointed the Administrative Committee, Audit Committee and
Compensation Committee as standing committees. The Board of Directors serves as
the Nominating Committee. Additional committees may be authorized by the Board
of Directors. During 1997, all directors of the Company and the Bank attended at
least 75% of the total meetings held during the period of their service on the
Board of Directors of each of the Company and the Bank and committees thereof.
The principal responsibilities of the standing committees of the Company and the
number of meetings held during 1997 appear below.
9
<PAGE>
ADMINISTRATIVE COMMITTEE. The Administrative Committee is responsible
for administering the Option Plan, including determining grants of Options under
the Option Plan, for administering certain parts of the ESOP and for
administering the Officers' RRP. The Administrative Committee met three times
during 1997. Messrs. Eisen, Galgano, Genovese, Kowatch, Loser, Orr and Voutsinas
currently comprise the Administrative Committee.
AUDIT COMMITTEE. The Audit Committee is charged with the responsibility
of annually examining the records and affairs of the Company to assess its
financial condition and presenting a report of examination to the Board of
Directors. The Audit Committee also makes other examinations directed by the
Board of Directors. The Audit Committee met four times during 1997. Messrs.
Eisen, Genovese, Loser, Mesloh, Orr and Voutsinas and Ms. Clancy currently
comprise the Audit Committee.
COMPENSATION COMMITTEE. The Compensation Committee annually reviews and
makes recommendations to the Board of Directors regarding the compensation of
the Company's senior officers, including the Chairman of the Board and Chief
Executive Officer. The Compensation Committee met two times during 1997. Messrs.
Eisen, Galgano, Genovese, Kowatch, Loser, Orr and Voutsinas currently comprise
the Compensation Committee.
NOMINATING COMMITTEE. The Board of Directors, acting as the Nominating
Committee, met in January 1998 to select the nominees for election as directors
at the Annual Meeting. In accordance with the Bylaws of the Company, no
nominations for election as directors, except those made by the Board of
Directors acting as the Nominating Committee, shall be voted upon at the Annual
Meeting unless properly made by a stockholder in accordance with the procedures
set forth below under "Additional Information -- Stockholder's Notice of
Business to be Conducted at the Annual Meeting." No nominations for directors
were received from stockholders for the elections to be held at the Annual
Meeting.
DIRECTORS' COMPENSATION
RETAINER AND FEES. In 1997, Directors of the Bank who were not
employees of the Bank or the Company received a retainer at an annualized rate
of $20,000 and a fee of $750 for each Board of Directors meeting of the Bank
attended and $350 for each committee meeting of the Bank attended (other than
the Administrative Committee and the Compensation Committee). Directors of the
Company who were not employees of the Company or the Bank received a retainer at
an annualized rate of $5,000 and a fee of $500 for each Board of Directors
meeting of the Company attended. Directors of the Company do not receive a fee
for attending committee meetings of the Company.
DIRECTORS' OPTION PLAN. Directors are eligible to receive options to
purchase shares of Common Stock pursuant to the T R Financial Corp. 1993 Stock
Option Plan for Outside Directors, as amended and restated effective as of
January 23, 1997 (the "Directors' Option Plan"). The Directors' Option Plan
authorizes the grant of stock options to purchase Company Common Stock (and
limited rights) equal to 808,448 shares (as adjusted to reflect the Stock
Split). Under the Directors' Option Plan, at the time of the Bank's conversion
to stock form and the Company's initial public offering in 1993, each
non-officer director who served on the Board of the Bank was granted a fixed
number of options. The exercise price of such options was $4.50 per share (as
adjusted to reflect the Stock Split), and the options became exercisable on June
29, 1994 (one year following the date of the grant). All options granted under
the Directors' Option Plan expire on the tenth anniversary of the date of grant,
or, if earlier, one year following termination of service for any reason other
than removal for cause.
In January 1997, the Directors' Option Plan was amended and restated to
provide for annual grants to each outside director of non-statutory stock
options ("Non-statutory Options") to purchase 2,400 shares of Common Stock (as
adjusted to reflect the Stock Split), or such lesser number of shares as remain
under the Directors' Option Plan, with such annual grants to be made as of the
day following each annual meeting of
10
<PAGE>
stockholders of the Company, beginning in April 1997. The exercise price of such
options is the fair market value of the shares of Common Stock on the date of
the grant, and such options vest at a rate of 331/3% per year after the date of
the grant, with full vesting in the event of death, disability, change in
control or retirement, as defined in such plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE FOLLOWING REPORT OF THE COMPANY'S COMPENSATION COMMITTEE IS
PROVIDED IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC"). PURSUANT TO SUCH RULES AND REGULATIONS, THIS
REPORT SHALL NOT BE DEEMED "SOLICITING MATERIAL" FILED WITH THE SEC SUBJECT TO
REGULATION 14A OR 14C OF THE SEC OR SUBJECT TO SECTION 18 OF THE EXCHANGE ACT.
The Human Resources Committee of the Bank (the "Human Resources
Committee") is responsible for establishing the policies that govern employee
compensation and stock ownership programs. The Compensation Committee of the
Company (the "Compensation Committee") is comprised of the Human Resources
Committee members who are not officers of the Bank or the Company. The
Compensation Committee annually reviews and makes recommendations to the Board
of Directors regarding the compensation of the Company's executive officers,
including the compensation of Mr. Tsimbinos, the Chairman of the Board and Chief
Executive Officer ("CEO") of the Company. Messrs. Tsimbinos, Nutt, Kuhn, Henchy,
Kramer and DeRusso are the executive officers of both the Bank and the Company.
They receive no additional compensation for their service with the Company.
The overall compensation structure of the Company is aimed at
establishing a total compensation package that rewards both strong individual
performance and Company performance and is competitive with compensation levels
at comparable banking institutions. In connection with the conversion of the
Bank from mutual to stock form and the initial public offering of the Company in
1993, the Bank, as part of its ongoing management of executive compensation,
utilized the services of its outside compensation consulting firm to advise the
Compensation Committee with respect to the Company's compensation programs for
executive officers adopted at the time of the conversion. As part of the
Compensation Committee's review of the Company's compensation programs in 1996,
the Bank utilized the services of the same compensation consulting firm. Their
1996 report and recommendations were taken into consideration by the
Compensation Committee in the development and implementation of the overall
compensation program for 1997 and will also be considered in the future.
In 1997, as a continuation of that process, senior management, in
conjunction with the Bank's outside counsel, prepared a detailed report
comparing the performance of the Bank to that of a peer group of twelve other
New York based public banking institutions each having total assets in excess of
$1 billion. The peer group and the methodology utilized in the preparation of
the report paralleled that used by the Bank's outside compensation consulting
firm in 1996. The relative performance was measured using key financial
performance factors for the years 1994, 1995, 1996 and the first six months of
1997. The peer group selected is different than the companies included in the
Nasdaq Composite Index and Nasdaq Bank Composite Index used in the Performance
Graph on page 14 of this Proxy Statement since these two indices reflect the
stock performance of a significantly broader group of companies and financial
institutions, in terms of the number and geographic location of such financial
institutions.
Based upon its review of the facts, the Compensation Committee
concluded that, in order to give the Company's executive officers incentives to
keep performing at their current and higher levels, the Company's compensation
programs should continue to be aligned with the level of performance achieved by
the Bank relative to the peer group. In addition, the Compensation Committee
concluded that the compensation programs should take into account the officer's
individual responsibility and performance as well. The Compensation Committee
believes that an executive's total pay level should continue to be considered
when making individual changes to annual salary, annual incentive compensation
or long-term incentive compensation.
11
<PAGE>
INCENTIVE COMPENSATION. The Compensation Committee believes that
incentive compensation should be an integral component of the Company's total
compensation package. In this regard, the Bank maintains a performance
compensation program (the "Performance Compensation Program") which provides for
cash payments based upon the annual performance of the Bank in comparison to a
pre-established target goal and, in the case of certain executive officers, the
individual performance of the executive officer. In order to assure that
incentive awards to Messrs. Tsimbinos, Nutt, Kuhn and Henchy are tax deductible
by the Company as "performance-based" compensation under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), the Bank adopted,
effective January 23, 1997, the Performance Compensation Plan, which was
approved by the Company's stockholders on April 21, 1997. The Performance
Compensation Plan is a written plan that is substantively equivalent to the
existing Performance Compensation Program, except for certain limitations,
requirements and provisions required under Section 162(m) of the Code in order
to assure that the Company may take tax deductions for the payments made under
the Performance Compensation Plan.
STOCK OWNERSHIP PROGRAMS. The Compensation Committee believes that
providing executive officers with significant stock ownership and stock options
aligns the interests of executive officers with the interests of stockholders.
In this regard, the Company adopted the ESOP and the Option Plan and the Bank
adopted the Roosevelt Savings Bank Recognition and Retention Plan for Officers
(the "Officers' RRP") at the time of the Company's initial public offering in
1993. The Option Plan and the Officers' RRP were ratified by the Company's
stockholders on December 13, 1993.
In June 1993, the Company granted stock options under the Option Plan
at an exercise price equal to the actual purchase price of the shares issued in
the initial public offering. These grants were awarded to provide an incentive
for future performance by giving full and part-time employees, including the
executive officers, equity interests in the Company. The size of the grants to
executive officers were based in part on the practices of other similar
institutions and in part on the performance and position of the executive
officer in the organization.
In January 1997, the Company amended the Option Plan, which was
approved by the Company's stockholders on April 21, 1997, to increase the number
of shares of Common Stock available for option awards and to assure that
Non-statutory Options awarded pursuant to the Option Plan are tax deductible by
the Company as "performance-based" compensation under Section 162(m) of the
Code. Consistent with the recommendation of the Bank's compensation consultant,
the Administrative Committee which administers the Option Plan granted stock
options to certain officers of the Bank in January 1997 and April 1997, and,
pursuant to the Option Plan, indicated that annual grants of stock options would
be considered in the future. Accordingly, the Administrative Committee granted
stock options to certain officers of the Bank in January 1998. In each case, the
exercise price of the stock option is equal to the fair market value of the
stock on the day the stock option was granted.
The Officers' RRP is designed to encourage executive officers to remain
with the Company. In June 1993, the Company made awards under the Officers' RRP
to certain officers, including Messrs. Tsimbinos, Nutt, Kuhn, Henchy and Kramer.
Since these awards, no further shares under the Officers' RRP have been
awarded to the Company's executive officers.
CHIEF EXECUTIVE OFFICER. The Compensation Committee reviewed the
performance of Mr. Tsimbinos as CEO of the Bank and the Company over the past
year. The Compensation Committee concluded that his performance was outstanding,
in terms of the development and achievement of the Bank's and the Company's
overall strategic goals and objectives as set forth in the Bank's strategic
operating plan, the record level of profits attained for 1997, the building of a
solid and talented management team and the management of the Bank's growth since
the successful conversion of the Bank and the initial public offering of the
Company. Mr. Tsimbinos also actively participated in a variety of outside
organizations and causes, including various community organizations, which
served to benefit the Company and the banking industry.
12
<PAGE>
Based upon the report presented to the Compensation Committee and the
outstanding financial performance of the Company and the Bank during 1997, the
Compensation Committee recommended, and the Board of Directors approved, a 10%
incentive award for Mr. Tsimbinos for 1997. This award is in addition to the
targeted performance award of the Performance Compensation Plan of 50% for Mr.
Tsimbinos for 1997. As previously noted, the Performance Compensation Plan does
not differ substantively from the previously described Performance Compensation
Program, except for certain limitations, requirements and provisions required
under Section 162(m) of the Code. The Compensation Committee also recommended,
and the Board of Directors approved, an increase in Mr. Tsimbinos's annual
salary from $600,000 to $675,000 for 1998. These actions were consistent with
the data contained in the report presented to the Compensation Committee
regarding the mix of incentive compensation to annual salary and result in a
compensation level appropriate to industry standards.
Ernest L. Loser, Chairperson Leonard Genovese
Edward J. Kowatch, Vice Chairperson James E. Orr, Jr.
Robert F. Eisen, Sr. Spiros J. Voutsinas
Michael P. Galgano
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
One of the responsibilities of the Compensation Committee of the Board
of Directors of the Company is to determine the level of compensation for
executive officers of the Bank. The members of the Human Resources Committee who
are not officers of the Bank or the Company acted as the Compensation Committee
for 1997 and consisted of Messrs. Eisen, Galgano, Genovese, Kowatch, Loser, Orr
and Voutsinas. There are no interlocks, as defined under the rules and
regulations of the SEC, between members of the Compensation Committee or
executive officers of the Company and corporations with respect to which such
persons are affiliated, or otherwise.
13
<PAGE>
PERFORMANCE GRAPH
Pursuant to the rules and regulations of the SEC, the graph below
compares the performance of the Company's Common Stock with that of the Nasdaq
Composite Index (U.S. Companies) and the Nasdaq Bank Composite Index (banks and
bank holding companies, over 99% of which are based in the United States) from
June 29, 1993, the date of the Company's initial public offering, through
December 31, 1997. The graph is based on an investment of $100 in the Company's
Common Stock at its closing price on June 29, 1993 and assumes the reinvestment
of all dividends paid in additional shares of the same class of equity
securities as those below.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
PERIOD ENDING
----------------------------------------------------------------------
INDEX 6/29/93 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
T R FINANCIAL CORP. $100.00 $130.38 $133.43 $264.19 $376.99 $723.11
NASDAQ - TOTAL US 100.00 111.00 108.50 153.45 188.74 231.61
NASDAQ - BANKS 100.00 107.25 106.86 159.14 210.10 354.95
</TABLE>
- ---------------------------
Note: There can be no assurance that the performance of the Company's Common
Stock will continue into the future with the same or similar trends
depicted in the graph above.
14
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table includes individual
compensation information on the CEO and the next five most highly paid executive
officers whose base salary and bonus exceeded $100,000 in 1997 (the "Named
Executive Officers") for services rendered in all capacities to the Company and
the Bank during the years ended December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL LONG TERM
COMPENSATION(1) COMPENSATION AWARDS(2)
--------------- ----------------------
RESTRICTED ALL OTHER
STOCK COMPEN-
SALARY(3) BONUS(4) AWARDS(5) OPTIONS(6) SATION(7)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- --------------------------- ---- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
John M. Tsimbinos 1997 600,000 424,800 -- 70,000 621,322
Chairman of the Board and 1996 570,000 319,200 -- -- 354,529
Chief Executive Officer 1995 570,000 323,190 -- -- 278,526
A. Gordon Nutt 1997 260,000 138,060 -- 31,000 261,398
President and Chief 1996 230,000 103,040 -- -- 134,112
Administrative Officer 1995 215,000 94,815 -- -- 102,916
William R. Kuhn 1997 205,000 72,570 -- 14,000 199,333
Executive Vice President and 1996 200,000 67,200 -- -- 109,111
Chief Real Estate Lending Officer 1995 195,000 61,425 -- -- 90,459
Dennis E. Henchy 1997 200,000 70,800 -- 14,000 194,162
Executive Vice President 1996 192,500 64,680 -- -- 104,829
and Chief Financial Officer 1995 185,000 58,275 -- -- 85,926
Ira H. Kramer 1997 155,000 45,725 -- 10,000 139,845
Senior Vice President 1996 140,000 31,360 -- -- 72,771
and Corporate Secretary 1995 125,000 31,500 -- -- 55,796
John J. DeRusso (8) 1997 150,000 44,250 -- 20,000 137,068
Senior Vice President 1996 145,000 32,480 -- -- 76,132
1995 140,000 35,280 -- -- --
</TABLE>
- ---------------------------
(1) For 1995, 1996 and 1997, there were no (a) perquisites over the lesser
of $50,000 or 10% of the individual's total salary and bonus for the
year; (b) payments of above-market or preferential earnings on deferred
compensation; (c) payments of earnings with respect to long-term
incentive plans prior to settlement; (d) tax payment reimbursements; or
(e) preferential discounts on stock.
(2) For 1995, 1996 and 1997, there were no payouts or awards under any
long-term incentive plan because the Bank and the Company did not
maintain any long-term incentive plans.
(3) Salary includes the amount of each individual's contributions to the
401(k) Plan.
(FOOTNOTES CONTINUED ON NEXT PAGE)
15
<PAGE>
(4) Bonus consists of payments under the Bank's Performance Compensation
Program and reflects amounts earned for each year, although such bonus
is paid in the subsequent year. For a description of this plan, see "--
PERFORMANCE COMPENSATION PROGRAM." Beginning in 1997, bonuses to the
four most highly compensated executive officers are awarded under the
Bank's Performance Compensation Plan. For a description of this plan,
see "-- PERFORMANCE COMPENSATION PLAN."
(5) Upon the Company's initial public offering in 1993, Messrs. Tsimbinos,
Nutt, Kuhn, Henchy and Kramer were awarded 218,500, 56,810, 56,810,
56,810 and 35,476 shares of Common Stock (as adjusted to reflect the
Stock Split), respectively, under the Officers' RRP. The awards to
Messrs. Tsimbinos, Nutt, Kuhn and Henchy vested at a rate of 331/3% per
year commencing on June 29, 1994. The award to Mr. Kramer vests at a
rate of 20% per year commencing on June 29, 1994. As of December 31,
1997, the awards to Messrs. Tsimbinos, Nutt, Kuhn and Henchy had fully
vested, and the number of shares held under the Officers' RRP for Mr.
Kramer was 7,100 (as adjusted to reflect the Stock Split). The value of
these shares at December 31, 1997 was $236,075. This 1997 dollar amount
is based upon $33.25 per share, the closing price of the Common Stock
as reported on the Nasdaq Stock Market on December 31, 1997. Dividends
are paid on shares awarded pursuant to the Officers' RRP to the same
extent as paid on the Company's outstanding shares of Common Stock.
(6) Options were granted pursuant to the Option Plan in 1997 and vest at a
rate of 331/3% per year commencing on January 23, 1998. No options were
earned or granted pursuant to the Option Plan in 1995 or 1996. For a
discussion of the terms of the grants and vesting of Options, see "--
1993 INCENTIVE STOCK OPTION PLAN" and the corresponding table.
(7) Includes the value of allocations under the Company's ESOP, which for
1997 totalled $117,240 for each of Messrs. Tsimbinos, Nutt, Kuhn,
Henchy, Kramer and DeRusso. Also includes the Bank's matching
contributions to the 401(k) Plan, a cash or deferred plan designed to
be qualified under Sections 401(a) and 401(k) of the Code, which for
1997, totalled $4,750 for each of Messrs. Tsimbinos, Nutt, Kuhn and
Henchy, $4,650 for Mr. Kramer and $4,500 for Mr. DeRusso. Also includes
the Bank's contributions to the trust established for the SERP
(excluding amounts contributed with respect to supplemental retirement
benefits thereunder) with respect to supplemental 401(k) plan benefits
and supplemental ESOP benefits, which for 1997 totalled $499,332 for
Mr. Tsimbinos, $139,408 for Mr. Nutt, $77,343 for Mr. Kuhn, $72,172 for
Mr. Henchy, $17,955 for Mr. Kramer and $15,328 for Mr. DeRusso. The
1997 dollar amounts are based on $33.25 per share, the closing price of
the Common Stock as reported on the Nasdaq Stock Market on December 31,
1997. See "-- 401(K) PLAN," "-- EMPLOYEE STOCK OWNERSHIP PLAN" and
"Retirement Plan and Supplemental Executive Retirement Plan --
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN."
(8) Mr. DeRusso commenced employment with the Bank in November 1994 and,
therefore, did not receive any awards, grants or allocations pursuant
to the Officers' RRP, the Option Plan, the ESOP and the 401(k) Plan for
1995.
EMPLOYMENT AGREEMENTS. The Bank and the Company have entered into
employment agreements with Messrs. Tsimbinos, Nutt, Kuhn, Henchy, Kramer and
DeRusso. The employment agreements are intended to ensure that the Bank and the
Company will be able to continue 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 executive officers.
The Bank's employment agreements, as amended, and the Company's
employment agreements, as amended (collectively, the "Employment Agreements"),
are substantially similar. The Employment Agreements provide for initial
three-year terms with respect to Messrs. Tsimbinos and Nutt, two-year terms with
respect to Messrs. Kuhn, Henchy and Kramer and a one-year term with respect to
Mr. DeRusso (each an "Executive"). Each contract provides for daily extensions
such that the term of the contract will always be three years for Messrs.
Tsimbinos and Nutt, two years for Messrs. Kuhn, Henchy and Kramer and one year
for Mr. DeRusso unless written notice of termination of such extensions is
provided by either party, but in no event may the term of the agreement extend
beyond the last day of the month in which the Executive attains the age of 65,
or, for
16
<PAGE>
Messrs. Tsimbinos and Nutt, the age of 68. The Employment Agreements provide for
a base salary which is reviewed at least annually. The Employment Agreements do
not preclude termination of the Executive's employment by the Bank or the
Company for "cause" at any time. In the event the Bank or the Company chooses to
terminate the Executive's employment for reasons other than for cause,
retirement, disability or death or, unless consented to by the Executive, in the
event of the Executive's resignation from the Bank or the Company upon (i)
failure to re-elect the Executive to his current office or offices (or a more
senior office) or, if currently a member of the Board of Directors, to
renominate the Executive for election to the Board of Directors, (ii) a material
adverse change in the Executive's functions, duties or responsibilities, or
relocation of his principal place of employment, or (iii) liquidation or
dissolution of the Bank or the Company, the Executive, or in the event of death,
his beneficiaries, would be entitled to receive payments and benefits under the
Employment Agreement. Such payments and benefits would generally include a lump
sum payment equal to (a) his earned but unpaid salary as of the date of
termination, (b) the present value of the amount the Executive would have earned
in salary had he continued working through the unexpired term of the Employment
Agreement and (c) the present value of the additional benefits to which he would
have been entitled under all of the Bank's or the Company's employee benefit
plans had he continued working through the unexpired term of the Employment
Agreement at the rate of salary in effect on his date of termination, including,
in the case of Messrs. Tsimbinos and Nutt, an additional two years of service
credit under the supplemental retirement benefit portion of the Supplemental
Executive Retirement Plan of Roosevelt Savings Bank (the "SERP"). Each Executive
would also be entitled to continued group insurance coverage through the
unexpired term of the Employment Agreement at the same level as of his date of
termination, except that for Messrs. Tsimbinos and Nutt, the insurance coverage
would continue for their lifetimes. Each Executive would also be entitled to the
payments that would have been paid under any incentive plan as if he had
continued working through the unexpired term of the Employment Agreement and had
earned an incentive award in each calendar year that ends during the unexpired
term of the Employment Agreement in an amount equal to the product of the
average rate for the four highest compensated officers of the Company and the
salary that would have been paid during such calendar year.
If termination of employment, whether voluntary or involuntary, follows
a change in control of the Bank or the Company, the Executive or, in the event
of death, his beneficiaries, would be entitled to the severance pay as described
above, except that the unexpired term of the Employment Agreement would be five
years from the date of the change in control for Messrs. Tsimbinos and Nutt,
three years from the date of the change in control for Messrs. Kuhn, Henchy and
Kramer, and one year from the date of the change in control for Mr. DeRusso, and
that the payments under any incentive plan would be based on the maximum
attainable rate under such plan. The payments made to an Executive upon or
following a change in control of the Bank or the Company may result in an
"excess parachute payment" as defined under Section 280G of the Code, which may
result in the imposition of a 20% federal excise tax on the Executive and a
denial of the deduction for such excess amounts to the Bank and the Company or
to an acquiror of the Bank or the Company. Under the Employment Agreements, the
Company would indemnify the Executive for any such excise tax and for any
additional income, excise and employment taxes imposed as a result of such
indemnification. A "change in control" is generally defined to mean, during the
term of the Employment Agreement, an event that would be reported in response to
Item 1(a) of the Current Report on Form 8-K, or the acquisition of Company or
Bank stock that would require Federal Reserve Board approval under the Bank
Holding Company Act of 1956, as amended, or approval under the Change in Bank
Control Act, as amended, or the acquisition by a person or group of persons 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. Payments to the Executives under the Bank's Employment
Agreements are guaranteed by the Company in the event that payments or benefits
are not paid by the Bank.
1993 INCENTIVE STOCK OPTION PLAN. The Option Plan was initially adopted
on June 29, 1993 and ratified by the stockholders of the Company on December 13,
1993. The Board of Directors of the Company amended the Option Plan in January
1997 to increase the number of shares of Common Stock available for option
awards, to assure that Non-statutory Options awarded pursuant to the Option Plan
are tax deductible by
17
<PAGE>
the Company as "performance-based" compensation under Section 162(m) of the Code
and to include certain other changes. The Company's stockholders approved the
amended and restated Option Plan on April 21, 1997.
All officers and employees of the Company and its affiliates are
eligible to participate in the Option Plan. The Option Plan authorizes the grant
of stock options to purchase Company Common Stock (and Limited Rights as defined
below) equal to 2,576,550 shares (as adjusted to reflect the Stock Split). The
options may either be (i) options intended to qualify as incentive stock options
under Section 422 of the Code ("incentive stock options") or (ii) options that
do not so qualify ("Non-statutory Options"). Such options may have related stock
appreciation rights ("SARs") which are exercisable only upon a change in control
of the Bank or the Company (the "Limited Rights"). The exercise price at the
time of the grant will be at least 100% of the fair market value of the
underlying Common Stock and may be paid either in cash or Common Stock. The
Administrative Committees of the Company and the Bank determine the term during
which an option may be exercised, but in no event will this be more than ten
years from the date of the grant of the option; provided, however, that all
options will be 100% exercisable in the event the optionee terminates his
employment due to death, disability or retirement or in the event of a change in
control of the Bank or the Company.
No incentive stock options granted in connection with the Option Plan
will be exercisable more than three months after the date on which the optionee
ceases to perform services for the Bank or the Company, except that in the event
of death, disability, retirement or a change in control of the Company or the
Bank, incentive stock options may be exercisable for up to one year thereafter
or such longer period as determined by the Administrative Committee; provided,
that incentive stock options may not be exercised more than ten years from the
date of grant; and provided further, that if an optionee ceases to perform
services for the Bank or the Company due to retirement or following a change in
control of the Company or the Bank, any incentive stock options exercised more
than three months following the date the optionee ceases to perform services
shall be treated as a Non-statutory Option as described above. Non-statutory
Options may be exercised up to one year following cessation of employment. A
change in control is defined in the Option Plan generally to occur upon: an
event that would be reported in response to Item 1(a) of the Current Report on
Form 8-K; the acquisition of Company or Bank stock that would require the
approval of the Board of Governors of the Federal Reserve System under the Bank
Holding Company Act of 1956, as amended, or the approval of the Federal Deposit
Insurance Corporation under the Change in Bank Control Act; the acquisition by a
person or group of persons of 20% or more of the Bank's or the Company's stock;
or a tender offer or exchange offer, merger or other form of business
combination, sale of assets or contested election of directors which results in
a change in control of a majority of the Board of Directors.
Upon exercise of Limited Rights in the event of a change in control of
the Company or the Bank, the optionee will be entitled to receive a lump sum
cash payment equal to the difference between the exercise price of the related
option and the fair market value of the shares of Common Stock, subject to the
terms of the option on the date of exercise of the right and in lieu of
purchasing the Common Stock underlying the option. In the event of death,
disability or retirement, the Company, if requested by the employee or his
representative, may elect, in exchange for the option, to pay the employee, or
beneficiary in the event of death, the amount by which the fair market value of
the Common Stock exceeds the exercise price of the option on the date of the
employee's termination of employment.
18
<PAGE>
The following table summarizes the grants of stock options that were
made to the CEO and the Named Executive Officers during 1997.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1997
INDIVIDUAL GRANTS
---------------------------------------------------------------------
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATE OF STOCK
NUMBER OF OPTIONS/ PRICE APPRECIATION FOR
SECURITIES SARS OPTION TERM
UNDERLYING GRANTED TO ----------------------
OPTIONS/SARS EMPLOYEES IN EXERCISE OR
GRANTED FISCAL YEAR BASE PRICE EXPIRATION 5% 10%
NAME (#)(1) (%) ($ PER SHARE) DATE ($) ($)
---- ------------ ------------ ------------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
John M. Tsimbinos 70,000 29.1 16.875 01/23/07 742,910 1,882,580
A. Gordon Nutt 31,000 12.9 16.875 01/23/07 329,003 833,714
William R. Kuhn 14,000 5.8 16.875 01/23/07 148,582 376,516
Dennis E. Henchy 14,000 5.8 16.875 01/23/07 148,582 376,516
Ira H. Kramer 10,000 4.2 16.875 01/23/07 106,130 268,940
John J. DeRusso 20,000 8.3 16.875 01/23/07 212,260 537,880
</TABLE>
- ---------------------------
(1) All Options granted vest at a rate of 331/3% per year beginning on the
first anniversary of the grant date and generally remain exercisable
until the tenth anniversary of the grant date, subject to earlier
expiration upon termination of employment. In the case of termination
due to death, disability, retirement or a change in control of the
Company, all Options granted become immediately exercisable.
The following table provides information on the number of shares of
Common Stock acquired during 1997 through the exercise of options or SARs, or
represented by unexercised options or SARs held by the CEO and the Named
Executive Officers as of December 31, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES DURING 1997
AND 1997 YEAR-END OPTION/SAR VALUES
-------------------------------------------
SHARES VALUE NUMBER OF
ACQUIRED REALIZED SECURITIES UNDERLYING VALUE OF UNEXERCISED
ON ON UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
EXERCISE EXERCISE AT YEAR-END 1997 AT YEAR-END 1997
NAME (#) ($) (#) ($)
---- --- --- EXERCISABLE UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE(2)
----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
John M. Tsimbinos -- -- 524,028 70,000 15,065,805 1,146,250
A. Gordon Nutt -- -- 131,100 31,000 3,769,125 507,625
William R. Kuhn -- -- 131,100 14,000 3,769,125 229,250
Dennis E. Henchy -- -- 131,100 14,000 3,769,125 229,250
Ira H. Kramer -- -- 59,130 10,000 1,699,988 163,750
John J. DeRusso -- -- 0 20,000 0 327,500
</TABLE>
- ---------------------------
(1) Based upon the difference between $33.25, the closing price of the
Common Stock as reported on the Nasdaq Stock Market on December 31,
1997, and the $4.50 exercise price of the options.
(2) Based upon the difference between $33.25, the closing price of the
Common Stock as reported on the Nasdaq Stock Market on December 31,
1997, and the $16.875 exercise price of the options.
19
<PAGE>
PERFORMANCE COMPENSATION PROGRAM. The Bank maintains the Performance
Compensation Program, which is a discretionary program covering all employees of
the Bank, except for certain executive officers covered by the Performance
Compensation Plan discussed below. The Performance Compensation Program provides
generally for cash awards to individual employees based upon the annual
performance of the Bank in comparison to its pre-established goal and the
individual performance of such employees. Prior to the Board's adoption of the
Performance Compensation Plan in January 1997, Messrs. Tsimbinos, Nutt, Kuhn and
Henchy were also covered under the Performance Compensation Program. Any awards
such officers received under the Performance Compensation Program were based
entirely on the Bank's achievement of its annual performance goal.
PERFORMANCE COMPENSATION PLAN. The Board of Directors of the Bank
adopted the Performance Compensation Plan, effective in January 1997, in order
to assure that the incentive payment awards to Messrs. Tsimbinos, Nutt, Kuhn and
Henchy are tax deductible by the Company as "performance-based" compensation
under Section 162(m) of the Code. The Performance Compensation Plan is a written
plan that is substantively equivalent to the Performance Compensation Program,
except for certain limitations and provisions required under Section 162(m) of
the Code.
BANK RECOGNITION AND RETENTION PLAN FOR OFFICERS. Executive officers of
the Bank are eligible to receive awards of shares of Common Stock pursuant to
the Officers' RRP. The awards are granted at the discretion of the
Administrative Committee. Awards to officers become vested over a period of
years as determined under the Officers' RRP. Awards become 100% vested upon
termination of employment due to death, disability or retirement of the officer,
or following a change in control of the Bank or the Company. In the event that,
before reaching retirement, an officer terminates employment with the Bank or
the Company, the unvested portion of the officer's award will be forfeited. When
awards become vested and shares of Common Stock are distributed in accordance
with the Officers' RRP, the participants also receive amounts equal to any
accrued dividends with respect thereto. Prior to vesting, recipients of awards
may direct the voting of the shares allocated to them. Unallocated shares will
be voted by the trustee of the Officers' RRP in the same proportion as the
shares that have been awarded. Vested shares are distributed to recipients as
soon as practicable following the day on which they vested.
At the time of the Company's initial public offering in 1993, awards
under the Officers' RRP were granted to certain officers, including Messrs.
Tsimbinos, Nutt, Kuhn, Henchy and Kramer. Since these awards, no further awards
have been granted to the Company's executive officers under the Officers' RRP.
401(K) PLAN. The Bank maintains the Roosevelt Savings Bank Salary
Reduction Plan in RSI Retirement Trust (the "401(k) Plan"), which is a
tax-qualified, defined contribution plan designed to be qualified under Section
401(a) and Section 401(k) of the Code. Full-time salaried employees of the Bank
become eligible to join the 401(k) Plan following the completion of one year of
service with the Bank. Under the 401(k) Plan, subject to the limitations imposed
under Section 401(a)(17), Section 401(k) and Section 415 of the Code, a
participant may elect to defer not less than 2% and not more than 6% of his or
her compensation by directing the Bank to contribute such amount to the 401(k)
Plan on his or her behalf. No after-tax voluntary contributions may currently be
made to the 401(k) Plan. The Bank makes matching contributions to the 401(k)
Plan equal to 50% of a participant's elective deferrals, up to a maximum of 3%
of the participant's compensation for the plan year. A participant's
"compensation" for purposes of the 401(k) Plan is generally defined as a
participant's base compensation from the Bank, including salary reduction
contributions to the 401(k) Plan and wage continuation payments to an employee
who is absent due to an illness or disability of a short-term nature, but
excluding overtime pay, bonuses, commissions and contributions made by the Bank
to any other pension, insurance, welfare or any other employee benefit or
deferred compensation plan. Participants are always 100% vested in their
contributions, in matching contributions and in the earnings thereon. The 401(k)
Plan provides for in-service hardship distributions, and for in-service
non-hardship distributions of certain after-tax contributions made prior to
January 1, 1989. Distributions from the 401(k) Plan are made upon or after
termination of service in a lump sum or over a period not to exceed 20 years.
20
<PAGE>
The 401(k) Plan includes a fund that invests primarily in shares of the
Company's Common Stock (the "Employer Stock Fund"). Participants investing in
the Employer Stock Fund direct the trustee how to vote the shares of the Common
Stock held by such fund, based on their proportionate interests in the fund.
Upon distribution of the participant's account, the participant will have the
choice of having his or her account paid to him or her in Common Stock (to the
extent invested in the Employer Stock Fund) or in cash. As of December 31, 1997,
the 401(k) Plan had $26,085,865 in total assets, of which $19,298,932 was
invested in the Employer Stock Fund.
EMPLOYEE STOCK OWNERSHIP PLAN. The Company has established the ESOP for
eligible employees of the Company and its affiliates, including the Bank.
Full-time salaried employees become eligible for participation in the ESOP on
the entry date following the completion of one year of service. As part of the
Company's initial public offering, the ESOP borrowed funds from the Company to
purchase 2,163,150 shares (as adjusted to reflect the Stock Split) of the Common
Stock issued in the Company's initial public offering in 1993. Collateral for
the loan was the Common Stock purchased by the ESOP. The loan is being repaid
principally from employer cash contributions to the ESOP over a period of
approximately ten years. The interest rate for the loan is equal to the average
prime interest rate as published by THE WALL STREET JOURNAL during the
applicable quarter plus 150 basis points. Shares of Common Stock purchased by
the ESOP and pledged as collateral for the loan are held in a suspense account
and released for allocation among participants annually in amounts proportionate
to the repayment of the loan.
Shares released annually from the suspense account and discretionary
contributions, if any, are allocated among ESOP participants on the basis of
compensation for the year of allocation, subject to the limitations imposed
under Section 401(a)(17) and Section 415 of the Code. A participant's
"compensation" for purposes of the ESOP is generally defined as a participant's
base compensation from the Bank, including salary reduction contributions to the
401(k) Plan and wage continuation payments to an employee who is absent due to
an illness or disability of a short-term nature, plus bonuses and overtime pay,
but excluding commissions and contributions made by the Bank to any other
pension, insurance, welfare or any other employee benefit or deferred
compensation plan. Benefits generally become vested over a seven-year period
with 10% becoming vested after the first year of credited service and an
additional 10% becoming vested for the second, third and fourth years of
credited service. An additional 20% of the benefit will become vested each year
thereafter until participants are 100% vested after seven years. However, in the
event of a change in control, as defined by the ESOP, any unvested portion of
benefits shall vest immediately. The ESOP generally provides that, upon certain
changes in control as described in the ESOP, unallocated shares in the ESOP will
be sold to repay any outstanding loan and all remaining unallocated shares or
proceeds thereof will be allocated among participants who were employed
immediately preceding the change in control in proportion to compensation for
that part of the year prior to the change in control. In the event of a change
in control, the ESOP provides that no amount credited to a participant's account
as a result of the repayment of any outstanding loan will be treated as an
annual addition for purposes of the limitations under Section 415 of the Code
and, if any amount cannot be allocated in the year of the change in control
because of these limitations, it will be allocated in subsequent years to those
persons who were participants immediately preceding the change in control and
who continue to be participants.
Prior to the completion of a year of credited service, a participant
who terminates employment for reasons other than death, retirement, or
disability will not receive any benefit under the ESOP. Forfeitures are
reallocated annually among remaining participating employees in the same
proportion as the annual allocation that is made on the basis of compensation.
Benefits are generally payable in the form of stock upon death, retirement,
disability or termination of service.
RETIREMENT PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
RETIREMENT PLAN. The Bank maintains the Retirement Plan of Roosevelt
Savings Bank in RSI Retirement Trust (the "Retirement Plan"), which is a
tax-qualified, defined benefit plan designed to be qualified
21
<PAGE>
under Section 401(a) of the Code. The Retirement Plan generally covers full-time
salaried employees who have attained the age of 21 and have completed one year
of service. Employees compensated on an hourly or on a contract basis, leased
employees and employees who work outside the Bank's offices in connection with
the operation and maintenance of buildings or other properties acquired through
foreclosure or deed, are not eligible to participate in the Retirement Plan. The
Bank makes quarterly contributions to the Retirement Plan in amounts necessary
to satisfy the minimum funding requirements under the Employee Retirement Income
Security Act of 1974, as amended.
A participant is fully vested in his or her benefit under the
Retirement Plan upon retirement at the age of 65, or if later, the fifth
anniversary of the participant's initial participation in the Retirement Plan.
The annual benefit provided to a participant under the Retirement Plan, subject
to the limitations imposed under Section 401(a)(17) and Section 415 of the Code,
is equal to 2% of the participant's average annual earnings, multiplied by the
number of years, and any fraction thereof, of service credited to the
participant for benefit purposes not in excess of 30 years, plus l% of average
annual earnings multiplied by the number of years, and any fraction thereof, of
credited service in excess of 30 years. A participant's "average annual
earnings" for purposes of the Retirement Plan is the average of his or her
annual compensation for the 36 consecutive calendar months with the highest
average during his or her final 120 months of credited service (or the total
number of months of credited service if the total is less than 120 months). A
participant's "compensation" for purposes of the Retirement Plan is generally
defined as a participant's base compensation, including salary reduction
contributions to the 401(k) Plan and wage continuation payments to an employee
who is absent due to an illness or disability of a short-term nature, but
excluding overtime pay, bonuses, commissions and contributions made by the Bank
to any other pension, insurance, welfare or any other employee benefit or
deferred compensation plan. A participant's annual benefit under the Retirement
Plan is limited to 60% of his or her average annual earnings. Retirement Plan
benefits are also payable upon termination due to disability and death.
At December 31, 1997 the market value of the Retirement Plan trust fund
was $21,494,060. The Bank's contribution to the Retirement Plan for 1997 was $0,
as a result of the actuarial valuation of the liabilities and assets under the
Retirement Plan.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Bank maintains the SERP for
designated salaried executive officers of the Bank to compensate such
individuals who participate in the Bank's Retirement Plan, ESOP and the 401(k)
Plan, but whose benefits otherwise receivable under such benefit plans are
limited by Sections 402(g), 401(a)(17) and 415 of the Code. Payment of benefits
under the SERP is triggered by the same events triggering payment under the
Bank's Retirement Plan, ESOP and 401(k) Plan. The SERP also provides that, if
allocations under the ESOP in the case of a change in control are limited by
Section 415 of the Code, the SERP benefit with respect to the ESOP for all
eligible employees will be determined by taking into account the allocation of
the unallocated shares and cash in accordance with the amendment to the ESOP.
This additional SERP benefit will not be reduced by any subsequent allocation of
unallocated shares or cash in the years following the change in control.
The SERP is an unfunded plan. All obligations arising under the SERP
are payable from the general assets of the Bank. However, the Bank has
established a trust (the "SERP Trust"), the assets of which will be used to pay
the benefits under the SERP, except in the event of the insolvency of the Bank,
in which case the assets of the SERP Trust would be used to satisfy the claims
of the Bank's general creditors.
22
<PAGE>
PENSION PLAN TABLE. The following table sets forth the estimated annual
benefits payable under the Retirement Plan and the retirement benefit portion of
the SERP upon retirement at age 65 in calendar year 1997, expressed in the form
of a single life annuity (with no offset for Social Security benefits), for the
average annual earnings and years of credited service specified.
<TABLE>
<CAPTION>
PENSION PLAN TABLE(1)
YEARS OF CREDITED SERVICE
AVERAGE -------------------------
ANNUAL
EARNINGS 15 20 25 30 35(2)
-------- -- -- -- -- -----
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000 $ 60,000
200,000(4) 60,000 80,000 100,000 120,000(3) 120,000(3)
300,000(4) 90,000 120,000(3) 150,000(3) 180,000(3) 180,000(3)
400,000(4) 120,000(3) 160,000(3) 200,000(3) 240,000(3) 240,000(3)
500,000(4) 150,000(3) 200,000(3) 250,000(3) 300,000(3) 300,000(3)
700,000(4) 210,000(3) 280,000(3) 350,000(3) 420,000(3) 420,000(3)
900,000(4) 270,000(3) 360,000(3) 450,000(3) 540,000(3) 540,000(3)
</TABLE>
- ---------------------------
(1) The annual benefits shown in the table above assume the participant
would receive his retirement benefits under the Retirement Plan and the
SERP in the form of a straight life annuity at normal retirement age.
(2) Normal retirement benefits are limited to 60% of average annual
earnings.
(3) These are hypothetical benefits based upon the Retirement Plan's normal
retirement benefit formula. The maximum annual benefit permitted under
Section 415 of the Code in 1997 is $125,000 and in 1998 is $130,000, or
if higher, a member's current accrued benefit as of December 31, 1982
(but not more than $136,425). The $130,000 ceiling will be adjusted to
reflect cost of living increases after 1998 in accordance with Section
415 of the Code. The SERP will provide the difference between the
amounts appearing in this table and the maximum amount allowed by the
Code.
(4) The benefits shown corresponding to these compensation ranges are
hypothetical benefits based upon the Retirement Plan's normal retirement
benefit formula. Under Section 401(a)(17) of the Code, a participant's
compensation in excess of $200,000 (as adjusted to reflect
cost-of-living increases) is disregarded for purposes of determining
average annual earnings in plan years beginning in or after 1989 but
before 1994. Benefits accrued as of the last day of the plan year
beginning in 1988 on the basis of compensation in excess of $200,000 are
preserved. The $200,000 limit was increased to $209,200 in 1990,
$222,220 in 1991, $228,860 in 1992, and $235,840 in 1993. The limitation
was reduced to $150,000 for plan years beginning in 1994 through 1996
and is $160,000 for plan years beginning in 1997 and 1998. The
limitation will be adjusted to reflect cost of living increases after
1997 in accordance with Section 401(a)(17) of the Code. The table
reflects amounts payable in conjunction with the SERP.
The following table sets forth the years of credited service (i.e.,
benefit service) as of December 31, 1997 for each of the individuals named in
the Summary Compensation Table.
CREDITED SERVICE
----------------
YEARS MONTHS
----- ------
John M. Tsimbinos 15 10
A. Gordon Nutt 14 6
William R. Kuhn 23 6
Dennis E. Henchy 22 8
Ira H. Kramer 14 7
John J. DeRusso 3 1
23
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time the Bank makes mortgage loans to its executive
officers and mortgage loans and consumer loans to members of the immediate
families of its executive officers and directors, to the extent consistent with
applicable laws and regulations. Such loans are made in the ordinary course of
business and on the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons, and
do not and will not involve more than the normal risk of collectibility or
present other unfavorable features. The outstanding principal balance of such
loans to executive officers and family members of executive officers and
directors totaled $70,306 as of December 31, 1997.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's
directors, its executive officers, and any person holding more than ten percent
of the Company's Common Stock are required to file initial reports of ownership
of the Company's Common Stock and reports of changes in that ownership to the
SEC. Specific due dates for these reports have been established and the Company
is required to disclose in this Proxy Statement any failure to file by these
dates during 1997. All of such filing requirements of the Company's directors
and executive officers were satisfied during 1997, based upon their written
representations and copies of the reports that they have filed with the SEC.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP
to continue as independent auditors for the Company for the year ending December
31, 1998, subject to ratification of such appointment by the Company's
stockholders. Representatives of KPMG Peat Marwick LLP are expected to be
present at the Annual Meeting. The representatives will have an opportunity to
make a statement if they desire to do so and will be available to respond to
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP
AS INDEPENDENT AUDITORS FOR THE COMPANY.
PROPOSAL THREE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
By resolutions adopted on March 10, 1998, the Board of Directors of the
Company declared it advisable and in the best interests of the Company to amend
the Company's Certificate of Incorporation to increase the number of shares of
stock that the Company has the authority to issue to an aggregate of 65,000,000
shares, of which 60,000,000 would be Common Stock and 5,000,000 would be
Preferred Stock, and directed that the Certificate of Incorporation be submitted
to a vote of the stockholders at the Annual Meeting. If the proposal
24
<PAGE>
is adopted, Article FOURTH, Section A of the Certificate of Incorporation is
hereby amended to read as follows:
"FOURTH: A. The total number of shares of all classes of stock which
the Corporation shall have authority to issue is sixty-five million
(65,000,000) consisting of:
1. Five million (5,000,000) shares of Preferred Stock, par value
one cent ($.01) per share (the "Preferred Stock"); and
2. Sixty million (60,000,000) shares of Common Stock par value
one cent ($.01) per share (the "Common Stock")."
The Certificate of Incorporation of the Company currently authorizes
the issuance of up to 35,000,000 shares, consisting of 30,000,000 shares of
Common Stock and 5,000,000 shares of Preferred Stock. As of March 12, 1998, the
Company had 17,529,929 shares of Common Stock outstanding. No shares of
Preferred Stock are outstanding. As of March 12, 1998, the Company had 7,276,000
authorized but unissued shares of Common Stock and an additional 5,194,071
shares of Common Stock held as treasury stock.
The Board of Directors believes that it is in the best interest of the
Company and its stockholders to increase the number of authorized shares of
Common Stock in order to have additional shares available for issuance to meet
various business needs as they may arise and to enhance the Company's
flexibility in connection with possible future actions. These business needs and
actions may include stock dividends, stock splits, employee benefit programs,
corporate business combinations, funding of business acquisitions and other
corporate purposes. Although the Board periodically considers transactions such
as those listed above, it currently does not have plans to issue any significant
amount of such Common Stock, except as reserved for issuance under the Company's
stock option plans and the Rights Agreement, dated as of July 19, 1994, between
the Company and The Chase Manhattan Bank, as Rights Agent.
The authorization of additional shares of Common Stock pursuant to this
proposal will have no dilutive effect upon the proportionate voting power of the
present shareholders of the Company. However, to the extent that shares are
subsequently issued in connection with any corporate action to persons other
than the present shareholders, such issuance could have a dilutive effect on the
earnings per share and voting power of present shareholders. The Company would
expect that the dilutive effect on earnings per share would be relatively
short-term in duration.
In addition, although the issuance of shares of Common Stock in certain
instances may have the effect of forestalling a hostile takeover, the Board does
not intend or view the increase in authorized Common Stock as an anti-takeover
measure. The Company is not aware of any proposed or contemplated transaction of
this type, and this amendment to the Certificate of Incorporation is not being
recommended in response to any specific effort of which the Company is aware to
obtain control of the Company. The authorized shares of Common Stock in excess
of those presently authorized and issued will be available for issuance at such
times and for such purposes as the Board of Directors may deem advisable without
further action by the Company's stockholders, except as may be required by
applicable laws or regulations.
Approval of the amendment to the Certificate of Incorporation of the
Company requires the affirmative vote of the holders of at least a majority of
the issued and outstanding shares of Common Stock entitled to vote at the Annual
Meeting. Accordingly, abstentions from voting and shares as to which the
"ABSTAIN" box has been selected on the Proxy Card with respect to the approval
of the amendment to the Certificate of Incorporation will have the effect of a
vote against such proposal. Shares underlying broker non-votes or held in excess
of the Limit will also be counted as votes against this proposal.
25
<PAGE>
In connection with this proposal, the Company recommends that each
stockholder consider the financial statements of the Company as set forth in the
Company's 1997 Annual Report to Stockholders, a copy of which is being furnished
to each stockholder together with this proxy statement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT
TO THE CERTIFICATE OF INCORPORATION.
ADDITIONAL INFORMATION
STOCKHOLDER'S NOTICE OF BUSINESS TO BE CONDUCTED AT THE ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for a
stockholder to properly bring business before an annual meeting or to nominate
any person for election to the Board of Directors. To properly bring business
before an annual meeting or to nominate any person for election to the Board of
Directors, a stockholder must be a stockholder of record entitled to vote with
respect thereto, and the stockholder must give timely notice thereof in writing
to the Corporate Secretary of the Company.
To be timely, a stockholder's notice must be delivered to and received
by the Corporate Secretary not less than 90 days prior to the date of the annual
meeting. However, if less than 100 days notice or prior disclosure of the date
of the meeting is given to stockholders, notice must be received not later than
the close of business on the tenth day following the day on which such notice of
the annual meeting was mailed or such public disclosure was made. A
stockholder's notice to the Corporate Secretary shall set forth such information
as required by the Bylaws of the Company. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and proxy card
relating to an annual meeting any stockholder proposal or nomination which does
not meet all of the requirements for inclusion established by the SEC in effect
at the time such proposal or nomination is received.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Any stockholder wishing to have a proposal considered for inclusion in
the Company's proxy statement and proxy card relating to the 1999 annual meeting
of stockholders must, in addition to other applicable requirements, set forth
such proposal in writing and file it with the Corporate Secretary of the Company
on or before [December 1, 1998], pursuant to the proxy soliciting regulations
of the SEC. Any such proposal will be subject to 17 C.F.R. ss.240.14a-8 of the
rules and regulations promulgated by the SEC under the Exchange Act.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters to be brought before the stockholders at the Annual
Meeting. If, however, any other matters not now known are properly brought
before the meeting, the persons named in the accompanying Proxy Card will vote
the shares represented by all properly executed proxies on such matters in such
manner as shall be determined by a majority of the Board of Directors.
26
<PAGE>
FINANCIAL STATEMENTS
A copy of the 1997 Annual Report to Stockholders for the year ended
December 31, 1997, containing consolidated statements of financial condition as
of December 31, 1997 and December 31, 1996 and related consolidated statements
of income, changes in stockholders' equity and cash flows for each of the years
ended December 31, 1997, 1996 and 1995, prepared in conformity with generally
accepted accounting principles, accompanies this Proxy Statement. The
consolidated financial statements have been audited by KPMG Peat Marwick LLP
whose report thereon appears in the Annual Report. The Annual Report serves as
the Bank's Annual Disclosure Statement for purposes of the regulations of the
Federal Deposit Insurance Corporation. Upon request, stockholders will be
furnished, free of charge, an additional copy of the Annual Report.
The Company is required to file an annual report on Form 10-K for the
year ended December 31, 1997 with the SEC. Stockholders may obtain, free of
charge, a copy of such annual report (excluding exhibits) by writing to Theodore
S. Ayvas, Vice President, Roosevelt Savings Bank, 1122 Franklin Avenue, Garden
City, New York 11530. A copy of the Form 10-K is also available on the SEC's
Electronic Data Gathering Analysis and Retrieval ("EDGAR") System at the SEC's
website, www.sec.gov.
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL
MEETING, PLEASE COMPLETE, SIGN, DATE AND PROMPTLY
RETURN THE ACCOMPANYING PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
27
<PAGE>
REVOCABLE PROXY
T R FINANCIAL CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
T R FINANCIAL CORP.
FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, APRIL 27, 1998
The undersigned stockholder of T R Financial Corp. (the "Company")
hereby appoints James E. Orr, Jr., John M. Tsimbinos and Douglas J. McClintock,
or any of them, with full powers of substitution, to attend and act as proxy for
the undersigned and to vote all shares of common stock of the Company which the
undersigned may be entitled to vote at the 1998 Annual Meeting of Stockholders
(the "Annual Meeting") to be held on Monday, April 27, 1998 at 9:30 a.m. New
York time at the Westbury Manor, Jericho Turnpike, Westbury, New York, and at
any adjournment or postponement thereof.
(CONTINUED ON REVERSE SIDE)
PLEASE COMPLETE, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE
AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
<TABLE>
<CAPTION>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN I WILL ATTEND ANNUAL MEETING /_/
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN ITEM 1 AND FOR THE PROPOSALS IN (PLEASE MARK BOX IF YOU PLAN
ITEMS 2 AND 3. TO ATTEND THE ANNUAL MEETING.)
(IMPORTANT: IF YOUR SHARES ARE
NOT REGISTERED IN YOUR NAME,
YOU WILL NEED ADDITIONAL
DOCUMENTATION TO ATTEND THE
ANNUAL MEETING.)
PLEASE MARK YOUR CHOICE LIKE THIS /X/ IN BLUE OR BLACK INK.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND "FOR" THE PROPOSALS IN ITEMS 2 AND 3.
<S> <C> <C> <C> <C> <C> <C>
FOR AGAINST ABSTAIN
1. Election of Directors for a FOR all Nominees WITHHOLD 2. Ratification of appointment of KPMG /_/ /_/ /_/
three-year term. (except as for all Peat Marwick LLP as independent
NOMINEES: otherwise indicated) Nominees auditors for the
A. Gordon Nutt, /_/ /_/
Michael P. Galgano
John C. Mesloh 3. Approval of the amendment to the /_/ /_/ /_/
Certificate of Incorporation of
(INSTRUCTION: TO WITHHOLD AUTHORITY to vote for any individual the Company to increase the number
nominee, write that nominee's name in the space provided below.) of shares of common stock that the
Company is authorized to issue.
_______________________________________________________________ 4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF. AS OF
THE DATE OF THE PROXY STATEMENT FOR THE ANNUAL MEETING,
MANAGEMENT OF THE COMPANY IS NOT AWARE OF ANY SUCH OTHER
BUSINESS.
The undersigned hereby
acknowledges receipt of the
Notice of the 1998 Annual
Meeting of Stockholders and the
Proxy Statement, dated March 31,
1998, for the Annual Meeting to
be held on April 27, 1998.
________________________________
Signature of Stockholder
________________________________
Signature of Stockholder
Dated:__________________________
Please sign exactly as your name
appears on this proxy card.
Joint owners should each sign
personally. If signing as
attorney, executor,
administrator, trustee or
guardian, please include your
full title. Corporate proxies
should be signed by an
authorized officer.
PLEASE COMPLETE, SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
</TABLE>
