<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Astoria Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Astoria Financial Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[LETTERHEAD OF FINANCIAL CORPORATION]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 1997
The Annual Meeting of Shareholders of Astoria Financial Corporation will be
held on Wednesday, May 21, 1997, at 9:30 a.m., Eastern time, at the New Hyde
Park Inn, 214 Jericho Turnpike, New Hyde Park, New York 11040. The meeting will
be held to consider and act upon the following matters:
1. The election of three directors for terms of three years each;
2. The ratification of the appointment of independent auditors; and
3. Such other matters as may properly come before the Annual Meeting
or any adjournment or postponements thereof.
Holders of record of Astoria Financial Corporation common stock as of the
close of business on March 26, 1997, are entitled to notice of and to vote at
the meeting and any adjournment or postponement thereof. A list of shareholders
entitled to vote at the Annual Meeting will be available at the meeting and at
Astoria Financial Corporation, One Astoria Federal Plaza, Lake Success, New York
11042-1085, and the New Hyde Park Inn at the address set forth above for a
period of ten days prior to the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE AS SOON AS
POSSIBLE.
By Order of the Board of Directors,
/s/ William K. Sheerin
William K. Sheerin
Senior Vice President & Secretary
Dated: April 7, 1997
<PAGE>
ASTORIA FINANCIAL CORPORATION
ONE ASTORIA FEDERAL PLAZA
LAKE SUCCESS, NEW YORK 11042-1085
------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1997
------------------------------
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy card are being furnished to
the shareholders of Astoria Financial Corporation ("AFC") in connection with the
solicitation of proxies by the Board of Directors of AFC (the "Board") for use
at the AFC Annual Meeting of Shareholders to be held on May 21, 1997, and at any
adjournment or postponement thereof (the "Annual Meeting"). The Annual Meeting
will be held at 9:30 a.m., Eastern time, at the New Hyde Park Inn, 214 Jericho
Turnpike, New Hyde Park, New York 11040. Only holders of record of AFC's issued
and outstanding common stock ("AFC Common Stock"), par value $0.01 per share, as
of the close of business on March 26, 1997 (the "Record Date") are entitled to
vote at the Annual Meeting. The 1996 Annual Report to Shareholders, including
the consolidated financial statements for the fiscal year ended December 31,
1996, accompanies this Proxy Statement and the proxy card which are first being
mailed or given to shareholders of record on or about April 7, 1997.
VOTING AND QUORUM REQUIREMENTS
As of the Record Date, there were 21,230,708 shares of AFC Common Stock
issued and outstanding and entitled to vote at the Annual Meeting. Each share of
AFC Common Stock outstanding on the Record Date entitles the holder thereof to
one vote on each matter to properly come before the Annual Meeting, except as
described below. The presence, either in person or by proxy, of the holders of a
majority of the shares of AFC Common Stock issued and outstanding as of the
Record Date is necessary to constitute a quorum at the Annual Meeting.
The election of directors shall be by a plurality of votes cast by the
holders of AFC Common Stock present, in person or by proxy, and entitled to vote
thereon. Holders of AFC Common Stock may not vote their shares cumulatively with
respect to the election of directors. The ratification of the appointment of
independent auditors and any other matters as may properly come before the
annual meeting requires the affirmative vote of a majority of the votes cast by
the holders of AFC Common Stock present, in person or by proxy, and entitled to
vote thereon.
Shares of AFC Common Stock as to which the "ABSTAIN" box has been selected
on the proxy card with respect to the ratification of appointment of KPMG Peat
Marwick LLP as independent auditors for AFC will be counted as present and
entitled to vote and will have the effect of a vote against the proposal. In
contrast, shares underlying broker non-votes will not be counted as present and
entitled to vote and will have no effect on the vote on each matter presented.
1
<PAGE>
EVERY PROPERLY EXECUTED PROXY THAT IS TIMELY RECEIVED BY AFC WILL BE VOTED
IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED THEREIN UNLESS OTHERWISE REVOKED.
PROPERLY EXECUTED UNMARKED PROXIES WILL BE VOTED FOR THE ELECTION OF THE BOARD'S
NOMINEES AS DIRECTORS, AND FOR THE RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS. IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED
IN YOUR OWN NAME, YOU WILL NEED AN ASSIGNMENT OF VOTING RIGHTS FROM THE
SHAREHOLDER OF RECORD TO VOTE PERSONALLY AT THE ANNUAL MEETING.
Pursuant to the Certificate of Incorporation of AFC, no record shareholder
of AFC Common Stock which is beneficially owned, directly or indirectly, by a
shareholder who as of the Record Date beneficially owns more than ten percent
(10%) of the AFC Common Stock outstanding on such date will be entitled or
permitted to vote any shares of AFC Common Stock in excess of ten percent (10%)
of AFC Common Stock outstanding as of the Record Date. For purposes of this
limitation, neither the Astoria Federal Savings and Loan Association Employee
Stock Ownership Plan (the "ESOP") nor the trustee of such plan is considered the
beneficial owner of the AFC Common Stock held by the ESOP.
REVOCATION OF PROXIES
Any shareholder who executes a proxy has the right to revoke it at any
time before it is voted. A proxy may be revoked by delivering to the Secretary
of AFC, at its principal office, either a written revocation or a proxy, duly
executed, bearing a later date, or by attending the Annual Meeting and voting in
person.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of February 28,
1997, with respect to the beneficial ownership of AFC Common Stock by each
person or group of persons, as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), known to AFC to be the
beneficial owner of more than 5% of AFC voting stock. The only AFC voting stock
outstanding is AFC Common Stock.
<TABLE>
<S> <C> <C> <C>
AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS NAME & ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ---------------- ---------------------------------- -------------------- ----------
Common State Street Bank and Trust Company, Trustee 2,716,424 (1) 12.72 %
225 Franklin Street
Boston, Massachusetts
Common FMR Corp. 1,530,170 (2) 7.16 %
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ----------
(1) State Street Bank and Trust Company ("State Street") is the trustee of the
ESOP, which is administered by the ESOP Committee consisting of four (4)
officers of Astoria Federal Savings and Loan Association (the
"Association"), one of whom is an executive officer of AFC. As of December
31, 1996, State Street held 2,612,324 shares of AFC Common Stock for the
benefit of the participants of the ESOP. Under the terms of the ESOP, the
Trustee votes the shares held by the ESOP Trust based upon directions
received from the participants as "named fiduciaries" in the ESOP. As of
December 31, 1996, approximately 653,212 shares were allocated to
participants. For voting purposes, each participant as a "named fiduciary"
will be eligible to direct the Trustee how to vote at the Annual Meeting as
to the number of shares of AFC Common Stock which have been allocated to
his or her account under the ESOP. The remaining unallocated shares and any
allocated shares with respect to which no voting instructions have been
received, will be voted by the Trustee at the Annual Meeting in the same
manner and proportion as the allocated shares with respect to which voting
instructions have been received, so long as such vote is in accordance with
the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Due to the requirements of ERISA, the trustee
2
<PAGE>
is deemed to have shared voting power as to all shares held in the ESOP
trust. According to a filing on Schedule 13G dated February 10, 1997, State
Street also holds 104,100 shares as trustee of various collective
investment funds for employee benefit plans of other companies and other
index accounts, as to which State Street has sole voting and dispositive
power.
(2) According to a filing on Schedule 13G dated February 14, 1997, Edward C.
Johnson 3d and Abigail P. Johnson own 12.0 % and 24.5 %, respectively, of
the outstanding voting common stock of FMR Corp. Mr. Johnson is Chairman of
FMR Corp. Ms. Johnson is a director of FMR Corp. Members of Mr. Johnson's
family and trusts for their benefit own approximately 49% of the voting
power of FMR Corp. These family members may be deemed to form a controlling
group with respect to FMR Corp. Fidelity Management & Research Company
("FMRC"), a wholly owned subsidiary of FMR Corp. and an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, is the
beneficial owner of 816,000 shares of AFC Common Stock as a result of
acting as investment advisor to various investment companies registered
under Section 8 of the Investment Company Act of 1940. Fidelity Management
Trust Company, a wholly owned subsidiary of FMR Corp., is the beneficial
owner of 714,170 shares of AFC Common Stock. Edward C. Johnson 3d and FRM
Corp., through its control of Fidelity Management Trust Company, each claim
sole dispositive over 714,170 shares of AFC Common Stock and sole power to
direct the voting of 582,570 shares, and no power to vote or to direct the
voting of 131,600 shares of AFC Common Stock owned by institutional
account(s).
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board consists of nine directors divided into three classes, each
consisting of three directors. Upon election by the shareholders, the directors
of each class serve for a term of three years, with the directors of one class
elected each year.
In all cases, directors serve until their respective successors are duly
elected and qualified. Pursuant to the Bylaws of AFC, no person is eligible for
election or appointment as a director who is seventy-five (75) years of age or
older, and no person shall continue to serve as a director after the regular
meeting immediately preceding his seventy-fifth (75th) birthday. As a result,
Mr. Henry Drewitz will retire from the Boards of Directors of AFC and the
Association on April 16, 1997. The Board has elected Mr. Engelke to the office
of Chairman of the Board and has reduced size of the Board of Directors to eight
seats effective upon Mr. Drewitz's retirement.
The directors whose terms expire at the Annual Meeting are Andrew M.
Burger, Denis J. Connors and Thomas J. Donahue. Each of these directors
(singularly the "Board Nominee" and collectively the "Board Nominees") has been
nominated by the Board to stand for reelection, and, if elected, to serve for a
term expiring at the annual meeting of shareholders to be held in 2000. Each
Board Nominee has consented to being named in this Proxy Statement and to serve
if elected.
IF ANY BOARD NOMINEE SHOULD REFUSE OR BE UNABLE TO SERVE, THE PROXIES WILL
BE VOTED FOR SUCH PERSON AS SHALL BE DESIGNATED BY THE BOARD TO REPLACE SUCH
NOMINEE. THE BOARD PRESENTLY HAS NO KNOWLEDGE THAT ANY OF THE BOARD NOMINEES
WILL REFUSE OR BE UNABLE TO SERVE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE BOARD NOMINEES FOR
---
ELECTION AS DIRECTORS OF AFC FOR TERMS OF THREE YEARS EACH.
BOARD NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the Board
Nominees for election and members of the Board of AFC.
3
<PAGE>
<TABLE>
<CAPTION> DIRECTOR TERM
NAME AGE (1) POSITIONS HELD WITH AFC (2) SINCE (3) EXPIRES
---- ------- --------------------------- --------- -------
<S> <C> <C> <C> <C>
Henry Drewitz 74 Director, Chairman of the Board (4) 1971 1999
George L. Engelke, Jr. 58 Director, President, & Chief Executive Officer (4) 1983 1999
Ralph F. Palleschi 50 Director 1996 1999
Andrew M. Burger 62 Director & Nominee 1975 1997
William J. Fendt 71 Director 1976 1998
Robert G. Bolton 72 Director 1988 1998
Denis J. Connors 55 Director & Nominee 1990 1997
Thomas J. Donahue 56 Director & Nominee 1990 1997
Thomas V. Powderly 59 Director, Consultant & Advisory Board Member 1995 1998
</TABLE>
- ----------
(1) As of the Record Date.
(2) All directors of AFC also serve as directors of the Association.
(3) All directors, except Messrs. Powderly and Palleschi, commenced service as
directors of AFC on June 14, 1993, the date of AFC's incorporation. As to
such directors, the dates set forth are the dates the individuals commenced
service as directors of the Association. Mr. Powderly and Mr. Palleschi
commenced service as directors of AFC and the Association on January 31,
1995 and on July 17, 1996, respectively.
(4) Mr. Drewitz will retire from the Board on April 16, 1997. The Board has
elected Mr. Engelke Chairman of the Board effective following the regular
Board meeting called for such date.
The following table sets forth certain information regarding the non-
director executive officers of AFC.
<TABLE>
<CAPTION>
NAME AGE (1) POSITIONS HELD WITH AFC
---- ------ -----------------------
<S> <C> <C>
Arnold K. Greenberg 56 Senior Vice President & Assistant Secretary
Thomas W. Drennan 52 Senior Vice President
Monte N. Redman 46 Senior Vice President, Treasurer & Chief Financial Officer
William K. Sheerin 61 Senior Vice President & Secretary
Alan P. Eggleston 43 Senior Vice President & General Counsel
</TABLE>
- ----------
(1) As of the Record Date
All executive officers of AFC have served as such since June 16, 1993, the
date of the first organizational meeting of AFC following its incorporation,
except Mr. Eggleston who has served as an executive officer since December 1995.
All executive officers of AFC are elected annually and serve until their
respective successors have been chosen, subject to their removal as officers at
any time by the affirmative vote of a majority of the authorized number of
directors then constituting the Board of Directors. See "Executive Compensation
- -Employment Agreements".
BIOGRAPHICAL INFORMATION
The following is a brief description of the business experience of the
directors, Board Nominees and executive officers for at least the past five
years and their respective directorships, if any, with other public companies
subject to the reporting requirements of the Exchange Act.
Directors and Board Nominees
HENRY DREWITZ has been Chairman of the Board of AFC since its formation in
1993. Mr. Drewitz was
4
<PAGE>
named President and Chief Executive Officer of the Association in 1974 and
Chairman of the Association's Board of Directors in 1975. In 1989 he retired as
President and Chief Executive Officer of the Association. From the time of his
retirement as an officer of the Association in 1989 until September 30,1993, Mr.
Drewitz served as a consultant to the Association. Mr. Drewitz will cease
service as a director and as Chairman of the Board of AFC on April 16, 1997.
GEORGE L. ENGELKE, JR. has been President and Chief Executive Officer of
AFC since its formation in 1993. A certified public accountant, he joined the
Association in 1971 as Vice President and Treasurer. He was named Executive Vice
President and Treasurer in 1974, Chief Operating Officer in 1986 and President
and Chief Executive Officer in 1989. Mr. Engelke is the past Chairman and a
current director of the Community Bankers Association of New York State, a
former director of the Federal Home Loan Bank of New York and America's
Community Bankers and a director of the Community Preservation Corporation. The
Board has elected Mr. Engelke Chairman of the Board effective following the
regular Board meeting called for April 16, 1997.
RALPH F. PALLESCHI, a certified public accountant, co-founded, in 1983,
First Long Island Investors, Inc., a registered investment advisor pursuant to
the Investment Advisors Act of 1940 and a registered broker/dealer with the
National Association of Securities Dealers, Inc. (NASD). He continues to serve
as a director and is Executive Vice President and Chief Financial Officer of
such company. He has also served from 1993 to 1997 as Chief Operating Officer of
the New York Islanders Hockey Team. From 1977 to 1983, he served as Vice
President - Finance and Chief Financial Officer of Entenmann's Inc., a publicly
traded food products company. From 1968 to 1977, he was employed by Peat Marwick
Mitchell & Co., predecessor of KPMG Peat Marwick LLP.
ANDREW M. BURGER is President of Atlantic Iron Works, Inc., a steel
fabricating company located in Long Island City, New York.
WILLIAM J. FENDT is a retired executive of New York Telephone Company, the
predecessor of NYNEX.
ROBERT G. BOLTON, in 1989, retired from his position as Vice President of
the Association. Prior to his service with the Association, Mr. Bolton was Chief
Executive Officer of Oneonta Federal Savings and Loan Association, which was
acquired by the Association in 1988.
DENIS J. CONNORS is the former Chairman and Chief Executive Officer of
Curran & Connors, Inc., a designer and publisher of annual reports. See
"Compensation Committee Interlocks and Insider Participation on Compensation
Decisions."
THOMAS J. DONAHUE, a certified public accountant, retired as a partner of
Peat, Marwick, Mitchell & Co., the predecessor of KPMG Peat Marwick LLP, in
1986. Following his retirement and prior to becoming a director of the
Association, Mr. Donahue served as president and a director of other savings
institutions from 1987 to 1990. Presently, Mr. Donahue is self-employed as a
financial consultant.
THOMAS V. POWDERLY served in a variety of capacities with Fidelity New
York, F.S.B. ("Fidelity") prior to its acquisition by the Association on January
31, 1995. From 1986 to 1990, he served as its Executive Vice President. In 1990,
he was appointed its President and Chief Operating Officer and in 1992 was named
its Chief Executive Officer. He was named Chairman of the Board of Directors of
Fidelity in 1993. From 1993 until January 31, 1995, he served as its Chairman
and Chief Executive Officer. Prior to 1986, Mr. Powderly held positions with
Edward S. Gordon, Inc., a commercial real estate brokerage and management firm,
and with
5
<PAGE>
several other thrift institutions.
Executive Officers Who Are Not Directors
ARNOLD K. GREENBERG has served as Senior Vice President of AFC since its
formation in 1993 and as Assistant Secretary since December 1993. He joined the
Association in 1975 as Vice President and was appointed Senior Vice President in
1979. In 1986, Mr. Greenberg became Senior Vice President, Administration and
Operations, and in January of 1993, Senior Vice President, Consumer Services.
THOMAS W. DRENNAN, a certified public accountant, has served as Senior Vice
President of AFC since its formation in 1993. He joined the Association in 1986
as Senior Vice President, Mortgage Services. He also serves as the Association's
Community Reinvestment Act Officer.
MONTE N. REDMAN has served as Senior Vice President, Treasurer and Chief
Financial Officer of AFC since its formation in 1993. He joined the Association
in 1977. In 1979, he was named Assistant Controller, and, in 1982, Assistant
Vice President. Mr. Redman became Vice President, Investment Officer in 1985
and, in 1989, was appointed Senior Vice President, Treasurer and Chief Financial
Officer.
WILLIAM K. SHEERIN has served as Senior Vice President and Secretary of AFC
since its formation in 1993. He joined the Association in 1956. He was named
Assistant Treasurer and promoted to Branch Manager in 1966. In 1974, he was
promoted to Secretary and head of Savings Operations. In 1979, he was given the
additional title of Vice President and in 1986 he was appointed Senior Vice
President, Consumer Services. In January 1993, Mr. Sheerin became Senior Vice
President, Administrative Services.
ALAN P. EGGLESTON has served as Senior Vice President and General Counsel
of AFC since December 1995. He joined the Association in 1993 as Vice President
and General Counsel. In March 1994, he was named Vice President and General
Counsel of AFC. In January 1995, he became First Vice President and General
Counsel of AFC and the Association. Prior to joining the Association, he served
as an officer and counsel to several thrift institutions, including, from 1990
to 1993, as Senior Vice President and Secretary of National Savings Bank of
Albany, a publicly traded thrift institution.
COMMITTEES AND MEETINGS OF THE BOARD
The Board meets on a monthly basis and may have additional special meetings
upon the request of the Chairman, the President and Chief Executive Officer or
any three (3) members of the Board. During the fiscal year ended December 31,
1996, the Board of Directors met twelve (12) times. During this period, no
director attended fewer than 75% of the total number of meetings of the Board of
Directors and its committees on which such director served held. The Board of
AFC has established the following standing committees:
The Compensation Committee of AFC consists of Mr. Fendt, as Chairman, and
Messrs. Burger, Donahue, Drewitz and Connors. Mr. Engelke serves ex officio as a
non-voting member of the Compensation Committee. The function of the
Compensation Committee is to review the performance and compensation of the
officers of AFC, make recommendations to the Board with respect thereto and
administer the Astoria Financial Corporation 1993 Incentive Stock Option Plan
(the "Incentive Option Plan")and the 1996 Stock Option Plan for Officers and
Employees of Astoria Financial Corporation (the "1996 Officer Option Plan")
including the granting of options pursuant thereto. This committee meets as
needed and met three (3) times during 1996.
6
<PAGE>
The Nominating Committee currently consists of Messrs. Engelke, Drewitz and
Powderly. The purpose of this committee is to recommend to the Board of
Directors nominees for election to the Board with respect to those directorships
which become vacant or whose terms expire at the next annual meeting of
shareholders, to review any nominations for election to the Board made by any
shareholder of AFC, and to determine compliance with the provisions of the
Bylaws of AFC applicable thereto. See "Additional Information - 'Shareholders
Proposals' and 'Notice of Business to be Conducted at an Annual Meeting'". The
committee meets as needed and met one (1) time during 1996.
The Audit Committee consists of Mr. Donahue, as Chairman, and Messrs.
Drewitz, Burger, Fendt, Connors and Powderly. The purpose of this committee is
to meet with the independent and internal auditors of AFC and the Association
and review the plans and reports of such auditors. This committee meets, at a
minimum, on a quarterly basis, and met four (4) times during 1996.
There is no family relationship between any director, any Board Nominee,
any officer or any significant employee of AFC, except that Mr. Connors' spouse
is the first cousin of Mr. Sheerin.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
It is the policy of AFC and the Association that all transactions between
AFC or the Association and its directors, executive officers, holders of 10% or
more of the shares of any class of its common stock, and affiliates thereof,
will contain terms no less favorable to AFC or the Association than could have
been obtained by it in arms-length negotiations with unaffiliated persons and
will be approved by a majority of independent outside directors of AFC or the
Association, respectively, not having any interest in the transaction or, as
allowed by law, are benefits provided generally to all full time employees of
the Association on a nondiscriminatory basis and such benefits have been
similarly approved by the Board of Directors. For a discussion of certain
transactions involving AFC's directors, Board Nominees, executive officers or
members of their families, see "Compensation Committee Interlocks and Insider
Participation."
Following the close of business on January 31, 1995, AFC acquired, by
merger into the Association, Fidelity of which Mr. Powderly was Chairman,
President and Chief Executive Officer. As of the consummation of the merger, AFC
entered into consulting agreements with Mr. Powderly (the "Consulting
Agreement"), as well as with certain other executive officers of Fidelity. The
Consulting Agreement has a three year term commencing on January 31, 1995.
Pursuant to the Consulting Agreement, Mr. Powderly received from AFC in 1996 an
annual consulting fee of $290,000, payable in monthly installments.
For a discussion of the compensation received by directors, Board Nominees
or executive officers, see "Director Compensation" and "Executive Compensation".
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information concerning the interests
in AFC Common Stock as of February 28, 1997 of each director or Board Nominee of
AFC, each executive officer of AFC named in the Summary Compensation Table (See
"Executive Compensation - Summary Compensation Table"), and all directors and
executive officers of AFC as a group.
7
<PAGE>
<TABLE>
<CAPTION> AMOUNT AND NATURE PERCENT OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) CLASS (2)
- -------------- ------------------------ --------------------------- --------
<S> <C> <C> <C>
Common Henry Drewitz 134,474 (3)(13)
Common George L. Engelke, Jr. 647,281 (4)(13) 2.99 %
Common Andrew M. Burger 111,754 (13)
Common William J. Fendt 120,474 (13)
Common Robert G. Bolton 114,874 (5)(13)
Common Denis J. Connors 122,066 (13)
Common Thomas J. Donahue 124,666 (6)(13)
Common Thomas V. Powderly 115,349 (7)(13)
Common Ralph F. Palleschi 7,000 (13)
Common Arnold K. Greenberg 294,449 (8)(13) 1.37 %
Common Thomas W. Drennan 193,896 (9)(13)
Common Monte N. Redman 186,790 (10)(13)
Common William K. Sheerin 251,105 (11)(13) 1.17 %
Common All Directors, Board Nominees and
Executive Officers as a group (14
persons) 2,255,084 (12)(13) 9.98 %
</TABLE>
- ----------
(1) Except as otherwise indicated, each person listed has sole voting and
investment power with respect to the shares of AFC Common Stock indicated.
(2) Except as otherwise indicated, the percent of class beneficially owned does
not exceed one percent (1.00%).
(3) Included are 4,000 shares of AFC Common Stock as to which Mr. Drewitz is
deemed to have shared voting and investment power.
(4) Included are 102,000 shares of AFC Common Stock as to which Mr. Engelke has
shared voting and investment power, 105,800 shares of AFC Common Stock as
to which he has sole voting and no investment power, 5,521 shares of AFC
Common Stock as to which he has shared voting and no investment power, and
8,195 shares of AFC Common Stock as to which he has shared voting and sole
investment power.
(5) Included are 2,270 shares of AFC Common Stock as to which Mr. Bolton is
deemed to have shared voting and investment power.
(6) Included are 24,813 shares of AFC Common Stock as to which Mr. Donahue is
deemed to have shared voting and investment power.
(7) Included are 6,784 shares of AFC Common Stock as to which Mr. Powderly is
deemed to have shared voting and investment power and 3,392 shares of AFC
Common Stock as to which he has sole voting and no investment power.
(8) Included are 103,477 shares of AFC Common Stock as to which Mr. Greenberg
has shared voting and investment power, 37,836 shares of AFC Common Stock
as to which he has sole voting and no investment power, 5,521 shares of AFC
Common Stock as to which he has shared voting and no investment power, and
12,079 shares of AFC Common Stock as to which he has shared voting and sole
investment power.
(9) Included are 40,336 shares of AFC Common Stock as to which Mr. Drennan has
shared voting and investment power, 37,836 shares of AFC Common Stock as to
which he has sole voting and no investment power, 5,521 shares of AFC
Common Stock as to which he has shared voting and no investment power, and
9,698 shares of AFC Common Stock as to which he has shared voting and sole
investment power.
(10) Included are 704 shares of AFC Common Stock as to which Mr. Redman has
shared voting and investment power, 37,836 shares of AFC Common Stock as to
which he has sole voting and no investment power, 5,521 shares of AFC
Common Stock as to which he has shared voting and no investment power, and
7,837 shares of AFC Common Stock as to which he has shared voting and sole
investment power.
(11) Included are 101,938 shares of AFC Common Stock as to which Mr. Sheerin has
shared voting power, 28,478 shares of AFC Common Stock as to which he has
sole voting and no investment power, 5,521 shares of AFC Common Stock as to
which he has shared voting and no investment power, and 13,402 shares of
AFC Common
8
<PAGE>
Stock as to which he has shared voting and sole investment power.
(12) Included are 190,856 shares of AFC Common Stock as to which Directors,
Board Nominees and Executive Officers, as a group, have shared voting and
investment power, 251,178 shares of AFC Common Stock as to which they have
sole voting and no investment power, 31,097 shares of AFC Common Stock as
to which they have shared voting and no investment power, and 51,808 shares
of AFC Common Stock as to which they have shared voting and sole investment
power.
(13) Included are shares of AFC Common Stock which could be acquired within 60
days of February 28, 1997 pursuant to options to acquire AFC Common Stock
as follows: Mr. Drewitz (80,314 shares), Mr. Engelke (285,660 shares), Mr.
Burger (80,314 shares), Mr. Fendt (80,314 shares), Mr. Bolton (80,314
shares), Mr. Connors (80,314 shares), Mr. Donahue (80,314 shares), Mr.
Powderly (104,969 shares), Mr. Palleschi (6,000 shares), Mr. Greenberg
(97,669 shares), Mr. Drennan (92,669 shares), Mr. Redman (97,669 shares),
and Mr. Sheerin (68,243 shares) and All Directors, Board Nominees and
Executive Officers as a group (1,168,499 shares).
DIRECTOR COMPENSATION
DIRECTORS' AND OTHER FEE ARRANGEMENTS
Except for the Chairman of the Board (the "AFC Chairman"), non-employee
directors of AFC receive an annual retainer of $15,000. The AFC Chairman
receives an annual retainer of $19,000. No additional fees for attendance at
Board or committee meetings are paid.
The members of the Board also served as directors of the Association.
Except for the Chairman of the Board of Directors of the Association (the
"Association Chairman"), directors of the Association who are not also employees
of AFC or the Association, receive an annual retainer of $30,000. The
Association Chairman receives an annual retainer of $40,000. No additional fees
for attendance at Association Board of Directors or committee meetings are paid.
Chairman Drewitz was provided with membership in a country club at an annual
cost to the Association, during 1996, of $4,720.
Mr. Engelke will assume the offices of AFC Chairman and Association
Chairman on April 16, 1997 and will not receive an annual retainer or other
directors fees for his service as a director, as AFC Chairman or as Association
Chairman while employed by AFC or the Association.
DIRECTORS OPTION PLANS
AFC maintains the AFC 1993 Stock Option Plan for Outside Directors (the
"1993 Directors Option Plan") and the 1996 Stock Option Plan for Outside
Directors of AFC (the "1996 Directors Option Plan") pursuant to which non-
employee directors of AFC and the Association are granted options on terms
previously approved by the shareholders of AFC.
No option grants were made under the 1993 Directors Option Plan in 1996,
and the Board has frozen the 1993 Directors Option Plan so that no option grants
may be made thereunder after 1996. Pursuant to the 1996 Directors Option Plan,
each person who was a non-employee director of AFC or the Association on May
15,1996 was granted an initial option on such date to purchase 2,000 shares of
AFC Common Stock at an exercise price per share of $26.19. Each person who
becomes a non-employee director of AFC or the Association after May 15, 1996
will he granted, on the 15th day of the month following the month in which he or
she becomes a non-employee director, an option to purchase 4,000 shares of AFC
Common Stock at an exercise price per share equal to the closing bid quotation
for AFC Common Stock on the NASDAQ Stock Market on the date of grant. In
addition, on January 15th of each succeeding year, each person who is then a
non-employee director will receive a grant of an option to purchase an
additional 2,000 shares of AFC Common Stock at an exercise price per share
9
<PAGE>
equal to the closing bid quotation for AFC Common Stock on the NASDAQ Stock
Market on the date of grant.
All options granted under the 1993 Directors Option Plan or the 1996
Directors Option Plan expire upon the earlier of 10 years following the date of
grant or one year following the date the director ceases to be a director for
any reason other than removal for cause, in which case the option terminates
immediately. Upon death or disability of the participant, retirement from the
Board or in the event of a change of control as defined in the 1993 Directors
Option Plan or the 1996 Directors Option Plan, all options previously granted
automatically become exercisable.
DIRECTOR RRP
The Association maintains the Association Recognition and Retention Plan
for Outside Directors (the "Director RRP") pursuant to which directors of AFC or
the Association who are not employees of AFC, the Association, or any of their
affiliates have been awarded restricted shares of AFC Common Stock on terms
previously approved by the shareholders of AFC.
Non-employee directors of AFC or the Association in 1993 received awards of
38,160 restricted shares each, subject to vesting in equal installments of
12,720 shares on the tenth business days of January 1995, 1996 and 1997.
Individuals who became non-employee directors after 1993 and before 1996
received awards of 10,176 restricted shares each, subject to vesting in three
equal annual installments. Vesting may he accelerated in the event of death,
disability or retirement, or following a change in control of AFC or the
Association as defined in the Director RRP. In the event of termination for
cause, all rights to unearned awards are forfeited.
In connection with the adoption of the 1996 Director Stock Option Plan, the
Director RRP was amended such that no further awards will be made pursuant to
the Director RRP.
DIRECTORS' RETIREMENT PLAN
The Association maintains the Directors' Retirement Plan (the "Retirement
Plan") to provide retirement benefits for directors, who are not also employees
of AFC or the Association, with at least 10 years of service as a director of
AFC or the Association. The annual benefit is payable beginning in the month
following termination of service as a director or attainment of age 65,
whichever is later, and continues until the death of the retired director. The
annual benefit amount is equal to 100% of the annualized aggregate rate of fees
paid for service as a non-employee director of AFC and the Association for the
last month of service prior to retirement, reduced by 10% for each year that the
director's years of service is less than 20.
The Retirement Plan provides that, in the event of a change of control of
AFC or the Association, each director may require the Association or its
successor to pay either (i) a lump sum payment to the director, at the time of
the change of control or such later date as the director ceases to serve as a
director of AFC or the Association, equal to the actuarially determined present
value of the future benefits payable to the director or (ii) an amount into a
grantor trust established for the benefit of the director adequate to fund the
benefits payable under the Retirement Plan as they become due.
DIRECTORS DEFERRED COMPENSATION PLAN
AFC has adopted the AFC Directors Deferred Compensation Plan (the "Deferred
Plan") which is an unfunded plan . Pursuant to the Deferred Plan, outside
directors of either AFC or the Association may elect to defer receipt of all or
any part of the directors' fees to which such director would otherwise be
entitled. Deferred
10
<PAGE>
fees are carried on the books of AFC and are credited with interest quarterly at
a rate of equal to the average of AFC's consolidated cost of funds and yield on
investments for the preceding quarter, unless the cost of funds exceeds the
yield on investments, in which case the rate is based upon the preceding
quarter's consolidated yield on investments.
In the event of a change of control of AFC, the Association or other
affiliated company, as defined in the Deferred Plan, each participating director
may elect that his fees, with accrued interest, be placed in a trust fund with
an independent trustee for his benefit, applied to the purchase of an insurance
company annuity contract to provide payments according to the director's
previously selected payment schedule, or he may continue to rely upon AFC or it
successor for the payment of such benefits.
DIRECTORS' DEATH BENEFIT
The Board has adopted the AFC Death Benefit Plan for Outside Directors (the
"Death Benefit Plan") which provides that in the event a non-employee director
dies while in service as a director of AFC or the Association, the decedent's
designated beneficiary will receive from AFC a payment equal to the annualized
aggregate directors fees received by the director for the last month of service
as a director of AFC and the Association. If a director leaves the service of
AFC and the Association for any reason other than death, all rights to any
benefit under the Death Benefit Plan cease.
EXECUTIVE COMPENSATION
The Report of the Compensation Committee on Executive Compensation and the
Stock Performance Chart shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 (the "Securities Act") or the Exchange
Act, except to the extent that AFC specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Under rules established by the SEC, AFC is required to provide certain data
and information regarding the compensation and benefits provided to AFC's Chief
Executive Officer and certain other executives of AFC. The disclosure
requirements for the Chief Executive Officer and such other executives include
the use of tables and a report explaining the rationale and considerations that
led to fundamental compensation decisions affecting those individuals. In
fulfillment of this requirement, the Compensation Committee of AFC, at the
direction of the Board of AFC, has prepared the following report for inclusion
in this proxy statement.
GENERAL. The compensation of the executive and other officers of AFC for
fiscal year 1996 was reviewed by the Compensation Committees of AFC and the
Association and ratified by the Boards of Directors of AFC and the Association
in December 1995.
The Compensation Committee of AFC met on three occasions in fiscal 1996. It
limited its activities to granting stock options under the 1996 Officer Option
Plan to, among others, executive officers, ratifying certain actions of the
Association's Compensation Committee relating to payments earned by, among
others, executive officers, under the Association Incentive Compensation Plan
for Select Executives (the "Incentive Compensation Plan"), and the establishment
of compensation levels for the executive officers of AFC for fiscal year 1997.
EXECUTIVE COMPENSATION PHILOSOPHY. The primary objective of the executive
compensation program
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of AFC and the Association is to attract and retain highly skilled and motivated
executive officers who will manage AFC in a manner to promote its growth and
profitability and advance the interests of its shareholders. The compensation
program is designed to provide levels of compensation which are competitive and
reflective of the organization's performance in achieving its goals and
objectives, both financial and non-financial, as determined in its business
plan. The program aligns the interests of the executives with those of the
shareholders of AFC by providing a proprietary interest in AFC, the value of
which can be significantly enhanced by the appreciation of AFC Common Stock. The
program also seeks to adequately provide for the needs of the executive upon
retirement based upon the length of service provided to AFC and the Association.
In structuring its executive compensation program, among the factors
considered by AFC is the before and after tax financial impact the program will
have or likely have on AFC and the Association. Section 162(m) of the Internal
Revenue Code of 1986, as amended, (the "Code") places a limitation of $1 million
for each executive named in the "Summary Compensation Table" below (the "Named
Executivep" or collectively the "Named Executives") on the deductibility of
certain elements of compensation, as defined in the Code, paid to such executive
by either AFC or the Association. Among the factors which would influence the
effect of this provision, in addition to the specific provisions of its
compensation plans, is the date the specific plan was adopted or implemented, as
well as the composition of the Compensation Committees. This limitation does not
apply to all institutions within AFC's industry or to all companies from which
it would recruit executive personnel. For 1996, based upon the current level and
composition of the compensation of its executive officers, AFC does not believe
that the limitations contained in Section 162(m) of the Code will have an
adverse impact on AFC.
The executive compensation program of AFC consists of four elements: base
salary, short-term incentive compensation, long-term incentive compensation and
retirement benefits. The following is a discussion of each of these components.
BASE SALARIES. Salary levels are designed to be competitive with cash
compensation levels paid to similar executives at banking and thrift
institutions of similar size and standing, giving due consideration to the
marketplace in which AFC and the Association operate. Base salary is considered
in conjunction with the short-term incentive compensation component of the
executive compensation program. Base salary is set at a level to provide a
reasonably competitive level of compensation even if AFC, due to factors outside
of the control of the executives, fails to meet its minimum threshold targets
such that no awards are made under the short-term incentive component of the
compensation program.
To determine whether or not base salary and short-term incentive
compensation, discussed below, for 1996 were set at levels that were
competitive, the Compensation Committee reviewed a number of sources of
information, including SNL Executive Compensation Review 1995, Thrift
Institutions, and the SNL Executive Compensation Review 1995, Commercial Banks.
Particular emphasis was placed on those institutions that were of similar asset
size to that of AFC. The total cash compensation level was then targeted at the
high end of the survey data in recognition, in part, that such survey data is
historical in nature.
As a result of their analysis, the Compensation Committees approved and the
Boards of Directors of AFC and the Association ratified total 1996 base salary
compensation for the six (6) executive officers of $1,737,000 compared to
$1,618,000 paid to such officers for 1995, an increase of 7.35%. The Chief
Executive Officer received an increase of $35,000, from $525,000 to $560,000, or
6.67%, effective January 1, 1996. The remaining five (5) executive officers
received average increases of 7.69%, ranging from a high of 12.5% to a low of
6.00%. All such increases reflected, either alone or in combination,
contribution to the goals and objectives of AFC and the Association and the
increased cost of living within the market from which AFC and the
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<PAGE>
Association draw their work force and promotions to more senior positions.
SHORT-TERM INCENTIVE COMPENSATION. Short-term incentive compensation
consists of awards paid pursuant to the Association's Incentive Compensation
Plan. The Board and Compensation Committee of AFC recognize that the operation
of AFC is substantially impacted by the environment in which it operates. It is
expected that its executives will maintain systems in place to monitor that
environment and will take steps to foresee and manage the various risks that
such environment presents. The Board and the Compensation Committee also believe
that to be effective, the attainment of targets established under the short term
incentive component of the compensation program should be both attainable, yet
very challenging.
The Incentive Compensation Plan for 1996 provided for a target incentive
for the Chief Executive Officer equal to thirty-five percent (35%) of his base
salary and, in the case of the other executive officers, equal to twenty-five
percent (25%) of each executive's base salary. Individual awards to the Chief
Executive Officer are computed based upon AFC's consolidated financial
performance, to the extent of eighty percent (80%) of the award, and an
evaluation of his contribution to and the overall level of achievement of the
goals and objectives of AFC's business plan, to the extent of twenty percent
(20%) of the award. Other executive officers' awards are similarly computed with
AFC's consolidated financial performance comprising seventy-five percent (75%)
of the award and individual performance related to AFC's business plan
comprising twenty-five percent (25%).
The financial performance measurements utilized for 1996 for the financial
performance portion of such awards consisted of two performance measures: (i)
eighty percent (80%) of the financial performance measure was based upon the
earnings per share of AFC; and (ii) twenty percent (20%) was based upon the
return on average assets of AFC. For each of these measurements, a series of
achievement levels was established, with each level assigned a percentage award
from zero percent (0%) up to one hundred percent (100%). The zero percent (0%)
award represented performance below a reasonable threshold level of achievement.
If the range of performance specified for a one hundred percent (100%) award was
exceeded, the executive could be paid an award of up to one hundred fifty
percent (150%) of the financial performance measurement award. The Compensation
Committee of the Association, which administers the plan, has discretion under
the Incentive Compensation Plan to exclude from AFC's financial performance
unusual items of income or loss in determining the actual awards to be granted
and may make additional awards to any employee who has made an unusual and
important contribution outside of the ordinary course of his or her duties.
For fiscal year 1996, AFC's financial performance, after adjustment by the
Compensation Committee, fell within a range that resulted in awards of 100% to
110% of target amounts for financial performance. Executive officers also
received 100% or 110% of their individual performance awards.
LONG-TERM INCENTIVE COMPENSATION. The long-term incentive compensation
portion of AFC's and the Association's compensation program consists of the
Association Recognition and Retention Plan for Officers and Employees (the
"Officer and Employee RRP"), the Incentive Option Plan and the 1996 Officer
Option Plan (the option plans being referred to collectively as the"Option
Plans").These plans are designed to provide incentives for longer-term positive
performance of the executive officers and to align their financial interests to
those of AFC shareholders by providing the opportunity to participate in AFC
Common Stock price appreciation, if any, which may occur after the date of grant
of such award or option.
The Compensation Committee of the Association administers the Officer and
Employee RRP, determines which eligible employees will be granted plan share
awards (the "Plan Share Awards") and grants Plan Share Awards. Under the Officer
and Employee RRP, Plan Share Awards, which are nontransferable and
nonassignable, are granted in the form of shares of AFC Common Stock which are
held in trust until the Plan Share Awards vest.
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<PAGE>
Recipients of the Plan Share Awards become vested in the shares of AFC
Common Stock covered by the Plan Share Awards over a period of time. The Plan
Share Awards granted to the Named Executives vest in equal installments of
twenty percent (20 %) on the tenth business day of January each year, commencing
on January 17, 1995. Plan Share Awards immediately vest upon termination of
employment due to death, disability or retirement of the award holder or
following a change of control of AFC or the Association, as defined in the
Officer and Employee RRP. In the event that an award holder otherwise terminates
employment with AFC or the Association, the award holder's non-vested awards
will be forfeited. See "Executive Compensation - Employment Agreements" below.
Vested shares are distributed to recipients as soon as practicable
following the vesting date. At such time, the recipients also receive amounts
equal to accumulated dividends with respect to such shares. Prior to vesting,
recipients of Plan Share Awards may direct the voting of shares of AFC Common
Stock granted to them and held in the trust. Shares of AFC Common Stock held by
the Officer and Employee RRP trust which have not been awarded are voted by the
trustee in the same proportion as the awarded shares are voted in accordance
with the directions given by the recipients. See the "Summary Compensation
Table" below for description of the Plan Share Awards outstanding to the Named
Executives as of December 31, 1996.
RETIREMENT BENEFITS. Retirement benefits are designed to provide for an
adequate level of income to the executive officer following his or her
retirement from AFC and the Association based upon length of service with the
organization and to support the goals and objectives of the rest of the
compensation program as described above. The retirement benefits are provided
through the Incentive Savings Plan, the ESOP, the Association Employees' Pension
Plan (the "Pension Plan"), the Association Excess Benefit Plan (the "Excess
Plan"), and the Association Supplemental Benefit Plan (the "Supplemental Plan").
See "Executive Compensation - Pension Plans" for a description of the Pension
Plan, Excess Plan and Supplemental Plan which are all defined benefit pension
plans. See the table above related to the beneficial ownership of AFC Common
Stock by the directors, Board Nominees and executive officers of AFC for further
information regarding the ownership of AFC Common Stock by the Named Executives.
The Association maintains the ESOP and ESOP Trust for the benefit of the
salaried employees of AFC or the Association. The ESOP provides for the
allocation of shares of AFC Common Stock and other contributions, if any, based
on payments by the Association of a loan made by AFC to the ESOP to fund the
acquisition of 2,642,354 shares of AFC Common Stock. See the "Summary
Compensation Table" below and the table above related to the beneficial
ownership of AFC Common Stock by the directors, Board Nominees and executive
officers of AFC for further information regarding the ownership of AFC Common
Stock by the Named Executives of AFC.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. The Compensation Committees of
AFC and the Association met in December 1995 to review the performance of the
executive officers during 1995, to establish recommended compensation levels for
such officers for 1996 and to commence discussions regarding appropriate goals
and participation levels with respect to such officers participation in the
Incentive Compensation Plan.
At the December 1995 meeting, the financial performance of AFC and the
accomplishments of financial and non-financial goals and objectives of AFC and
the Association as set forth in the prior year business plan were reviewed. Each
of the executive officers was interviewed by the Compensation Committees to
provide further insight and input regarding such executive's performance. Each
such interview contained a review of the accomplishments of those areas of the
organization within the scope of authority of the executive. Mr. Engelke
provided to the Committees his insights as to both his own performance and that
of the other executive officers.
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<PAGE>
The Compensation Committees, based upon these discussions, determined the
level of salary for the executive officers including the Chief Executive
Officer, to take effect January 1, 1996, after reviewing the overall executive
compensation program for the executive officers including the Chief Executive
Officer. As a part of that review, the Board utilized relative information
provided in the SNL Executive Compensation Review 1995, Thrift Institutions and
the SNL Executive Compensation Review 1995, Commercial Banks.
COMPENSATION COMMITTEE OF AFC
William J. Fendt, Chairman Thomas J. Donahue
Andrew M. Burger Henry Drewitz
Denis J. Connors George L. Engelke, Jr. (ex officio)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
While AFC does not, the Association from time to time lends money to AFC's
and the Association's directors, Board Nominees, executive officers, or members
of their families, as well as to members of the public. The Association's policy
provides that all loans made by the Association to AFC or Association directors
and executive officers or members of their families be made in the ordinary
course of the Association's business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and not involve more than the normal risk of
collection or present other unfavorable features. Since January 1, 1996, all
loans outstanding to the directors, Board Nominees or executive officers of AFC
or members of their immediate families were made in conformity with the
Association's policy in this regard and have not been disclosed as non-accrual,
past due, restructured or potential problems.
Mr. Drewitz, who presently serves on the Compensation Committee, retired as
the President and Chief Executive Officer of the Association in 1989.
Mr. Denis J. Connors during a portion of 1996 was a principal shareholder
and the Chairman and Chief Executive Officer of Curran & Connors, Inc. a
designer and publisher of annual reports. AFC contracted with Curran & Connors,
Inc. for services in connection with the production of AFC's fiscal 1995 Annual
Report to Shareholders. In connection with this engagement, Curran & Connors,
Inc. was paid aggregate fees of $136,617 during 1996.
Recommendations to the Compensation Committees of AFC and the Association
as to officers' salaries, including those of executive officers, are developed
by an internal salary committee including Messrs. Engelke and Sheerin and the
Association's Vice President - Human Resources, a non-executive officer. These
recommendations are presented to the Compensation Committees by Mr. Engelke. Mr.
Engelke also provides insight to the Compensation Committees regarding his and
the performance of the other officers of AFC and the Association, both executive
and non-executive. Mr. Engelke is an ex officio member of the Compensation
Committees and does not participate in the discussion or approval of
compensation issues relating to himself.
STOCK PERFORMANCE CHART. The following graph shows a comparison of
cumulative total shareholder return on AFC Common Stock since November 18, 1993,
the day AFC Common Stock began trading, with the cumulative total returns of
both a broad - market index, the NASDAQ Stock Market (U.S.) Index produced by
the Center for Research in Security Prices ("CRSP"), and a peer group index, the
NASDAQ Financial Stock Index also produced by CRSP. The peer group index set
forth in the graph below consists of a different set of institutions than that
considered by the Compensation Committees or the Boards of Directors of AFC or
the Association in determining the compensation of the executive officers.
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COMPARISON OF CUMULATIVE TOTAL RETURN OF
AFC COMMON STOCK, NASDAQ MARKET INDEX AND PEER GROUP INDEX (1)
[GRAPHIC]
<TABLE>
<CAPTION>
AFC COMMON STOCK NASDAQ MARKET INDEX NASDAQ FINANCIAL INDEX
---------------- ------------------- ----------------------
<S> <C> <C> <C>
November 18, 1993 $100.000 $100.000 $100.000
December 31, 1993 96.943 102.787 102.927
December 30, 1994 91.703 100.473 103.171
December 29, 1995 160.852 142.089 150.225
December 31, 1996 263.897 174.775 192.612
</TABLE>
- ----------
(1) Assumes $100 invested on November 18,1993 and all dividends reinvested
through the end of AFC's fiscal year ended December 31, 1996. NASDAQ Market
Index and NASDAQ Financial Index values calculated using monthly values for
CRSP Total Return Indexes as of the applicable month end.
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended December 31, 1996,
1995 and 1994, the cash compensation paid by AFC and the Association, as well as
certain other compensation paid or accrued for those years, to the Chief
Executive Officer and the four highest paid executive officers (also referred to
as the Named Executives) of AFC and the Association who received salary and
bonus in excess of $100,000 in fiscal year 1996.
16
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<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------- --------------------------------------
AWARDS PAYOUTS
------------------------- -------
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND SALARY BONUS SATION AWARDS SARS PAYOUTS SATION
PRINCIPAL POSITIONS YEAR $ ($) (1) ($) ($) (2) (#) (3) ($) ($) (4)
- ------------------- ---- --------- ------- ------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George L. Engelke, Jr. 1996 560,000 215,600 --- --- 20,000 --- 56,080
President, CEO and 1995 525,000 126,000 --- --- --- --- 40,091
Director 1994 490,000 135,240 --- --- --- --- 28,200
Arnold K. Greenberg 1996 265,000 66,250 --- --- 10,000 --- 56,080
Senior Vice President 1995 250,000 41,250 --- --- --- --- 40,091
and Assistant Secretary 1994 235,000 43,710 --- --- --- --- 28,200
Thomas W. Drennan 1996 265,000 72,875 --- --- 10,000 --- 56,080
Senior Vice President 1995 250,000 41,250 --- --- --- --- 40,091
1994 235,000 43,710 --- --- --- --- 28,200
Monte N. Redman 1996 270,000 74,250 --- --- 10,000 --- 56,080
Senior Vice President, 1995 250,000 41,250 --- --- --- --- 40,091
Chief Financial Officer 1994 230,000 42,780 --- --- --- --- 28,200
and Treasurer
William K. Sheerin 1996 197,000 49,250 --- --- 10,000 --- 56,080
Senior Vice President 1995 183,000 30,195 --- --- --- --- 40,091
and Secretary 1994 167,000 31,062 --- --- --- --- 28,200
</TABLE>
- ----------
(1) The column titled "Bonus" consists of payments under the Association
Incentive Compensation Plan which is a short-term incentive plan. See
"Executive Compensation - Report of the Compensation Committee on Executive
Compensation".
(2) Pursuant to the Officer and Employee RRP, as of December 31, 1996, Messrs.
Engelke, Greenberg, Drennan, Redman and Sheerin had outstanding grants of
restricted stock of 158,700, 56,754, 56,754, 56,754 and 42,718 shares of
AFC Common Stock, respectively. The awards, based upon the closing price of
AFC Common Stock of $36.875 as quoted on the NASDAQ National Market on
December 31, 1996, had a value, of $5,852,062.50,
$2,092,803.75,$2,092,803.75,$2,092,803.75, and $1,575,226.25, respectively.
(3) There were no options or stock appreciation rights ("SARs") granted to any
of the Named Executives during 1994 or 1995. Options with limited stock
appreciation rights ("LSARs") attached were granted to the Named Executives
during 1996. No freestanding SARs have been granted to the Named
Executives. See "Executive Compensation -Incentive Option Plans" below.
(4) The sums reported represent the fair market value of AFC Common Stock which
was allocated under the ESOP to the account of the Named Executive during
the year ended December 31, 1996, 1995, and 1994, respectively, based upon
the closing price of AFC Common Stock of $36.875 as quoted on the NASDAQ
National Market on December 31, 1996, $22.8125 as quoted on the NASDAQ
National Market on December 29, 1995 and 13.125 as quoted on the NASDAQ
National Market on December 30, 1994, respectively.
EMPLOYMENT AGREEMENTS
AFC and the Association have entered into employment agreements with each of
the executive officers. Mr. Engelke's employment agreements each provide for a
three-year term. The employment agreements entered
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<PAGE>
into with the remaining Named Executives each provide for two-year terms. The
Association's agreements each run from January 1st. Prior to January 1st each
year, the Board of Directors of the Association may extend the agreements with
the Association for an additional year such that the remaining terms shall be 3
years, in the case of Mr. Engelke, and 2 years, respectively, as to the other
Named Executives. Prior to January 1, 1997, such employment agreements were so
extended. The agreements with AFC automatically extend daily, so as to maintain
their original term, unless written notice of non-renewal is given by the Board.
No such notice has been given to any Named Executive.
The employment agreements provide for the Named Executives participation in
retirement plans, group life, medical and disability insurance plans and any
other employee benefit programs, including incentive compensation plans and
stock option, SAR and restricted stock plans maintained by AFC or the
Association in accordance with the terms and conditions of such plans. The
employment agreements also provide that AFC and the Association will maintain
for the benefit of the Named Executives directors and officers liability
insurance and will indemnify the Named Executives for claims and related costs
and liabilities, arising from the services provided pursuant to the employment
agreements on prescribed terms for a period of six years beyond the termination
of such agreements.
The employment agreements provide for termination of each of the Named
Executive's employment at any time by AFC or the Association with or without
cause, as separately defined in such agreements. In the event a Named
Executive's employment terminates (A) due to AFC's or the Association's (i)
failure to re-elect the executive to his current office, and in Mr. Engelke's
agreement, to the Board; (ii) failure by whatever cause to vest in the executive
the functions, duties or responsibilities prescribed for the executive in such
agreement; (iii) a material breach of the agreement by AFC or the Association or
a reduction in the executive's base salary or other change to the terms and
conditions of the executive's compensation and benefits which either
individually or in the aggregate, as to such executive, has a material adverse
effect on the aggregate value of the total compensation package provided to such
executive; or (iv) relocation of the executive's principal place of employment
outside of Nassau or Queens Counties of New York; or (B) for reasons other than
(i) for cause; (ii) voluntary resignation, except as a result of the actions
specified under clause (A) above or following a change of control, as defined in
the agreements; (iii) following the executive's attainment of mandatory
retirement age for executive officers (currently 70 years of age); (iv) death;
(v) long term disability or (iv) expiration of the term of the agreement; the
Named Executive would be entitled to a severance payment(s).
The severance payment(s), to which the Named Executives would be entitled,
include: (i) continued life, medical and disability insurance benefits for the
period from termination of the executive's employment through the remaining term
of the applicable employment agreement as if the executive had continued in the
employ of AFC or the Association through the end of the term of the agreement
(the "Unexpired Term"); (ii) a lump sum payment equal to the present value of
the salary, incentive compensation, pension, profit-sharing and ESOP benefits
the executive would have earned during the Unexpired Term computed using a
prescribed valuation method; (iii) accelerated vesting of all outstanding
options and restricted stock awards; (vi) at the election of AFC or the
Association, a cash settlement of all outstanding options and restricted stock
awards.
In addition to the severance payment described above, if a Named Executive's
employment terminates following a change of control of AFC or the Association,
the executive's employment agreement with AFC provides that for any taxable year
in which the executive would be liable for the payment of excise taxes under
Section 4999 of the Code with respect to any payment in the nature of
compensation paid by AFC or any of its affiliated companies, as a result of such
payments constituting an "excess parachute payments" under Section 280G of the
Code, or any successor thereto, then an amount will be paid (the "Tax Payment")
to the executive, or on behalf of the executive, based upon a formula set forth
in the agreements, the effect of which would be to
18
<PAGE>
maintain the after- tax severance benefit to which the executive would be
entitled as described in the preceding paragraph but for the application of the
excise tax specified in Section 4999 of the Code and any federal, state and
local income or other taxes to which the executive would be subject as a result
of the Tax Payment.
It is anticipated, given the renewal provisions described above and set forth
in the employment agreements between AFC and the Named Executives, respectively,
that in the event of a termination of a Named Executive, entitling such
executive to a severance benefit or the payment described in the preceding
paragraph, the Unexpired Term, in the case of Mr. Engelke, will be three years
from the date of termination and, in the case of the other Named Executives,
will be two years from the date of termination.
INCENTIVE OPTION PLANS
The Board of AFC has established the Incentive Option Plan and the 1996
Officer Option Plan for the benefit of the officers and employees of AFC and the
Association. The following table sets forth all grants of options (and limited
SARs), under the 1996 Officer Option Plan, to the Named Executives during 1996
and contains certain information about potential value of these options based
upon certain assumptions as to the appreciation of AFC Common Stock over the
life of the option. No options or SARs were granted pursuant to the Incentive
Option Plan to any of the Named Executives during 1996, nor has AFC, during such
period, adjusted or amended the exercise price of any stock options or SARs
previously awarded to any of the Named Executives or otherwise.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (3)
------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS/
SECURITIES SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/ EMPLOYEES OR BASE
SARS IN FISCAL PRICE PER EXPIRATION
GRANTED (1) YEAR SHARE (2) DATE 5% 10%
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George L. Engelke, Jr. 20,000 10.23% $36.00 December 17, 2006 $452,804 $1,147,495
Arnold K. Greenberg 10,000 5.12% $36.00 December 17, 2006 $226,402 $ 573,747
Thomas W. Drennan 10,000 5.12% $36.00 December 17, 2006 $226,402 $ 573,747
Monte N. Redman 10,000 5.12% $36.00 December 17, 2006 $226,402 $ 573,747
William K. Sheerin 10,000 5.12% $36.00 December 17, 2006 $226,402 $ 573,747
</TABLE>
- ----------
(1) Of the options granted, each Named Executive received the grant of an
option as to 2,777 shares which are intended to qualify as incentive stock
options. The remainder are non-statutory stock options. All options granted
to the Named Executives have a ten year term and vest on January 10, 2000.
See "Executive Compensation -Employment Agreements" above. All such options
also vest and become immediately exercisable upon death, disability,
retirement or in the event of a Change of Control or Threatened Change of
Control, as defined in the 1996 Officer Option Plan. All such options were
granted in tandem with LSAR. The LSAR provides that in the event of a
Change of Control the Named Executive, in lieu of exercising the option as
to which the LSAR relates,
19
<PAGE>
may, during the period commencing on the Change of Control and ending at
the latter of six (6) months following such date or thirty (30) days
following the earliest date on which the Named Executive may exercise the
LSAR without subjecting himself to liability under Section 16 of the
Exchange Act, as amended, surrender his option and receive a payment in
cash equal to, on a per share basis as to the number of shares as to which
the option is surrendered, the difference between the exercise price per
share and the greater of (i) the highest price paid per share of AFC Common
Stock by any person who initiated or sought to effect the Change of Control
during the one year period ending on the date of the Change of Control or
(ii) the average of the Fair Market Value per share as defined in the 1996
Officer Option Plan over the last ten trading days preceding the date of
exercise of the LSAR.
(2) The exercise price may be paid in whole or in part in cash, through the
surrender of previously held shares of AFC Common Stock, or the surrender
of options granted pursuant to the 1996 Officer Option Plan.
(3) The amounts stated assume the specified annual rates of appreciation only.
Actual experience is dependent on the future performance of AFC Common
Stock and overall stock market conditions. There can be no assurance that
the amounts reflected in this table will be achieved.
The following table provides certain information with respect to options
exercised by the Named Executives during 1996 and the number of shares of AFC
Common Stock represented by outstanding stock options held by the Named
Executives as of December 31, 1996. Also reported are the values for "in-the-
money" options, which represents the positive spread between the exercise price
of any outstanding stock options and the 1996 fiscal year end price of AFC
Common Stock.
<TABLE>
<CAPTION>
FISCAL YEAR END OPTION/SAR VALUES
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN - THE - MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL YEAR- AT FISCAL YEAR-
END (#) END ($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED UNEXERCISABLE UNEXERCISABLE (1)
- ---------------------- ----------------- -------------- ------------- -----------------
<S> <C> <C> <C> <C>
George L. Engelke, Jr. 0 NA 190,440 / 305,660 $4,641,975 / $6,980,462
Arnold K. Greenberg 0 NA 65,112 / 107,670 $1,587,105 / $2,389,456
Thomas W. Drennan 5,000 $113,125 60,112 /107,670 $1,465,230 /$2,389,456
Monte N. Redman 0 NA 65,112 / 107,670 $1,587,105 / $2,389,456
William K. Sheerin 5,000 $113,125 43,828 / 83,244 $1,068,307 / $1,794,072
</TABLE>
- ----------
(1) Represents the difference between the fair market value per share of AFC
Common Stock at fiscal year end based upon the closing price of $36.875 as
quoted on the NASDAQ National Market on December 31, 1997 minus the
exercise price per share of the options outstanding times the number of
shares of AFC Common Stock as to which the option, whether exercisable or
unexercisable as the case may be, relates.
PENSION PLANS. The Association maintains the Pension Plan, a non-contributory
defined benefit pension plan for the benefit of eligible employees. The Pension
Plan permits the trustee to purchase shares of AFC Common Stock. At December 31,
1996, the Pension Plan trust held 100,000 shares of AFC Common Stock.
The Association also maintains the Excess Plan. This non-qualified plan
provides the benefits that would have been provided under the Pension Plan but
for the maximum annual benefit limitation in Section 415 of the Code ($112,150
for 1996, payable in the form of a ten-year certain and continuous annuity at
age 65) and the maximum annual compensation limitation in Section 401(a)(17) of
the Code ($150,000 for 1996). In addition, the Association maintains the
Supplemental Plan. This non-qualified plan was adopted effective January 1, 1989
20
<PAGE>
so that selected participants in the Pension Plan could receive the retirement
benefits that would have been provided under the Pension Plan had the benefit
formula in effect immediately prior to that date remained in effect.
The following tables set forth the estimated annual benefits payable under
the defined benefit pension plans described above upon retirement at age 65 in
calendar year 1996, expressed in the form of a ten-year certain and continuous
annuity, for the highest five-year average annual base wage (referred to in the
table as remuneration) and years of service classifications specified.
<TABLE>
<CAPTION>
PENSION AND EXCESS PLANS
CREDITABLE YEARS OF SERVICE AT AGE 65 (1)
-------------------------------------------------------
REMUNERATION (2) 15 20 25 30 35 (3)
- ------------ ----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
$125,000 $27,500 $36,700 $45,900 $55,000 $55,000
150,000 33,500 44,700 55,900 67,000 67,000
175,000 39,500 52,700 65,900 79,000 79,000
200,000 45,500 60,700 75,900 91,000 91,000
225,000 51,500 68,700 85,900 103,000 103,000
250,000 57,500 76,700 95,900 115,000 115,000
300,000 69,500 92,700 115,900 139,000 139,000
350,000 81,500 108,700 135,900 163,000 163,000
400,000 93,500 124,700 155,900 187,000 187,000
450,000 105,500 140,700 175,900 211,000 211,000
500,000 117,500 156,700 195,900 235,000 235,000
550,000 129,500 172,700 215,900 259,000 259,000
600,000 141,500 188,700 235,900 283,000 283,000
650,000 153,500 204,700 255,900 307,000 307,000
700,000 165,500 220,700 275,900 331,000 331,000
</TABLE>
<TABLE>
<CAPTION>
PENSION, EXCESS AND SUPPLEMENTAL PLANS
CREDITABLE YEARS OF SERVICE AT AGE 65 (1)
-------------------------------------------------------
REMUNERATION (2) 15 20 25 30 35 (3)
- ------------ ----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
$125,000 $32,500 $43,300 $54,100 $65,000 $65,000
150,000 40,000 53,300 66,600 80,000 80,000
175,000 47,500 63,300 79,100 95,000 95,000
200,000 55,000 73,300 91,600 110,000 110,000
225,000 62,500 83,300 104,100 125,000 125,000
250,000 70,000 93,300 116,600 140,000 140,000
300,000 85,000 113,300 141,600 170,000 170,000
350,000 100,000 133,300 166,600 200,000 200,000
400,000 115,000 153,300 191,600 230,000 230,000
450,000 130,000 173,300 216,600 260,000 260,000
500,000 145,000 193,300 241,600 290,000 290,000
550,000 160,000 213,300 266,600 320,000 320,000
600,000 175,000 233,300 291,600 350,000 350,000
650,000 190,000 253,300 316,600 380,000 380,000
700,000 205,000 273,300 341,600 410,000 410,000
</TABLE>
- ----------
(1) The benefits listed in the retirement benefits table are not subject to any
Social Security or other offset amounts.
(2) The remuneration under the Pension Plan, the Excess Plan and the
Supplemental Plans is the amount shown in the column entitled "Salary" in
the "Summary Compensation Table" and does not include amounts shown in the
column
21
<PAGE>
entitled "Bonus" in such Table. The Pension Plan is a qualified plan and is
subject to the compensation limit, described above, contained in Section
401 (a) (17) of the Code for calculating the Participant's benefit.
(3) Benefits do not accrue for service in excess of 30 years.
The Named Executives, as of December 31, 1996, had the following years of
credited service (i.e., benefit service): George L. Engelke, Jr., 25 years 6
months; Arnold K. Greenberg, 21 years 7 months; Thomas W. Drennan, 10 years 6
months; Monte N. Redman, 19 years 7 months; and William K. Sheerin, 40 years 8
months.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
AFC's independent auditors for the fiscal year ended December 31, 1996 were
KPMG Peat Marwick LLP. AFC's Board of Directors has reappointed KPMG Peat
Marwick LLP to continue as independent auditors for AFC and the Association for
the year ending December 31, 1997, subject to ratification of such appointment
by the shareholders. Representatives of KPMG Peat Marwick LLP will be present at
the Annual Meeting. They will be given an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions
from shareholders present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
---
OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF AFC.
ADDITIONAL INFORMATION
Cost of Proxy Solicitation
The cost of solicitation of proxies by AFC, which is expected to be less than
$15,000.00, will be borne by AFC. Kissell-Blake, Inc. has been retained to
assist in the solicitation of proxies under a contract providing for payment of
a fee of $5,000 plus reimbursement for its expenses. In addition to
solicitations by mail, Kissell-Blake, Inc., or a number of regular employees and
directors of AFC and its subsidiaries, may solicit proxies in person, by mail or
by telephone, but none of these persons will receive any compensation for their
solicitation activities in addition to their regular compensation. Arrangements
will also be made with brokerage houses and other custodians, nominees, and
fiduciaries for forwarding solicitation material to the beneficial owners of AFC
Common Stock held of record by such fiduciaries, and AFC will reimburse them for
their reasonable expenses in accordance with the rules of the SEC and the NASD.
Shareholder Proposals
To be considered for inclusion in AFC's proxy statement and form of proxy
relating to the annual meeting of shareholders to be held in 1998, a shareholder
proposal must be received by the Secretary of AFC at the address set forth on
the first page of this Proxy Statement not later than December 8, 1997. Any such
proposal will be subject to 17 C.F.R. (S)240.14a-8 promulgated by the SEC under
the Exchange Act.
Notice of Business to be Conducted at an Annual Meeting
The Bylaws of AFC provide an advance notice procedure for a shareholder to
properly bring business before an annual meeting or to nominate any person for
election to the Board. The shareholder must give written advance notice to the
Secretary of AFC not less than ninety (90) days before the date originally fixed
for such
22
<PAGE>
meeting; provided, however, that in the event that less than one hundred (100)
days notice or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder, to be timely, must be received
not later than the close of business on the tenth day following the date on
which AFC's notice to shareholders of the annual meeting date was mailed or such
public disclosure was made. The advance notice by shareholders must include the
shareholder's name and address, as they appear on AFC's record of shareholders,
the class and number of shares of AFC's capital stock that are beneficially
owned by such shareholder, a brief description of the proposed business or the
names of the person(s) the shareholder proposes to nominate, and, as to business
which the shareholder seeks to bring before an annual meeting, the reason for
conducting such business at the Annual Meeting and any material interest of such
shareholder in the proposed business. In the case of nominations for election to
the Board, certain information regarding the nominee must also be provided.
Nothing in this paragraph shall be deemed to require AFC to include in its proxy
statement and proxy relating to an annual meeting any shareholder 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.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters as directed by the
Board
Whether or not you intend to be present at the Annual Meeting, you are urged
to return your proxy card promptly. If you are present at the Annual Meeting and
wish to vote your shares in person, your proxy may be revoked by voting at the
Annual Meeting.
A COPY OF AFC'S ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) FOR THE YEAR
ENDED DECEMBER 31, 1996, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE
TO SHAREHOLDERS OF RECORD UPON WRITTEN REQUEST TO ASTORIA FINANCIAL CORPORATION,
INVESTOR RELATIONS DEPARTMENT, ONE ASTORIA FEDERAL PLAZA, LAKE SUCCESS, NEW YORK
11042-1085.
By order of the Board of Directors
/s/ William K. Sheerin
William K. Sheerin
Senior Vice President and Secretary
Lake, Success, New York
April 7, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
23
<PAGE>
[LETTERHEAD OF ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION]
April 7, 1997
TO: ALL PARTICIPANTS IN THE ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
RECOGNITION AND RETENTION PLAN FOR OUTSIDE DIRECTORS (DIRECTOR RRP)
Re: Annual Meeting of Shareholders to be held on May 21, 1997
---------------------------------------------------------
Dear Participants:
In connection with the Annual Meeting of Shareholders of Astoria Financial
Corporation to be held on May 21, 1997, enclosed please find the following
documents:
a) Confidential Voting Instruction form,
b) Proxy Statement dated April 7, 1997, including a Notice of Annual
Meeting of Shareholders,
c) 1996 Annual Report to Shareholders, and
d) a return envelope, addressed to ChaseMellon Shareholder Services,
Inc., C/O Alan P. Eggleston, Senior Vice President and General
Counsel, Astoria Federal Savings and Loan Association.
As a participant in the Director RRP, you have the right to direct the
Trustee of the Director RRP (Chase Manhattan Bank, N.A.) how to vote the shares
of Astoria Financial Corporation Common Stock ("Shares") held by the Director
RRP Trust and awarded to you, but not yet earned and distributed under the Plan
as of March 26, 1997, the meeting record date. In general, the Director RRP
Trustee will be directed to vote the Shares held by the Director RRP Trust and
awarded to you by casting votes FOR and AGAINST each proposal as specified in
the Confidential Voting Instruction form accompanying this letter. If you do not
direct the Trustee how to vote the Shares awarded to you, the Director RRP
Trustee shall not vote such Shares.
UNANTICIPATED PROPOSALS
It is possible, although very unlikely, that proposals other than those
specified on the Confidential Voting Instruction form will be presented for
shareholder action at the 1997 Annual Meeting of Shareholders. If this should
happen, the Director RRP Trustee will be instructed to vote upon such matters in
the Director RRP Trustee's discretion, or to cause such matters to be voted upon
in the discretion of the individuals named in any proxies executed by the
Director RRP Trustee.
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction form to signify
<PAGE>
your direction to the Trustee. The Confidential Voting Instruction form should
then be sealed in the envelope provided and returned to Mr. Eggleston for
delivery to ChaseMellon Shareholder Services, Inc. To direct the voting of your
shares, the Confidential Voting Instruction form must be received no later than
May 13, 1997.
PLEASE NOTE THAT THE INSTRUCTION OF INDIVIDUAL PARTICIPANTS WILL BE KEPT
CONFIDENTIAL. INSTRUCTIONS WILL BE DELIVERED BY MR. EGGLESTON IN THE SEALED
ENVELOPES AND CHASEMELLON SHAREHOLDER SERVICES, INC. AND THE DIRECTOR RRP
TRUSTEE WILL NOT DISCLOSE YOUR VOTING INSTRUCTION TO ANYONE AT ASTORIA FEDERAL
SAVINGS AND LOAN ASSOCIATION OR ASTORIA FINANCIAL CORPORATION.
This memorandum is subject in its entirety to the information set forth in
the enclosed Proxy Statement, which you are encouraged to read and study
thoroughly.
Very truly yours,
Astoria Federal Savings and Loan Association,
as Administrator
By: /S/ William K. Sheerin
--------------------------------------------
Senior Vice President and Secretary
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE ADMINISTRATOR FOR THE
ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION RECOGNITION AND RETENTION
PLAN FOR OUTSIDE DIRECTORS
The undersigned participant or beneficiary of a deceased former participant
in the Astoria Federal Savings and Loan Association Recognition and Retention
Plan for Outside Directors (the "Director RRP") hereby provides the voting
instructions hereinafter specified to the Trustee of the Director RRP (the
"Trustee"), which instructions shall be taken into account by the Trustee in
voting, in person, by limited or general power of attorney or by proxy, the
shares of common stock of Astoria Financial Corporation that are held by the
Trustee, in its capacity as Trustee as of March 26, 1997, at the Annual Meeting
of Shareholders of Astoria Financial Corporation to be held on May 21, 1997 at
9:30 a.m., eastern time, at the New Hyde Park Inn, 214 Jericho Turnpike, New
Hyde Park, New York, and at any adjournment or postponement thereof.
As to the proposals listed below which are more particularly described in
the Proxy Statement dated April 7, 1997, the Trustee will vote the common stock
of Astoria Financial Corporation held by the Director RRP Trust, so as to
reflect the voting instructions on this Confidential Voting Instruction, in the
manner described in the accompanying letter from the Administrator dated April
7, 1997.
If the duly executed Confidential Voting Instruction is returned but no
instruction is given, such shares will not be voted.
THE BOARD OF DIRECTORS OF ASTORIA FINANCIAL CORPORATION RECOMMENDS A VOTE
"FOR"ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSAL NO. 2. THE DIRECTIONS, IF
ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL
FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF EITHER ASTORIA FINANCIAL
CORPORATION OR ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION.
1. The election of nominees Andrew M. Burger, Denis J. Connors and Thomas J.
Donahue as directors for terms of three years each.
FOR WITHHOLD
[ ] [ ]
TO WITHHOLD AUTHORITY TO VOTE FOR ANY PARTICULAR NOMINEE, LINE OR STRIKE OUT
THAT NOMINEE'S NAME AND THEN CHECK THE APPROPRIATE BOX AS TO THE REMAINING
NOMINEES.
2. The ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors of Astoria Financial Corporation for the fiscal year ending
December 31, 1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE REVERSE SIDE
AND PROMPTLY RETURN IN THE ENCLOSED ENVELOPE.)
<PAGE>
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the Annual Meeting and any adjournment or
adjournments thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction were
proposed by Astoria Financial Corporation.
The undersigned hereby instructs the Trustee to vote in accordance with the
voting instructions indicated above and hereby acknowledges receipt, prior to
the execution of this Confidential Voting Instruction, of a Notice of Annual
Meeting of Shareholders, a Proxy Statement dated April 7, 1997 for the Annual
Meeting and a 1996 Annual Report to Shareholders of Astoria Financial
Corporation.
--------------------------------------------
Date:___________________________, 1997
Signature of participant or designated
beneficiary of deceased former participant.
Please sign name exactly as it appears
herein. When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
<PAGE>
[LETTERHEAD OF ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION]
April 7, 1997
TO: ALL ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION RECOGNITION AND RETENTION
PLAN FOR OFFICERS AND EMPLOYEES ("OFFICER AND EMPLOYEE RRP") PARTICIPANTS
Re: Annual Meeting of Shareholders to be held on May 21, 1997
---------------------------------------------------------
Dear Participants:
In connection with the Annual Meeting of Shareholders of Astoria Financial
Corporation to be held on May 21, 1997, enclosed please find the following
documents:
a) Confidential Voting Instruction form,
b) Proxy Statement dated April 7, 1997, including a Notice of Annual
Meeting of Shareholders,
c) 1996 Annual Report to Shareholders, and
d) a return envelope, addressed to ChaseMellon Shareholder Services,
Inc., C/O Alan P. Eggleston, Senior Vice President and General
Counsel, Astoria Federal Savings and Loan Association.
As a participant in the Officer and Employee RRP, you have the right to
direct the Officer and Employee RRP Trustee (Chase Manhattan Bank, N.A.) how to
vote the shares of Astoria Financial Corporation Common Stock ("Shares") held by
the Officer and Employee RRP Trust and awarded to you, but not yet earned and
distributed under the Plan as of March 26, 1997, the meeting record date. In
general, the Officer and Employee RRP Trustee will be directed to vote the
Shares held by the Officer and Employee RRP Trust and awarded to you by casting
votes "FOR", "AGAINST", "WITHHELD" and "ABSTAIN" as to each proposal as
specified in the Confidential Voting Instruction form accompanying this letter.
If you do not direct the Trustee how to vote the Shares awarded to you, and as
to any Shares which may be held by the Officer and Employee RRP Trust which are
not yet awarded, the Officer and Employee RRP Trustee shall vote such Shares in
the same manner and proportion as the Shares held by the Officer and Employee
RRP Trust which have been awarded and as to which both instructions have been
received by May 13, 1997 and, with respect to the instructions so received,
directions have been given therein to the Trustee by participants or designated
beneficiaries of deceased former participant as to the manner in which their
awarded Shares should be voted.
UNANTICIPATED PROPOSALS
It is possible, although very unlikely, that proposals other than those
specified on the
<PAGE>
Confidential Voting Instruction form will be presented for shareholder action at
the 1997 Annual Meeting of Shareholders. If this should happen, the Officer and
Employee RRP Trustee will be instructed to vote upon such matters in the Officer
and Employee RRP Trustee's discretion, or to cause such matters to be voted upon
in the discretion of the individuals named in any proxies executed by the
Officer and Employee RRP Trustee.
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction form to signify your direction to the Officer
and Employee RRP Trustee. The Confidential Voting Instruction form should then
----------------------------------------------------
be sealed in the envelope provided and returned to Mr. Eggleston for delivery to
- --------------------------------------------------------------------------------
ChaseMellon Shareholder Services, Inc. for tabulation. To direct the voting of
- ------------------------------------------------------------------------------
your shares, the Confidential Voting Instruction form must be received no later
- -------------------------------------------------------------------------------
than May 13, 1997.
- ------------------
PLEASE NOTE THAT THE INSTRUCTION OF INDIVIDUAL PARTICIPANTS WILL BE KEPT
CONFIDENTIAL. INSTRUCTIONS WILL BE DELIVERED BY MR. EGGLESTON IN THE SEALED
ENVELOPES AND CHASEMELLON SHAREHOLDER SERVICES, INC. AND THE OFFICER AND
EMPLOYEE RRP TRUSTEE WILL NOT DISCLOSE YOUR VOTING INSTRUCTION TO ANYONE AT
EITHER ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION OR ASTORIA FINANCIAL
CORPORATION.
This memorandum is subject in its entirety to the information set forth in
the enclosed Proxy Statement, which you are encouraged to read and study
thoroughly.
Very truly yours,
The Officer and Employee RRP Committee
By: /S/ William J. Fendt
----------------------------------------
William J. Fendt, Chairman
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMMITTEE FOR THE
ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
RECOGNITION AND RETENTION PLAN FOR OFFICERS AND EMPLOYEES
The undersigned participant or beneficiary of a deceased former participant
in the Astoria Federal Savings and Loan Association Recognition and Retention
Plan for Officers and Employees (the "Officer and Employee RRP") hereby provides
the voting instructions hereinafter specified to the Trustee of the Officer and
Employee RRP (the "Trustee"), which instructions shall be taken into account by
the Trustee in voting, in person, by limited or general power of attorney or by
proxy, the shares of common stock of Astoria Financial Corporation that are held
by the Trustee, in its capacity as Trustee, as of March 26, 1997, at the Annual
Meeting of Shareholders of Astoria Financial Corporation to be held on May 21,
1997 at 9:30 a.m., eastern time, at the New Hyde Park Inn, 214 Jericho Turnpike,
New Hyde Park, New York, and at any adjournment or postponement thereof.
As to the proposals listed below which are more particularly described in
the Proxy Statement dated April 7, 1997, the Trustee will vote the common stock
of Astoria Financial Corporation held by the Officer and Employee RRP Trust so
as to reflect the voting instructions on this Confidential Voting Instruction,
in the manner described in the accompanying letter from the Committee dated
April 7, 1997.
If the duly executed Confidential Voting Instruction is returned, but no
instruction is given, such shares will not be voted.
THE BOARD OF DIRECTORS OF ASTORIA FINANCIAL CORPORATION RECOMMENDS A VOTE
"FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSAL NO. 2. THE DIRECTIONS,
IF ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL
FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF EITHER ASTORIA FINANCIAL
CORPORATION OR ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION.
1. The election of nominees Andrew M. Burger , Denis J. Connors and Thomas J.
Donahue as directors for terms of three years each.
FOR WITHHOLD
[ ] [ ]
TO WITHHOLD AUTHORITY TO VOTE FOR ANY PARTICULAR NOMINEE, LINE OR STRIKE OUT
THAT NOMINEE'S NAME AND THEN CHECK THE APPROPRIATE BOX AS TO THE REMAINING
NOMINEES.
2. The ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors of Astoria Financial Corporation for the fiscal year ending
December 31, 1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE REVERSE SIDE
AND PROMPTLY RETURN IN THE ENCLOSED ENVELOPE.)
<PAGE>
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the Annual Meeting and any adjournment or
adjournments thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction were
proposed by Astoria Financial Corporation.
The undersigned hereby instructs the Trustee to vote in accordance with the
voting instruction indicated above and hereby acknowledges receipt, prior to the
execution of this Confidential Voting Instruction, of a Notice of Annual Meeting
of Shareholders, a Proxy Statement dated April 7, 1997 for the Annual Meeting
and a 1996 Annual Report to Shareholders of Astoria Financial Corporation.
---------------------------------------
Date:______________________, 1997
Signature of participant or designated
beneficiary of deceased former
participant. Please sign name exactly
as it appears herein. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title as such.
<PAGE>
[LETTERHEAD OF ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION]
April 7, 1997
TO: ALL ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION EMPLOYEE STOCK OWNERSHIP
PLAN (THE "ESOP") PARTICIPANTS
Re: Annual Meeting of Shareholders to be held on May 21, 1997
---------------------------------------------------------
Dear Participants:
In connection with the Annual Meeting of Shareholders of Astoria Financial
Corporation to be held on May 21, 1997, enclosed please find the following
documents:
a) Confidential Voting Instruction card,
b) Proxy Statement dated April 7, 1997, including a Notice of Annual
Meeting of Shareholders,
c) 1996 Annual Report to Shareholders, and
d) a postage-paid return envelope addressed to ChaseMellon Shareholder
Services, Inc., Proxy Tabulation Department (ChaseMellon
Shareholder Services, Inc. is the Confidential Voting Instruction
tabulator for the ESOP).
As a participant in the ESOP, you have the right to direct the ESOP Trustee
(State Street Bank & Trust Company) how to vote the shares of Astoria Financial
Corporation Common Stock ("Shares") held by the ESOP as of March 26, 1997, the
meeting record date. Pursuant to the terms of the ESOP, each participant has the
right to instruct the ESOP Trustee how to vote the Shares allocated to that
person's account in the ESOP as of the record date. That number is shown on the
enclosed Confidential Voting Instruction card. In general, the ESOP Trustee will
be directed to vote the Shares held by the ESOP Trust and allocated to you by
casting votes "FOR", "AGAINST", "WITHHELD" or "ABSTAIN" as to each proposal as
specified in the Confidential Voting Instruction card accompanying this letter.
The ESOP generally states that if you do not direct the Trustee how to vote the
Shares allocated to your account, and as to the unallocated Shares held by the
ESOP trust, the Trustee shall vote such Shares in a manner calculated to most
accurately reflect the instructions received from participants regarding
allocated Shares to the extent consistent with its fiduciary duties. The
Trustee's fiduciary duties require it to vote any shares which are either
unallocated or as to which the Trustee receives no voting instructions in the
manner determined by the Trustee to be prudent and solely in the interest of the
participants and beneficiaries. To be considered by the Trustee in determining
how to vote the Shares held by the ESOP Trust, your voting instruction must be
received by ChaseMellon Shareholder Services, Inc. not later than by May 13,
1997.
<PAGE>
UNANTICIPATED PROPOSALS
It is possible, although very unlikely, that proposals other than those
specified on the Confidential Voting Instruction card will be presented for
shareholder action at the 1997 Annual Meeting of Shareholders. If this should
happen, the ESOP Trustee will be instructed to vote upon such matters, in the
ESOP Trustee's discretion, or to cause such matters to be voted upon in the
discretion of the individuals named in any proxies executed by the ESOP Trustee.
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card to signify your direction to the Trustee.
You should then seal the card in the enclosed envelope and return it to
- -----------------------------------------------------------------------
ChaseMellon Shareholder Services, Inc. To direct the voting of Shares within the
- --------------------------------------------------------------------------------
ESOP, the Confidential Voting Instruction card must be received by ChaseMellon
- ------------------------------------------------------------------------------
Shareholder Services, Inc. no later than May 13, 1997.
- ------------------------------------------------------
PLEASE NOTE THAT THE INSTRUCTION OF INDIVIDUAL PARTICIPANTS ARE TO BE KEPT
CONFIDENTIAL BY CHASEMELLON SHAREHOLDER SERVICES, INC. AND THE TRUSTEE, WHO HAVE
BEEN INSTRUCTED NOT TO DISCLOSE THEM TO ANYONE AT ASTORIA FEDERAL SAVINGS AND
LOAN ASSOCIATION OR ASTORIA FINANCIAL CORPORATION.
This memorandum is subject in its entirety to the information set forth in
the enclosed Proxy Statement, which you are encouraged to read and study
thoroughly.
Very truly yours,
The ESOP Committee
By: /S/ Rhoda Baisi
-----------------------------------
Rhoda Baisi
<PAGE>
[LETTERHEAD OF ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION]
April 7, 1997
TO: ALL ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION INCENTIVE SAVINGS PLAN
("401K PLAN") PARTICIPANTS WITH A PORTION OF HIS OR HER ACCOUNT BALANCE
INVESTED IN THE EMPLOYER STOCK FUND
Re: Annual Meeting of Shareholders to be held on May 21, 1997
---------------------------------------------------------
Dear Participants:
In connection with the Annual Meeting of Shareholders of Astoria Financial
Corporation to be held on May 21, 1997, enclosed please find the following
documents:
a) Confidential Voting Instruction card,
b) Proxy Statement dated April 7, 1997, including a Notice of Annual
Meeting of Shareholders,
c) 1996 Annual Report to Shareholders, and
d) a postage-paid return envelope addressed to ChaseMellon Shareholder
Services, Inc., Proxy Tabulation Department (ChaseMellon
Shareholder Services, Inc. is the Confidential Voting Instruction
tabulator for the 401K Plan).
As a participant in the 401K Plan with all or a portion of your account
balance invested in the Employer Stock Fund, you have the right to participate
in directing how the Plan Administrator (Astoria Federal Savings and Loan
Association) instructs the 401K Trustee (T. Rowe Price Trust Company) to vote
the shares of Astoria Financial Corporation Common Stock (the "Shares") held by
the 401K Plan as of March 26, 1997, the meeting record date (provided that you
had all or a portion of your account invested in the Employer Stock Fund as of
the most recent valuation date on or before the meeting record date). In
general, the 401K Trustee will be directed to vote the Shares held in the
Employer Stock Fund "FOR"and "AGAINST" as to each proposal listed on the
Confidential Voting Instruction card in the same proportions as instructions to
cast votes "FOR"and "AGAINST" each proposal are given by those individuals with
the right to give directions. Each individual's instructions are weighted
according to the value of the participant's interest in the Employer Stock Fund
as of the most recent valuation available prior to the record date. If you do
not file a Confidential Voting Instruction card on or before May 13, 1997, or if
you ABSTAIN, your directions will not count.
UNANTICIPATED PROPOSALS
It is possible, although very unlikely, that proposals other than those
specified on the
<PAGE>
Confidential Voting Instruction card will be presented for shareholder action at
the 1997 Annual Meeting of Shareholders. If this should happen, the 401K Trustee
will be instructed to vote upon such matters in the 401K Trustee's discretion,
or to cause such matters to be voted upon in the discretion of the individuals
named in any proxies executed by the 401K Trustee.
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card to signify your direction to the Plan
Administrator. You should then seal the card in the enclosed envelope and return
-----------------------------------------------------------------
it to ChaseMellon Shareholder Services, Inc. To direct the voting of your
- -------------------------------------------------------------------------
Shares, your instruction card must be received by ChaseMellon Shareholder
- -------------------------------------------------------------------------
Services, Inc. no later than May 13, 1997.
- ------------------------------------------
PLEASE NOTE THAT THE INSTRUCTION OF INDIVIDUAL PARTICIPANTS ARE TO BE KEPT
CONFIDENTIAL BY CHASEMELLON SHAREHOLDER SERVICES, INC. AND THE 401K TRUSTEE, WHO
HAVE BEEN INSTRUCTED NOT TO DISCLOSE THEM TO ANYONE AT ASTORIA FEDERAL SAVINGS
AND LOAN ASSOCIATION OR ASTORIA FINANCIAL CORPORATION.
This memorandum is subject in its entirety to the information set forth in
the enclosed Proxy Statement, which you are encouraged to read and study
thoroughly.
Very truly yours,
Astoria Federal Savings and Loan Association
By: /S/ William K. Sheerin
----------------------------------------------
Plan Administrator
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION, AS PLAN
ADMINISTRATOR, FOR THE ASTORIA FEDERAL SAVINGS AND LOAN
ASSOCIATION INCENTIVE SAVINGS PLAN
The undersigned participant, former participant or beneficiary of a deceased
former participant in the Astoria Federal Savings and Loan Association Incentive
Savings Plan (the "401K Plan") hereby provides the voting instructions
hereinafter specified to ChaseMellon Shareholder Services, Inc., as the designee
of Astoria Federal Savings and Loan Association, as Plan Administrator (the
"Plan Administrator"), which instructions shall be taken into account in
directing the trustee of the 401K Plan (the "Trustee") to vote in person, by
limited or general power of attorney or by proxy the shares and fractional
shares of common stock of Astoria Financial Corporation that are held by the
Trustee, in its capacity as Trustee, as of March 26, 1997, at the Annual Meeting
of Shareholders of Astoria Financial Corporation to be held on May 21, 1997 at
9:30 a.m., eastern time, at the New Hyde Park Inn, 214 Jericho Turnpike, New
Hyde Park, New York, and at any adjournment or postponement thereof.
As to the proposals listed below which are more particularly described in the
Proxy Statement dated April 7, 1997, the Plan Administrator of the 401K Plan,
will give voting directions to the Trustee. Such directions will reflect the
voting instructions on this Confidential Voting Instruction, in the manner
described in the accompanying letter from the Plan Administrator dated April 7,
1997.
If the duly executed Confidential Voting Instruction is returned, but no
instruction is given, for purposes of providing voting instructions, such shares
shall be treated as described in the letter from the Plan Administrator dated
April 7, 1997.
(Continued on reverse side. Please complete, sign and date on the reverse side
and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a vote "FOR"
all nominees in Proposal No. 1 and "FOR" Proposal No. 2. The directions, if any,
given in this Confidential Voting Instruction will be kept confidential from all
directors, officers and employees of Astoria Financial Corporation or the
Association.
Please mark your votes as [X]
indicated in this example
1. The election of nominees Andrew M. Burger, FOR WITHHOLD
Denis J. Connors and Thomas J. Donahue as [ ] [ ]
directors for terms of three years each.
To withhold authority to vote FOR any
particular nominee, line or strike out
that nominee's name and then check the
appropriate box as to the remaining
nominees.
2. The ratification of the appointment of FOR AGAINST ABSTAIN
KPMG Peat Marwick LLP as independent
auditors of Astoria Financial Corporation for [ ] [ ] [ ]
the fiscal year ending December
31, 1997.
In its discretion, the Trustee is authorized to vote upon such other business as
may come before the Annual Meeting and any adjournment or adjournments thereof
or to cause such matters to be voted upon in the discretion of the individuals
named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction were proposed
by Astoria Financial Corporation.
The undersigned hereby instructs the Plan Administrator to direct the Trustee to
vote in accordance with the voting instruction indicated above and hereby
acknowledges receipt, prior to execution of this Confidential Voting
Instruction, of a Notice of Annual Meeting of Shareholders, a Proxy Statement
dated April 7, 1997 for the Annual Meeting and a 1996 Annual Report to
Shareholders of Astoria Financial Corporation.
Please sign and date below and return promptly in the enclosed postage paid
envelope.
X
----------------------------- Date:___________________, 1997
Signature of participant, former participant or designated beneficiary of
deceased former participant. Please sign name exactly as it appears herein.
<PAGE>
ASTORIA FINANCIAL CORPORATION
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ASTORIA
FINANCIAL CORPORATION FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO
BE HELD ON MAY 21, 1997 AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
The undersigned shareholder of Astoria Financial Corporation, hereby authorizes
and appoints John M. Graham, Jr., William M. Thomas, Jr., or either of them,
proxy of the undersigned, with full power of substitution, to attend and act as
proxy for the undersigned and to vote as designated below all shares of common
stock of Astoria Financial Corporation which the undersigned may be entitled to
vote at the Annual Meeting of Shareholders of Astoria Financial Corporation to
be held on May 21, 1997 at 9:30 a.m., eastern time, at the New Hyde Park Inn,
214 Jericho Turnpike, New Hyde Park, New York, and at any adjournment or
postponement thereof.
(Continued on reverse side. Please complete, sign and date on the reverse side
and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a vote "FOR"
all nominees in Proposal No. 1 and "FOR" Proposal No. 2.
Please mark your votes as [X]
indicated in this example
1. The election of nominees Andrew M. Burger, FOR WITHHOLD
Denis J. Connors and Thomas J. Donahue as [ ] [ ]
directors for terms of three years each.
To withhold authority to vote FOR any particular
nominee, line or strike out that nominee's name
and then check the appropriate box as to the
remaining nominees.
2. The ratification of the appointment of FOR AGAINST ABSTAIN
KPMG Peat Marwick LLP as independent [ ] [ ] [ ]
auditors of Astoria Financial Corporation
for the fiscal year ending December
31, 1997.
All proposals listed above in this revocable proxy were proposed by Astoria
Financial Corporation. Astoria Financial Corporation is not currently aware of
any other business that may come before the Annual Meeting. The Board of
Directors of Astoria Financial Corporation, in its discretion, will direct the
vote of the proxies upon such other business as may properly come before the
Annual Meeting, and any adjournment or postponement thereof, including, without
limitation, a motion to postpone or adjourn the Annual Meeting.
THIS PROXY IS REVOCABLE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL NO. 1 AND FOR
PROPOSAL NO. 2.
The undersigned hereby acknowledges receipt, prior to the execution of this
proxy, of a Notice of Annual Meeting of Shareholders of Astoria Financial
Corporation, a Proxy Statement dated April 7, 1997 for the Annual Meeting and a
1996 Annual Report to Shareholders of Astoria Financial Corporation.
Please sign and date below and return promptly in the enclosed postage paid
envelope.
X____________________________________________________________________
X____________________________________________________________________
Date:___________________, 1997
Please sign name exactly as it appears hereon. If shares are registered in more
than one name, all should sign, but if one signs, it binds the others. When
signing as attorney, executor, administrator, trustee or guardian, please give
your full title as such. If a corporation, please sign in full corporate name by
an authorized officer. If a partnership, please sign in partnership name by an
authorized person.
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE EMPLOYEE STOCK OWNERSHIP PLAN COMMITTEE,
AS PLAN ADMINISTRATOR, FOR THE ASTORIA FEDERAL SAVINGS
AND LOAN ASSOCIATION EMPLOYEE STOCK OWNERSHIP PLAN
As a "named fiduciary," the undersigned participant, former participant or
beneficiary of a deceased former participant in the Astoria Federal Savings and
Loan Association Employee Stock Ownership Plan (the "ESOP") hereby provides the
voting instructions hereinafter specified to State Street Bank & Trust Company,
the trustee of the ESOP (the "Trustee"), which instructions shall be taken into
account by the Trustee in voting, in person, by limited or general power of
attorney or by proxy, the shares and fractional shares of common stock of
Astoria Financial Corporation that are held by the Trustee, in its capacity as
Trustee, as of March 26, 1997, at the Annual Meeting of Shareholders of Astoria
Financial Corporation to be held on May 21, 1997 at 9:30 a.m., eastern time, at
the New Hyde Park Inn, 214 Jericho Turnpike, New Hyde Park, New York, and at any
adjournment or postponement thereof.
As to the proposals listed below which are more particularly described in the
Proxy Statement dated April 7, 1997, the Trustee will vote the common stock of
Astoria Financial Corporation held by the ESOP Trust to reflect the voting
instructions on this Confidential Voting Instruction, in the manner described in
the accompanying letter from the ESOP Committee dated April 7, 1997.
If the duly executed Confidential Voting Instruction is returned, but no
instruction is given, for purposes of providing voting instructions, such shares
shall be treated as described in the letter from the Plan Administrator dated
April 7, 1997.
(Continued on reverse side. Please complete, sign and date on the reverse side
and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a vote "FOR"
all nominees in Proposal No. 1 and "FOR" Proposal No. 2. The directions, if any,
given in this Confidential Voting Instruction will be kept confidential from all
directors, officers and employees of Astoria Financial Corporation or the
Association.
Please mark your votes as
indicated in this example [X]
1. The election of nominees Andrew M. FOR WITHHOLD
Burger, Denis J. Connors and Thomas J. [ ] [ ]
Donahue as directors for terms of three
years each.
To withhold authority to vote FOR any
particular nominee, line or strike out
that nominee's name and then check the
appropriate box as to the remaining
nominees.
2. The ratification of the appointment FOR AGAINST ABSTAIN
of KPMG Peat Marwick LLP as independent [ ] [ ] [ ]
auditors of Astoria Financial Corporation
for the fiscal year ending December
31, 1997.
In its discretion, the Trustee is authorized to vote upon such other business as
may come before the Annual Meeting and any adjournment or adjournments thereof
or to cause such matters to be voted upon in the discretion of the individuals
named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction were proposed
by Astoria Financial Corporation.
The undersigned hereby instructs the Trustee to vote in accordance with the
voting instruction indicated above and hereby acknowledges receipt, prior to the
execution of this Confidential Voting Instruction, of a Notice of Annual Meeting
of Shareholders, a Proxy Statement dated April 7, 1997 for the Annual Meeting
and a 1996 Annual Report to Shareholders of Astoria Financial Corporation.
Please sign and date below and return promptly in the enclosed postage paid
envelope.
X
- ----------------------------------- Date:___________________, 1997
Signature of participant, former participant or designated beneficiary of
deceased former participant. Please sign name exactly as it appears herein.
