<PAGE> 1
As Filed Pursuant to Rule 424(b)(3)
Registration No. 333-29901
One Astoria Federal
Plaza
Lake Success, NY
11042-1085
Astoria Financial Corp. Logo (516) 327-3000
October 3, 1997
Dear Former Stockholder of The Greater New York Savings Bank:
On September 30, 1997, Astoria Financial Corporation ("AFC") acquired The
Greater New York Savings Bank ("GNYSB") pursuant to an Agreement and Plan of
Merger entered into by AFC, Astoria Federal Savings and Loan Association
("Astoria Federal") and GNYSB on March 29, 1997, as amended, and the related
Plan of Bank Merger (together, the "Merger Agreement"), which provided for the
merger of GNYSB with and into Astoria Federal with Astoria Federal being the
surviving corporation (the "Merger"). As described in the Joint Proxy
Statement-Prospectus referred to below, the Merger Agreement provides that, upon
consummation of the Merger, the aggregate consideration payable to stockholders
of GNYSB Common Stock will consist of 0.5 of a share of AFC Common Stock per
share of GNYSB Common Stock for 75% of the shares of GNYSB Common Stock and
$19.00 in cash per share of GNYSB Common Stock for the remaining 25% of the
shares of GNYSB Common Stock. Accordingly, each share of GNYSB Common Stock
(including shares of GNYSB Series A ESOP Convertible Preferred Stock, which were
converted into shares of GNYSB Common Stock prior to the consummation of the
Merger) has been converted in the Merger into the right to receive: (i) 0.5 of a
share of AFC Common Stock, (ii) $19.00 in cash or (iii) a combination of cash
and a fraction of a share of AFC Common Stock. The actual consideration
ultimately received by a stockholder for shares of GNYSB Common Stock will
depend upon certain election, allocation and proration procedures and the
election of other stockholders as described in the accompanying materials,
therefore no guarantee can be given that any stockholder's election will be
honored. Holders of shares of GNYSB 12% Noncumulative Perpetual Preferred Stock,
Series B are entitled to receive an equal amount of shares of a newly-created
series of preferred stock of AFC with substantially identical and no less
favorable terms.
AFC is now asking you to indicate whether you wish to elect to receive in
exchange for each share of GNYSB Common Stock: (i) 0.5 of a share of AFC Common
Stock (a "Stock Election"), (ii) $19.00 in cash (a "Cash Election"), (iii) a
Stock Election with respect to some of your shares of GNYSB Common Stock and a
Cash Election with respect to your remaining shares of GNYSB Common Stock (a
"Split Election") or (iv) whatever is left after the election of the other
holders of shares of GNYSB Common Stock and, to the extent necessary, the
application of certain random selection procedures (a "No-Election").
Notwithstanding the foregoing, in order to make a Stock Election, the number of
shares of GNYSB Common Stock a holder must elect to convert to AFC Common Stock
must equal or exceed 100 shares. Therefore, any holder of GNYSB Common Stock who
owns less than 100 shares must elect a Cash Election or No-Election or be
treated as having made a No-Election. A failure to properly make an Election as
described below will be treated as a No-Election. To assist you in making this
election, enclosed are an Election Form and Letter of Transmittal (the "Election
Form"), a Notice of Guaranteed Delivery and a Prospectus Supplement to the
original Joint Proxy Statement-Prospectus, dated June 24, 1997, which was sent
to holders of record of GNYSB Common Stock as of June 19, 1997. The Prospectus
Supplement is attached to this letter, and a copy of the original Joint Proxy
Statement-Prospectus is also enclosed.
Because the value of AFC Common Stock changes in the market, it is possible
that the value of AFC Common Stock to be received for each share of GNYSB Common
Stock will be worth more or less than the $19.00 per share under the cash
payment alternative when the stock consideration is received. For example, based
upon the closing price per share of AFC Common Stock of $50 5/16 on September
30, 1997 and the exchange ratio of 0.5 of a share of AFC Common Stock per share
of GNYSB Common Stock, the market value of the AFC Common Stock to be received
would be $25 5/32 per share of GNYSB Common Stock. Each holder of GNYSB Stock
Certificates is urged to check current market price information of AFC Common
Stock prior to making an election. AFC Common Stock trades on the National
Market System of the Nasdaq Stock Market under the symbol "ASFC."
<PAGE> 2
You will need to complete, sign and return the accompanying Election Form
to the Exchange Agent, ChaseMellon Shareholder Services, L.L.C., in order to
indicate whether you wish to make a Stock Election, a Cash Election, a Split
Election or a No-Election.
We urge you to consult your own financial advisor before making your
election. Moreover, although certain federal income tax consequences of the
Merger to former GNYSB stockholders are described in the Prospectus Supplement,
you should consult your own tax advisor because of the complexities of the
federal, state and local tax laws. WE MAKE NO RECOMMENDATION AS TO WHETHER YOU
SHOULD MAKE A STOCK ELECTION, A CASH ELECTION, A SPLIT ELECTION OR A
NO-ELECTION.
IT IS IMPORTANT THAT YOU READ THE ACCOMPANYING DOCUMENTS CAREFULLY,
COMPLETE AND SIGN THE ENCLOSED ELECTION FORM AND ENSURE THAT IT, TOGETHER WITH
ALL STOCK CERTIFICATES REPRESENTING YOUR GNYSB COMMON STOCK TO WHICH THE
ELECTION FORM RELATES, OR A PROPERLY COMPLETED AND SIGNED NOTICE OF GUARANTEED
DELIVERY, IS ACTUALLY RECEIVED BY THE EXCHANGE AGENT AT ONE OF THE PROPER
LOCATIONS SPECIFIED IN THE ELECTION FORM BY 5:00 P.M., EASTERN TIME, ON OCTOBER
17, 1997. IF SUCH MATERIALS ARE NOT ACTUALLY RECEIVED BY THE EXCHANGE AGENT AT
ONE OF THE PROPER LOCATIONS BY THE PROPER TIME, YOU WILL BE DEEMED TO HAVE MADE
A NO-ELECTION AND WILL RECEIVE EITHER CASH, AFC COMMON STOCK OR A COMBINATION
THEREOF, DEPENDING UPON THE CHOICES MADE BY OTHER HOLDERS OF GNYSB STOCK
CERTIFICATES.
If you have any questions, please call the Information Agent, ChaseMellon
Shareholder Services, L.L.C., toll-free at (888) 213-0887.
Sincerely,
George L. Engelke, Jr. Signature
George L. Engelke, Jr.
Chairman, President and
Chief Executive Officer
2
<PAGE> 3
PROSPECTUS SUPPLEMENT
TO
JOINT PROXY STATEMENT-PROSPECTUS
DATED JUNE 24, 1997
------------------------
ASTORIA FINANCIAL CORPORATION
This Prospectus Supplement (the "Supplement") is being furnished to former
holders of Common Stock, par value $1.00 per share ("GNYSB Common Stock"), of
The Greater New York Savings Bank ("GNYSB"), which was, until September 30,
1997, a New York State chartered stock savings bank, as a supplement to the
Joint Proxy Statement-Prospectus, dated June 24, 1997 (the "Proxy
Statement-Prospectus"), of GNYSB and Astoria Financial Corporation, a Delaware
corporation ("AFC"). The Proxy Statement-Prospectus was previously sent to
holders of record of GNYSB Common Stock as of June 19, 1997 in connection with
the Special Meeting of Stockholders of GNYSB held on August 1, 1997 (the
"Special Meeting"). An additional copy of the Proxy Statement-Prospectus is
enclosed herewith. At the Special Meeting, GNYSB stockholders approved the
Agreement and Plan of Merger, dated as of the 29th day of March, 1997, by and
among AFC, Astoria Federal Savings and Loan Association, a federally chartered
savings and loan association and wholly-owned subsidiary of AFC ("Astoria
Federal"), and GNYSB, as amended, and the related Plan of Bank Merger (together,
the "Merger Agreement"), a copy of which is attached to the Proxy
Statement-Prospectus as Appendix A, and the transactions contemplated thereby,
which provided for the merger of GNYSB with and into Astoria Federal (the
"Merger"). The Merger of GNYSB with and into Astoria Federal was consummated on
September 30, 1997. Subject to the election, allocation and proration procedures
described herein, all of the shares of GNYSB Common Stock held by each holder
have been converted into the right to receive for each share of GNYSB Common
Stock either (i) 0.5 of a share of AFC Common Stock, par value $0.01 per share
("AFC Common Stock"), (ii) $19.00 in cash or (iii) a combination of cash and a
fraction of a share of AFC Common Stock.
The aggregate consideration payable to stockholders of GNYSB Common Stock
will consist of 0.5 of a share of AFC Common Stock per share of GNYSB Common
Stock for 75% of the shares of GNYSB Common Stock and $19.00 in cash per share
of GNYSB Common Stock for the remaining 25% of the shares of GNYSB Common Stock.
Accordingly, each share of GNYSB Common Stock has been converted in the Merger
into the right to receive: (i) 0.5 of a share of AFC Common Stock, (ii) $19.00
in cash or (iii) a combination of cash and a fraction of a share of AFC Common
Stock. The actual consideration ultimately received by a stockholder for shares
of GNYSB Common Stock will depend upon certain election, allocation and
proration procedures and the election of other stockholders as described herein
and in the accompanying materials, therefore no guarantee can be given that any
stockholder's election will be honored.
This Supplement updates certain information contained in the Proxy
Statement-Prospectus and, together with the Proxy Statement-Prospectus, is for
the use of holders of record of GNYSB Common Stock as of September 30, 1997 in
determining whether they elect to receive for all of their shares of GNYSB
Common Stock either (i) all AFC Common Stock (a "Stock Election"), (ii) all cash
(a "Cash Election"), (iii) a Stock Election with respect to some of such
stockholder's shares of GNYSB Common Stock and a Cash Election with respect to
the remaining shares of GNYSB Common Stock held by such holder (a "Split
Election") or (iv) whatever is left after the election of the other holders of
shares of GNYSB Common Stock and the application, to the extent necessary of
certain random selection procedures (a "No-Election"). Notwithstanding the
foregoing, in order to make a Stock Election, the number of shares of GNYSB
Common Stock a holder must elect to convert to AFC Common Stock must equal or
exceed 100 shares. Therefore, any holder of GNYSB Common Stock who owns less
than 100 shares must elect a Cash Election or No-Election or be treated as
having made a No-Election. A failure to properly make an Election as described
below will be treated as a No-Election.
Depending upon the market value of AFC Common Stock at the time of receipt,
it is possible that the market value of the AFC Common Stock to be received for
each share of GNYSB Common Stock will be worth more or less than the $19.00 per
share of GNYSB Common Stock to be received under the cash payment alternative.
Based upon the closing price per share of AFC Common Stock of $50 5/16 on
September 30, 1997 as reported on the National Market System of the Nasdaq Stock
Market (the "Nasdaq National Market") and on the exchange ratio of 0.5 of a
share of AFC Common Stock per share of GNYSB Common Stock, the market value of
the AFC Common Stock to be received would be $25 5/32 per share of GNYSB Common
Stock. As the market price for AFC Common Stock is likely to fluctuate, a holder
of certificates representing shares of GNYSB Common Stock ("GNYSB Stock
Certificates") should consider more recent price information prior to making an
election. In addition, stockholders who receive AFC Common Stock can expect to
receive the dividend typically declared by AFC in October and payable in early
December. Under the terms of the Merger Agreement, no consideration will be paid
to holders of GNYSB Common Stock until the completion of the election,
allocation and proration procedures described herein, which will not occur until
October 27, 1997 at the earliest.
PLEASE READ THIS SUPPLEMENT AND THE PROXY STATEMENT-PROSPECTUS CAREFULLY.
FAILURE OF A HOLDER OF GNYSB COMMON STOCK TO PROPERLY COMPLETE AND DELIVER THE
ACCOMPANYING ELECTION FORM AND LETTER OF TRANSMITTAL (THE "ELECTION FORM"),
TOGETHER WITH THE GNYSB STOCK CERTIFICATES TO WHICH THE ELECTION FORM RELATES,
OR TO PROPERLY COMPLETE AND DELIVER THE ACCOMPANYING NOTICE OF GUARANTEED
DELIVERY, TO ONE OF THE PROPER LOCATIONS SPECIFIED IN THE ELECTION FORM, SO THAT
THE ELECTION FORM AND RELATED DOCUMENTS OR NOTICE OF GUARANTEED DELIVERY ARE
RECEIVED BY THE EXCHANGE AGENT BY 5:00 P.M., EASTERN TIME, ON OCTOBER 17, 1997
(THE "ELECTION DEADLINE"), AND TO COMPLY WITH THE PROCEDURES DESCRIBED IN THIS
SUPPLEMENT WILL CAUSE SUCH HOLDER TO BE DEEMED NOT TO HAVE MADE AN ELECTION AND
TO HAVE MADE A NO-ELECTION, AND SUCH HOLDER WILL RECEIVE EITHER ALL CASH, ALL
AFC COMMON STOCK OR A COMBINATION THEREOF, DEPENDING UPON THE ELECTIONS MADE BY
OTHER HOLDERS OF GNYSB STOCK CERTIFICATES. IF ANY GNYSB STOCK CERTIFICATE IS
LOST, STOLEN OR DESTROYED, YOU ARE URGED TO REFER TO INSTRUCTION 12 SET FORTH IN
THE ACCOMPANYING ELECTION FORM.
This Supplement and the Proxy Statement-Prospectus constitute a prospectus
of AFC with respect to the shares of AFC Common Stock issuable pursuant to the
Merger. This Supplement shall not constitute an offer to sell or solicitation of
an offer to purchase unless accompanied or preceded by the Proxy
Statement-Prospectus.
The outstanding shares of AFC Common Stock are listed on the Nasdaq National
Market under the symbol "ASFC."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS SUPPLEMENT TO THE JOINT PROXY STATEMENT-PROSPECTUS
DATED JUNE 24, 1997. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF AFC COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY AND ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF INVESTMENT.
------------------------
THE DATE OF THIS SUPPLEMENT IS OCTOBER 3, 1997.
<PAGE> 4
AVAILABLE INFORMATION
AFC is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith file
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Prior to the consummation of the Merger, GNYSB
had pending a proposed reorganization of GNYSB as a wholly-owned subsidiary of
Greater New York Bancorp Inc. ("GNYBancorp"). In connection therewith,
GNYBancorp had filed with the Commission a Registration Statement on Form S-4,
which included GNYSB's Registration Statement on Form F-1, GNYSB's 1996 Annual
Report on Form F-2, GNYSB's Current Report on Form F-3, dated April 8, 1997, and
GNYSB's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, as
exhibits. As a result of the consummation of the Merger, such proposed
reorganization did not occur.
Copies of AFC's reports, proxy statements and other information and copies
of GNYBancorp's Registration Statement on Form S-4 can be obtained, upon payment
of prescribed fees, from the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such
reports, proxy statements and other information can be inspected at the
Commission's facilities referred to above and at the Commission's Regional
Offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
If available, such information may also be accessed through the Commission's
Electronic Data, Gathering, Analysis and Retrieval System via electronic means,
including the Commission's website on the Internet (http://www.sec.gov).
Copies of GNYSB's reports, proxy statements and other information can be
obtained, upon payment of prescribed fees, from the Federal Deposit Insurance
Corporation ("FDIC") at the Registration and Disclosure Section of the FDIC at
550 17th Street, N.W., Room F-643, Washington, D.C. 20429 (202-898-8910).
The AFC Common Stock is, and, until consummation of the Merger, the GNYSB
Common Stock was, included for quotation on the Nasdaq National Market, and such
reports, proxy statements and other information concerning AFC and GNYSB are
available for inspection and copying at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
AFC has filed with the Commission a Registration Statement on Form S-4
(together with any amendments thereto, the "AFC Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the shares of AFC Common Stock to be issued in the Merger. This Supplement and
the Proxy Statement-Prospectus do not contain all of the information set forth
in the AFC Registration Statement and the exhibits thereto. Such additional
information may be obtained from the Commission's principal office in
Washington, D.C. Statements contained in the Proxy Statement-Prospectus, this
Supplement or in any document incorporated by reference herein or therein as to
the contents of any contract or other document referred to herein or therein are
not necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the AFC Registration
Statement or such other document, each such statement being qualified in all
respects by such reference.
S-2
<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS SUPPLEMENT INCORPORATES DOCUMENTS BY REFERENCE THAT ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (EXCLUDING CERTAIN EXHIBITS
THERETO) WILL BE FURNISHED WITHOUT CHARGE TO ANY PERSON TO WHOM THIS SUPPLEMENT
IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, DIRECTED TO ASTORIA
FINANCIAL CORPORATION, INVESTOR RELATIONS DEPARTMENT, ONE ASTORIA FEDERAL PLAZA,
LAKE SUCCESS, NEW YORK 11042, TELEPHONE NUMBER (516) 327-7877. FURTHERMORE,
ADDITIONAL COPIES OF THE PROXY STATEMENT-PROSPECTUS, ELECTION FORM AND THIS
SUPPLEMENT ARE AVAILABLE UPON REQUEST FROM THE INFORMATION AGENT, CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., 450 WEST 33RD STREET, 14TH FLOOR, NEW YORK, NEW
YORK 10001, ATTENTION: INFORMATION AGENT DEPARTMENT (888-213-0887). IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY OCTOBER
14, 1997.
The following documents filed with the Commission by AFC (File No. 0-22228)
pursuant to the Exchange Act are incorporated by reference in this Supplement:
1. AFC's Annual Report on Form 10-K for the year ended December 31, 1996;
2. AFC's Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 1997;
3. AFC's Current Report on Form 8-K, dated March 31, 1997, as amended by a
Form 8-K/A, dated April 8, 1997;
4. AFC'S Current Report on Form 8-K, dated June 30, 1997;
5. AFC's Current Report on Form 8-K, dated July 17, 1997;
6. AFC's Current Report on Form 8-K, dated July 24, 1997;
7. AFC's Current Report on Form 8-K, dated August 7, 1997;
8. AFC's Current Report on Form 8-K, dated October 3, 1997; and
9. The description of AFC Common Stock, and AFC Series A Junior
Participating Preferred Stock and Preferred Stock Purchase Rights set
forth in AFC's Registration Statements on Form 8-A dated August 11, 1993
and July 23, 1996, respectively, and any amendment or report filed for
the purpose of updating any such descriptions.
AFC expects to announce its earnings for the quarter and nine months ended
September 30, 1997 on or about October 23, 1997. A copy of such press release
will be filed by AFC promptly thereafter under cover of a Current Report on Form
8-K.
The following documents filed with the FDIC by GNYSB (FDIC Insurance
Certificate No. 16015-6) pursuant to the Exchange Act also have been filed as
exhibits to GNYBancorp's Registration Statement on Form S-4 filed with the
Commission on February 20, 1997, as amended (File No. 333-22127) pursuant to the
Securities Act, and are incorporated by reference in this Supplement:
1. GNYSB's Annual Report on Form F-2 for the year ended December 31, 1996;
2. The description of the GNYSB Common Stock included in the Registration
Statement on Form F-1 filed with the FDIC on May 4, 1987, and the
description of the GNYSB Series A Preferred Stock, GNYSB 12%
Noncumulative Perpetual Preferred Stock, Series B, and GNYSB Junior
Participating Preferred Stock included in the Amended and Restated
Organization Certificate of The Greater New York Savings Bank, including
any amendment or report filed for the purpose of updating any such
description;
3. GNYSB's Current Report on Form F-3 dated April 8, 1997; and
4. GNYSB's Quarterly Reports on Form 10-Q for the quarters ended March 31.
S-3
<PAGE> 6
All documents filed by AFC with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Supplement
and prior to the Election Deadline, as described herein, shall be deemed to be
incorporated by reference in this Supplement and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Supplement to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Supplement.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS SUPPLEMENT IN CONNECTION WITH
THE OFFERING OF SECURITIES MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY AFC.
THIS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, ANY SECURITIES, BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS SUPPLEMENT NOR
ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF AFC SINCE
THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
S-4
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION................. S-2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... S-3
SUMMARY............................... S-6
The Parties......................... S-6
Consummation of the Merger.......... S-6
Merger Consideration and Election,
Allocation and Proration
Procedures....................... S-7
Material Federal Income Tax
Consequences..................... S-10
Market Prices and Dividends......... S-10
Recent Developments................. S-11
SELECTED CONSOLIDATED FINANCIAL AND
OTHER DATA OF AFC................... S-13
SELECTED CONSOLIDATED FINANCIAL AND
OTHER DATA OF GNYSB................. S-15
UNAUDITED PRO FORMA COMBINED CONDENSED
CONSOLIDATED FINANCIAL
INFORMATION......................... S-17
INTRODUCTION.......................... S-24
SUMMARY OF THE MERGER................. S-26
Consummation........................ S-26
Consideration for GNYSB Shares...... S-26
ELECTION, ALLOCATION AND PRORATION
PROCEDURES.......................... S-26
Description of Elections............ S-26
Election Procedures................. S-27
No Oversubscription................. S-28
Oversubscription for Cash........... S-29
Oversubscription for AFC Common
Stock............................ S-29
No Guarantee of Chosen Consideration
or Equivalent Value.............. S-30
Fractional Shares................... S-30
Miscellaneous....................... S-30
GNYSB Series A Preferred Stock...... S-30
GNYSB Series B Preferred Stock...... S-30
Delivery of AFC Common Stock and
Cash............................. S-30
Lost, Stolen or Destroyed
Certificates..................... S-31
Completion of the Election Form..... S-32
MATERIAL FEDERAL INCOME TAX
CONSEQUENCES........................ S-32
DESCRIPTION OF ASTORIA FINANCIAL
CORPORATION CAPITAL STOCK........... S-36
CERTAIN REGULATORY CONSIDERATIONS..... S-36
EXPERTS............................... S-36
</TABLE>
S-5
<PAGE> 8
SUMMARY
The following is a summary of certain information relating to AFC, Astoria
Federal, GNYSB, the Merger and the related stockholder election, allocation and
proration procedures contained elsewhere in this Supplement, the Proxy
Statement-Prospectus and the documents incorporated herein and therein by
reference. Reference is made to, and this summary is qualified in its entirety
by, the more detailed information contained elsewhere in this Supplement and the
Proxy Statement-Prospectus, as well as the Appendices thereto, and the documents
incorporated by reference in this Supplement and the Proxy Statement-Prospectus
and contained in the documents referred to herein and therein. Stockholders are
urged to read this Supplement and the Proxy Statement-Prospectus, as well as the
Appendices thereto, and the documents incorporated herein and therein by
reference in their entirety.
THE PARTIES
AFC and Astoria Federal. Astoria Financial Corporation is a Delaware
corporation incorporated on June 14, 1993, and is the holding company for
Astoria Federal. The principal business of AFC is the operation of its
wholly-owned subsidiary, Astoria Federal, a federally-chartered savings and loan
association. Astoria Federal's principal business is attracting retail deposits
from the general public and investing those deposits, together with funds
generated from operations, principal repayments and borrowings, primarily in
one-to-four family residential mortgage loans and mortgage-backed and
mortgage-related securities and, to a lesser extent, commercial real estate
loans, multi-family mortgage loans and consumer loans. In addition, Astoria
Federal invests in mortgage-backed and mortgage-related securities and other
securities, including those issued by the U.S. Government and Federal agencies
and other securities. At June 30, 1997, AFC had total consolidated assets of
$7.7 billion, deposits of $4.5 billion and stockholders' equity of $599.8
million. As of June 30, 1997, Astoria Federal had 45 retail banking office
locations with 13 in Queens County, New York, 18 in Nassau County, New York, 6
in Suffolk County, New York, and 8 in the upstate New York counties of
Westchester, Chenango and Otsego. The principal executive offices of AFC are
located at One Astoria Federal Plaza, Lake Success, New York 11042-1085, and its
telephone number is (516) 327-3000. Astoria Federal's deposits are insured by
the Savings Association Insurance Fund ("SAIF") of the FDIC.
GNYSB. The Greater New York Savings Bank was a New York State-chartered
capital stock savings bank which was originally organized as a New York
State-chartered mutual savings bank in 1897 in the Park Slope section of
Brooklyn, New York. At June 30, 1997, GNYSB had total assets of $2.6 billion,
deposits of $1.6 billion and stockholders' equity of $216.8 million.
As of June 30, 1997, GNYSB conducted its retail banking activities through
nine full-service branch offices located in Brooklyn, New York, three
full-service branch offices in Nassau County, New York and one full-service
branch office in each of Queens and Suffolk Counties, New York. GNYSB has
received regulatory approval to open three new full service branches in
Brooklyn. AFC intends to proceed with the opening of these facilities. GNYSB had
its administrative headquarters in Manhattan, New York at One Penn Plaza, New
York, New York 10119, telephone number (212) 613-4000, and its lending office in
Mineola, New York. GNYSB's deposits were insured by the Bank Insurance Fund of
the FDIC.
See "AVAILABLE INFORMATION," "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE," "SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF AFC," "SELECTED
CONSOLIDATED FINANCIAL AND OTHER DATA OF GNYSB" and "UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION" in this Supplement and
"THE MERGER -- Parties to the Merger," "CERTAIN REGULATORY CONSIDERATIONS" and
"DESCRIPTION OF AFC CAPITAL STOCK" in the Proxy Statement-Prospectus.
CONSUMMATION OF THE MERGER
The Merger was consummated following the close of business on September 30,
1997 (the "Effective Time") pursuant to the terms contained in the Merger
Agreement and as described in the Proxy Statement-Prospectus. See "THE MERGER"
in the Proxy Statement-Prospectus.
S-6
<PAGE> 9
MERGER CONSIDERATION AND ELECTION, ALLOCATION AND PRORATION PROCEDURES
General. The Merger Agreement provides that the aggregate consideration
(the "Merger Consideration") payable to holders of GNYSB Common Stock will
consist of 0.5 of a share of AFC Common Stock (together with the related
preferred share purchase right ("AFC Right") for each full share of AFC Common
Stock issued pursuant to the Rights Agreement (the "AFC Rights Agreement")
between AFC and ChaseMellon Shareholder Services, L.L.C. dated as of July 17,
1996) per share of GNYSB Common Stock for 75% of the shares of GNYSB Common
Stock (the "Stock Consideration") and $19.00 in cash per share of GNYSB Common
Stock for the remaining 25% of the shares of GNYSB Common Stock (the "Cash
Consideration"). Accordingly, each share of GNYSB Common Stock has been
converted in the Merger into the right to receive: (i) 0.5 of a share of AFC
Common Stock, (ii) $19.00 in cash or (iii) a combination of cash and a fraction
of a share of AFC Common Stock determined as provided below.
The actual consideration ultimately received by a stockholder for shares of
GNYSB Common Stock will depend upon certain election, allocation and proration
procedures and the election of other stockholders as described herein, and no
guarantee can be given that the election of any stockholder will be honored.
Holders of GNYSB Common Stock who own less than 100 shares will not be entitled
to elect to receive the Stock Consideration.
Elections. Each record holder of GNYSB Common Stock is now being asked to
elect (an "Election") to receive for its shares of GNYSB Common Stock:
(i) 0.5 of a share of AFC Common Stock for each share of GNYSB Common
Stock (a "Stock Election");
(ii) $19.00 in cash without interest for each share of GNYSB Common Stock
(a "Cash Election");
(iii) a Stock Election with respect to some of such stockholder's shares of
GNYSB Common Stock and a Cash Election with respect to the remaining
shares of GNYSB Common Stock held by such holder; or
(iv) whatever is left after the Election of the other holders of GNYSB
Common Stock and, to the extent necessary, the application of certain
random selection procedures (a "No-Election").
Depending upon the market value of AFC Common Stock at the time of receipt,
it is possible that the market value of the AFC Common Stock to be received for
each share of GNYSB Common Stock will be worth more or less than the $19.00 to
be received under the Cash Election alternative. Based upon the closing price of
AFC Common Stock of $50 5/16 on September 30, 1997 and the exchange ratio of 0.5
of a share of AFC Common Stock, the market value of the AFC Common Stock to be
received would be $25 5/32 per share of GNYSB Common Stock. As the market price
for AFC Common Stock is likely to fluctuate, a stockholder should consider more
recent price information prior to making an Election. In addition, stockholders
who receive AFC Common Stock can expect to receive the dividend typically
declared by AFC in October and payable in early December. The foregoing
discussion does not take into account various factors that may affect the value
to a particular holder of GNYSB Stock Certificates of any consideration
received, including, for example, federal, state and local tax consequences. See
"MATERIAL FEDERAL INCOME TAX CONSEQUENCES."
No Oversubscription. In the event that the number of shares as to which a
Cash Election has been made does not exceed 25% of the shares of GNYSB Common
Stock outstanding at the Effective Time and the number of shares as to which a
Stock Election has been made does not exceed 75% of the shares of GNYSB Common
Stock outstanding at the Effective Time, then:
(i) all shares as to which a Cash Election has been made shall be
converted into the right to receive $19.00 in cash without interest
per share of GNYSB Common Stock;
(ii) all shares as to which a Stock Election has been made shall be
converted into the right to receive 0.5 of a share of AFC Common Stock
per share of GNYSB Common Stock; and
S-7
<PAGE> 10
(iii) shares as to which No-Election has been made shall be converted into
either the right to receive 0.5 of a share of AFC Common Stock per
share of GNYSB Common Stock or $19.00 per share of GNYSB Common Stock
as determined by random selection so that 25% of the shares of GNYSB
Common Stock are converted into the right to receive cash and 75% of
the shares of GNYSB Common Stock are converted into the right to
receive AFC Common Stock.
The random selection process to be used by ChaseMellon Shareholder
Services, L.L.C. (the "Exchange Agent") will consist of drawing by lot or such
other process as the Exchange Agent deems equitable and necessary to effect the
allocations described above.
Oversubscription for Cash. If the aggregate number of shares as to which a
Cash Election has been made exceeds 25% of the shares of GNYSB Common Stock
outstanding at the Effective Time, then:
(i) each share as to which a Stock Election has been made and each share
as to which No-Election has been made shall be converted into the
right to receive 0.5 of a share of AFC Common Stock; and
(ii) each share as to which a Cash Election has been made shall be
converted into the right to receive a combination of cash and AFC
Common Stock. The amount in cash will be equal to the product, rounded
to the nearest $0.01, of (x) $19.00 and (y) a fraction (the "Cash
Fraction"), the numerator of which shall be a number equal to 25% of
the shares of GNYSB Common Stock outstanding at the Effective Time and
the denominator of which shall be the total number of shares as to
which a Cash Election has been made. The number of shares of AFC
Common Stock will be equal to the product, rounded to four decimal
places, of (x) 0.50 and (y) a number equal to one minus the Cash
Fraction. For example, if the aggregate number of shares as to which a
Cash Election has been made equals 50%, 75% or 100% of the shares of
GNYSB Common Stock, the combination would consist of $9.50 in cash and
0.25 of a share of AFC Common Stock, $6.33 in cash and 0.3333 of a
share of AFC Common Stock and $4.75 in cash and 0.375 of a share of
AFC Common Stock, respectively.
Oversubscription for AFC Common Stock. If the aggregate number of shares
as to which a Stock Election has been made exceeds 75% of the shares of GNYSB
Common Stock outstanding at the Effective Time, then:
(i) each share as to which a Cash Election has been made and each share as
to which No-Election has been made shall be converted into the right
to receive $19.00 in cash without interest; and
(ii) each share as to which a Stock Election has been made shall be
converted into the right to receive a combination of cash and AFC
Common Stock. The number of shares of AFC Common Stock will be equal
to the product, rounded to four decimal places, of (x) 0.50 and (y) a
fraction (the "Stock Fraction"), the numerator of which shall be a
number equal to 75% of the shares of GNYSB Common Stock outstanding at
the Effective Time and the denominator of which shall be the total
number of shares as to which a Stock Election has been made. The
amount of cash will be equal to the product, rounded to the nearest
$0.01, of (x) $19.00 and (y) a number equal to one minus the Stock
Fraction. For example, if the aggregate number of shares as to which a
Stock Election has been made equals 90% or 100% of the shares of GNYSB
Common Stock, the combination would consist of 0.4167 of a share of
AFC Common Stock and $3.17 in cash and 0.375 of a share of AFC Common
Stock and $4.75 in cash, respectively.
No Guarantee of Chosen Consideration or Equivalent Value. Because the
Merger Agreement provides that the aggregate consideration payable to holders of
GNYSB Common Stock in the Merger will be fixed such that it consists of 0.5 of a
share of AFC Common Stock per share of GNYSB Common Stock for 75% of the shares
of GNYSB Common Stock and $19.00 in cash per share of GNYSB Common Stock for the
remaining 25% of the shares of GNYSB Common Stock, no guarantee can be given
that the Election of any given stockholder will be honored. Rather, the Election
by each stockholder will be subject to the election, allocation and proration
procedures described herein. Thus, stockholders may not receive their requested
form of consideration or combination thereof. Because the market price of AFC
Common Stock may fluctuate and it could be greater than or less than $38.00 per
share (the price at which the market value of 0.5 of a share of
S-8
<PAGE> 11
AFC Common Stock would equal the cash consideration of $19.00 per share), the
market value of 0.5 of a share of AFC Common Stock received per share could be
less than or greater than the cash price per share of $19.00.
Election Procedures. All Elections will be required to be made on an
Election Form. To make an effective Election with respect to shares of GNYSB
Common Stock, the holder thereof must, in accordance with the Election Form, (i)
complete properly and return the Election Form to the Exchange Agent, (ii)
deliver therewith his or her GNYSB Stock Certificates with respect to such
shares and (iii) deliver therewith any other required documents, prior to 5:00
p.m. on October 17, 1997 (the "Election Deadline"). A failure to properly make
an Election as described below will be treated as a No-Election. If a GNYSB
Stock Certificate has been lost, stolen or destroyed, the holder is requested to
immediately contact the Exchange Agent for instructions as to how to submit a
valid Election. See "ELECTION, ALLOCATION AND PRORATION PROCEDURES -- Lost,
Stolen or Destroyed Certificates."
You may cause a written guarantee substantially in the form enclosed
herewith (the "Notice of Guaranteed Delivery" for a member firm of an approved
Signature Guarantee Medallion Program (an "Eligible Institution"), to be
received by the Exchange Agent at or prior to the Election Deadline. Such Notice
of Guaranteed Delivery must state your name, the number of GNYSB shares
represented by your stock Certificate and the Election with respect to such
shares, and the Eligible Institution must guarantee the delivery to the Exchange
Agent of your properly completed and executed Election Form and Letter of
Transmittal and your stock Certificate(s) within three (3) Trading Days
following the date of the Notice of Guaranteed Delivery. If this procedure is
followed, your Election Form and Letter of Transmittal and your stock
Certificate(s) must be received by the Exchange Agent within three (3) Trading
Days following the date of the Notice of Guaranteed Delivery relating thereto.
Additional copies of the Notice of Guaranteed Delivery may be obtained upon
request from the Information Agent.
A holder of shares of GNYSB Common Stock having a preference as to the form
of consideration to be received for his or her shares of GNYSB Common Stock
should make an Election, because shares as to which an Election has been made
will be given priority in allocating such consideration over shares as to which
an Election is not received. Neither AFC nor the Board of Directors of AFC makes
any recommendation as to whether stockholders should make a Stock Election, a
Cash Election, a Split Election or a No-Election. Each holder of GNYSB Common
Stock must make his or her own decision with respect to such Election.
Any Cash Election, Stock Election, Split Election or No-Election may be
revoked, but only by written notice actually received by the Exchange Agent at
one of the proper locations specified in the Election Form by the Election
Deadline. NEITHER AFC NOR THE EXCHANGE AGENT WILL BE UNDER ANY OBLIGATION TO
NOTIFY ANY PERSON OF ANY DEFECT IN AN ELECTION FORM OR NOTICE OF REVOCATION
SUBMITTED TO THE EXCHANGE AGENT. See "ELECTION, ALLOCATION AND PRORATION
PROCEDURES" in this Supplement.
Holders of GNYSB Common Stock are urged to read carefully the more complete
description of the election, allocation and proration procedures under
"ELECTION, ALLOCATION AND PRORATION PROCEDURES."
Fractional Shares. Stock certificates will not be delivered for fractional
shares resulting from the exchange of GNYSB Common Stock for AFC Common Stock.
Instead, each holder of GNYSB Common Stock who would otherwise be entitled to a
fractional share will receive in lieu thereof a check in an amount equal to such
fractional share multiplied by $48.26, the average of the mean between the
closing high bid and low asked prices of a share of AFC Common Stock, as
reported on the Nasdaq National Market, for the 30 consecutive trading days
immediately preceding September 27, 1997 (the day on which all applicable
waiting periods expired following the date on which the last approval necessary
to consummate the Merger was received), rounded to the nearest cent.
GNYSB Series A Preferred Stock. Prior to the consummation of the Merger,
the Trustee of GNYSB's Employee Stock Ownership Plan and Trust (the "ESOP
Trustee") converted the GNYSB Series A ESOP Convertible Preferred Stock (the
"GNYSB Series A Preferred Stock") into 1,396,227 shares of GNYSB Common Stock.
The ESOP Trustee will be subject to the election, allocation and proration
procedures with respect to the GNYSB Common Stock held by the GNYSB ESOP at the
Effective Time.
S-9
<PAGE> 12
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Thacher Proffitt & Wood, counsel for AFC, and Sullivan &
Cromwell, counsel for GNYSB, the Merger qualifies as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and, accordingly, for federal income tax purposes, no gain or loss will
be recognized by AFC, Astoria Federal or GNYSB as a result of the Merger and,
except where any Cash Consideration is received or to the extent of any cash
received in lieu of a fractional share interest in GNYSB Common Stock, no gain
or loss will be recognized by holders of GNYSB Common Stock or GNYSB Series B
Preferred Stock as a result of the Merger. See "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES."
Because the tax consequences of receiving cash, AFC Common Stock or a
combination thereof will differ, stockholders of GNYSB are urged to read
carefully the information under the caption "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES" in this Supplement.
MARKET PRICES AND DIVIDENDS
AFC Common Stock is included for quotation on the Nasdaq National Market
(symbol: "ASFC"). The following table sets forth the high and low sale prices of
shares of AFC Common Stock as reported on the Nasdaq National Market, and the
quarterly cash dividends declared per share, for the periods indicated.
<TABLE>
<CAPTION>
AFC COMMON STOCK
---------------------------------
HIGH LOW DIVIDENDS
--------- --------- ---------
<S> <C> <C> <C>
1995(1)
First Quarter.................................. $15 5/8 $13 1/8 $ --
Second Quarter................................. 18 7/16 15 3/8 --
Third Quarter.................................. 22 5/16 17 29/32 0.10
Fourth Quarter................................. 23 1/4 21 1/32 0.10
1996
First Quarter(1)............................... 25 15/16 22 5/16 0.10
Second Quarter(1).............................. 28 1/8 23 5/16 0.11
Third Quarter.................................. 29 1/8 24 5/8 0.11
Fourth Quarter................................. 38 29 3/8 0.11
1997
First Quarter.................................. 44 35 1/2 0.11
Second Quarter................................. 47 5/8 33 3/4 0.15
Third Quarter.................................. 50 7/8 44 3/4 0.15
</TABLE>
- ---------------
(1) On April 17, 1996 the Board of Directors of AFC declared a two-for-one stock
split in the form of a 100% stock dividend, and on June 3, 1996, AFC
stockholders received one additional share of AFC Common Stock for each
share of AFC Common Stock owned as of May 15, 1996. AFC's high and low stock
prices and dividends for prior periods have been adjusted to reflect the
effect of such stock split.
The following table sets forth the last reported sale price per share of
AFC Common Stock on (i) January 31, 1997; (ii) March 27, 1997, the last business
day preceding public announcement of the signing of the Merger Agreement; and
(iii) September 30, 1997, the last practicable date prior to the mailing of this
Supplement:
<TABLE>
<CAPTION>
AFC
COMMON STOCK
------------
<S> <C>
January 31, 1997............................... 39
March 27, 1997................................. 37 7/8
September 30, 1997............................. 50 5/16
</TABLE>
S-10
<PAGE> 13
FORMER GNYSB STOCKHOLDERS ARE ADVISED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR AFC COMMON STOCK. The market price of AFC Common Stock will fluctuate
between the date of this Supplement and the Election Deadline. No assurance can
be given concerning the market price of AFC Common Stock before or after the
Election Deadline.
RECENT DEVELOPMENTS
On April 3, 1997, a purported class action (the "Action") was commenced in
the Supreme Court of the State of New York (Kings County) entitled Leonard
Minzer et ano. v. Gerard C. Keegan, et al. (Index No. 11546/1997) against GNYSB
and its directors and certain executive officers. The suit alleges, among other
things, that the directors and executive officers of GNYSB have breached their
fiduciary duties in entering into the Merger Agreement and related arrangements.
The complaint seeks, among other things, a preliminary and permanent injunction
against the Merger and the related transactions, an order to the directors and
executive officers of GNYSB to carry-out their fiduciary duties and unspecified
damages and costs. GNYSB has indicated that it believes that the allegations
made in the Action are without merit and, on May 16, 1997, the defendants filed
a motion to dismiss the Action. Astoria Federal is a party to such action as the
successor in interest to GNYSB as a result of the Merger. Astoria Federal
intends to aggressively defend its interests with respect to such matter.
On July 18, 1997, a purported class action (the "Federal Action") was
commenced in the United States District Court for the Eastern District of New
York entitled Leonard Minzer et ano. v. Gerard C. Keegan, et al. (Index No. 97
Civ. 4077 (CPS)) against GNYSB, GNYSB's directors and certain of its executive
officers, AFC and Astoria Federal. The suit alleges, among other things, that
GNYSB, GNYSB's directors and certain of its executive officers solicited proxies
in violation of Section 14(a) of the Securities Exchange Act of 1934 and Rule
14a-9, promulgated thereunder, by failing to disclose certain allegedly material
facts in the proxy statement, as amended, that was circulated to GNYSB
stockholders in connection with the Merger, and that GNYSB's directors and
certain of its executive officers have breached their fiduciary duties by
entering into the Merger Agreement and related arrangements. The suit further
alleges, without specification, that AFC and Astoria Federal participated in the
preparation, specification and distribution of GNYSB's proxy materials and/or
aided and abetted the alleged breaches of fiduciary duty by GNYSB defendants.
Plaintiffs sought, among other things, a preliminary and permanent injunction
against consummation of the Merger and the related transactions, an order
directing that the directors and executive officers of GNYSB carry-out their
fiduciary duties and unspecified damages and costs. AFC and Astoria Federal were
served with the complaint in the Federal Action on July 30, 1997. On July 31,
1997, plaintiffs made an application to the Court for expedited discovery and to
set a hearing on their prospective application for a preliminary injunction.
Shortly thereafter, all defendants in the Action filed motions to dismiss the
complaint in the Federal Action.
At a hearing on August 11, 1997, the Court permitted certain limited,
particularized discovery to be had by plaintiffs. On September 2, 1997,
plaintiffs filed an amended complaint and an Application for a preliminary
injunction (the "Application").
An evidentiary hearing on plaintiffs' Application was held on September 10,
1997. On September 22, 1997, the Court issued a written decision denying
plaintiffs' Application in all respects.
AFC and Astoria Federal believe the allegations made in the amended
complaint in the Federal Action are without merit and intend to aggressively
defend their interests with respect to such matters.
During 1994, an action was commenced against Astoria Federal, AF Roosevelt
Avenue Corporation, a wholly owned subsidiary of Astoria Federal, 149 Roosevelt
Avenue Associates, a joint venture in which AF Roosevelt Avenue Corporation was
a joint venture partner, Henry Drewitz, then Chairman of the Board of Astoria
Federal, and George L. Engelke, Jr., Chairman, President and Chief Executive
Officer of Astoria Federal and a director and officer of AF Roosevelt Avenue
Corporation, among others. The litigation, which seeks damages in excess of
$20,000,000, arises from the development by 149 Roosevelt Avenue Associates of a
condominium project commencing in the mid 1980's. The development consists of
134 residential units, 25 medical facility units, and associated parking and
other facilities located in Flushing, New York. The litigation, commenced by the
Board of Managers of the condominium, alleges that there are various defects in
S-11
<PAGE> 14
the condominium buildings with respect to the roof, certain masonry work and
structural components and seeks damages based upon breach of contract, fraud,
misrepresentation, breach of warranty, violations of Articles 23A and 36B of the
General Business Law of the State of New York, recklessness and negligence. The
above listed defendants have served their answers in the litigation, which is in
the preliminary stages of discovery. Astoria Federal has notified its liability
and director and officer liability insurance carriers of the action.
On September 19, 1997, the Queens Buildings Department ordered the partial
evacuation of the condominium. Management of Astoria Federal is continuing to
work with the Attorney General's office, the Queens Buildings Department and the
Board of Managers in an attempt to remedy the situation. In the event such a
remedy is not found, Astoria Federal intends to continue to defend the action
vigorously.
S-12
<PAGE> 15
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF AFC
Set forth below is selected consolidated financial and other data of AFC,
which is based on, and qualified in its entirety by, the consolidated financial
statements of AFC and subsidiary, including the notes thereto, that are
incorporated by reference in this Supplement and the Proxy Statement-Prospectus
and should be read in conjunction therewith. The selected consolidated financial
and other data for AFC at and for the six-month periods ended June 30, 1997 and
June 30, 1996 were not audited, but, in the opinion of management, contain all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the financial condition and results for such periods. The
results of operations for the six-month periods ended June 30, 1997 and June 30,
1996 are not necessarily indicative of the results of operations to be expected
for the remainder of the year or any other interim period.
<TABLE>
<CAPTION>
AT DECEMBER 31,
AT JUNE 30, --------------------------------------------------------------
1997 1996 1995 1994 1993 1992
----------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA:
Total assets................................... $7,664,495 $7,272,763 $6,620,102 $4,642,547 $4,121,280 $3,418,924
Federal funds sold and repurchase agreements... 162,586 56,000 100,000 198,490 229,820 150,000
Securities available-for-sale.................. 1,955,046 2,296,662 2,515,968 55,550 -- --
Securities held-to-maturity.................... 2,167,309 1,961,015 1,615,542 2,659,533 2,227,402 1,404,020
Loans receivable, net.......................... 3,070,395 2,637,327 2,043,643 1,574,760 1,506,966 1,692,939
Real estate owned and investments in real
estate, net.................................. 10,473 12,129 23,331 26,378 32,141 36,428
Deposits....................................... 4,545,241 4,513,093 4,263,421 3,280,652 2,898,372 2,877,843
Borrowed funds................................. 2,446,017 2,111,514 1,704,691 766,849 652,849 265,500
Stockholders' equity(1)........................ 599,767 588,829 590,685 550,575 537,349 242,219
Non-performing assets(9)(10)................... 39,324 45,589 67,811 93,316 130,957 164,225
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Interest income................................. $264,485 $237,076 $491,174 $434,976 $301,387 $266,983 $266,119
Interest expense................................ 165,584 145,518 304,481 265,705 150,527 140,406 155,692
-------- -------- -------- -------- -------- -------- --------
Net interest income............................. 98,901 91,558 186,693 169,271 150,860 126,577 110,427
Provision for loan losses....................... 1,914 2,564 3,963 2,007 3,733 6,959 11,553
-------- -------- -------- -------- -------- -------- --------
Net interest income after provision for loan
losses........................................ 96,987 88,994 182,730 167,264 147,127 119,618 98,874
Non-interest income............................. 8,132 6,997 13,722 9,466 6,218 6,374 5,759
Non-interest expense:
General and administrative.................... 47,885 48,601 96,165 90,344 72,089 61,877 59,500
Real estate operations, net................... 191 (2,916) (2,723) (3,344) 1,894 3,557 2,218
Provision for (recovery of) real estate
losses...................................... 291 (1,332) (1,747) 259 3,017 6,020 3,546
Amortization of excess of cost over fair value
of net assets acquired...................... 4,220 4,342 8,684 8,307 1,788 2,250 2,895
SAIF recapitalization assessment.............. -- -- 28,545 -- -- -- --
Provision for restructuring................... -- -- -- -- -- 8,325 --
-------- -------- -------- -------- -------- -------- --------
Total non-interest expense...................... 52,587 48,695 128,924 95,566 78,788 82,029 68,159
-------- -------- -------- -------- -------- -------- --------
Income before income taxes, extraordinary item
and cumulative effect of accounting changes... 52,532 47,296 67,528 81,164 74,557 43,963 36,474
Income tax expense.............................. 21,891 20,868 30,675 35,743 30,880 18,677 17,502
-------- -------- -------- -------- -------- -------- --------
Income before extraordinary item and cumulative
effect of accounting changes.................. 30,641 26,428 36,853 45,421 43,677 25,286 18,972
Extraordinary item:
Penalty on prepayment of FHLB-NY advances, net
of income tax benefit......................... -- -- -- -- -- (3,499) --
Cumulative effect of accounting changes......... -- -- -- -- -- 2,881 --
-------- -------- -------- -------- -------- -------- --------
Net income...................................... $ 30,641 $ 26,428 $ 36,853 $ 45,421 $ 43,677 $ 24,668 $ 18,972
======== ======== ======== ======== ======== ======== ========
Primary earnings per common share(2),(3)........ $ 1.45 $ 1.24 $ 1.77 $ 2.07 $ 1.85 $ 0.19 N/A
Fully diluted earnings per common
share(2),(3).................................. $ 1.44 $ 1.23 $ 1.71 $ 2.06 $ 1.85 $ 0.19 N/A
</TABLE>
(See footnotes on the following page)
S-13
<PAGE> 16
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF AFC -- (CONTINUED)
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED AT OR FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------------------
1997 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
(UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA:
Fully diluted earnings per common share excluding
SAIF recapitalization assessment, net of
tax(2)(3)(12)...................................... $ 1.44 $ 2.49 $ 2.06 $ 1.85 $ 0.19 $ N/A
Return on average assets(11)......................... 0.81% 0.53% 0.73% 0.99% 0.67% 0.57%
Return on average assets, excluding SAIF
Recapitalization assessment(11)(12)................ 0.81 0.77 0.73 0.99 0.67 0.57
Return on average stockholders' equity(11)........... 10.40 6.38 8.01 7.95 8.37 8.14
Return on average stockholders' equity, excluding
SAIF recapitalization assessment(11)(12)........... 10.40 9.28 8.01 7.95 8.37 8.14
Return on average tangible stockholders'
equity(11)......................................... 12.48 7.79 9.81 8.04 8.61 8.54
Return on average tangible stockholders' equity,
excluding SAIF recapitalization
assessment(11)(12)................................. 12.48 11.33 9.81 8.04 8.61 8.54
Average stockholders' equity to average assets....... 7.81 8.25 9.09 12.44 7.99 7.02
Average tangible stockholders' equity to average
tangible assets.................................... 6.59 6.86 7.55 12.32 7.79 6.69
Stockholders' equity to total assets................. 7.83 8.10 8.92 11.86 13.04 7.08
Core deposits to total deposits(4)................... 40.25 38.52 39.59 38.71 47.56 45.49
Net interest spread(11).............................. 2.35 2.45 2.55 3.04 3.29 3.20
Net interest margin(5)(11)........................... 2.70 2.77 2.85 3.51 3.55 3.45
Operating income to average assets(6)(11)............ 0.18 0.17 0.15 0.14 0.17 0.17
General and administrative expense to average
assets(11)......................................... 1.27 1.37 1.45 1.63 1.68 1.79
Efficiency ratio(7).................................. 45.38 48.37 50.55 45.89 46.54 51.21
Average interest-earning assets to average
interest-bearing liabilities....................... 1.08x 1.07x 1.07x 1.13x 1.07x 1.05x
Book value per common share.......................... $ 28.59 $ 27.42 $ 26.13 $ 22.87 $ 20.39 $ --
Tangible book value per common share................. 24.01 22.75 21.30 22.65 20.12 --
Cash dividends declared per common share............. 0.26 0.43 0.20 -- -- --
ASSET QUALITY RATIOS:
Non-performing loans to total loans(8)............... 0.94% 1.26% 2.16% 4.20% 6.45% 7.43%
Non-performing loans to total assets................. 0.38 0.46 0.67 1.44 2.40 3.74
Non-performing assets to total assets(9)............. 0.51 0.63 1.02 2.01 3.18 4.80
Allowance for loan losses to non-performing loans.... 51.74 42.11 30.34 18.19 16.87 12.32
Allowance for loan losses to non-accrual loans....... 62.53 54.06 34.90 21.37 21.47 15.14
Allowance for loan losses to total loans............. 0.48 0.53 0.65 0.76 1.09 0.92
OTHER DATA:
Number of deposit accounts........................... 468,407 461,044 439,681 308,218 284,334 297,941
Mortgage loans serviced for others (in thousands).... $ 103,472 $109,521 $123,931 $ 54,157 $ 67,791 $ 87,070
Number of full service banking offices............... 45 46 46 28 28 30
Full time equivalent employees....................... 934 930 954 751 788 791
</TABLE>
- ---------------
(1) Balance at December 31, 1992 represents only retained earnings,
substantially restricted.
(2) 1993 based on net income from November 18, 1993 to December 31, 1993.
(3) Prior periods adjusted for two-for-one stock split on June 3, 1996.
(4) Core deposits are comprised of savings, money market, money manager and NOW
accounts.
(5) Net interest margin represents net interest income divided by average
interest-earning assets.
(6) Operating income represents total non-interest income less net gains on
sales of securities, loans and premises and equipment of $1,614,000,
$11,000 and $165,000, for 1996, 1995 and 1993, respectively.
(7) Efficiency ratio represents general and administrative expense divided by
the sum of net interest income plus operating income.
(8) Non-performing loans consist of all non-accrual loans and all mortgage
loans delinquent 90 days or more as to their maturity date but not their
interest payments.
(9) Non-performing assets consist of all non-performing loans, real estate
owned and investments in real estate, net.
(10) For the periods indicated, AFC had no troubled debt restructurings.
(11) Data provided at or for the six months ended June 30, 1997 is shown on an
annualized basis.
(12) The SAIF recapitalization assessment was a one-time nonrecurring charge
taken as a result of the Deposit Insurance Funds Act of 1996 which was
enacted into law on September 30, 1996. Such disclosure is shown for
purposes of comparing information with prior periods. See "CERTAIN
REGULATORY CONSIDERATIONS -- Impact of Recent Legislation -- Deposit
Insurance - SAIF Recapitalization" in the Proxy Statement-Prospectus.
S-14
<PAGE> 17
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF GNYSB
Set forth below is selected consolidated financial and other data of GNYSB
and subsidiaries for the years 1992-1996, which is derived from, and qualified
in its entirety by, GNYSB's Annual Report on Form F-2 for the year ended
December 31, 1996, which is incorporated by reference in this Supplement and
should be read in conjunction therewith. In addition, set forth below is
selected unaudited financial and other data of GNYSB and subsidiaries at June
30, 1997 and for the six months ended June 30, 1996 and 1997. This information
is derived from, and qualified in its entirety by, GNYSB's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997, which is incorporated herein by
reference. In the opinion of management, all material adjustments necessary for
a fair presentation of the financial position and results of operations for the
interim periods presented have been made. All such adjustments were of a normal
recurring nature. The results of operations for the six months ended June 30,
1997 are not necessarily indicative of the results of operations for the full
year or any other interim period.
<TABLE>
<CAPTION>
AT DECEMBER 31,
AT JUNE 30, --------------------------------------------------------------
1997 1996 1995 1994 1993 1992
----------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL CONDITION DATA:
Total assets................................... $2,579,098 $2,541,888 $2,582,977 $2,572,631 $2,459,696 $2,702,849
Securities available-for-sale.................. 204,087 215,961 202,444 44,331 44,806 262,064
Securities held-to-maturity.................... 1,207,466 1,174,321 1,091,717 1,125,637 906,148 804,156
Loans receivable, net.......................... 963,709 951,340 1,071,175 1,191,323 1,285,061 1,427,428
Real estate held for development and acquired
through foreclosure, net..................... 32,480 33,644 36,076 67,693 83,052 89,321
Deposits....................................... 1,643,100 1,666,674 1,715,340 1,732,453 1,811,311 2,195,850
Borrowed funds................................. 689,504 640,384 641,242 622,356 438,024 333,763
Stockholders' equity........................... 216,758 209,648 195,937 182,484 175,506 142,107
Troubled debt restructurings................... 142,046 155,538 195,139 199,290 174,769 159,485
Nonperforming assets........................... 52,055 45,561 55,769 123,674 186,092 245,835
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
----------------- ----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- -------- -------- -------- -------- --------
(UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Interest income................................... $89,113 $88,854 $176,934 $182,351 $170,607 $168,466 $203,998
Interest expense.................................. 51,161 52,917 104,577 109,994 92,766 96,223 129,826
------- ------- -------- -------- -------- -------- --------
Net interest income............................... 37,952 35,937 72,357 72,357 77,841 72,243 74,172
Provision for loan losses......................... 500 1,000 1,500 29,400 7,990 26,444 26,289
------- ------- -------- -------- -------- -------- --------
Net interest income after provision for loan
losses.......................................... 37,452 34,937 70,857 42,957 69,851 45,799 47,883
Noninterest income................................ 3,871 4,578 10,797 10,419 5,799 15,912 32,613
Noninterest expenses:
General and administrative...................... 24,239 24,077 48,151 47,539 47,119 49,466 48,804
Real estate operations, net..................... 1,489 1,839 3,457 8,398 11,470 15,597 10,485
Provision for real estate losses................ 500 -- 500 17,700 7,110 22,056 6,711
------- ------- -------- -------- -------- -------- --------
Total noninterest expenses........................ 26,228 25,916 52,108 73,637 65,699 87,119 66,000
------- ------- -------- -------- -------- -------- --------
Income (loss) before income tax expense (benefit)
and cumulative effect of accounting change...... 15,095 13,599 29,546 (20,261) 9,951 (25,408) 14,496
Income tax expense (benefit)...................... 5,646 5,135 11,047 (39,500) (3,000) (3,750) 750
------- ------- -------- -------- -------- -------- --------
Income (loss) before cumulative effect of
accounting change............................... 9,449 8,464 18,499 19,239 12,951 (21,658) 13,746
Cumulative effect of accounting change(1)......... -- -- -- -- -- 7,000 --
------- ------- -------- -------- -------- -------- --------
Net income (loss)................................. $ 9,449 $ 8,464 $ 18,499 $ 19,239 $ 12,951 $(14,658) $ 13,746
======= ======= ======== ======== ======== ======== ========
Primary earnings (loss) per common share(2)....... $ 0.42 $ 0.36 $ 0.83 $ 0.85 $ 0.42 $ (1.25) $ 0.92
Fully diluted earnings (loss) per common
share(2)........................................ $ 0.39 $ 0.33 $ 0.77 $ 0.80 $ 0.41 $ (1.25) $ 0.79
</TABLE>
(See footnotes on following page.)
S-15
<PAGE> 18
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF GNYSB -- (CONTINUED)
<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED AT OR FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
1997 1996 1995 1994 1993 1992
------------- ------ ------ ------ ------ ------
(UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA:
Return on average assets(3).......................... 0.74% 0.72% 0.74% 0.51% (0.58)% 0.50%
Return on average stockholders' equity(3)............ 8.90 9.20 10.18 7.22 (9.31) 9.83
Average stockholders' equity to average assets....... 8.29 7.87 7.31 7.09 6.21 5.05
Stockholders' equity to total assets................. 8.40 8.25 7.59 7.09 7.14 5.26
Core deposits to total deposits(4)................... 43.05 43.30 44.44 50.88 56.92 56.07
Net interest spread(3)............................... 2.85 2.78 2.77 3.12 2.95 2.60
Net interest margin(3)............................... 3.12 3.02 2.98 3.28 3.04 2.77
General and administrative expenses to average
assets(3).......................................... 1.89 1.88 1.84 1.86 1.95 1.76
Efficiency ratio(5).................................. 58.00 58.40 57.50 56.10 60.90 58.00
Average interest-earning assets to average
interest-bearing liabilities....................... 1.06 1.05 1.05 1.04 1.02 1.03
Book value per common share.......................... $ 11.74 $11.31 $10.55 $ 9.71 $ 9.36 $10.65
Cash dividends declared per common share............. $ 0.10 $ 0.05 $ -- $ -- $ -- $ --
Number of full service banking offices............... 14 14 14 13 13 14
ASSET QUALITY RATIOS:
Nonperforming loans to total loans................... 3.97% 3.29% 3.59% 5.83% 8.54% 11.77%
Nonperforming loans to total assets.................. 1.51 1.25 1.52 2.75 4.56 6.40
Nonperforming assets to total assets................. 2.02 1.79 2.16 4.81 7.57 9.10
Allowance for loan losses to nonperforming loans..... 42.96 54.14 60.94 32.99 27.01 23.76
Allowance for loan losses to total loans............. 1.71 1.78 2.19 1.92 2.31 2.80
</TABLE>
- ---------------
(1) The cumulative effect of accounting change represents the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes."
(2) For 1993, both primary and fully diluted loss per common share, based on
loss before cumulative effect of accounting change, was $1.78.
(3) Data provided for the six months ended June 30, 1997 is shown on an
annualized basis.
(4) Core deposits are comprised of savings, money market and NOW accounts.
(5) The efficiency ratio is defined as general and administrative expenses as a
percentage of net interest and dividend income plus noninterest income
excluding net gain (loss) on sales of assets.
S-16
<PAGE> 19
UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following Unaudited Pro Forma Combined Condensed Consolidated Statement
of Financial Condition combines the historical Consolidated Statement of
Financial Condition of AFC and subsidiary and the adjusted historical
Consolidated Statement of Financial Condition of GNYSB and subsidiaries giving
effect to the consummation of the Merger on June 30, 1997, using the purchase
method of accounting and giving effect to the related pro forma adjustments
described in the accompanying Notes to the Unaudited Pro Forma Combined
Condensed Consolidated Financial Statements. The following Unaudited Pro Forma
Combined Condensed Consolidated Statements of Operations for the six months
ended June 30, 1997 combine the historical Consolidated Statements of Operations
of AFC and subsidiary and GNYSB and subsidiaries giving effect to the Merger as
if the Merger had become effective on January 1, 1996, using the purchase method
of accounting and giving effect to the related pro forma adjustments described
in the accompanying Notes to the Unaudited Pro Forma Combined Condensed
Consolidated Financial Statements. These adjustments are substantially the same
as the adjustments set forth in the Proxy Statement-Prospectus under the caption
"UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION."
Management believes that updating such adjustments to a more recent date would
not, in the aggregate, have a material effect on the pro forma information set
forth herein.
The unaudited pro forma combined condensed consolidated financial
statements included herein are presented for informational purposes only. This
information includes various estimates and may not necessarily be indicative of
the financial position or results of operations that would have occurred if the
Merger had been consummated on the date or at the beginning of the periods
indicated or which may be obtained in the future. The unaudited pro forma
combined condensed consolidated financial statements and accompanying notes
should be read in conjunction with and are qualified in their entirety by
reference to the historical financial statements and related notes thereto of
AFC and subsidiary and GNYSB and subsidiaries incorporated by reference in this
Supplement and the Proxy Statement-Prospectus and the other pro forma financial
information and notes thereto appearing elsewhere herein and therein.
S-17
<PAGE> 20
AFC AND SUBSIDIARY AND GNYSB AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
CONDITION
AS OF JUNE 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL ADJUSTED
AFC HISTORICAL PRO FORMA PRO FORMA
FINANCIAL GNYSB ADJUSTMENTS COMBINED
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Cash on Hand & In Banks..................... $ 17,026 $ 21,588 $ -- $ 38,614
Federal Funds Sold and Repurchase
Agreements................................ 162,586 12,900 -- 175,486
Securities Available-for-Sale............... 1,955,046 204,087 (107,609)(C) 2,051,524
FHLB Stock.................................. 35,800 24,250 -- 60,050
Securities Held-to-Maturity................. 2,167,309 1,207,466 (15,000)(D) 3,359,775
Loans and Investments In Real Estate
Held-for-Sale............................. -- -- 33,413(D(ii)) 33,413
Loans Receivable............................ 3,085,322 980,447 23,000(D) 4,051,659
-- -- (37,110)(D(ii)) --
Less allowance for Loan Losses............ (14,927) (36,238)(B) -- (51,165)
---------- ---------- --------- -----------
Total Loans Receivable, Net............... 3,070,395 944,209(B) (14,110) 4,000,494
Real Estate Owned and Investments in Real
Estate, net............................... 10,473 32,480 (21,803)(D(ii)) 21,150
Accrued Interest Receivable................. 47,113 14,964 -- 62,077
Premises and Equipment, Net................. 82,802 28,788 -- 111,590
Excess of cost over fair value of net assets
acquired and other intangibles............ 96,047 -- 158,044(E) 254,091
Other Assets................................ 19,898 77,817(B) 9,467(D) 107,182
---------- ---------- --------- -----------
Total Assets...................... $7,664,495 $2,568,549(B) $ 42,402 $10,275,446
========== ========== ========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:................................. $4,545,241 $1,643,100 $ 5,200(D) $ 6,193,541
Borrowed Funds............................ 2,446,017 689,504 (14,164)(D) 3,121,357
Accrued Expenses and Other Liabilities.... 73,470 29,736 -- 103,206
---------- ---------- --------- -----------
Total Liabilities................. 7,064,728 2,362,340 (8,964) 9,418,104
---------- ---------- --------- -----------
Stockholders' Equity:
Preferred Stock........................... -- 3,478 (3,478)(F) 2,000
2,000(C)
Common Stock.............................. 264 13,717 (13,717)(F) 264
Additional paid-in capital................ 337,391 167,437 (167,437)(F) 477,829
140,438(C)
Retained Earnings......................... 403,136 34,791(B) (34,791)(F) 403,136
Treasury Stock............................ (115,137) -- 115,137(C) --
Net Unrealized Gains on Securities, Net of
Taxes.................................. 1,827 250 (250)(F) 1,827
Less Common Stock acquired by the ESOP.... (23,001) (13,464) 13,464(F) (23,001)
Less Common Stock acquired by the RRPs.... (4,713) -- -- (4,713)
---------- ---------- --------- -----------
Total Stockholders' Equity........ 599,767 206,209(B) 51,366 857,342
---------- ---------- --------- -----------
Total Liabilities and
Stockholders' Equity............ $7,664,495 $2,568,549(B) $ 42,402 $10,275,446
========== ========== ========= ===========
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
S-18
<PAGE> 21
AFC AND SUBSIDIARY AND GNYSB AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
------------------------- PRO FORMA PRO FORMA
AFC GNYSB ADJUSTMENTS COMBINED
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Total interest income............................ $ 264,485 $ 89,113 $(2,891)(G) $ 350,707
Total interest expense........................... 165,584 51,161 (450)(G) 216,295
-------- ------- ------- --------
Net interest income.............................. 98,901 37,952 (2,441)(B) 134,412
Provision for loan losses........................ 1,914 500 -- 2,414
-------- ------- ------- --------
Net interest income after provision for loan
losses......................................... 96,987 37,452 (2,441) 131,998
Non-interest income.............................. 8,132 3,871 -- 12,003
Non-interest expense:
General and administrative..................... 47,885 24,239 -- 72,124
Real estate operations, net.................... 191 1,489 -- 1,680
Provision for real estate losses............... 291 500 -- 791
Amortization of excess of cost over fair value
of net assets acquired...................... 4,220 -- 5,268(H) 9,488
-------- ------- ------- --------
Total non-interest expense....................... 52,587 26,228 5,268 84,083
-------- ------- ------- --------
Income before income taxes....................... 52,532 15,095 (7,709) 59,918
Income taxes..................................... 21,891 5,646 (2,551) 24,986(I)
-------- ------- ------- --------
Net income....................................... $ 30,641 $ 9,449 $(5,158) $ 34,932
======== ======= ======= ========
Primary weighted average number of common stock
equivalents outstanding during the year........ 21,177,749 13,951,271 26,845,204(J)
Fully diluted weighted average number of common
stock equivalents outstanding during the
year........................................... 21,307,568 15,430,020 26,975,023(J)
Net income per common share:
Primary........................................ $ 1.45 $ 0.42 $ 1.19(K)
Fully diluted.................................. $ 1.44 $ 0.39 $ 1.18(K)
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
S-19
<PAGE> 22
AFC AND SUBSIDIARY AND GNYSB AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 1997
(A) Basis of Presentation
The Unaudited Pro Forma Combined Condensed Consolidated Statement of
Financial Condition of AFC and subsidiary and GNYSB and subsidiaries at June 30,
1997 has been prepared as if the Merger had been consummated on that date. The
Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations for
the six months ended June 30, 1997 was prepared as if the Merger had been
consummated on January 1, 1996. The unaudited pro forma combined condensed
consolidated financial statements are based on the historical financial
statements of AFC and GNYSB after giving effect to the Merger under the purchase
method of accounting and the assumptions and adjustments in the notes that
follow.
Assumptions relating to the pro forma adjustments set forth in the
unaudited pro forma combined condensed consolidated financial statements are
summarized as follows:
(i) Estimated fair values -- Estimated fair values for securities
held-to-maturity, loans, deposits and borrowings were obtained from GNYSB's
1996 Annual Report to Shareholders -- Footnote number 17 of "Notes to
Consolidated Financial Statements -- Fair Value of Financial Instruments."
The resulting net discount/premium on securities held-to-maturity and
loans, respectively, for purposes of these pro forma financial statements,
is being accreted/amortized to interest income on a straight-line basis
over four and ten years, respectively. The actual discount/premium will be
accreted/amortized to interest income to produce a constant yield to
maturity. The resulting net premium and discount on deposits and
borrowings, respectively, is being amortized/accreted into interest expense
on a straight-line basis over their remaining estimated lives of five
years.
(ii) Income taxes -- a net deferred tax asset was recorded equal to
the deferred tax consequences associated with the differences between the
tax basis and book basis of the assets acquired and liabilities assumed,
using a statutory rate of 43.03%.
(B) The Merger Agreement requires GNYSB at the written request of AFC to
modify and change certain of its policies and practices, including loan policies
and practices, before the Effective Time so as to be consistent on a mutually
satisfactory basis with those of Astoria Federal subject to compliance with
generally accepted accounting principles and all applicable laws and
regulations. GNYSB is not obligated to take any such action until after the date
on which all required regulatory approvals and stockholder approvals are
received and after receipt of written confirmation from AFC that it is not aware
of any fact or circumstance that would prevent completion of the Merger. AFC has
advised GNYSB that it expects to make such a request and that it currently
expects that compliance with such requirement will result in an additional
provision for loan losses of $19,500,000. A corresponding deferred tax asset of
$8,951,000 was recorded in other assets using GNYSB's historical statutory rate
of 45.9%. The provision is not reflected in the Unaudited Pro Forma Combined
Condensed Consolidated Statements of Operations as the statements are prepared
as if the Merger had occurred on January 1, 1996. The provision is a
non-recurring charge which would have been recorded by GNYSB prior to the
Merger. The following table reconciles the adjustments to the historical GNYSB
and subsidiaries Consolidated Statement of Condition of June 30, 1997 with the
presentation of the Unaudited Pro Forma Combined Condensed Consolidated
Statement of Financial Condition as of June 30, 1997.
S-20
<PAGE> 23
AFC AND SUBSIDIARY AND GNYSB AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
ADJUSTED
HISTORICAL HISTORICAL
GNYSB ADJUSTMENT GNYSB
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Allowance for loan losses.................. $ (16,738) $(19,500) $ (36,238)
======== ======== =======
Other assets (including deferred tax assets
of $40,365,000 prior to adjustment and
$49,316,000 after adjustment)............ $ 68,866 $ 8,951 $ 77,817
======== ======== =======
Retained Earnings.......................... $ 45,340 $(10,549) $ 34,791
======== ======== =======
</TABLE>
(C) Under the terms of the Merger Agreement, holders of GNYSB Common Stock
will receive either 0.50 shares of AFC Common Stock or $19.00 in cash for each
share, subject to 75% of the GNYSB Common Stock being converted into the right
to receive AFC Common Stock and 25% being converted into the right to receive
cash. The total cost of the transaction is summarized as follows:
<TABLE>
<CAPTION>
25% CASH 75% STOCK TOTAL
-------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
GNYSB's total common shares outstanding(i).......... $ 65,156 $ 190,838(vii) $255,994
Cash-out of incremental stock options, net of
tax(ii)........................................... 6,826 -- 6,826
Conversion of GNYSB's Series A Preferred Stock to
GNYSB Common Stock(iii)........................... 6,632 19,425 26,057
Issuance of Preferred Stock Series B(iv)............ -- 47,312 47,312
Estimated transaction costs......................... 28,995(v) -- 28,995
-------- -------- --------
Totals.................................... $107,609(vi) $ 257,575 $365,184
======== ======== ========
</TABLE>
- ---------------
(i) Based on 13,716,985 shares of GNYSB Common Stock outstanding as of June
30, 1997, of which 25% represents 3,429,246 shares and 75% represents
10,287,739 shares.
(ii) Assumes that none of the holders of GNYSB's stock options elect to
exchange such options for AFC's options. As of June 30, 1997, there were
1,083,410 outstanding options to purchase GNYSB Common Stock with a
weighted average exercise price of $7.94.
(iii) Assumes the conversion of shares of GNYSB Series A Preferred Stock into
shares of GNYSB Common Stock at or prior to the Effective Time at an
exchange ratio of .9448 shares of GNYSB Common Stock for each share of
GNYSB Series A Preferred Stock. As of June 30, 1997, there were 1,477,802
shares of GNYSB Series A Preferred Stock outstanding. See "THE
MERGER -- Merger Consideration and Election, Allocation and Proration
Procedures -- CNYSB Series A Preferred Stock."
(iv) Estimated fair value of AFC Series B Preferred Stock to be issued pursuant
to the Merger Agreement.
(v) Estimated transaction costs of $28,995,000 consist of the following:
<TABLE>
<S> <C>
Merger-related compensation and severance....... $19,320,000
Professional services........................... 5,600,000
Systems and facilities conversion and other
expenses...................................... 4,075,000
</TABLE>
(vi) It is assumed that the cash portion of the transaction will be financed
through the sale of securities from AFC's available-for-sale securities
portfolio. As of June 30, 1997, the weighted average yield of AFC's
available-for-sale securities portfolio was 6.72%.
(vii) Assumes reissuance of AFC's Common Stock through its treasury account
with an average cost per share of $21.39. For accounting purposes, the
fair market value of AFC Common Stock was $37.10 per share, for
determination of total stock consideration.
S-21
<PAGE> 24
AFC AND SUBSIDIARY AND GNYSB AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS -- (CONTINUED)
(D) Purchase Accounting adjustments are estimated as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C> <C>
GNYSB's net assets -- historical at June 30, 1997
(i).............................................. $206,209
Adjustments to GNYSB's statement conditions:
Termination of GNYSB's ESOP (payoff of loan
payable)...................................... 13,464
Fair value adjustments: (ii)
Securities held-to-maturity...................... $(15,000)
Loans and investments in real estate
held-for-sale................................. (25,500)(iii)
Loans receivable................................. 23,000
Deposits......................................... (5,200)
Borrowings....................................... 700
--------
Subtotal -- net fair value adjustments............. (22,000)
Tax effects of fair value adjustments at 43.03%.... 9,467
--------
Total net adjustments to net assets acquired....... 931
--------
Adjusted net assets acquired....................... $207,140
========
</TABLE>
- ---------------
(i) After adjustments as described above under Note B.
(ii) Fair value adjustments in accordance with purchase accounting under
generally accepted accounting principles.
(iii) Represents loans and investments in real estate, held-for-investment by
GNYSB, but which AFC will consider selling subsequent to the consummation
of the Merger. Based on the intent to accelerate the disposition of such
assets, an estimated purchased accounting adjustment of $25,500,000 was
made.
(E) The excess of cost over the fair value of net assets acquired is set
forth below:
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
Total cost:
Cash portion................................................... $107,609
Stock portion.................................................. 257,575
--------
365,184
Net assets acquired............................................ 207,140
--------
Total excess of cost over the fair value of net assets
acquired..................................................... $158,044
========
</TABLE>
(F) Purchase accounting adjustments to eliminate GNYSB's stockholders'
equity accounts.
S-22
<PAGE> 25
AFC AND SUBSIDIARY AND GNYSB AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS -- (CONTINUED)
(G) Pro forma adjustments to interest income and interest expense were
calculated as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
FOR THE YEAR ENDED ENDED JUNE 30,
DECEMBER 31, 1996 1997
------------------ ------------------
(IN THOUSANDS)
<S> <C> <C>
Reduction in interest income on securities
sold to fund acquisition ($107,609 at
6.72%).................................. $ (7,248) $ (3,616)
Accretion of discount on securities (4
years).................................. 3,750 1,875
Amortization of premium on loans (10
years).................................. (2,300) (1,150)
------- -------
Total net adjustments -- interest
income............................... $ (5,798) $ (2,891)
======= =======
Amortization of premium on deposits (5
years).................................. $ 1,040 $ 520
Accretion of discount on borrowings (5
years).................................. (140) (70)
------- -------
Total net adjustments -- interest
expense.............................. $ 900 $ 450
======= =======
</TABLE>
(H) The amortization of the excess of cost over the fair value of net
assets acquired is assumed straight-line over a period of fifteen years.
(I) Income tax expense was calculated using AFC's actual six months ended
June 30, 1997 and year ended December 31, 1996 effective rates of 41.7%, and
45.4%, respectively.
(J) Primary and fully diluted weighted average number of common and common
stock equivalents utilized for the calculation of earnings per share for the
periods presented were calculated using AFC's historical weighted average common
and common stock equivalents plus 5,667,455 shares issued to GNYSB stockholders
under the terms of the Merger Agreement.
(K) Net income per common share was adjusted for dividends on preferred
shares of $6,000,000 annually and $3,000,000 for the six months ended June 30,
1997.
(L) The following table summarizes the estimated impact of the amortization
and accretion of the purchase accounting adjustments made in connection with the
Merger on AFC's results of operations for the next five years:
<TABLE>
<CAPTION>
EXCESS OF COST
PROJECTED FUTURE OVER FAIR NET NET DECREASE
AMOUNTS FOR THE YEARS VALUE OF (ACCRETION) IN INCOME
ENDED DECEMBER 31 NET ASSETS ACQUIRED AMORTIZATION BEFORE TAXES
---------------------------------- ------------------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
1997.............................. $ 10,536 $ (2,350) $ 8,186
1998.............................. 10,536 (2,350) 8,186
1999.............................. 10,536 (2,350) 8,186
2000.............................. 10,536 (2,350) 8,186
2001.............................. 10,536 1,400 11,936
2002 and thereafter............... 105,364 11,500 116,864
-------- ------- --------
$ 158,044 $ 3,500 $161,544
======== ======= ========
</TABLE>
S-23
<PAGE> 26
INTRODUCTION
This Supplement contains important information for the holders of record of
GNYSB Stock Certificates as of September 30, 1997 concerning the Elections to be
made in connection with the Merger.
PLEASE READ THIS SUPPLEMENT AND THE PROXY STATEMENT-PROSPECTUS CAREFULLY.
THE FAILURE OF A HOLDER OF GNYSB STOCK CERTIFICATES TO PROPERLY COMPLETE, SIGN
AND DELIVER THE ACCOMPANYING ELECTION FORM, TOGETHER WITH THE GNYSB STOCK
CERTIFICATES REPRESENTING THE SHARES OF GNYSB COMMON STOCK TO WHICH THAT
ELECTION FORM RELATES, TO ONE OF THE PROPER LOCATIONS SPECIFIED BELOW, SO THAT
THE ELECTION FORM AND ACCOMPANYING DOCUMENTS ARE RECEIVED BY THE EXCHANGE AGENT
BY 5:00 P.M., EASTERN TIME, ON OCTOBER 17, 1997, THE ELECTION DEADLINE, OR TO
PROPERLY COMPLETE, SIGN AND DELIVER THE ACCOMPANYING NOTICE OF GUARANTEED
DELIVERY TO THE EXCHANGE AGENT BY THE ELECTION DEADLINE, AND TO COMPLY WITH THE
PROCEDURES DESCRIBED IN THIS SUPPLEMENT AND THE INSTRUCTIONS TO THE ELECTION
FORM, WILL CAUSE SUCH STOCKHOLDER TO BE DEEMED TO HAVE MADE A NO-ELECTION, WHICH
WILL RESULT IN SUCH STOCKHOLDER RECEIVING EITHER CASH, AFC COMMON STOCK, OR A
COMBINATION THEREOF, DEPENDING UPON THE ELECTIONS MADE BY OTHER HOLDERS OF GNYSB
STOCK CERTIFICATES. IF A FORMER GNYSB STOCKHOLDER IS DEEMED TO HAVE MADE A
NO-ELECTION AND IF EITHER (I) THE NUMBER OF SHARES OF GNYSB COMMON STOCK WITH
RESPECT TO WHICH CASH ELECTIONS ARE MADE EXCEEDS THE NUMBER OF SHARES WHICH CAN
BE CONVERTED INTO CASH OR (II) THE NUMBER OF SHARES OF GNYSB COMMON STOCK WITH
RESPECT TO WHICH STOCK ELECTIONS ARE MADE EXCEEDS THE NUMBER OF SHARES WHICH CAN
BE CONVERTED INTO SHARES OF AFC COMMON STOCK, SUCH STOCKHOLDER WILL RECEIVE THE
FORM OF CONSIDERATION THAT WAS NOT OVERSUBSCRIBED.
IMPORTANT: To make a valid Election, record holders of GNYSB Common Stock
as of September 30, 1997 must complete, sign and return the accompanying
Election Form and the certificates with respect to all of the shares of GNYSB
Common Stock to which the Election Form relates, in accordance with the
Instructions to the Election Form or Notice of Guaranteed Delivery. A properly
completed and signed Election Form (with signature guarantees, if required by
the Election Form), together with certificate(s) representing all of the GNYSB
Common Stock to which the Election Form relates (see Instructions to the
accompanying Election Form), or a Notice of Guaranteed Delivery must be received
by the Exchange Agent at one of the proper locations specified in the Election
Form by the Election Deadline (5:00 p.m., Eastern Time, on October 17, 1997).
S-24
<PAGE> 27
ALL ELECTION FORMS AND NOTICE OF GUARANTEED DELIVERY MUST BE ACTUALLY
RECEIVED BY THE EXCHANGE AGENT AT ONE OF THE PROPER LOCATIONS LISTED BELOW BY
THE ELECTION DEADLINE. THE EXCHANGE AGENT AND THE PROPER LOCATIONS ARE:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT DELIVERY:
P.O. Box 3305 120 Broadway, 13th Floor 85 Challenger Road
South Hackensack, New Jersey New York, New York 10271 Mail Drop-Reorg.
07606 Attention: Reorganization Ridgefield Park, New Jersey
Attention: Reorganization Department 07660
Department Attention: Reorganization
Department
</TABLE>
It is recommended that certificates be sent via certified mail, return
receipt requested, and appropriately insured.
If you have any questions, you should contact the Information Agent,
ChaseMellon Shareholder Services, L.L.C., toll-free at (888) 213-0887.
STOCK CERTIFICATES REPRESENTING THE SHARES OF AFC COMMON STOCK ISSUED IN
THE MERGER, CHECKS IN PAYMENT OF FRACTIONAL SHARES, AND CHECKS IN PAYMENT OF
CASH PAID IN THE MERGER ARE EXPECTED TO BE DISTRIBUTED WITHIN TEN (10) BUSINESS
DAYS AFTER OCTOBER 17, 1997, THE ELECTION DEADLINE.
S-25
<PAGE> 28
SUMMARY OF THE MERGER
CONSUMMATION
The Merger of GNYSB with and into Astoria Federal was consummated following
the close of business on September 30, 1997 pursuant to the terms contained in
the Merger Agreement and as described in the Proxy Statement-Prospectus. See
"THE MERGER" in the Proxy Statement-Prospectus.
CONSIDERATION FOR GNYSB SHARES
The Merger Agreement provides that the aggregate Merger Consideration
payable to holders of GNYSB Common Stock will consist of 0.5 of a share of AFC
Common Stock (together with the related AFC Right for each full share of AFC
Common Stock issued pursuant to the AFC Rights Agreement between AFC and
ChaseMellon Shareholder Services, L.L.C. dated as of July 17, 1996) per share of
GNYSB Common Stock for 75% of the shares of GNYSB Common Stock (the "Stock
Consideration") and $19.00 in cash per share of GNYSB Common Stock for the
remaining 25% of the shares of GNYSB Common Stock (the "Cash Consideration").
Accordingly, each share of GNYSB Common Stock has been converted in the Merger
into the right to receive: (i) 0.5 of a share of AFC Common Stock, (ii) $19.00
in cash or (iii) a combination of cash and a fraction of a share of AFC Common
Stock determined as provided below.
The actual consideration ultimately received by a stockholder for shares of
GNYSB Common Stock will depend upon certain election, allocation and proration
procedures and the Election of other stockholders as described herein, and no
guarantee can be given that the Election of any stockholder will be honored. See
"ELECTION, ALLOCATION AND PRORATION PROCEDURES." Holders of shares of GNYSB
Series B Preferred Stock will receive an equal amount of shares of AFC Series B
Preferred Stock, a newly-created series of preferred stock of AFC with
substantially identical and no less favorable terms.
ELECTION, ALLOCATION AND PRORATION PROCEDURES
The following is a summary of information concerning the election,
allocation and proration procedures that are applicable to the Merger. The
procedures for completing the enclosed Election Form are described in detail in
such Election Form and the accompanying instructions, which stockholders are
urged to read carefully. The terms of such election, allocation and proration
and the procedures therefor are set forth in the Merger Agreement and are also
described in the Proxy Statement-Prospectus under the heading "THE MERGER."
DESCRIPTION OF ELECTIONS
Each record holder of GNYSB Common Stock is being asked to make an Election
to receive for its shares of GNYSB Common Stock:
(i) 0.5 of a share of AFC Common Stock for each share of GNYSB Common
Stock (a "Stock Election");
(ii) $19.00 in cash without interest for each share of GNYSB Common Stock
(a "Cash Election");
(iii) a Stock Election with respect to some of such stockholder's shares of
GNYSB Common Stock and a Cash Election with respect to the remaining
shares of GNYSB Common Stock held by such holder; or
(iv) whatever is left after the Election of the other holders of GNYSB
Common Stock and, to the extent necessary, the application of certain
random selection procedures (a "No-Election").
S-26
<PAGE> 29
Notwithstanding the foregoing, in order to make a Stock Election, the
number of shares of GNYSB Common Stock a holder must elect to convert to AFC
Common Stock must equal or exceed 100 shares. Therefore, any holder of GNYSB
Common Stock who owns less than 100 shares must elect a Cash Election or
No-Election or be treated as having made a No-Election. A failure to properly
make an Election as described below will be treated as a No-Election.
The aggregate consideration payable to stockholders of GNYSB Common Stock
will consist of 0.5 of a share of AFC Common Stock per share of GNYSB Common
Stock for 75% of the shares of GNYSB Common Stock and $19.00 in cash per share
of GNYSB Common Stock for the remaining 25% of the shares of GNYSB Common Stock.
Accordingly, each share of GNYSB Common Stock has been converted in the Merger
into the right to receive: (i) 0.5 of a share of AFC Common Stock, (ii) $19.00
in cash or (iii) a combination of cash and a fraction of a share of AFC Common
Stock. The actual consideration ultimately received by a stockholder for shares
of GNYSB Common Stock will depend upon certain election, allocation and
proration procedures and the Election of other stockholders as described herein
and in the accompanying materials, therefore no guarantee can be given that any
stockholder's Election will be honored.
ELECTION PROCEDURES
All Elections will be required to be made on the accompanying Election
Form. To make an effective Election with respect to shares of GNYSB Common
Stock, the holder thereof must, in accordance with the Election Form, (i)
complete properly, sign and return the Election Form to the Exchange Agent, (ii)
either (a) deliver therewith his or her GNYSB Stock Certificates with respect to
such shares or (b) complete the procedure for delivery by book-entry transfer of
such shares on a timely basis, and (iii) deliver therewith any other required
documents, so that the Election Form and related documents are received by the
Exchange Agent prior to 5:00 p.m., Eastern Time, on October 17, 1997. If a GNYSB
Stock Certificate has been lost, stolen or destroyed, the holder is requested to
immediately contact the Exchange Agent for instructions as to how to submit a
valid Election. See "-- Lost, Stolen or Destroyed Certificates."
A holder of shares of GNYSB Common Stock having a preference as to the form
of consideration to be received for his or her shares of GNYSB Common Stock
should make an Election, because shares as to which an Election has been made
will be given priority in allocating such consideration over shares as to which
an Election is not received. Neither AFC nor the AFC Board of Directors makes
any recommendation as to whether stockholders should make a Stock Election, a
Cash Election, a Split Election or a No-Election. Each holder of GNYSB Stock
Certificates must make his or her own decision with respect to such Election.
Each holder of record is entitled to make an Election and submit an
Election Form covering all shares of GNYSB Common Stock actually held of record
by such holder. Nominee record holders, which includes any nominee, any trustee
or any other person that holds shares of GNYSB Common Stock in any capacity
whatsoever on behalf of another person or entity, are entitled to make a
separate Election in each capacity, as well as an Election on behalf of each
beneficial owner of shares of GNYSB Common Stock held through such nominee
record holder through proper instructions and documentation. Beneficial owners
who are not record holders are not entitled to submit Election Form but make
their Election through their record owner.
A holder of shares of GNYSB Common Stock may cause a written guarantee
substantially in the form enclosed herewith (the "Notice of Guaranteed
Delivery") by an "Eligible Institution", (as defined below) to be received by
the Exchange Agent at or prior to the Election Deadline. Such Notice of
Guaranteed Delivery must state the holder's name, the number of GNYSB shares
represented by the holder's GNYSB Stock Certificate and the Election with
respect to such shares, and the Eligible Institution must guarantee the delivery
to the Exchange Agent of the holder's properly completed and executed Election
Form and Letter of Transmittal and the holder's GNYSB Stock Certificate(s)
within three (3) Trading Days following the date of the Notice of Guaranteed
Delivery. If this procedure is followed, the holder's Election Form and Letter
of Transmittal and the holder's GNYSB Stock Certificate(s) must be received by
the Exchange Agent within three (3) Trading Days following the date of the
Notice of Guaranteed Delivery relating thereto. Additional copies of the Notice
of Guaranteed Delivery may be obtained upon request from the Information Agent.
Eligible Institutions include: (i) a bank (as defined in Section 3(a) of the
Federal Deposit Insurance Act);
S-27
<PAGE> 30
(ii) a broker, dealer, municipal securities dealer, municipal securities broker,
governmental securities dealer or government securities broker, as those terms
are defined under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); (iii) a credit union (as defined in Section 19(b)(1)(A) of the Federal
Reserve Act); (iv) a national securities exchange, registered securities
association or clearing agency, as those terms are used under the Exchange Act;
or (v) a savings association (as defined in Section 3(b) of the Federal Deposit
Insurance Act).
Neither a Cash Election nor a Stock Election will be effective if the
Election Form or Notice of Guaranteed Delivery is not properly completed and
signed (with signature guarantees, if required by the Election Form) by each
holder of record of GNYSB Common Stock as of September 30, 1997, and actually
received by the Exchange Agent at one of the proper locations specified in the
Election Form or Notice of Guaranteed Delivery by the Election Deadline. For a
Cash Election or a Stock Election to be effective, a properly completed and
signed Election Form or Notice of Guaranteed Delivery must be received on time
and be accompanied by the certificate or certificates representing all of the
GNYSB Common Stock held of record by the holder of record submitting the
Election Form. The Election Deadline is 5:00 p.m., Eastern Time, on October 17,
1997. Stockholders who indicate No-Election on the Election Form or Notice of
Guaranteed Delivery are also asked to send in the certificate or certificates
representing their GNYSB Common Stock when they return their completed Election
Form. Any Cash Election, Stock Election or No-Election may be revoked, but only
by written notice actually received by the Exchange Agent at one of the proper
locations specified in the Election Form by October 17, 1997.
AFC and the Exchange Agent shall be entitled to rely upon GNYSB's stock
transfer books to establish the identity of those persons entitled to receive
the Merger Consideration or shares of AFC Series B Preferred Stock, which books
shall be conclusive with respect thereto. In the event of a dispute with respect
to ownership of stock represented by any GNYSB stock certificate, AFC and the
Exchange Agent shall be entitled to deposit any consideration represented
thereby in escrow with an independent third party and thereafter be relieved
with respect to any claims thereto.
AFC has the discretion, which it may delegate in whole or in part to the
Exchange Agent, to determine whether Election Forms have been properly
completed, signed and submitted or revoked and to disregard immaterial defects
in Election Forms and revocations. The decisions of AFC or of the Exchange Agent
with respect to the effectiveness of any Election Form or revocation will be
conclusive and binding. Allocations will be made by the Exchange Agent and will
be conclusive and binding on holders of GNYSB Common Stock.
IF A STOCKHOLDER DOES NOT MAKE AN EFFECTIVE CASH ELECTION, STOCK ELECTION,
SPLIT ELECTION OR NO-ELECTION (WHICH WOULD RESULT, OR EXAMPLE, FROM THE FAILURE
TO SEND TO THE EXCHANGE AGENT GNYSB STOCK CERTIFICATES WITH A PROPERLY COMPLETED
AND SIGNED ELECTION FORM OR FROM THE EXCHANGE AGENT NOT ACTUALLY RECEIVING THE
PROPER DOCUMENTS AT ONE OF THE PROPER LOCATIONS SPECIFIED IN THE ELECTION FORM
BY THE ELECTION DEADLINE), THE STOCKHOLDER WILL BE DEEMED NOT TO HAVE MADE AN
ELECTION AND WILL BE DEEMED TO HAVE MADE A NO-ELECTION WITH RESPECT TO RECEIVING
EITHER AFC COMMON STOCK OR CASH FOR ALL OF SUCH STOCKHOLDER'S SHARES. NEITHER
AFC NOR THE EXCHANGE AGENT WILL BE UNDER ANY OBLIGATION TO NOTIFY ANY PERSON OF
ANY DEFECT IN AN ELECTION FORM OR REVOCATION SUBMITTED TO THE EXCHANGE AGENT.
THE MERGER QUALIFIES AS A REORGANIZATION WITHIN THE MEANING OF SECTION
368(A) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND,
ACCORDINGLY, FOR FEDERAL INCOME TAX PURPOSES, NO GAIN OR LOSS WILL BE RECOGNIZED
BY AFC, ASTORIA FEDERAL OR GNYSB AS A RESULT OF THE MERGER AND, EXCEPT WHERE ANY
CASH CONSIDERATION IS RECEIVED OR TO THE EXTENT OF ANY CASH RECEIVED IN LIEU OF
A FRACTIONAL SHARE INTEREST IN GNYSB COMMON STOCK, NO GAIN OR LOSS WILL BE
RECOGNIZED BY HOLDERS OF GNYSB COMMON STOCK OR GNYSB SERIES B PREFERRED STOCK AS
A RESULT OF THE MERGER. SEE "MATERIAL FEDERAL INCOME TAX CONSEQUENCES."
NO OVERSUBSCRIPTION
In the event that the number of shares as to which a Cash Election has been
made does not exceed 25% of the shares of GNYSB Common Stock outstanding at the
Effective Time and the number of shares as to
S-28
<PAGE> 31
which a Stock Election has been made does not exceed 75% of the shares of GNYSB
Common Stock outstanding at the Effective Time, then:
(i) all shares as to which a Cash Election has been made shall be
converted into the right to receive $19.00 in cash without interest
per share of GNYSB Common Stock;
(ii) all shares as to which a Stock Election has been made shall be
converted into the right to receive 0.5 of a share of AFC Common
Stock per share of GNYSB Common Stock; and
(iii) shares as to which No-Election has been made shall be converted into
either the right to receive 0.5 of a share of AFC Common Stock per
share of GNYSB Common Stock or $19.00 per share of GNYSB Common Stock
as determined by random selection so that 25% of the shares of GNYSB
Common Stock are converted into the right to receive cash and 75% of
the shares of GNYSB Common Stock are converted into the right to
receive AFC Common Stock.
The random selection process to be used by the Exchange Agent will consist
of drawing by lot or such other process as the Exchange Agent deems equitable
and necessary to effect the allocations described above.
OVERSUBSCRIPTION FOR CASH
If the aggregate number of shares as to which a Cash Election has been made
exceeds 25% of the shares of GNYSB Common Stock outstanding at the Effective
Time, then:
(i) each share as to which a Stock Election has been made and each share
as to which No-Election has been made shall be converted into the
right to receive 0.5 of a share of AFC Common Stock; and
(ii) each share as to which a Cash Election has been made shall be
converted into the right to receive a combination of cash and AFC
Common Stock. The amount in cash will be equal to the product, rounded
to the nearest $0.01, of (x) $19.00 and (y) a fraction (the "Cash
Fraction"), the numerator of which shall be a number equal to 25% of
the shares of GNYSB Common Stock outstanding at the Effective Time and
the denominator of which shall be the total number of shares as to
which a Cash Election has been made. The number of shares of AFC
Common Stock will be equal to the product, rounded to four decimal
places, of (x) 0.50 and (y) a number equal to one minus the Cash
Fraction. For example, if the aggregate number of shares as to which a
Cash Election has been made equals 50%, 75% or 100% of the shares of
GNYSB Common Stock, the combination would consist of $9.50 in cash and
0.25 of a share of AFC Common Stock, $6.33 in cash and 0.3333 of a
share of AFC Common Stock and $4.75 in cash and 0.375 of a share of
AFC Common Stock, respectively.
OVERSUBSCRIPTION FOR AFC COMMON STOCK
If the aggregate number of shares as to which a Stock Election has been
made exceeds 75% of the shares of GNYSB Common Stock outstanding at the
Effective Time, then:
(i) each share as to which a Cash Election has been made and each share as
to which No-Election has been made shall be converted into the right
to receive $19.00 in cash without interest; and
(ii) each share as to which a Stock Election has been made shall be
converted into the right to receive a combination of cash and AFC
Common Stock. The number of shares of AFC Common Stock will be equal
to the product, rounded to four decimal places, of (x) 0.50 and (y) a
fraction (the "Stock Fraction"), the numerator of which shall be a
number equal to 75% of the shares of GNYSB Common Stock outstanding at
the Effective Time and the denominator of which shall be the total
number of shares as to which a Stock Election has been made. The
amount of cash will be equal to the product, rounded to the nearest
$0.01, of (x) $19.00 and (y) a number equal to one minus the Stock
Fraction. For example, if the aggregate number of shares as to which a
Stock Election has been made equals 90% or 100% of the shares of GNYSB
Common Stock, the combination would consist of 0.4167 of a share of
AFC Common Stock and $3.17 in cash and 0.375 of a share of AFC Common
Stock and $4.75 in cash, respectively.
S-29
<PAGE> 32
NO GUARANTEE OF CHOSEN CONSIDERATION OR EQUIVALENT VALUE
Because the Merger Agreement provides that the aggregate consideration
payable to holders of GNYSB Common Stock in the Merger will be fixed such that
it consists of 0.5 of a share of AFC Common Stock per share of GNYSB Common
Stock for 75% of the shares of GNYSB Common Stock and $19.00 in cash per share
of GNYSB Common Stock for the remaining 25% of the shares of GNYSB Common Stock,
no guarantee can be given that the Election of any given stockholder will be
honored. Rather, the Election by each stockholder will be subject to the
election, allocation and proration procedures described herein. Thus
stockholders may not receive their requested form of consideration or
combination thereof. Because the market price of AFC Common Stock may fluctuate
and it could be greater than or less than $38.00 per share (the price at which
the market value of 0.5 of a share of AFC Common Stock would equal the cash
consideration of $19.00 per share), the market value of 0.5 of a share of AFC
Common Stock received per share could be less than or greater than the cash
consideration per share of $19.00.
FRACTIONAL SHARES
Stock certificates will not be delivered for fractional shares resulting
from the exchange of GNYSB Common Stock for AFC Common Stock. Instead, each
holder of GNYSB Common Stock who would otherwise be entitled to a fractional
share will receive in lieu thereof a check in an amount equal to such fractional
share multiplied by $48.26, the average of the mean between the closing high bid
and low asked prices of a share of AFC Common Stock, as reported on the Nasdaq
National Market, for the 30 consecutive trading days immediately preceding
September 27, 1997 (the day on which all applicable waiting periods expired
following the date on which the last approval necessary to consummate the Merger
was received), rounded to the nearest cent.
MISCELLANEOUS
Upon consummation of the Merger, any shares of GNYSB Common Stock that were
owned by GNYSB as treasury stock or that were held directly or indirectly by AFC
other than in a fiduciary capacity or in satisfaction of a debt previously
contracted were canceled and retired. No payment will be made with respect
thereto and such shares will not be considered for purposes of the foregoing.
GNYSB SERIES A PREFERRED STOCK
Prior to the consummation of the Merger, the GNYSB ESOP Trustee converted
the GNYSB Series A Preferred Stock into 1,396,227 shares of GNYSB Common Stock.
The ESOP Trustee will be subject to the election, allocation and proration
procedures with respect to the GNYSB Common Stock held by the GNYSB ESOP at the
Effective Time.
GNYSB SERIES B PREFERRED STOCK
At the Effective Time, the outstanding shares of GNYSB Series B Preferred
Stock were converted into shares of AFC Series B Preferred Stock, a
newly-created series of preferred stock of AFC with substantially identical and
no less favorable terms.
DELIVERY OF AFC COMMON STOCK AND CASH
At the Effective Time, holders of GNYSB Stock Certificates ceased to have
any rights as stockholders of GNYSB and now only have the right to receive the
AFC Common Stock and/or cash into which their GNYSB Common Stock is to be
converted. AFC will mail a Letter of Transmittal (for use in submitting to the
Exchange Agent GNYSB Stock Certificates) as promptly as practicable after the
Election Deadline to all GNYSB stockholders of record on September 30, 1997 who
do not submit such certificates to the Exchange Agent in connection with the
Election Form. No further action will be required of those record holders of
GNYSB Common Stock who submit such certificates to the Exchange Agent with their
Election Form.
S-30
<PAGE> 33
After the completion of the foregoing election, allocation and proration
procedures, each holder of a GNYSB Stock Certificate who surrenders to the
Exchange Agent such certificate or certificates, will be entitled, upon
acceptance of such certificates by the Exchange Agent, to (i) a certificate or
certificates representing the number of full shares of AFC Common Stock and/or
the amount of cash into which the aggregate number of shares of GNYSB Common
Stock previously represented by such surrendered certificate or certificates has
been converted pursuant to the Merger Agreement and (ii) any other distribution
theretofore paid with respect to the AFC Common Stock issuable to such holder in
the Merger, in each case without interest. The Exchange Agent will accept such
certificates upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. It is expected that within ten (10) business
days after the Election Deadline, the Exchange Agent will distribute AFC Common
Stock and cash with respect to shares of GNYSB Common Stock covered by effective
Election Forms.
No holder of GNYSB Stock Certificates will be entitled to receive either
cash, AFC Common Stock or a combination thereof until he or she surrenders such
certificates to the Exchange Agent, and no interest will accrue in respect
thereof. Each share of AFC Common Stock for which shares of GNYSB Common Stock
are exchanged in the Merger will be deemed to have been issued on September 30,
1997. Accordingly, former GNYSB stockholders who receive AFC Common Stock in the
Merger will be entitled to receive any dividends or other distributions, without
interest and less any applicable withholding taxes imposed thereon, that may be
payable to holders of record of AFC Common Stock after September 30, 1997.
However, no dividends or other distributions will actually be paid on such AFC
Common Stock to any holder until the certificate or certificates formerly
representing the GNYSB Common Stock have been surrendered, at which time such
dividends or other distributions shall be remitted to such person without
interest. If a GNYSB Stock Certificate has been lost, stolen or destroyed, the
holder is requested to immediately contact the Exchange Agent for instructions
as to how to submit a valid Election. See "-- Lost, Stolen or Destroyed
Certificates."
Any portion of the aggregate Cash Consideration or the proceeds of any
investments thereof that remains unclaimed by the former stockholders of GNYSB
for six (6) months after the Effective Time shall be repaid by the Exchange
Agent to AFC upon the written request of AFC. After such request is made, any
such stockholder who has not theretofore complied with the election, allocation
and proration procedures described herein shall look only to AFC for payment and
issuance of their Merger Consideration deliverable in respect of each share of
GNYSB Common Stock such stockholder holds as determined pursuant to the Merger
Agreement without any interest thereon. If outstanding GNYSB Stock Certificates
are not surrendered or the payment for them is not claimed prior to the date on
which such payments would otherwise escheat to or become the property of any
governmental unit or agency, the unclaimed items shall, to the extent permitted
by abandoned property and any other applicable law, become the property of AFC
(and to the extent not in its possession shall be paid over to it), free and
clear of all claims or interest of any person previously entitled to such
claims. Notwithstanding the foregoing, none of AFC, Astoria Federal, the
Exchange Agent or any other person shall be liable to any former holder of GNYSB
Common Stock for any amount delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
LOST, STOLEN OR DESTROYED CERTIFICATES
If a GNYSB Stock Certificate has been lost, stolen or destroyed, the holder
is requested to immediately contact the Exchange Agent for instructions as to
how to submit a valid Election. See Instruction 12 set forth in the accompanying
Election Form. In any such event, upon the making of an affidavit of that fact
by the person claiming such certificate to be lost, stolen or destroyed and, if
required by the Exchange Agent, the posting by such person of a bond in such
amount as the Exchange Agent may direct as indemnity against any claim that may
be made against it with respect to such certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed certificate the Merger
Consideration or the shares of AFC Series B Preferred Stock, as the case may be,
deliverable in respect thereof pursuant to the Merger Agreement.
S-31
<PAGE> 34
COMPLETION OF THE ELECTION FORM
Elections by record holders of shares of GNYSB Common Stock must be made by
properly completing and signing the Election Form (a copy of which is enclosed)
or a photocopy thereof, or a Notice of Guaranteed Delivery (a copy of which is
enclosed), and delivering it to the Exchange Agent at one of the proper
locations specified in the Election Form so that it is received by the Exchange
Agent by the Election Deadline. Detailed instructions for completing the
Election Form are set forth on the Election Form.
An Election will have been validly made by a holder of shares of GNYSB
Common Stock only if that holder's properly completed and signed Election Form
(with signature guarantees, if required by the Election Form), accompanied by
the certificates representing all shares of GNYSB Common Stock to which such
Election Form relates (unless the holder completes the procedure for delivery by
book-entry transfer of such shares on a timely basis), or a properly executed
Notice of Guaranteed Delivery is actually received by the Exchange Agent at one
of the proper locations specified in the Election Form by the Election Deadline
(5:00 p.m., Eastern Time, on October 17, 1997). See Instructions 1 and 3 to the
Election Form.
Special rules are provided for Elections made by nominees and those who
hold in various capacities. See Instruction 13 to the Election Form.
Holders of GNYSB Stock Certificates who have made Elections will be
permitted to change their Elections or revoke their Elections in accordance with
the procedures and within the time deadlines set forth in Instruction 2 to the
Election Form.
Holders of GNYSB Stock Certificates who wish to have certificates for AFC
Common Stock or checks for fractional shares or cash to be paid in the Merger
issued in names or mailed to addresses different than those of the record
holders of GNYSB Common Stock must comply with Instruction 10 to the Election
Form.
No-Election will be effective unless (i) the Election Form is signed by a
holder of record of GNYSB Common Stock as of September 30, 1997, (ii) the
Election Form is properly completed and signed (with signature guarantees, if
required by the Election Form) accompanied by the GNYSB Stock Certificate(s) to
which the Election Form relates and (iii) all such materials are actually
received by the Exchange Agent at one of the proper locations specified in the
Election Form by the Election Deadline. If a GNYSB Stock Certificate has been
lost, stolen or destroyed, the holder is requested to immediately contact the
Exchange Agent for instructions as to how to submit a valid Election. See
"-- Lost, Stolen or Destroyed Certificates."
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the principal federal income tax consequences
of the Merger is based upon the provisions of the Code, the regulations
thereunder, judicial authority, administrative rulings and practice as of the
date hereof and the opinion of Thacher Proffitt & Wood. The following discussion
does not address the federal income tax consequences to special classes of
taxpayers, including, without limitation, insurance companies, securities
dealers, financial institutions, tax exempt organizations or trusts, foreign
persons, persons who hold shares of GNYSB Common Stock as part of a straddle or
conversion transaction and persons who acquired shares of GNYSB Common Stock
pursuant to the exercise of employee stock options or rights or otherwise as
compensation. In addition, this discussion does not address the tax consequences
of transactions effectuated prior to or after the Merger, whether or not such
transactions are in connection with the Merger, including, without limitation,
the exercise of options or rights to purchase shares of GNYSB Common Stock in
anticipation of the Merger. This discussion is based upon representations
contained in certificates provided by officers of AFC and GNYSB. No ruling has
been requested from the Internal Revenue Service (the "Service") with respect to
the federal income tax consequences of the Merger. Former GNYSB stockholders are
urged to consult their own tax advisors as to the specific tax consequences to
them of the Merger, including the applicability and effect of federal, state,
local and other tax laws.
Tax Opinions. The Merger will be treated as a reorganization within the
meaning of Section 368(a) of the Code. Thacher Proffitt & Wood has provided AFC
an opinion, and Sullivan & Cromwell has provided GNYSB an opinion (the "Tax
Opinions"), each dated the Effective Time, substantially to the effect that, for
S-32
<PAGE> 35
federal income tax purposes: (i) the Merger will be treated as a reorganization
within the meaning of Section 368(a) of the Code, (ii) no gain or loss will be
recognized by AFC, Astoria Federal or GNYSB as a result of the Merger; (iii)
except to the extent of any cash received in lieu of a fractional share interest
in GNYSB Common Stock or of any Cash Consideration received, no gain or loss
will be recognized by holders of GNYSB Common Stock who exchange their shares of
GNYSB Common Stock for shares of AFC Common Stock pursuant to the Merger; (iv)
the tax basis of the shares of AFC Common Stock received by each holder of GNYSB
Common Stock who exchanges shares of GNYSB Common Stock for shares of AFC Common
Stock in the Merger will be the same as the tax basis of the shares of GNYSB
Common Stock surrendered pursuant to the Merger, reduced by any amount allocable
to a fractional share interest of GNYSB Common Stock for which cash is received
and by the amount of any Cash Consideration received, and increased by any gain
recognized on such exchange; (v) the holding period of the shares of AFC Common
Stock received by each holder of GNYSB Common Stock in the Merger will include
the holding period of the shares of GNYSB Common Stock exchanged therefor,
provided that such stockholder holds such shares of GNYSB Common Stock as a
capital asset at the Effective Time; (vi) no gain or loss will be recognized by
the holders of GNYSB Series B Preferred Stock who exchange their shares of GNYSB
Series B Preferred Stock solely for shares of AFC Series B Preferred Stock
pursuant to the Merger; (vii) the tax basis of the shares of AFC Series B
Preferred Stock received by each GNYSB stockholder who exchanges GNYSB Series B
Preferred Stock solely for shares of AFC Series B Preferred Stock in the Merger
will be the same as the tax basis of the GNYSB Series B Preferred Stock
surrendered pursuant to the Merger and (viii) the holding period of the shares
of AFC Series B Preferred Stock received by each holder of GNYSB Series B
Preferred Stock in the Merger will include the holding period of the shares of
GNYSB Series B Preferred Stock exchanged therefor, provided that such
stockholder holds such GNYSB Series B Preferred Stock as a capital asset at the
Effective Time.
The Tax Opinions will not be binding on the Service, and there can be no
assurance that the Service will not contest the conclusions expressed therein.
The Tax Opinions are based in part upon certain factual assumptions and upon
certain representations made, and certificates delivered, by AFC, Astoria
Federal, GNYSB and certain of their respective stockholders, officers and other
persons, which representations and certificates Thacher Proffitt & Wood and
Sullivan & Cromwell have assumed to be true, correct and complete. If such
representations or certificates are inaccurate, the Tax Opinions could be
adversely affected.
Tax Consequences; General. The following summary sets forth certain
anticipated material federal income tax consequences of the Merger to former
GNYSB stockholders. The tax treatment of each stockholder will depend in part
upon such stockholder's particular situation and the consideration received by
such stockholder pursuant to the Merger. This summary is based on the provisions
of the Code, the Treasury Regulations promulgated thereunder and administrative
and judicial interpretations thereof, all as in effect as of the date hereof.
Such laws, regulations or interpretations may differ at the Effective Time, and
relevant facts also may differ. In general, the tax treatment of holders of both
GNYSB Common Stock and GNYSB Series B Preferred Stock who receive Cash
Consideration pursuant to the Merger will be essentially as described below
under "Exchange of GNYSB Common Stock for AFC Common Stock and Cash." Such
holders should consult their own tax advisors for the specific tax consequences
applicable to such holders.
Exchange of GNYSB Stock Solely for AFC Stock. No gain or loss will be
recognized by a former GNYSB stockholder who receives solely AFC Common Stock
for such stockholder's shares of GNYSB Common Stock (except to the extent such a
stockholder receives cash in lieu of a fractional share interest in AFC Common
Stock) or by a former GNYSB stockholder who receives solely AFC Series B
Preferred Stock for such stockholder's shares of GNYSB Series B Preferred Stock.
Such a stockholder's aggregate tax basis in the AFC Common Stock received
pursuant to the Merger will equal such stockholder's aggregate tax basis in the
shares of GNYSB Common Stock exchanged therefor, reduced by any amount allocable
to a fractional share interest of AFC Common Stock for which cash is received.
Such a stockholder's aggregate tax basis in the AFC Series B Preferred Stock
received pursuant to the Merger will equal such stockholder's aggregate tax
basis in the shares of GNYSB Series B Preferred Stock exchanged therefor. The
holding period of AFC Common Stock or AFC Series B Preferred Stock received will
include the holding period of the shares of GNYSB Common Stock or GNYSB Series B
Preferred Stock
S-33
<PAGE> 36
exchanged therefor, provided that such shares were held as a capital asset as of
the Effective Time. Former GNYSB stockholders should consult their own tax
advisors concerning the determination of their basis and holding period in any
particular share of AFC Common Stock or AFC Series B Preferred Stock since
several methods of determination may be available.
Exchange of GNYSB Common Stock for AFC Common Stock and Cash. A former
GNYSB stockholder who receives both AFC Common Stock and cash (other than cash
received in lieu of a fractional share interest in AFC Common Stock) will
recognize gain, but not loss, to the extent of the lesser of:
(i) the excess of (A) the sum of the aggregate fair market value of
the AFC Common Stock received (including the fair market value of any
fractional share interest in AFC Common Stock for which cash is received)
and the amount of cash received (other than cash received in lieu of such
fractional share interest) over (B) the stockholder's aggregate adjusted
federal income tax basis for the shares of GNYSB Common Stock exchanged;
and
(ii) the amount of cash received by such stockholder (other than cash
received in lieu of such fractional share interest).
If the shares of GNYSB Common Stock exchanged in the Merger were held as
capital assets at the Effective Time, any gain will be treated as capital gain.
Any such capital gain realized by an individual, estate or trust will qualify
for the 20% maximum tax (10% in the case of a taxpayer in the 15% ordinary
income tax bracket) on capital gains if such GNYSB Common Stock exchanged was
held for at least 18 months, and for the 28% maximum tax on capital gains if
such GNYSB Common Stock was held for more than one year and less than 18 months.
However, if the receipt of cash (other than cash received in lieu of a
fractional share interest) has the effect of a distribution of a dividend within
the meaning of Section 356(a)(2) of the Code, such gain will be treated as a
dividend to the extent of such stockholder's ratable share of the undistributed
accumulated earnings and profits of GNYSB or possibly of AFC. The following is a
brief discussion of such potential tax treatment; however, former GNYSB
stockholders should consult their own tax advisors as to the possibility that
all or a portion of any cash received in exchange for their GNYSB Common Stock
will be treated as a dividend.
The stock redemption provisions of Section 302 of the Code apply in
determining whether cash received by a former GNYSB stockholder pursuant to the
Merger has the effect of a distribution of a dividend under Section 356(a)(2) of
the Code (the "Hypothetical Redemption Analysis"). Under the Hypothetical
Redemption Analysis, a former GNYSB stockholder will be treated as if the
portion of the shares of GNYSB Common Stock exchanged for cash in the Merger had
been instead exchanged for shares of AFC Common Stock (the "Hypothetical
Shares"), followed immediately by a redemption of the Hypothetical Shares by AFC
for cash. Under the principles of Section 302 of the Code, a former GNYSB
stockholder will recognize capital gain rather than dividend income with respect
to the cash received if the hypothetical redemption is "not essentially
equivalent to a dividend" or is "substantially disproportionate" with respect to
such stockholder. In applying the principles of Section 302, the constructive
ownership rules of Section 318 of the Code apply in comparing a former GNYSB
stockholder's ownership interest in AFC both immediately after the Merger (but
before the hypothetical redemption) and after the hypothetical redemption.
Whether the hypothetical redemption by AFC of the Hypothetical Shares for
cash is "not essentially equivalent to a dividend" with respect to a former
GNYSB stockholder depends upon such stockholder's particular circumstances.
However, the hypothetical redemption must, in any event, result in a "meaningful
reduction" in such stockholder's percentage ownership of AFC stock. In
determining whether the hypothetical redemption by AFC results in a meaningful
reduction in a former GNYSB stockholder's percentage ownership of AFC stock, and
therefore, does not have the effect of a distribution of a dividend, a former
GNYSB stockholder should compare his or her share interest in AFC (including
interests owned actually, hypothetically and constructively) immediately after
the Merger (but before the hypothetical redemption) to his or her share interest
after the hypothetical redemption. The Service has indicated, in Revenue Ruling
76-385, that a stockholder in a publicly-held corporation whose relative stock
interest in the corporation is minimal and who exercises no "control" over
corporate affairs is generally treated as having had a meaningful reduction in
his or her stock after a redemption transaction if his or her percentage stock
S-34
<PAGE> 37
ownership in the corporation has been reduced to any extent, taking into account
the stockholder's actual and constructive ownership before and after the
redemption. In Revenue Ruling 76-385, a reduction from .0001118 percent to
.0001081 percent was found to be a meaningful reduction in stockholdings.
The hypothetical redemption transaction would be "substantially
disproportionate," and therefore, would not have the effect of a distribution of
a dividend with respect to a former GNYSB stockholder who owns less than 50% of
the voting power of the outstanding AFC Common Stock if the percentage of AFC
Common Stock actually and constructively owned by such stockholder immediately
after the hypothetical redemption is less than 80% of the percentage of AFC
Common Stock actually, hypothetically and constructively owned by such
stockholder immediately before the hypothetical redemption.
In determining how many shares of AFC Common Stock a former GNYSB
stockholder owns constructively before the hypothetical redemption for purposes
of making the "not essentially equivalent to a dividend" or "substantially
disproportionate" determination, such stockholder must take into account any
Hypothetical Shares owned by the persons or entities whose stock he or she is
deemed to own constructively under Section 318 of the Code.
Such a stockholder's aggregate tax basis in the AFC Common Stock received
pursuant to the Merger equals such stockholder's aggregate tax basis in the
shares of GNYSB Common Stock exchanged therefor, reduced by any amount allocable
to a fractional share interest of AFC Common Stock for which cash is received
and by the amount of any Cash Consideration received, and increased by the
amount of gain, if any, recognized by such stockholder in the Merger (including
any portion of such gain that is treated as a dividend). The holding period of
AFC Common Stock received includes the holding period of the shares of GNYSB
Common Stock exchanged therefor, provided that such shares of GNYSB Common Stock
were held as a capital asset as of the Effective Time. Former GNYSB stockholders
should consult their own tax advisors concerning the determination of their
basis and holding period in any particular share of AFC Common Stock since
several methods of determination may be available.
Exchange of GNYSB Common Stock Solely for Cash. A former GNYSB stockholder
who receives solely cash in exchange for such stockholder's shares of GNYSB
Common Stock may be treated as (i) having sold such shares of GNYSB Common Stock
to AFC, (ii) having received, in exchange for such shares of GNYSB Common Stock,
stock of AFC which was deemed to have been redeemed by AFC, or (iii) having such
shares of GNYSB Common Stock deemed to have been redeemed by GNYSB. In the event
of sale treatment, such stockholder would recognize gain or loss in an amount
equal to the difference between the amount of cash received and the
stockholder's aggregate adjusted federal income tax basis for such shares of
GNYSB Common Stock. In the event of redemption treatment, such deemed redemption
would be subject to Section 302 of the Code, with the result that such
stockholder would be treated as having sold his or her shares and would
recognize gain or loss in a like amount if the deemed redemption is in "complete
redemption" of all of such stockholder's stock in the redeeming corporation, is
"substantially disproportionate" with respect to such stockholder or is "not
essentially equivalent to a dividend." In making such a determination under
Section 302, the constructive ownership rules of Section 318 of the Code will
apply in comparing a former GNYSB stockholder's ownership interest in the
redeeming corporation both immediately before and after the Merger. See
"-- Exchange of GNYSB Common Stock for AFC Common Stock and Cash." Gain or loss
realized on a sale of such shares of GNYSB Common Stock will be capital gain or
loss if such shares of GNYSB Common Stock were held as capital assets at the
Effective Time. Any such capital gain realized by an individual, estate or trust
will qualify for the 20% maximum tax (10% in the case of a taxpayer in the 15%
ordinary income tax bracket) on capital gains if the GNYSB Common Stock
exchanged was held for at least 18 months, and for the 28% maximum tax on
capital gains if such GNYSB Common Stock was held for more than one year and
less than 18 months. If sale treatment does not apply to a deemed redemption,
the cash received by such a stockholder will be treated as a dividend to the
extent of the redeeming corporation's accumulated and current earnings and
profits. Former GNYSB stockholders should consult their own tax advisors as to
the possibility that all or a portion of any cash received in exchange for their
shares of GNYSB Common Stock will be treated as a dividend.
S-35
<PAGE> 38
Fractional Shares of AFC Common Stock. No fractional shares of AFC Common
Stock will be issued in the Merger. A former GNYSB stockholder who receives cash
in lieu of such a fractional share will be treated as having received such
fractional share pursuant to the Merger and then as having exchanged such
fractional share for cash in a redemption by AFC subject to Section 302 of the
Code. Such a deemed redemption will be treated as a sale of the fractional
share, provided that it is not "essentially equivalent to a dividend." See
"-- Exchange of GNYSB Common Stock for AFC Common Stock and Cash." If the AFC
Common Stock represents a capital asset in the hands of the stockholder, the
stockholder generally will recognize capital gain or loss on such a deemed
redemption of the fractional share in an amount determined by the excess of the
amount of cash received therefor and the stockholder's tax basis in the
fractional share. Any such capital gain realized by an individual, estate or
trust will qualify for the 20% maximum tax (10% in the case of a taxpayer in the
15% ordinary income tax bracket) on capital gains if the GNYSB Common Stock
exchanged was held for at least 18 months, and for the 28% maximum tax on
capital gains if such GNYSB Common Stock was held for more than one year and
less than 18 months.
Backup Withholding. Unless an exemption applies under applicable law and
regulations, the Exchange Agent will be required to withhold 31% of any cash
payments to which a non-corporate stockholder or other payee is entitled
pursuant to the Merger unless the stockholder or other payee provides its
taxpayer identification number (social security number, employer identification
number or individual taxpayer identification number) and certifies that such
number is correct. Each stockholder and, if applicable, each other payee must
complete and sign the substitute Form W-9 or, if applicable, the certificate of
foreign status on Form W-8, included with the Election Form, so as to provide
the information and certification necessary to avoid backup withholding, unless
an applicable exemption exists and is established in a manner satisfactory to
AFC and the Exchange Agent.
DESCRIPTION OF ASTORIA FINANCIAL CORPORATION CAPITAL STOCK
See "DESCRIPTION OF AFC CAPITAL STOCK" and "COMPARISON OF CERTAIN RIGHTS OF
STOCKHOLDERS' in the Proxy Statement-Prospectus.
CERTAIN REGULATORY CONSIDERATIONS
See "CERTAIN REGULATORY CONSIDERATIONS" in the Proxy Statement-Prospectus.
EXPERTS
The consolidated financial statements of AFC and subsidiaries as of
December 31, 1996 and 1995 and for each of the years in the three-year period
ended December 31, 1996, included in AFC's Form 10-K for the year ended December
31, 1996 and incorporated by reference into this Supplement, have been
incorporated by reference herein and in the Registration Statement of which the
Proxy Statement-Prospectus is a part in reliance upon the report of KPMG Peat
Marwick LLP, independent auditors, included in AFC's 1996 Form 10-K and
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The consolidated financial statements of GNYSB and subsidiaries as of
December 31, 1996 and 1995 and for each of the years in the three-year period
ended December 31, 1996, included in GNYBancorp's Registration Statement on Form
S-4 dated March 11, 1997 and GNYSB's Annual Report on Form F-2 and incorporated
by reference into this Supplement, have been incorporated by reference herein
and in the Registration Statement of which the Proxy Statement-Prospectus is a
part in reliance upon the report of KPMG Peat Marwick LLP, independent auditors,
included in GNYBancorp's Registration Statement on Form S-4 dated March 11, 1997
and incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
S-36
<PAGE> 39
ELECTION FORM AND LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATES FORMERLY REPRESENTING SHARES OF COMMON STOCK,
PAR VALUE $1.00 PER SHARE ("GNYSB COMMON STOCK" OR "SHARES") OF
THE GREATER NEW YORK SAVINGS BANK
SUBMITTED PURSUANT TO AN ELECTION (AN "ELECTION")
IN CONNECTION WITH THE MERGER WITH AND INTO
ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
A FEDERALLY CHARTERED SAVINGS AND LOAN ASSOCIATION
AND WHOLLY-OWNED SUBSIDIARY OF
ASTORIA FINANCIAL CORPORATION
THE INSTRUCTIONS ACCOMPANYING THIS ELECTION FORM AND LETTER OF TRANSMITTAL
("ELECTION FORM") SHOULD BE READ CAREFULLY BEFORE THIS ELECTION FORM IS
COMPLETED.
ELECTION
TO MAKE A VALID ELECTION AS DESCRIBED HEREIN, THIS ELECTION FORM OR A
NOTICE OF GUARANTEED DELIVERY, PROPERLY COMPLETED AS DESCRIBED HEREIN, MUST
ACTUALLY BE RECEIVED BY THE EXCHANGE AGENT BY 5:00 P.M., EASTERN TIME, ON
OCTOBER 17, 1997 (THE "ELECTION DEADLINE").
You must elect to receive in exchange for each share of GNYSB Common Stock:
(i) 0.5 of a share of AFC Common Stock, par value $0.01 per share ("AFC Common
Stock") (a "Stock Election"), (ii) $19.00 in cash (a "Cash Election"), (iii) a
Stock Election with respect to some of your shares of GNYSB Common Stock and a
Cash Election with respect to your remaining shares of GNYSB Common Stock (a
"Split Election") or (iv) make no election with respect your GNYSB Common Stock
(a "No-Election").
In determining whether to make a Cash Election, a Stock Election, a Split
Election or a No-Election, stockholders should consult their own financial and
tax advisors. NO RECOMMENDATION IS MADE WITH RESPECT TO WHETHER A CASH ELECTION,
STOCK ELECTION, SPLIT ELECTION OR NO-ELECTION SHOULD BE MADE.
Nominee record holders, which include any nominee, any trustee or any other
person who holds shares of GNYSB Common Stock in any capacity whatsoever on
behalf of another person or entity are directed to Instruction 14.
For information as to the federal income tax consequences of receiving
shares of AFC Common Stock or cash in exchange for your shares of GNYSB Common
Stock, see "MATERIAL FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus
Supplement delivered herewith. You are urged, in addition, to consult with your
tax advisor.
This Election Form should be promptly (i) completed and signed in the space
provided below and on the Substitute Form W-9 and (ii) mailed or delivered with
your certificate(s) representing shares of GNYSB Common Stock to ChaseMellon
Shareholder Services, L.L.C., acting as exchange agent (the "Exchange Agent") at
either of the following addresses:
<PAGE> 40
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND BY OVERNIGHT DELIVERY
P.O. Box 3305 120 Broadway, 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, New York 10271 Mail Drop -- Reorg
Attention: Reorganization Attention: Reorganization Ridgefield Park, NJ 07660
Department Department Attention: Reorganization
Department
</TABLE>
FOR INFORMATION CALL:
(888) 213-0887
IT IS RECOMMENDED THAT CERTIFICATES AND ELECTION FORMS BE SENT VIA CERTIFIED
MAIL,
APPROPRIATELY INSURED, WITH RETURN RECEIPT REQUESTED.
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES OF GNYSB COMMON STOCK ENCLOSED*
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
NAME EXACTLY AS IT APPEARS ON YOUR STOCK CERTIFICATE(S) CERTIFICATE(S) ENCLOSED
AND ADDRESS OF REGISTERED HOLDER (PLEASE LIST BELOW -- ATTACH
(PLEASE FILL IN, IF BLANK) ADDITIONAL LIST IF NECESSARY)
------------------------------------------------------------------------------------------------------------------
CERTIFICATE NUMBER
NUMBER(S) OF SHARES
------------------------------------------
------------------------------------------
==========================================
Total Number of Shares
------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
TYPE OF ELECTION
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF GNYSB SHARES
TOTAL NUMBER OF STOCK ELECTION CASH ELECTION AS TO WHICH AN ELECTION IS NO-ELECTION
GNYSB SHARES** SHARES SHARES ** BEING MADE SHARES**
==================================================================================================================
------------------------------------------------------------------------------------------------------------------
</TABLE>
ASTORIA FINANCIAL CORPORATION RESERVES THE RIGHT TO DEEM THAT YOU HAVE MADE A
"NO-ELECTION" IF:
(A) NO CHOICE IS INDICATED ABOVE;
(B) YOU FAIL TO FOLLOW THE INSTRUCTIONS ON THIS ELECTION FORM (INCLUDING
SUBMISSION OF YOUR GNYSB STOCK CERTIFICATES)* OR OTHERWISE FAIL TO
PROPERLY MAKE AN ELECTION;
(C) A COMPLETED ELECTION FORM (INCLUDING SUBMISSION OF YOUR GNYSB STOCK
CERTIFICATES) OR A NOTICE OF GUARANTEED DELIVERY IS NOT ACTUALLY
RECEIVED BY OCTOBER 17, 1997, THE ELECTION DEADLINE; OR
(D) YOU OWN LESS THAN 100 SHARES OF GNYSB COMMON STOCK AND DO NOT MAKE A
CASH ELECTION.
- ---------------
* IF YOUR STOCK CERTIFICATE(S) HAS BEEN EITHER LOST, STOLEN OR DESTROYED AND
YOU REQUIRE ASSISTANCE IN REPLACING IT/THEM, CALL THE INFORMATION AGENT,
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., TOLL-FREE AT (888) 213-0887
IMMEDIATELY TO RECEIVE INSTRUCTIONS REGARDING REPLACEMENT. SEE ALSO
INSTRUCTION 12 BELOW. YOU CANNOT SUBMIT AN EFFECTIVE ELECTION FORM WITHOUT
YOUR GNYSB STOCK CERTIFICATES ATTACHED HERETO.
** ANY HOLDER OF GNYSB COMMON STOCK WHO OWNS LESS THAN 100 SHARES MUST ELECT THE
CASH ELECTION OR NO-ELECTION OR BE TREATED AS HAVING MADE A NO-ELECTION.
<PAGE> 41
Under the Taxpayer Relief Act of 1997, capital gain realized by holders of
GNYSB Common Stock may qualify for the 20% maximum tax (10% in the case of such
a taxpayer in the 15% ordinary income tax bracket) on capital gains if the GNYSB
Common Stock exchanged was held for at least 18 months, and for the 28% maximum
tax on capital gains if such GNYSB Common Stock was held for more than one year
and less than 18 months. If you acquired shares of GNYSB Common Stock on
different dates or at different prices and make a Split Election, you may
designate below the certificate number for each GNYSB Common Stock certificate
that represents shares of GNYSB Common Stock for which cash is to be received.
To insure proper tax treatment, you (or, if you are acting through a broker or
other agent, such broker or agent) should retain records of the particular
Shares that are exchanged for cash.
- --------------------------------------------------------------------------------
FOR SPLIT ELECTIONS ONLY
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------
CERTIFICATE NUMBER
(PLEASE LIST BELOW -- ATTACH
ADDITIONAL LIST IF NECESSARY) NUMBER OF SHARES EXCHANGED FOR CASH
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
==================================================================================================================
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 42
NOTE: SIGNATURE MUST BE PROVIDED BELOW
AND ON THE SUBSTITUTE FORM W-9 BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
To ChaseMellon Shareholder Services, L.L.C.:
In connection with the merger (the "Merger") of The Greater New York
Savings Bank ("GNYSB") with and into Astoria Federal Savings and Loan
Association ("Astoria Federal"), pursuant to an Agreement and Plan of Merger,
dated as of the 29th day of March, 1997, by and among Astoria Financial
Corporation, a Delaware corporation ("AFC"), Astoria Federal and GNYSB, as
amended, together with the related Plan of Bank Merger (together, the "Merger
Agreement"), the undersigned hereby makes the Election or Elections set forth
herein and surrenders to you for cancellation, as Exchange Agent, certificates
(the "Certificates") representing all of the undersigned's shares of GNYSB
Common Stock listed above in exchange for the right to receive for each share of
GNYSB Common Stock: (i) 0.5 of a share of AFC Common Stock, together with the
related preferred share purchase right for each full share of AFC Common Stock
issued pursuant to the Rights Agreement between AFC and the Exchange Agent,
dated as of July 17, 1996 (the "Stock Consideration"), (ii) $19.00 in cash (the
"Cash Consideration"), (iii) Stock Consideration with respect to some of the
undersigned's shares of GNYSB Common Stock and Cash Consideration with respect
to the undersigned's remaining shares of GNYSB Common Stock, or (iv) whatever is
left after the election of the other holders of GNYSB Common Stock and, to the
extent necessary, the application of certain allocation and proration
procedures. In addition, it is understood that AFC will pay cash in lieu of any
fractional shares of AFC Common Stock in connection with the Merger.
The undersigned understands that the election referred to above is subject
to certain terms, conditions and limitations that have been set out in the
following documents: the Merger Agreement, the Joint Proxy Statement-Prospectus,
dated June 24, 1997 (the "Proxy Statement-Prospectus") and the Prospectus
Supplement (the "Supplement"), copies of which accompany this Election Form. The
Merger Agreement is included as Appendix A to the Proxy Statement-Prospectus.
Extra copies of the Election Form, Notice of Guaranteed Delivery, Supplement or
Proxy Statement-Prospectus may be requested from ChaseMellon Shareholder
Services, L.L.C., as Information Agent, at the addresses or phone number shown
above. The undersigned hereby acknowledges the receipt of the Proxy
Statement-Prospectus and the Supplement.
The undersigned hereby represents and warrants that the undersigned was, at
close of business on September 30, 1997, the effective date of the merger of
GNYSB with and into Astoria Federal ("Effective Date"), and is the registered
holder of the above-described GNYSB Common Stock with good title to the
above-described GNYSB Common Stock and full power and authority to sell, assign
and transfer the above-described GNYSB Common Stock represented by the enclosed
Certificate(s), free and clear of all liens, claims and encumbrances, and not
subject to any adverse claims. The undersigned will, upon request, execute any
additional documents necessary or desirable to complete the surrender and
exchange of such GNYSB Common Stock. The undersigned hereby irrevocably appoints
the Exchange Agent, as agent of the undersigned, to effect the exchange. All
authority conferred or agreed to be conferred in this Election Form shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned.
Unless otherwise indicated below under Special Issuance and Payment
Instructions, in exchange for the enclosed Certificate(s), the undersigned
requests issuance of a certificate representing the appropriate number of shares
of the Stock Consideration (which shall include a check for cash in lieu of
fractional shares, if any) or a check for the Cash Consideration, as the case
may be, in the name of the undersigned. Similarly, unless otherwise indicated
below under Special Delivery Instructions, please mail such certificate and/or
check, as the case may be, to the undersigned at the address shown above. In the
event that both the Special Delivery Instructions and the Special Issuance and
Payment Instructions are completed, please issue such certificate and/or check,
as the case may be, in the name of, and mail such certificate and/or check to,
the person or entity so indicated at the address so indicated. Appropriate
signature guarantees have been included with respect to GNYSB Common Stock for
which Special Delivery Instructions and/or Special Issuance and Payment
Instructions have been given.
<PAGE> 43
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
IMPORTANT
SIGN HERE
=========================================================================================
(SIGNATURE(S) OF OWNER(S))
(Must be signed by registered holder(s) as name(s) appear(s) on stock certificate(s). If
signed by an attorney, trustee, executor, administrator, guardian, officer, custodian or
other person acting in a representative capacity and the shares submitted herewith are
registered in the name of such signatory expressly in such capacity (e.g., John Doe, as
Trustee), such capacity should be indicated. (See Instruction 8)
Dated: -----------------, 1997
Name(s):
=========================================================================================
(PLEASE PRINT)
Capacity, if applicable:
-----------------------------------------------------------------
Area Code and
Telephone Number: ------------------------------
=================================================================================================
SIGNATURE GUARANTEE
(REQUIRED ONLY IF EITHER "SPECIAL ISSUANCE AND PAYMENT INSTRUCTIONS" OR "SPECIAL
DELIVERY INSTRUCTIONS" ARE PROVIDED BELOW. SEE INSTRUCTION 5)
Signature(s)
Guaranteed:
-----------------------------------------------------------------------------------------
----------------------------------------------------------------------------
(NAME OF FIRM PROVIDING SIGNATURE GUARANTEE -- PLEASE PRINT)
-----------------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Date --------------, 1997
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 44
- ------------------------------------------------------
SPECIAL ISSUANCE AND PAYMENT
INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 10)
To be completed ONLY if the certificate representing the Stock Consideration
or the check representing the Cash Consideration, or cash in lieu of
fractional shares, as the case may be, is to be issued in the name of someone
other than the undersigned.
ISSUE THE CERTIFICATE REPRESENTING THE STOCK CONSIDERATION OR THE CHECK
REPRESENTING THE CASH CONSIDERATION, OR CASH IN LIEU OF FRACTIONAL SHARES TO:
Name
---------------------------------------------
(PLEASE PRINT)
Address
-------------------------------------------
-----------------------------------------------------
(INCLUDE ZIP CODE)
-----------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
======================================================
SPECIAL DELIVERY
INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 10)
To be completed ONLY if the certificate representing the Stock Consideration
or the check representing the Cash Consideration, or cash in lieu of
fractional shares, as the case may be, is to be sent to someone other than the
undersigned or to the undersigned at an address other than that shown above.
MAIL THE CERTIFICATE REPRESENTING THE STOCK CONSIDERATION OR THE CHECK
REPRESENTING THE CASH CONSIDERATION, OR CASH IN LIEU OF FRACTIONAL SHARES TO:
Name
---------------------------------------------
(PLEASE PRINT)
Address
-------------------------------------------
-----------------------------------------------------
(INCLUDE ZIP CODE)
-----------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
------------------------------------------------------
<PAGE> 45
INSTRUCTIONS
Former stockholders of GNYSB will not receive any certificates representing
shares of the Stock Consideration or the check representing the Cash
Consideration, or the cash in lieu of fractional shares (if any), in exchange
for their Certificates representing GNYSB Common Stock, or any dividends payable
on such shares of AFC Common Stock comprising the Stock Consideration, until the
Certificates owned by such stockholders are received by the Exchange Agent at
the address set forth above, together with such documents as the Exchange Agent
may require, and until the same are processed for exchange by the Exchange
Agent. No interest will accrue on such dividends, and such dividends will not be
reinvested pursuant to AFC's Automatic Dividend Reinvestment and Stock Purchase
Plan. If your Certificate(s) is lost, stolen or destroyed, refer to Instruction
12 below.
You should understand that your Election is subject to certain terms,
conditions and limitations that have been set out in the following documents:
the Merger Agreement, the Proxy Statement-Prospectus and the Supplement. The
Merger Agreement is included as Appendix A to the Proxy Statement-Prospectus.
The filing of this Election Form constitutes acknowledgment of the receipt of
the Proxy Statement-Prospectus and the Supplement.
1. ELECTION DEADLINE. For any Election contained herein to be considered,
this Election Form, properly completed, and the related certificates
representing GNYSB Common Stock must actually be received by the Exchange Agent
at the address on the front of this Election Form no later than 5:00 p.m.,
Eastern Time, on October 17, 1997, the Election Deadline. The Exchange Agent
will determine whether any Election Form is received on a timely basis and
whether an Election Form has been properly completed. The Exchange Agent may
disregard immaterial defects in Election Forms.
2. REVOCATION OR CHANGE OF ELECTION FORM. Any Election Form may be revoked
or changed by written notice from the person submitting such Election Form to
the Exchange Agent, but to be effective such notice must actually be received by
the Exchange Agent at or prior to the Election Deadline. The Exchange Agent will
have reasonable discretion to determine whether any revocation or change is
received on a timely basis and whether any such revocation or change has been
properly made. The Exchange Agent may disregard immaterial defects with respect
to revocations and changes.
3. ELECTION PROCEDURES. As set forth in the Merger Agreement, Supplement
and the Proxy Statement-Prospectus, the Cash Consideration and the Stock
Consideration to which GNYSB common stockholders will be entitled by virtue of
the Merger are fixed at approximately 25% and approximately 75%, respectively,
of the GNYSB Common Stock outstanding. Thus, approximately 25% of the shares of
GNYSB Common Stock outstanding on the Effective Date have been converted into
the right to receive cash, and approximately 75% of the shares of GNYSB Common
Stock outstanding at the Effective Date have been converted into the right to
receive shares of AFC Common Stock (and cash in lieu of fractional shares). The
extent to which Elections will be accommodated will depend upon the respective
numbers of Stock Elections, Cash Elections, Split Elections and No-Elections. A
GNYSB stockholder who makes a Cash Election may receive some shares of AFC
Common Stock, and a GNYSB stockholder who makes a Stock Election may receive
some cash. To the extent that all Elections cannot be accommodated, the
consideration to be issued in the Merger will be allocated pursuant to the
procedures set forth in the Merger Agreement and described in the Supplement
under "ELECTION, ALLOCATION AND PRORATION PROCEDURES." Thus, an Election made by
you may not be honored in certain circumstances. Allocations will be made by the
Exchange Agent and will be conclusive and binding on holders of GNYSB Common
Stock.
4. NO FRACTIONAL INTERESTS. No certificate(s) representing a fraction of a
full share of AFC Common Stock will be issued, and, in lieu thereof, the
Exchange Agent will remit on AFC's behalf cash in an amount equal to the product
of (i) the fraction of a share of AFC Common Stock, if any, to which any GNYSB
stockholder would otherwise be entitled and (ii) $48.26, the average of the mean
between the closing high bid and low asked prices of a share of AFC Common
Stock, as reported on the National Market System of the Nasdaq National Market,
for the 30 consecutive trading days immediately preceding September 27, 1997,
rounded to the nearest cent. No such holder shall be entitled to dividends,
voting rights or any other rights in respect of any fractional share.
<PAGE> 46
5. GUARANTEE OF SIGNATURES. A signature guarantee on this Election Form is
required only if the holder has completed either the box entitled "Special
Issuance and Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Election Form, or both. Such guarantee must be made by an
Eligible Institution. Eligible Institutions include: (i) a bank (as defined in
Section 3(a) of the Federal Deposit Insurance Act); (ii) a broker, dealer,
municipal securities dealer, municipal securities broker, governmental
securities dealer or government securities broker, as those terms are defined
under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
(iii) a credit union (as defined in Section 19(b)(1)(A) of the Federal Reserve
Act); (iv) a national securities exchange, registered securities association or
clearing agency, as those terms are used under the Exchange Act; or (v) a
savings association (as defined in Section 3(b) of the Federal Deposit Insurance
Act). Public notaries cannot execute acceptable guarantees of signatures.
6. DELIVERY OF ELECTION FORM AND CERTIFICATES. This Election Form,
properly completed and duly executed, together with the Certificate(s), should
be delivered to the Exchange Agent at the addresses set forth in this Election
Form. The method of delivery of Certificate(s) and all other required documents
is at the election and risk of the owner. However, if any Certificate is sent by
mail, it is recommended that it be sent by certified mail, appropriately
insured, with return receipt requested.
7. INADEQUATE SPACE. If the space provided herein is inadequate, the
Certificate numbers and the numbers of shares of GNYSB Common Stock represented
thereby should be listed on additional sheets and attached hereto.
8. SIGNATURES ON ELECTION FORM; REQUIREMENT TO BE A RECORD HOLDER . All
signatures must correspond exactly with the name written on the face of the
Certificate(s) without alteration, variation or any change whatsoever.
If any Certificate surrendered hereby is owned of record by two or more
joint owners, all such owners must sign this Election Form.
If any surrendered GNYSB Common Stock is registered in different names on
several Certificates, it will be necessary to complete, sign and submit as many
separate Election Forms as there are different registrations of Certificates.
If you hold Certificates for which you are not the record holder you may
not submit an election. You may, however, want to request the record holder to
make an Election on your behalf.
9. STOCK TRANSFER TAXES. In the event that any transfer or other taxes
become payable by reason of the issuance or payment of Stock Consideration or
Cash Consideration in any name other than that of the record holder, such
transferee or assignee must pay such tax to AFC or must establish to the
satisfaction of AFC that such tax has been paid.
10. SPECIAL ISSUANCE AND PAYMENT INSTRUCTIONS; SPECIAL DELIVERY
INSTRUCTIONS. Indicate the name and/or address of the person(s) to whom the
Stock Consideration or the check representing the Cash Consideration, or the
cash in lieu of fractional shares (if any), is to be issued or sent, if
different from the name and/or address of the person(s) signing this Election
Form.
11. SUBSTITUTE FORM W-9. Each surrendering stockholder is required to
provide the Exchange Agent with such holder's correct Taxpayer Identification
Number ("TIN") on the Substitute Form W-9 which is a part of this Election Form
and to certify whether such stockholder is subject to backup withholding.
Failure to provide the information on the form may subject the surrendering
stockholder to 31% federal income tax withholding on payments made to such
surrendering stockholder with respect to his or her GNYSB Common Stock and on
future dividends paid by AFC. A holder must cross out item (2) in the
Certification box of Substitute Form W-9 if such holder has been notified by the
Internal Revenue Service that such holder is currently subject to backup
withholding. The box in Part 3 of the form should be checked if the surrendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked and the Exchange
Agent is not provided with a TIN within 60 days, thereafter AFC will withhold
31% of all such payments and dividends until a TIN is provided to the Exchange
Agent.
<PAGE> 47
12. LOST, STOLEN OR DESTROYED CERTIFICATES. If any stock Certificate has
been either lost, stolen or destroyed, unless you take certain actions as
advised by the Exchange Agent, you may not make a valid Election. You are urged
to call the Information Agent, ChaseMellon Shareholder Services, L.L.C.,
toll-free at (888) 213-0887 immediately to receive instructions as to the steps
you must take in order to effect a valid Election.
13. TO EXERCISE RIGHTS IF STOCK CERTIFICATE MIGHT NOT PROPERLY REACH THE
EXCHANGE AGENT PRIOR TO THE ELECTION DEADLINE. You may cause a written
guarantee substantially in the form enclosed herewith (the "Notice of Guaranteed
Delivery") by an Eligible Institution, to be received by the Exchange Agent at
or prior to the Election Deadline. Such Notice of Guaranteed Delivery must state
your name, the number of GNYSB shares represented by your stock Certificate and
the Election with respect to such shares, and the Eligible Institution must
guarantee the delivery to the Exchange Agent of your properly completed and
executed Election Form and Letter of Transmittal and your stock Certificate(s)
within three (3) Trading Days following the date of the Notice of Guaranteed
Delivery. If this procedure is followed, your election Form and Letter of
Transmittal and your stock Certificate(s) must be received by the Exchange Agent
within three (3) Trading Days following the date of the Notice of Guaranteed
Delivery relating thereto. Additional copies of the Notice of Guaranteed
Delivery may be obtained upon request from the Information Agent.
14. HOLDERS WHO ARE NOMINEES, TRUSTEES OR OTHER REPRESENTATIVES . Each
holder of record is entitled to make an Election and submit an Election Form
covering all shares of GNYSB Common Stock actually held of record by such
holder. Nominee record holders, which includes any nominee, any trustee or any
other person that holds shares of GNYSB Common Stock in any capacity whatsoever
on behalf of another person or entity, are entitled to make an election for such
nominee record holder as well as an election on behalf of each beneficial owner
of shares of GNYSB Common Stock held through such nominee record holder, but
such elections must be made on one Election Form. Beneficial owners who are not
record holders are not entitled to submit Election Forms.
15. INFORMATION AND ADDITIONAL COPIES . Information and additional copies
of this Election Form, the Proxy Statement-Prospectus or the Supplement may be
obtained by writing to ChaseMellon Shareholder Services, L.L.C., 450 West 33rd
Street, 14th Floor, New York, New York 10001. Attention: Information Agent
Department, or by telephoning toll-free (888) 213-0887.
<PAGE> 48
IMPORTANT TAX INFORMATION
Under federal income tax laws, a holder who receives payments pursuant to
the merger of GNYSB with and into Astoria Federal is required by law to provide
the Exchange Agent (as payer) with such holder's correct TIN on Substitute Form
W-9 below. If such holder is an individual, the TIN is his or her social
security number. If the holder is a business or other entity, such holder's TIN
number will be the same as such holder's employer identification number. If the
Exchange Agent is not provided with the correct TIN, a $50 penalty may be
imposed by the Internal Revenue Service, and payments made with respect to the
GNYSB Common Stock and payments of dividends on AFC Common Stock received by
such holder in the merger of GNYSB with and into Astoria Federal may be subject
to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. In order for a foreign individual to qualify as an exempt recipient,
such individual must submit a statement, signed under penalties of perjury,
attesting to such individual's exempt status. Forms of such statements can be
obtained from the Exchange Agent. See the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
instructions.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any payments made to the holder or other payee. Backup withholding is not
an additional tax. Rather, the federal income tax liability of persons subject
to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to GNYSB Common
Stock, the holder is required to notify the Exchange Agent of such holder's
correct TIN by completing the form below, certifying that the TIN provided on
the Substitute Form W-9 is correct (or that such holder is awaiting a TIN) and
that (a) such holder is exempt from backup withholding, (b) such holder has not
been notified by the Internal Revenue Service that he is subject to backup
withholding as a result of a failure to report all interest or dividends or (c)
the Internal Revenue Service has notified such holder that such holder is no
longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The holder is required to give the Exchange Agent the TIN (i.e., social
security number or employer identification number) of the holder of the GNYSB
Common Stock tendered hereby. If such shares of GNYSB Common Stock are held in
more than one name or are not held in the name of the beneficial owner, consult
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional guidance on which number to report.
<PAGE> 49
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN -------------------------------
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY BY Social Security Number
(SEE INSTRUCTION 11) SIGNING AND DATING BELOW OR
PLEASE FILL IN YOUR NAME AND -------------------------------
ADDRESS BELOW Employer Identification Number
-------------------------------------------------------------------
PART 2 -- CERTIFICATION--UNDER PENALTIES OF
---------------------------- PERJURY, I CERTIFY THAT: PART 3 --
Name (1) The number shown on this form is my correct Awaiting TIN [
(if joint names, circle the Taxpayer Identification Number (or I am waiting ]
name of for a number to be issued to me) and
the person or entity whose
name is
entered in Part 1)
-------------------------------------------------------------------
(2) I am not subject to backup withholding
---------------------------- because (a) I am exempt from backup withholding or PART 4 --
Address (number and street) (b) I have not been notified by the Internal Exempt [ ]
- ---------------------------- Revenue Service ("IRS") that I am subject to
City, State and Zip Code backup withholding as a result of failure to
report all interest or dividends, or (c) the
IRS has notified me that I am no longer
subject to backup withholding.
-------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part
2 above if you have been notified by the IRS that you are subject
to backup withholding because of under reporting interest or
DEPARTMENT OF THE TREASURY dividends on your tax return. However, if after being notified by
INTERNAL REVENUE SERVICE the IRS that you are no longer subject to backup withholding, do
PAYER'S REQUEST FOR TAXPAYER not cross out item (2). If you are exempt from backup withholding,
IDENTIFICATION NUMBER (TIN)
check the box in part 4 above.
SIGNATURE ---------------------------------- DATE
---------------- , 1997
- -------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER OF GNYSB WITH
AND INTO ASTORIA FEDERAL. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within 60 days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a number.
<TABLE>
<S> <C>
- ------------------------------------------------- ------------------------------- , 1997
Signature Date
</TABLE>
<PAGE> 50
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-000-0000. Employer identification numbers have nine digits separated by
only one hyphen: I.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the
account) account or, if combined
funds, any one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of the
account or, if joint
funds, either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the minor(1)
6. Account in the name of guardian The ward, minor, or
or committee for a designated incompetent person(3)
ward, minor, or incompetent
person
7. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in the The partnership
name of the business
13. Association, club or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE:If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 51
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--if you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE> 52
October 3, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Astoria Financial Corporation to act as Information
Agent in connection with the merger of The Greater New York Savings Bank
("GNYSB") into a wholly-owned subsidiary of Astoria Financial Corporation (the
"Merger").
For your information and for forwarding to your clients for whom you hold shares
registered in your name or in the name of your nominee, we are enclosing the
following documents:
1. A Joint Proxy Statement-Prospectus dated June 24, 1997;
2. A Prospectus Supplement dated October 3, 1997;
3. An Election Form and Letter of Transmittal for your use and for the
information of your clients;
4. A Notice of Guaranteed Delivery;
5. Instructions for Form W-9; and
6. A form of letter which may be sent to your clients for whose accounts
you hold shares of GNYSB's common stock registered in your name or in the name
of your nominee, with space provided for obtaining the instructions of such
clients with regard to the Merger.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
PLEASE NOTE THAT THE ELECTION DEADLINE IS OCTOBER 17, 1997 AT 5:00 P.M.,
EASTERN TIME.
Astoria Financial Corporation will, upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and necessary costs and
expenses incurred by them in forwarding materials to their customers.
Any inquiries you may have with respect to the Merger should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent at the address and telephone number set forth on the Election
Form and Letter of Transmittal.
Very truly yours,
ChaseMellon Shareholder Services, L.L.C.
(212) 273-8070
<PAGE> 53
To Our Clients:
Enclosed for your consideration is the Election Form and Letter of Transmittal
in connection with the merger of The Greater New York Savings Bank ("GNYSB")
with a wholly-owned subsidiary of Astoria Financial Corporation. We are the
holder of record of shares of GNYSB's common stock held for your account. AN
ELECTION OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. The Election Form and Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
shares held by us for your account.
You may elect to receive cash, stock or a mixture of cash and stock in exchange
for your GNYSB shares. The actual consideration ultimately received by a
stockholder for shares of GNYSB common stock will depend upon certain election,
allocation and proration procedures and the election of other stockholders.
We request instructions as to whether you wish us to elect cash, stock or a
mixture of cash and stock for your shares held by us for your account upon the
terms and subject to the conditions set forth in the Election Form and Letter of
Transmittal.
The Election Deadline is October 17, 1997 at 5:00 P.M., New York City Time.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT
AN ELECTION ON YOUR BEHALF BY THE ELECTION DEADLINE, THE ELECTION DEADLINE IS
OCTOBER 17, 1997, AT 5:00 P.M., EASTERN TIME.
<PAGE> 54
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
THE GREATER NEW YORK SAVINGS BANK
This Notice of Guaranteed Delivery, or a facsimile hereof, must be used to
tender shares of common stock, par value $1.00 per share (the "GNYSB Common
Stock"), of The Greater New York Savings Bank ("GNYSB") pursuant to the terms
and subject to the conditions set forth in the Joint Proxy-Statement Prospectus
dated June 24, 1997 (the "Proxy Statement-Prospectus"), the Prospectus
Supplement dated October 3, 1997 (the "Supplement") and the related Election
Form and Letter of Transmittal (the "Letter of Transmittal") if certificates for
shares of GNYSB Common Stock are not immediately available, or if the procedures
for book-entry transfer of shares of GNYSB Common Stock cannot be completed on
or prior to the expiration date, or if time will not permit all required
documents to reach the Exchange Agent on or prior to the expiration date. This
form or one substantially equivalent hereto may be delivered by hand or
transmitted by facsimile transmission or letter to the Exchange Agent.
Capitalized terms used herein but not defined herein shall have the meanings
given to them in the Proxy Statement-Prospectus, the Supplement or the Letter of
Transmittal.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<CAPTION>
BY MAIL: BY HAND DELIVERY: BY OVERNIGHT DELIVERY:
<S> <C> <C>
Post Office Box 3305 120 Broadway -- 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop-Reorg.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department Attn: Reorganization
Department
</TABLE>
By Facsimile:
201/329-8936
Confirm by Telephone:
201/296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 55
LADIES AND GENTLEMEN:
The undersigned hereby represents that the undersigned owns the shares of
GNYSB Common Stock tendered hereby, and hereby (i) tenders to the Exchange Agent
upon the terms and subject to the conditions set forth in the Proxy
Statement-Prospectus, the Supplement and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the number of shares of GNYSB Common
Stock specified below pursuant to the guaranteed delivery procedures set forth
under the caption "Election, Allocation and Proration Procedures -- Election
Procedures" in the Supplement. The undersigned hereby tenders the shares of
GNYSB Common Stock listed below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
TYPE OF ELECTION
- -----------------------------------------------------------------------------------------------
TOTAL NUMBER OF
GNYSB SHARES AS TO
TOTAL NUMBER WHICH AN ELECTION
OF GNYSB STOCK ELECTION CASH ELECTION IS NO-ELECTION
SHARES** SHARES SHARES ** BEING MADE SHARES**
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
</TABLE>
A HOLDER OF SHARES OF GNYSB COMMON STOCK WHO ELECTS TO TENDER GNYSB COMMON STOCK
PURSUANT TO THIS NOTICE OF GUARANTEED DELIVERY MUST (I) DELIVER A PROPERLY
COMPLETED, VALID AND UNREVOKED LETTER OF TRANSMITTAL WITH RESPECT TO ALL GNYSB
COMMON STOCK TENDERED HEREBY AND (II) DELIVER THEREWITH HIS OR HER GNYSB STOCK
CERTIFICATES OR COMPLETE THE PROCEDURE FOR DELIVERY BY BOOK-ENTRY TRANSFER OF
SUCH SHARES, WITHIN THREE (3) TRADING DAYS AFTER EXECUTION OF THIS NOTICE OF
GUARANTEED DELIVERY.
AFC RESERVES THE RIGHT TO DEEM THAT YOU HAVE MADE A "NO-ELECTION" IF:
(A) NO CHOICE IS INDICATED ABOVE;
(B) YOU FAIL TO FOLLOW THE INSTRUCTIONS ON THE LETTER OF TRANSMITTAL (INCLUDING
SUBMISSION OF YOUR GNYSB STOCK CERTIFICATES)* OR OTHERWISE FAIL TO PROPERLY
MAKE AN ELECTION;
(C) A COMPLETED LETTER OF TRANSMITTAL (INCLUDING SUBMISSION OF YOUR GNYSB STOCK
CERTIFICATES) OR THIS NOTICE OF GUARANTEED DELIVERY IS NOT ACTUALLY RECEIVED
BY OCTOBER 17, 1997, THE ELECTION DEADLINE; OR
(D) YOU OWN LESS THAN 100 SHARES OF GNYSB COMMON STOCK AND DO NOT MAKE A CASH
ELECTION.
- ---------------
* IF YOUR STOCK CERTIFICATE(S) HAS BEEN EITHER LOST, STOLEN OR DESTROYED AND
YOU REQUIRE ASSISTANCE IN REPLACING IT/THEM, CALL THE INFORMATION AGENT,
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., TOLL-FREE AT (888) 213-0887
IMMEDIATELY TO RECEIVE INSTRUCTIONS REGARDING REPLACEMENT. SEE ALSO
INSTRUCTION 12 IN THE LETTER OF TRANSMITTAL. YOU CANNOT SUBMIT AN EFFECTIVE
LETTER OF TRANSMITTAL WITHOUT ATTACHING YOUR GNYSB STOCK CERTIFICATES THERETO
OR COMPLETING THE PROCEDURES FOR DELIVERY BY BOOK-ENTRY TRANSFER.
** ANY HOLDER OF GNYSB COMMON STOCK WHO OWNS LESS THAN 100 SHARES MUST ELECT THE
CASH ELECTION OR BE TREATED AS HAVING MADE A NO-ELECTION.
2
<PAGE> 56
Under the Taxpayer Relief Act of 1997, capital gain realized by holders of
GNYSB Common Stock may qualify for the 20% maximum tax (10% in the case of such
a taxpayer in the 15% ordinary income tax bracket) on capital gains if the GNYSB
Common Stock exchanged was held for at least 18 months, and for the 28% maximum
tax on capital gains if such GNYSB Common Stock was held for more than one year
and less than 18 months. If you acquired shares of GNYSB Common Stock on
different dates or at different prices and make a Split Election, you may
designate below the certificate number for each GNYSB Common Stock certificate
that represents shares of GNYSB Common Stock for which cash is to be received.
To insure proper tax treatment, you (or, if you are acting through a broker or
other agent, such broker or agent) should retain records of the particular
Shares that are exchanged for cash.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
FOR SPLIT ELECTIONS ONLY
- ------------------------------------------------------------------------------------------------------------------
CERTIFICATE NUMBER
(PLEASE LIST BELOW -- ATTACH
ADDITIONAL LIST IF NECESSARY) NUMBER OF SHARES EXCHANGED FOR CASH
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Check one box if Shares will be delivered by Name(s) of Record Holder(s):
book-entry transfer: [ ] The Depository Trust
Company ---------------------------------------------
[ ] Philadelphia Depository Trust Company ---------------------------------------------
Account Number: ---------------------------------------------
------------------------------------------- (Please Print)
Date:
- --------------------------------------------- Address(es):
---------------------------------------
=============================================
---------------------------------------------
Daytime Area Code
and Tel. No.
---------------------------------------
Signature(s):
---------------------------------------
---------------------------------------------
</TABLE>
3
<PAGE> 57
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an "Eligible Institution" (as defined in the Supplement
under "Election, Allocation and Proration Procedures -- Election Procedures")
guarantees (a) that the above named person(s) own(s) the shares of GNYSB Common
Stock tendered hereby and (b) delivery to the Exchange Agent of either the
shares of GNYSB Common Stock tendered hereby in proper form for transfer, or
confirmation of the book-entry transfer of such shares of GNYSB Common Stock
into the Exchange Agent's account at a book-entry transfer facility, and any
other required documents, including a Letter of Transmittal, all no later than
three (3) Trading Days following execution of this Notice of Guaranteed
Delivery.
SIGN HERE
- --------------------------------------------------------------------------------
NAME OF FIRM
- --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
- --------------------------------------------------------------------------------
NAME (PLEASE PRINT)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ADDRESS
- --------------------------------------------------------------------------------
ZIP CODE
- --------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NO.
Date:
- --------------------------------------------------------------------------------
DO NOT SEND GNYSB COMMON STOCK CERTIFICATES WITH THIS FORM. ACTUAL
SURRENDER OF GNYSB COMMON STOCK CERTIFICATES MUST BE MADE PURSUANT TO, AND BE
ACCOMPANIED BY, A COPY OF THE EXECUTED LETTER OF TRANSMITTAL.
4
