As filed with the Securities and Exchange Commission
on September 30, 1998 REGISTRATION NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
__________________
ASTORIA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 11-3170868
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE ASTORIA FEDERAL PLAZA
LAKE SUCCESS, NEW YORK 11042
(516) 327-3000
(Address, including Zip Code, of principal executive offices)
__________________
OPTION PLAN CONSISTING OF ADVISORY BOARD OPTION
AGREEMENTS AND OPTION CONVERSION AGREEMENTS WITH
FORMER OFFICERS AND DIRECTORS OF
LONG ISLAND BANCORP, INC.
(Full title of the Plan)
__________________
George L. Engelke, Jr.
Chairman of the Board and Chief Executive Officer
Astoria Financial Corporation
One Astoria Federal Plaza
Lake Success, New York 11042
(516) 327-3000
Copy to:
W. Edward Bright, Esq.
Thacher Proffitt & Wood
Two World Trade Center - 38th Floor
New York, New York 10048
(212) 912-7400
(Name and address, including zip code, telephone number and area code,
of agent for service)
__________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Title of Securities to be Registered Amount to be Proposed Maximum Proposed Maximum Amount of
Registered(1) Offering Price Per Share Aggregate Offering Price Registration Fee
(2) (2)
<S> <C> <C> <C> <C> <C>
Common Stock, $0.01 par value 1,649,330 shares ----- $24,210,503 $7,142.10
===================================================================================================================================
</TABLE>
(1) Based on the number of shares of common stock of Astoria Financial
Corporation ("AFC") reserved for issuance upon exercise of certain
options granted pursuant to Option Conversion Agreements dated
September 30, 1998, and Advisory Board Option Agreements dated
September 30, 1998.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457 of the Securities Act of 1933, pursuant to
which 1,296,509 shares of AFC Common Stock subject to outstanding
options are deemed to be offered at $10.00 per share, 1,191 shares are
deemed to be offered at $10.92, 48,417 shares are deemed to be offered
at $15.49 per share, 8,345 shares are deemed to be offered at $15.57
per share, 7,668 shares are deemed to be offered at $16.30 per share,
8,344 shares are deemed to be offered at $23.81 per share, 91,017
shares are deemed to be offered at $29.24 per share, 11,500 shares are
deemed to be offered at $30.16 per share, 7,748 shares are deemed to be
offered at $30.26 per share, 121,439 shares are deemed to be offered at
$38.37 per share and 7,152 shares are deemed to be offered at $56.85,
the prices at which such options may be exercised according to the
terms of the applicable agreements, and options to purchase 40,000
shares which will price after the filing of this Registration Statement
are deemed to be offered at $43.00, the average of the high and low
price of AFC Common Stock on The NASDAQ Stock Market on September 28,
1998.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The document containing the information specified in this Part
I will be sent or given to persons to whom delivery of a prospectus is required
as specified by Rule 428(b)(1). Such document need not be filed with the
Commission either as part of this registration statement or as prospectuses or
prospectus supplements pursuant to Rule 424. These documents and the documents
incorporated by reference in this registration statement pursuant to Item 3 of
Part II of this form, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933, as amended
("Securities Act").
ITEM 1. PLAN INFORMATION.
Not required to be filed with the Securities and Exchange Commission
(the "Commission").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information heretofore filed with the
Commission by the Registrant are incorporated by reference in this Registration
Statement:
(1) the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, filed with the Commission on March 25, 1998
pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"), as amended by Form 10- K/A filed on June 25, 1998;
(2) the description of the Registrant's Common Stock (the "Common
Stock"), set forth in the Registrant's Exchange Act Registration
Statement on Form 8-A, dated August 11, 1993, and any amendment or
report filed for the purpose of updating any such description;
(3) the description of the Registrant's Preferred Share Purchase Rights
contained in the Registrant's Exchange Act Registration Statement on
Form 8-A, dated July 17, 1996, and any amendment or report filed for
the purpose of updating any such description;
<PAGE>
(4) the Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998 and June 30, 1998, filed with the Commission on
May 14, 1998 and August 11, 1998 (as amended by Form 10-Q/A filed on
September 10, 1998), respectively; and
(5) the Registrant's Current Reports on Form 8-K, filed with the
Commission on April 3, 1998 (as amended on April 10, 1998), May 29,
1998, July 10, 1998, July 20, 1998 and July 22, 1998.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement 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 Registration
Statement to the extent that a statement contained herein or in any subsequently
filed document which is also or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's authority to indemnify its officers and directors
is governed by the provisions of Section 145 of the Delaware General Corporation
Law, as amended ("GCL") and by the Certificate of Incorporation of the
Registrant. Section 145 of the GCL authorizes a court to award or a
corporation's Board of Directors to grant indemnification to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act.
Article Tenth of the Certificate of Incorporation of the Registrant
provides that any person who is made a party or is threatened to be made a party
or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director or officer of the Registrant or is or was serving at the
request of the Registrant as a director, officer, employee or agent of another
corporation, will be indemnified and held harmless by the Registrant to the
fullest extent authorized by the GCL. Such indemnification shall apply whether
the basis of such proceeding is alleged action in an official capacity as a
director,
-2-
<PAGE>
officer, employee or agent or in any other capacity while serving as a director,
officer, employee or agent. Such indemnification shall be against all expenses,
liability and loss (including attorneys' fees, judgments, fines, excise taxes or
penalties imposed under the Employee Retirement Income Security Act of 1974, as
amended, and amounts paid in settlement) reasonably incurred or suffered in
connection with the proceeding. This right to indemnification includes, to the
extent permitted by the GCL, the right to be paid by the Registrant the expenses
incurred in defending any such proceeding in advance of its final determination.
If a claim for indemnification is not paid in full by the Registrant
within sixty days after a written claim has been received by the Registrant, the
indemnitee may at any time thereafter bring suit against the Registrant to
recover the unpaid amount of the claim. If successful in whole or in part in any
such suit (or in a suit brought by the Registrant to recover an advancement of
expenses), the indemnitee shall be entitled to be paid also the expenses of
prosecuting (or defending) such suit. In any such suit, it shall be a defense to
the Registrant that the indemnitee has not met any applicable standard for
indemnification set forth in the GCL. The burden of proof in any such suit shall
be on the Registrant to prove that the indemnitee is not entitled to be
indemnified.
The right of indemnification conferred in Article Tenth of the
Certificate of Incorporation shall not be exclusive of any right which any
person may have or hereafter acquire under any statute, the Registrant's Bylaws,
agreement, vote of stockholders, disinterested directors, or otherwise. The
Registrant maintains directors' and officers' liability insurance coverage for
all directors and officers of Astoria Financial Corporation and its subsidiaries
and has contractual obligations to provide such indemnification and insurance
pursuant to employment agreements with each of its executive officers.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Astoria Financial Corporation pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
-3-
<PAGE>
ITEM 8. EXHIBITS.
4.1 Form of Option Conversion Agreement by and between Astoria
Financial Corporation and Former Officer or Director of Long
Island Bancorp, Inc. dated September 30, 1998.
4.2 Form of Advisory Board Option Agreement by and between Astoria
Financial Corporation and Former Director of Long Island
Bancorp, Inc. dated September 30, 1998.
4.3 Certificate of Incorporation of Astoria Financial Corporation,
incorporated by reference to the Registrant's Registration
Statement on Form S-1, dated October 1, 1993, as amended
(Registration No. 33-67044), as amended by an amendment
incorporated by reference to the Registrant's Form 10-Q/A
filed on September 10, 1998.
4.4 Rights Agreement dated as of July 17, 1996 between Astoria
Financial Corporation and Chase Mellon Shareholder Services,
L.L.C., incorporated by reference to Registrant's Registration
Statement on Form 8-A dated July 17, 1996, as amended by an
amendment incorporated by reference to the Registrant's Form
8-K/A dated April 10, 1998.
4.5 By-Laws of Astoria Financial Corporation, incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, which was filed with
the Commission pursuant to the Securities Exchange Act of
1934, as amended.
4.6 Agreement and Plan of Merger dated as of the 2nd day of April,
1998 by and between Astoria Financial Corporation and Long
Island Bancorp, Inc., incorporated by reference to the
Registrant's Current Report on Form 8-K, dated April 10, 1998,
as amended by the First Amendment (incorporated by reference
to the Registrant's Current Report on Form 8-K dated May 29,
1998) and the Second Amendment (incorporated by reference to
the Registrant's Current Report on Form 8-K dated July 10,
1998).
5. Opinion of Thacher Proffitt & Wood, counsel for Registrant, as
to the legality of the securities being registered.
23.1 Consent of Thacher Proffitt & Wood (included in Exhibit 5
hereof).
23.2 Consent of KPMG Peat Marwick LLP.
ITEM 9. UNDERTAKINGS.
A. RULE 415 OFFERING. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof)
-4-
<PAGE>
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) (ss. 230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
C. INCORPORATED ANNUAL AND QUARTERLY REPORTS. The undersigned Registrant
hereby undertakes to deliver or cause to be delivered with the prospectus, to
each person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
D. FILING OF REGISTRATION ON FORM S-8. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that
-5-
<PAGE>
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant for expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
-6-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lake Success, State of New York, on September 30,
1998.
Astoria Financial Corporation
(Registrant)
By:/s/ George L. Engelke, Jr.
-----------------------------
George L. Engelke, Jr.
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George L. Engelke, Jr. Chairman of the Board, President and September 30, 1998
- ---------------------------------------------- Chief Executive Officer (Principal
George L. Engelke, Jr. Executive Officer) and Director
/s/ Gerard C. Keegan Vice Chairman, Chief Administrative September 30, 1998
- ----------------------------------------------
Gerard C. Keegan
/s/ Monte N. Redman Executive Vice President, Treasurer and September 30, 1998
- ---------------------------------------------- Chief Financial Officer (Principal
Monte N. Redman Financial and Accounting Officer)
/s/ Robert G. Bolton Director September 30, 1998
- ----------------------------------------------
Robert G. Bolton
/s/ Andrew M. Burger Director September 30, 1998
- ----------------------------------------------
Andrew M. Burger
/s/ Denis J. Connors Director September 30, 1998
- ----------------------------------------------
Denis J. Connors
/s/ Thomas J. Donahue Director September 30, 1998
- ----------------------------------------------
Thomas J. Donahue
/s/ Peter C. Haeffner, Jr. Director September 30, 1998
- ----------------------------------------------
Peter C. Haeffner, Jr.
/s/ William J. Fendt Director September 30, 1998
- ----------------------------------------------
William J. Fendt
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Ralph F. Palleschi Director September 30, 1998
- ----------------------------------------------
Ralph F. Palleschi
/s/ Thomas V. Powderly Director September 30, 1998
- ----------------------------------------------
Thomas V. Powderly
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C> <C>
4.1 Form of Option Conversion Agreement by and between Astoria
Financial Corporation and Former Officer or Director of Long
Island Bancorp, Inc. dated September 30, 1998.
4.2 Form of Advisory Board Option Agreement by and between Astoria
Financial Corporation and Former Director of Long Island Bancorp,
Inc. dated September 30, 1998.
4.3 Certificate of Incorporation of Astoria Financial Corporation,
incorporated by reference to the Registrant's Registration
Statement on Form S-1, dated October 1, 1993, as amended
(Registration No. 33-67044) as amended by amendment
incorporated by reference to
the Registrant's Form 10-Q/A filed on September 10, 1998 .................................... *
4.4 Rights Agreement dated as of July 17, 1996 between Astoria
Financial Corporation and Chase Mellon Shareholder Services,
L.L.C., incorporated by reference to Registrant's Registration
Statement on Form 8-A dated July 17, 1996, as amended by an
amendment incorporated by reference to Registrant's Current
Report on Form 8-K/A dated April 10, 1998.................................................... *
4.5 By-Laws of Astoria Financial Corporation, incorporated by
reference to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, filed with the
Commission on
March 30, 1994............................................................................... *
4.6 Agreement and Plan of Merger dated as of the 2nd day of April,
1998 by and between Astoria Financial Corporation and Long
Island Bancorp, Inc., incorporated by reference to the
Registrant's Current Report on Form 8-K/A, dated April 10,
1998, as amended by the First Amendment dated as of May 20,
1998(incorporated by reference to the Registrant's Current
Report on Form 8-K dated May 29, 1998) and the Second
Amendment dated as of July 9, 1998 (incorporated by reference
to the Registrant's Current Report on
Form 8-K dated July 10, 1998)................................................................ *
5. Opinion of Thacher Proffitt & Wood, counsel for Registrant, as to
the legality of the securities being registered.
23.1 Consent of Thacher Proffitt & Wood (included in Exhibit 5 hereof).
23.2 Consent of KPMG Peat Marwick LLP.
</TABLE>
* Incorporated by reference.
-9-
EXHIBIT 4.1
Form of Option Conversion Agreement by and between Astoria Financial Corporation
and Former Director or Officer of Long Island Bancorp, Inc. dated September 30,
1998.
<PAGE>
EXHIBIT 4.1
-----------
Form of Option Conversion Agreement by and between Astoria Financial
Corporation and Former Director or Officer of Long Island Bancorp, Inc.
dated September 30, 1998.
ASTORIA FINANCIAL CORPORATION
STOCK OPTIONS ASSUMED PURSUANT TO SECTION 1.04 OF
THE AGREEMENT AND PLAN OF MERGER DATED APRIL 2, 1998 (AS AMENDED)
BETWEEN ASTORIA FINANCIAL CORPORATION AND LONG ISLAND BANCORP, INC.
OPTION CONVERSION CERTIFICATE
-----------------------------
______________________________________________ ________-____-________
NAME OF OPTION HOLDER SOCIAL SECURITY NUMBER
_______________________________________________________________________________
STREET ADDRESS
______________________________ ________________ _____________________________
CITY STATE ZIP CODE
This Option Conversion Certificate sets forth the terms and conditions on which
options to purchase common stock of Long Island Bancorp, Inc. ("LISB Options")
granted to the Option Holder named above by Long Island Bancorp, Inc. ("LISB")
and outstanding at the Effective Time of the merger of LISB into Astoria
Financial Corporation ("AFC") have been converted into options to purchase
common stock of AFC ("Converted Options") pursuant to section 1.04 of the
Agreement and Plan of Merger dated as of April 2, 1998, as amended, by and
between AFC and LISB (the "Merger Agreement"). Below are specific terms and
conditions applicable to this Converted Option. Attached as Exhibit A are its
general terms and conditions.
<TABLE>
<CAPTION>
===================================================================================================
(A) (B) (C) (D) (E)
===================================================================================================
<S> <C> <C> <C> <C> <C>
LISB OPTION
- ---------------------------------------------------------------------------------------------------
Grant Date:
- ---------------------------------------------------------------------------------------------------
Class of Optioned Shares Common Common Common Common Common
- ---------------------------------------------------------------------------------------------------
No. of Shares
- ---------------------------------------------------------------------------------------------------
Exercise Price Per Share
- ---------------------------------------------------------------------------------------------------
Option Type (ISO or NQSO)
- ---------------------------------------------------------------------------------------------------
Plan (Employee or Director)
- ---------------------------------------------------------------------------------------------------
Option Expiration Date
- ---------------------------------------------------------------------------------------------------
CONVERTED OPTION
- ---------------------------------------------------------------------------------------------------
Class of Optioned Shares* Common Common Common Common Common
- ---------------------------------------------------------------------------------------------------
No. of Shares*
- ---------------------------------------------------------------------------------------------------
Exercise Price Per Share*
- ---------------------------------------------------------------------------------------------------
Option Type (ISO or NQSO)
- ---------------------------------------------------------------------------------------------------
Option Expiration Date*
===================================================================================================
*SUBJECT TO ADJUSTMENT AS PROVIDED IN THE GENERAL TERMS AND CONDITIONS.
</TABLE>
By signing where indicated below, AFC grants this Converted Option upon the
specified terms and conditions, and the Option Holder (1) acknowledges receipt
of this Option Conversion Certificate, including Exhibit A and Appendices A and
B thereto, and agrees to observe and be bound by the terms and conditions set
forth herein,(2) acknowledges receipt of the Prospectus dated September 30, 1998
pursuant to which shares of common stock of AFC which may be acquired upon
exercise of Converted Options are being offered and (3) agrees that this Option
Conversion Certificate and the attached Exhibit A (and Appendices A and B
attached thereto) supersedes, in their entirety, any and all prior terms and
conditions, agreements, understandings and arrangements, whether or not in
writing, with respect to his or her LISB Options.
ASTORIA FINANCIAL CORPORATION OPTION HOLDER
By______________________________________ __________________________________
NAME: ALAN P. EGGLESTON
TITLE: EXECUTIVE VICE PRESIDENT
<PAGE>
EXHIBIT A
---------
ASTORIA FINANCIAL CORPORATION
STOCK OPTIONS GRANTED PURSUANT TO SECTION 1.04
OF THE AGREEMENT AND PLAN OF MERGER, DATED APRIL 2, 1998,
AS AMENDED, BETWEEN ASTORIA FINANCIAL CORPORATION AND
LONG ISLAND BANCORP, INC.
GENERAL TERMS AND CONDITIONS
SECTION 1. APPLICABILITY.
This Exhibit A establishes the general terms and conditions applicable
to all options to purchase Common Stock, par value .01 per share, of Astoria
Financial Corporation ("AFC Common Stock") that have been granted by Astoria
Financial Corporation ("AFC") pursuant to section 1.04 of the Agreement and Plan
of Merger, dated April 2, 1998, as amended, by and between AFC and Long Island
Bancorp, Inc. (the "Merger Agreement") in substitution for options to purchase
common stock of Long Island Bancorp, Inc. ("LISB Common Stock") outstanding
under the Long Island Bancorp, Inc. 1994 Stock Incentive Plan (the "LISB
Employees Plan") or the Long Island Bancorp, Inc. 1994 Non-Employee Directors'
Stock Option Program (the "LISB Directors Plan") at the Effective Time of the
merger of Long Island Bancorp, Inc. ("LISB") with and into AFC pursuant to the
Merger Agreement (the "Effective Time"). For purposes of this Exhibit A and the
Option Conversion Certificate to which it is attached, options to purchase LISB
Common Stock that are outstanding at the Effective Time are referred to as "LISB
Options," the options to purchase AFC Common Stock that are granted in
substitution therefor are referred to as "Converted Options," and holders of
LISB Options or Converted Options are referred to as "Option Holders." This
Exhibit A, together with the Option Conversion Certificate to which it is
attached, constitute an Option Conversion Agreement containing all of the terms
and conditions of the Converted Options and supersede in their entirety all of
the terms and conditions of the LISB Employees Plan and the LISB Directors Plan
and any other agreements, understandings or arrangements, whether or not in
writing, evidencing or pertaining to any LISB Option.
SECTION 2. AFC COMMON STOCK SUBJECT TO CONVERTED OPTION.
The maximum number of shares of AFC Common Stock which may be
purchased upon exercise of a Converted Option is the number shown on the Option
Holder's Option Conversion Certificate. The number of shares of AFC Common Stock
which may be purchased upon exercise of the Converted Option at any time is the
maximum number shown on the Option Holder's Option Conversion Certificate
reduced by one share for each share of AFC Common Stock as to which the
Converted Option has previously been exercised. The number of shares of AFC
Common Stock which may be purchased upon exercise of the Converted Option is
subject to adjustment at the time and in the manner provided in section 13
below.
SECTION 3. INCENTIVE STOCK OPTION TREATMENT.
If a LISB Option is designated as an ISO on the Option Holder's Stock
Option Certificate, AFC intends the Converted Option evidenced thereby to be an
"incentive stock option" within the meaning of section 422 of the Internal
Revenue Code of 1986 ("Code") to the maximum
Page 1 of 12
<PAGE>
permissible extent. If the LISB Option is not designated as an ISO, and to the
extent that the terms of any LISB Option designated as an ISO do not permit it
(or any portion thereof) to qualify as an "incentive stock option" under the
Code, the Converted Option or the part not so qualifying shall be exercisable in
accordance with its terms and treated as a non-qualified stock option under the
Code.
SECTION 4. OPTION PERIOD.
(a) The Converted Option shall be exercisable at any time during the
period beginning at the Effective Time and ending on the earliest to occur of
the following dates and times:
(i) the Option Expiration Date shown on the Option Conversion
Certificate; and
(ii) if the Option Holder incurred a Termination of Service (as
defined below) prior to the Effective Time, the close of business on:
(A) the first anniversary of a Termination of Service that is due to
Retirement (as defined below), Disability (as defined below) or death
and (B) ninety (90) days after a Termination of Service (as defined
below) that was not due to Retirement, Disability, or death or a
Termination for Cause (as defined below); and
(iii) if the Option Holder did not incur a Termination of
Service prior to the Effective Time: (A) the date and time of the
Option Holder's Termination of Service (as defined below) that is a
Termination for Cause; (B) in the case of Converted Options issued in
substitution for Prior LISB Options granted under the LISB Employees
Plan, the close of business on the first anniversary of the Option
Holder's Termination of Service that is not a Termination for Cause;
and (C) in the case of Converted Options issued in substitution for
Prior LISB Options under the LISB Directors Plan, the date and time
of a Termination of Service that results from a voluntary resignation
or refusal to stand for election as a director or advisory director
that is not due to Retirement, death or Disability, and the first
anniversary of Termination of Service in all other cases
(the "Option Period").
(b) An Option Holder's "Termination of Service" shall be deemed to
occur: (i) before the Effective Time, on the earliest date on which he or she is
neither an employee nor a non-employee director (including an advisory or
emeritus director) nor a consultant with respect to LISB or any of its
subsidiaries and (ii) on or after the Effective Time, on the earliest date on
which he or she is neither an employee nor a non-employee director (including an
advisory or emeritus director) nor a consultant with respect to AFC or any of
its subsidiaries. An Option Holder who is an employee, non-employee director
(including an advisory or emeritus director) or consultant of LISB or any of its
subsidiaries immediately prior to the Effective Time and who becomes an
employee, non-employee director (including an advisory or emeritus director) or
consultant of AFC or any of its subsidiaries at the Effective Time shall not
incur a Termination of Service as of the Effective Time.
(c) An Option Holder's Termination of Service at or after the
Effective Time shall be deemed a "Termination for Cause" if it is due to the
Option Holder's: (i) personal dishonesty, (ii) incompetence, (iii) willful
misconduct, (iv) intentional failure to perform stated duties, (v) breach of
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<PAGE>
a fiduciary duty involving personal profit, or (vi) willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease and desist order.
(d) An Option Holder's Termination of Service prior to the Effective
Time shall have been due to "Retirement" if it constituted: (i) in the case of a
LISB Option granted under the LISB Employees Plan, retirement from active
employment with LISB and all of its subsidiaries upon or after attainment of (A)
age sixty-five (65), (B) age sixty (60) if such retirement was approved by the
committee constituted under section 3 of the LISB Employees Plan (the "LISB
Committee"), or (C) age fifty-five (55) if at the time of such retirement the
sum of the Option Holder's age plus years of "Vested Service" under the
Retirement Plan of The Long Island Savings Bank, FSB in RSI Retirement Trust was
at least eighty-five (85) years and (ii) in the case of a LISB Option granted
under LISB Directors Plan, voluntary retirement from active service as a
director of Long Island Bancorp, Inc. upon or after attaining age 75.
(e) An Option Holder's Termination of Service prior to the Effective
Time shall have been due to "Disability" if it constituted: (i) in the case of a
LISB Option granted under the LISB Employees Plan, (A) disability as defined
under any employment agreement or consulting agreement in effect for the Option
Holder at the time of such Termination of Service or (B) if the Option Holder
was not then a party to an employment agreement or consulting agreement which
contained a definition of the term disability, then: (I) disability as
determined by the LISB Committee in accordance with standards and procedures
similar to those under any group long-term disability plan in effect for
employees of LISB or The Long Island Savings Bank, FSB (if any) and (II) if
there was no such plan, physical or mental disability which was determined in
writing to be total and permanent by a medical physician selected in good faith
by the LISB Committee and (ii) in the case of a LISB Option granted under the
LISB Directors Plan, a physical or mental disability which was determined in
writing to be total and permanent by an independent physician selected in good
faith by the Board of Directors of LISB and reasonably satisfactory to the
Option Holder.
(f) Any and all determinations, consents or approvals required or
permitted to be made or given by the LISB Committee prior to the Effective Time
may be made or given by the AFC Committee after the Effective Time.
SECTION 5. EXERCISE PRICE.
During the Option Period, the Option Holder shall have the right to
purchase all or any portion of the AFC Common Stock then available for purchase
upon exercise of the Converted Option at the Exercise Price per Share specified
for the Converted Option on the Stock Option Certificate.
SECTION 6. METHOD OF EXERCISE.
The Option Holder may, at any time during the Option Period, exercise
his or her right to purchase all or any part of the optioned AFC Common Stock;
PROVIDED, HOWEVER, that the minimum number of shares of optioned Common Stock
which may be purchased shall be one hundred (100) or, if less, the total number
of shares of optioned AFC Common Stock then subject to the Converted Option. The
Option Holder shall exercise such right by:
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<PAGE>
(a) giving written notice to AFC, in the form attached hereto as
Appendix A; and
(b) either (i) delivering to AFC full payment of the Exercise
Price for the Common Stock to be purchased or (ii) requesting a
Cashless Exercise pursuant to section 7 below or a Net Exercise
pursuant to section 8 below, in either case which is approved by AFC.
The date of exercise shall be the earliest date practicable following the date
the requirements of this section 6 have been satisfied, but in no event more
than three (3) days after such date. Except as provided below in the case of a
Net Exercise, payment shall be made in United States dollars by certified check,
money order or bank draft made payable to the order of Astoria Financial
Corporation or in such other manner as AFC may agree to accept. As soon as is
practicable following the date on which the Option Holder has satisfied the
requirements of this section 6, the Committee shall take such action as is
necessary to cause AFC to issue a stock certificate evidencing the AFC Common
Stock that has been purchased. The Option Holder shall have no right to vote or
to receive dividends, nor have any other rights with respect to AFC Common Stock
subject to the Converted Option, prior to the date as of which such AFC Common
Stock is transferred to the Option Holder on the stock transfer records of AFC,
and no adjustments shall be made for any dividends or other rights for which the
record date is prior to the date as of which such transfer is effected.
SECTION 7. CASHLESS EXERCISE.
(a) For purposes of this section 7, a "Cashless Exercise" is a
transaction in which the Option Holder exercises all or a portion of the
Converted Option, AFC issues the entire number of shares of AFC Common Stock for
which the Converted Option is exercised, and AFC receives directly from a third
party who is not the Option Holder the entire Exercise Price that is due.
(b) The Option Holder may request that AFC permit him or her to
exercise the Converted Option (or any portion thereof permitted under section 6)
in a Cashless Exercise. If the Converted Option in question was granted in
substitution for a LISB Option granted under the LISB Employees Plan, AFC shall
either (i) approve such request or (ii) treat such request as a request for a
Net Exercise pursuant to section 8 below. If the Converted Option was granted in
substitution for a LISB Option granted under the LISB Directors Plan, AFC may,
but shall have no obligation to, approve such request.
(c) If a request for a Cashless Exercise is approved, then AFC shall
take one of the following actions:
(i) AFC shall cause the Converted Option to be exercised through
the cashless exercise program implemented by LISB and in effect at
the Effective Time, as such cashless exercise program may thereafter
be modified by AFC from time to time. Under this program, a broker or
brokers approved by AFC will establish with AFC coordinated
procedures for the broker to (A) purchase from the Option Holder, in
a principal transaction for the broker's own account, all or a
portion of the AFC Common Stock that is purchased by the Option
Holder upon exercise of the Converted Option and (B) remit directly
to AFC on behalf of the Option Holder a
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portion of the purchase price equal to aggregate Exercise Price due
upon exercise of the Converted Option.
(ii) If AFC, in its sole and absolute discretion, determines not
to continue the cashless exercise program described in section
7(b)(i) but makes available one or more other cashless exercise
programs for holders of options to purchase AFC Common Stock, AFC
shall permit the Converted Option to be exercised through any
cashless exercise then made available by AFC to the holders of any
other options to purchase AFC Common Stock granted in consideration
for service as an officer or director of AFC or of its predecessors
or any of their respective subsidiaries.
(iii) If AFC, in its sole and absolute discretion, determines
not to continue the cashless exercise program described in section
7(c)(i) and does not make available other cashless exercise programs
described in section 7(c)(ii), it shall cooperate with the Option
Holder in a cashless exercise effected through a broker selected by
the Option Holder and reasonably satisfactory to AFC; PROVIDED,
HOWEVER, that AFC shall not incur any brokerage commissions or other
costs in connection therewith and shall not be required to accept
payment of the Exercise Price in any form not authorized under
section 6.
The choice among the foregoing alternatives shall be made by AFC in its sole and
absolute discretion.
SECTION 8. NET EXERCISE.
(a) For purposes of this section 8, a "Net Exercise" is a transaction in
which (i) an Option Holder exercises all or a portion of the Converted Option,
(ii) AFC issues to the Option Holder a number of shares of AFC Common Stock
equal to the excess of (A) the number of shares of AFC Common Stock for which
the Converted Option is exercised over (B) the smallest number of whole shares
of AFC Common Stock that have an aggregate Fair Market Value (as defined below)
at least equal to the aggregate Exercise Price that is due to AFC and (iii) AFC
waives payment of the Exercise Price and cancels the Converted Option as to the
number of shares of AFC Common Stock described in section 8(a)(ii)(B).
(b) If the Option Holder of a Converted Option that was granted in
substitution for a LISB Option granted under the LISB Directors Plan requests a
Net Exercise of all or any portion of a Converted Option and establishes to the
satisfaction of AFC that he owns, and has owned for a period of at least six (6)
months, shares of AFC Common Stock having an aggregate Fair Market Value at
least equal to the aggregate Exercise Price of that portion of the Converted
Option that is being exercised, AFC shall approve such request. If AFC, in its
discretion, elects to treat a request for a Cashless Exercise as a request for a
Net Exercise pursuant to section 7(b)(ii), it shall approve such deemed request.
The Option Holder shall not have the right to request, nor shall AFC have any
obligation to consider or approve, a request for a Net Exercise in any other
circumstances.
(c) If a request for a Net Exercise is approved, AFC shall (i) cancel the
Option Holder's Converted Option with respect to the entire number of shares of
AFC Common Stock to which the Net Exercise is applicable; (ii) issue to the
Option Holder a number of shares of AFC Common Stock equal to excess of (A) the
number of shares of AFC Common Stock for which the Converted Option is being
canceled over (B) the smallest number of whole shares of AFC Common Stock that
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<PAGE>
have an aggregate Fair Market Value as of the date of exercise at least equal to
the aggregate Exercise Price that is due to AFC and (iii) waive payment of the
Exercise Price in exchange for cancellation of the Converted Option as to the
number of shares of AFC Common Stock described in section 8(c)(ii)(B).
(d) For purposes of this section 8 and section 13(d), the "Fair Market
Value" of a share of AFC Common Stock on any date means: (i) the average of the
highest and lowest reported sales prices on the date in question (or if there is
no reported sale on such date, on the last preceding date on which any reported
sale occurred) as reported in the principal consolidated reporting system with
respect to securities listed or admitted to trading on the principal United
States securities exchange (including the Nasdaq Stock Market as a national
securities exchange for this purpose) on which the shares of AFC Common Stock
are then listed or admitted to trading; or (ii) if shares of AFC Common Stock
are not listed or admitted to trading on any such exchange, the average of the
closing high bid and low asked quotations with respect to a share of AFC Common
Stock on such date on the National Association of Securities Dealers Automated
Quotations System, or, if no such quotation is provided, on another similar
system, selected by the AFC Committee (as defined below), then in use; or (iii)
if sections 8(d)(i) and (ii) are not applicable, the fair market value of a
share of AFC Common Stock as the AFC Committee may determine in good faith.
SECTION 9. DIVIDEND EQUIVALENT RIGHTS.
The Option Holder shall have no rights to dividend equivalents with
respect to the shares of AFC Common Stock available for purchase under any
unexercised Converted Option.
SECTION 10. TAX REIMBURSEMENTS.
The Option Holder shall have no right to any reimbursement,
indemnification or other payment, cash or otherwise, in relation to any federal,
state or local taxes for which the Option Holder may be liable in connection
with the exercise of a Converted Option or any portion thereof.
SECTION 11. STOCK APPRECIATION RIGHTS.
The Option Holder shall have no right to receive from AFC any cash
payment in full or partial settlement of his rights in, to or under a Converted
Option, whether denominated a limited right, stock appreciation right,
appreciation right, surrender option, SAR, or LSAR or known by any other name.
SECTION 12. DELIVERY AND REGISTRATION OF AFC COMMON STOCK.
The obligation of AFC to deliver AFC Common Stock pursuant to any
Converted Option shall, if the AFC Committee so requests, be conditioned upon
the receipt of a representation as to the investment intention of the person to
whom such AFC Common Stock is to be delivered, in such form as the AFC Committee
shall determine to be necessary or advisable to comply with the provisions of
applicable federal, state or local law. It may be provided that any such
representation shall become inoperative upon a registration of the AFC Common
Stock or upon the occurrence of any other event eliminating the necessity of
such representation. AFC shall not be required to deliver any AFC Common Stock
under this Agreement prior to (a) the admission of such AFC Common Stock to
listing on any stock exchange on which AFC Common Stock may then be listed, or
(b) the
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completion of such registration or other qualification under any state or
federal law, rule or regul ations as the AFC Committee shall determine to be
necessary or advisable.
SECTION 13. ADJUSTMENTS IN THE EVENT OF REORGANIZATION.
(a) The existence of any Converted Option hereunder shall not limit,
affect or restrict in any way the right or power of the Board of Directors of
AFC or the shareholders of AFC to make or authorize (i) any adjustment,
recapitalization, reorganization or other change in AFC's or any subsidiary's
capital structure or its business, (ii) any merger, consolidation or change in
the ownership of AFC or any subsidiary, (iii) any issue of bonds, debentures,
capital, preferred or prior preference stocks ahead of or affecting AFC's or any
subsidiary's capital stock or the rights thereof, (iv) any dissolution or
liquidation of AFC or any subsidiary, (v) any sale or transfer of all or any
part of AFC's or any subsidiary's assets or business, or (vi) any other
corporate act or proceeding by AFC or any subsidiary. No Option Holder or any
other person shall have any claim against any member of the Board of Directors
of AFC or the AFC Committee, or any subsidiary, or any employees, officers or
agents of AFC or any subsidiary, as a result of any such action.
(b) In the event of any merger, consolidation, or other business
reorganization in which AFC is the surviving entity, and in the event of any
stock split, stock dividend or other event generally affecting the number of
shares of AFC Common Stock held by each person who is then a shareholder of
record, the number of shares of AFC Common Stock then subject to a Converted
Option and the Exercise Price per share of such Converted Option shall be
adjusted to account for such event. Such adjustment shall be effected by
multiplying the number of shares of AFC Common Stock then subject to the
Converted Option by an amount equal to the number of shares of AFC Common Stock
that would be owned after such event by a person who, immediately prior to such
event, was the holder of record of one share of AFC Common Stock (the
"Adjustment Factor") and the Exercise Price of the Converted Option shall be
adjusted by dividing the Exercise Price by the Adjustment Factor; PROVIDED,
HOWEVER, that the AFC Committee may, in its discretion, establish another
appropriate method of adjustment that substantially preserves the value, rights
and benefits of the Converted Option.
(c) If AFC enters into or is involved in any merger, reorganization or
other business combination with any person or entity (such merger,
reorganization or other business combination to be referred to herein as a
"Merger Event") in which AFC will not be, or is not, the surviving corporation,
and AFC determines not to make the cash or certified check payment described in
section 13(d), AFC shall compel and obligate, as a condition of the consummation
of the Merger Event, the surviving or resulting corporation and/or the other
party to the Merger Event, as necessary, or any parent, subsidiary or acquiring
corporation thereof, to grant substitute stock options in respect of the shares
of common or other capital stock of such surviving or resulting corporation on
such terms and conditions, as to the number of shares, pricing and otherwise,
which shall substantially preserve the value, rights and benefits of any
affected Converted Options.
(d) Notwithstanding anything to the contrary, if any Merger Event occurs,
AFC shall have the right, but not the obligation, to pay to each affected Option
Holder an amount in cash or certified check equal to the excess of the Fair
Market Value of the AFC Common Stock underlying any affected unexercised
Converted Options as of the date of the execution of the agreement evidencing
the Merger Event over the aggregate Exercise Price of such unexercised Converted
Options.
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(e) Upon receipt by any affected Option Holder of any such cash, certified
check, or substitute stock options as a result of any such Merger Event, such
Option Holder's affected Converted Options for which such cash, certified check
or substitute awards was received shall be thereupon cancelled without the need
for obtaining the consent of any such affected Option Holder.
(f) The foregoing adjustments and the manner of application of the
foregoing provisions, including, without limitation, the issuance of any
substitute stock options, shall be determined in good faith by the AFC Committee
in its sole discretion. Any such adjustment may provide for the elimination of
fractional shares.
SECTION 14. ADMINISTRATION.
(a) Each Converted Option shall be administered by the committee of the
Board of Directors of AFC appointed by AFC to administer AFC's 1996 Stock Option
Plan for Officers and Employees of AFC (the "AFC Committee").
(b) The AFC Committee is authorized to construe and interpret the
Converted Option and this Option Conversion Agreement to promulgate, amend and
rescind rules and regulations relating to the implementation, administration and
maintenance of the Converted Options. Subject to the terms and conditions
hereof, the AFC Committee shall make all determinations necessary or advisable
for the implementation, administration and maintenance of the Converted Options
including, without limitation, (i) imposing such restrictions, terms and
conditions upon such Converted Option as the AFC Committee shall deem
appropriate, and (ii) correcting any technical defect(s) or technical
omission(s), or reconciling any technical inconsistency(ies), in the Converted
Options and/or the terms and conditions contained in this Option Conversion
Agreement. The AFC Committee may designate persons other than members of the AFC
Committee to carry out the day-to-day ministerial administration of the
Converted Options under such conditions and limitations as it may prescribe. The
AFC Committee's determinations need not be uniform and may be made selectively
among Option Holders, whether or not such Option Holders are similarly situated.
Any determination, decision or action of the AFC Committee in connection with
the construction, interpretation, administration, implementation or maintenance
of any Converted Option shall be final, conclusive and binding upon all Option
Holders and any person(s) claiming under or through any Option Holders.
(c) Neither the Board of Directors of AFC nor the AFC Committee, nor any
member of either, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the
Converted Options and the members of the Board of Directors of AFC and the AFC
Committee shall be entitled to indemnification and reimbursement by AFC in
respect of any claim, loss, damage or expense (including, without limitation,
attorneys' fees) arising or resulting therefrom to the fullest extent permitted
by law and/or under any directors and officers liability insurance coverage
which may be in effect from time to time.
SECTION 15. NO RIGHT TO CONTINUED SERVICE. Nothing herein nor any action
of the Board of Directors of AFC or of the AFC Committee with respect to a
Converted Option shall be held or construed to confer upon the Option Holder any
right to a continuation of service by AFC or any direct or indirect subsidiary
thereof. The Option Holder may be dismissed or otherwise dealt with as though
this Converted Option or the related LISB Option did not exist.
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SECTION 16. TAXES. Where any person is entitled to receive shares of AFC
Common Stock pursuant to the exercise of the Converted Option granted hereunder,
AFC shall have the right to require such person to pay to AFC the amount of any
tax which AFC is required to withhold with respect to such shares, or, in lieu
thereof, to retain, or to sell without notice, a sufficient number of shares of
AFC Common Stock to cover the amount required to be withheld.
SECTION 17. NOTICES. Any communication required or permitted to be given
hereunder, including any notice, direction, designation, comment, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below, or at such other
address as one such party may by written notice specify to the other party:
(a) If to AFC or the AFC Committee:
Astoria Financial Corporation
One Astoria Federal Plaza
Lake Success, New York 11042
Attention: Corporate Secretary
-------------------
(b) If to the Option Holder, to the Option Holder's address as
shown on the Stock Option Certificate or specified in any subsequent
notice to AFC.
SECTION 18. RESTRICTIONS ON TRANSFER.
The Converted Option granted hereunder shall not be subject in
any manner to anticipation, alienation or assignment, nor shall such
option be liable for or subject to debts, contracts, liabilities,
engagements or torts, nor shall it be transferable by the Option Holder
other than by will or by the laws of descent and distribution or as
otherwise permitted herein. To name a Beneficiary who may exercise the
Option Holder's Converted Options following the Option Holder's death, the
Option Holder must complete the attached Appendix B and file it with the
Corporate Secretary of AFC prior to his or her death. If this Converted
Option is designated as an ISO, the Option Holder shall not, without prior
notice to the AFC Committee, dispose of shares of AFC Common Stock
acquired pursuant to the exercise of an "Incentive Stock Option" until
after the later of (a) the second anniversary of the date on which the
Incentive Stock Option was granted, or (b) the first anniversary of the
date on which the shares were acquired.
SECTION 19. SUCCESSORS AND ASSIGNS.
The Option Conversion Agreement shall inure to the benefit of
and shall be binding upon AFC and the Option Holder and their respective
heirs, successors and assigns.
SECTION 20. CONSTRUCTION OF LANGUAGE.
Whenever appropriate in the Exhibit A, words used in the
singular may be read in the plural, words used in the plural may be read
in the singular, and words importing the masculine gender may be read as
referring equally to the feminine or the neuter. Any reference to a
section shall be a reference to a section of this Exhibit A, unless the
context clearly indicates otherwise.
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SECTION 21. GOVERNING LAW.
This Agreement shall be construed, administered and enforced
according to the laws of the State of New York without giving effect to
the conflict of laws principles thereof, except to the extent that such
laws are preempted by the federal law.
SECTION 22. AMENDMENT.
The Option Conversion Agreement may be amended, in whole or in
part and in any manner, at any time and from time to time, by AFC upon
written notice to the Option Holder; PROVIDED, HOWEVER, that no amendment
which materially adversely affects the rights of the Option Holder with
respect to the Converted Option shall be effective unless the Option
Holder consents in writing thereto.
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APPENDIX A TO OPTION CONVERSION AGREEMENT
STOCK OPTIONS GRANTED PURSUANT TO SECTION 1.04 OF THE AGREEMENT
AND PLAN OF MERGER, DATED AS OF THE 2ND DAY OF APRIL, 1998, AS AMENDED,
BY AND BETWEEN ASTORIA FINANCIAL CORPORATION AND LONG ISLAND BANCORP, INC.
NOTICE OF EXERCISE OF STOCK OPTION
- --------------------------------------------------------------------------------
Use this Notice to inform the AFC Committee administering the Stock Options
granted pursuant to section 1.04 of the Agreement and Plan of Merger dated as of
the 2nd day of April, 1998, as amended, by and between Astoria Financial
Corporation and Long Island Bancorp, Inc. that you are exercising your right to
purchase shares of Common Stock of Astoria Financial Corporation ("AFC")
pursuant to an option ("Converted Option") granted under the Plan. If you are
not the person to whom the Option was granted ("Option Recipient"), you must
attach to this Notice proof of your right to exercise the Option granted under
the Option Conversion Agreement entered into by AFC and the Option Recipient
("Option Conversion Agreement"). This Notice should be personally delivered or
mailed by certified mail, return receipt requested to: Astoria Financial
Corporation, One Astoria Federal Plaza, Lake Success, New York 11042, Attention:
Carol O'Reilly. The effective date of the exercise of the Option shall be the
earliest date practicable following the date this properly completed Notice is
received by AFC, but in no event more than three business days after such date
("Effective Date"). Except as specifically provided to the contrary herein,
capitalized terms shall have the meanings assigned to them under the Option
Conversion. This Notice is subject to all of the terms and conditions of the
Option Conversion Agreement.
OPTION INFORMATION Identify below the Option that you are exercising by
providing the following information from the Option
Conversion Agreement.
NAME OF OPTION HOLDER: _______________________________________________________
OPTION GRANT DATE: _______________, ______ EXERCISE PRICE PER SHARE: $_____.__
(Month and Day) (Year)
EXERCISE PRICE Compute the exercise price below and select a method of payment.
TOTAL EXERCISE PRICE _______________ x $___________.__ = $___________________
(No. of Shares) (Exercise Price) Total Exercise Price
METHOD OF PAYMENT
/ / I enclose a certified check, money order, or bank draft payable to the
order of Astoria Financial Corporation in the amount of the Total
Exercise Price
/ / Cashless Exercise (subject to approval by the AFC Committee)
/ / Net Exercise (subject to approval by the AFC Committee)
ISSUANCE OF CERTIFICATES
I hereby direct that the stock certificates representing the shares of AFC
Common Stock purchased pursuant to section 2 above be issued to the
following person(s) in the amount specified below:
NAME AND ADDRESS SOCIAL SECURITY NO. NO. OF SHARES
________________________________________
________________________________________ _______-______-_______ _____________
________________________________________
________________________________________ _______-______-_______ _____________
WITHHOLDING ELECTIONS For Employee Option Recipients with Non-Qualified Stock
Options only.
Beneficiaries and Outside Directors should not complete. I understand that
I am responsible for the amount of federal, state and local taxes required
to be withheld with respect to the shares of AFC Common Stock to be issued
to me pursuant to this Notice, but that I may request AFC to retain or sell
a sufficient number of such shares to cover the amount to be withheld. I
hereby request that any taxes required to be withheld be paid in the
following manner [check one]:
/ / With a certified or bank check that I will deliver to AFC on or
before the Effective Date of my Option exercise.
/ / With the proceeds from a sale of Shares of AFC Common Stock that
would otherwise be distributed to me.
/ / Retain Shares of AFC Common Stock that would otherwise be
distributed to me.
I understand that the withholding elections I have made on this form are
not binding on the AFC Committee, and that the AFC Committee will decide
the amount to be withheld and the method of withholding and advise me of
its decision prior to the Effective Date. I further understand that the AFC
Committee may request additional information or assurances regarding the
manner and time at which I will report the income attributable to the
distribution to be made to me.
I further understand that if I have elected to have shares of AFC Common
Stock sold to satisfy tax withholding, I may be asked to pay a minimal
amount of such taxes in cash in order to avoid the sale of more shares of
AFC Common Stock than are necessary.
COMPLIANCE WITH TAX AND SECURITIES LAWS
S H I understand that I must rely on, and consult with, my own tax and legal
I E counsel (and not Astoria Financial Corporation) regarding the application
G R of all laws -- particularly tax and securities laws -- to the transactions
N E to be effected pursuant to my Option and this Notice. I understand that I
will be responsible for paying any federal, state and local taxes that may
become due upon the sale (including a sale pursuant to a "cashless
exercise") or other disposition of shares of AFC Common Stock issued
pursuant to this Notice and that I must consult with my own tax advisor
regarding how and when such income will be reportable.
______________________________________________ ________________________
Signature Date
_______________________________________________________________________________
Address
- --------------------------------------------------------------------------------
- --------------------------------INTERNAL USE ONLY-------------------------------
- --------------------------------------------------------------------------------
ASTORIA FINANCIAL CORPORATION
Received [CHECK ONE]: / / By Hand / / By Mail Post Marked
______________________
DATE OF POST MARK
By _________________________________________________ ______________________
AUTHORIZED SIGNATURE DATE OF RECEIPT
- --------------------------------------------------------------------------------
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APPENDIX B TO STOCK OPTION CONVERSION AGREEMENT
STOCK OPTIONS GRANTED PURSUANT TO SECTION 1.04
OF THE AGREEMENT AND PLAN OF MERGER, DATED AS OF THE 2ND DAY OF APRIL, 1998,
AS AMENDED, BY AND BETWEEN ASTORIA FINANCIAL CORPORATION
AND LONG ISLAND BANCORP, INC.
BENEFICIARY DESIGNATION FORM
- --------------------------------------------------------------------------------
GENERAL Use this form to designate the Beneficiary(ies) who may exercise
INFORMATION Converted Options outstanding to you at the time of your death
under the Option Conversion Agreement dated September 30, 1998
between Astoria Financial Corporation and the Option Holder named
below.
Name of Person
Making Designation ________________________ Social Security Number ___-___-____
Name of
Option Holder _____________________________ Social Security Number ___-___-____
BENEFICIARY Complete sections A and B. If no percentage shares are specified,
DESIGNATION each beneficiary in the same class (primary or contingent) shall
have an equal share. If any designated Beneficiary predeceases
you, the shares of each remaining Beneficiary in the same class
(primary or contingent) shall be increased proportionately.
A PRIMARY BENEFICIARY(IES). I hereby designate the following person(s) as my
primary Beneficiary(ies) under the Option Conversion Agreement, reserving the
right to change or revoke this designation at any time prior to my death:
NAME ADDRESS RELATIONSHIP BIRTHDATE SHARE
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________ Total=100%
B CONTINGENT BENEFICIARY(IES). I hereby designate the following person(s) as my
contingent Beneficiary(ies) under the Option Conversion Agreement to receive
benefits only if all of my primary Beneficiaries should predecease me, reserving
the right to change or revoke this designation at any time prior to my death as
to all outstanding Converted Options:
NAME ADDRESS RELATIONSHIP BIRTHDATE SHARE
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________ Total=100%
S H I understand that this Beneficiary Designation shall be effective only if
I E properly completed and received by the Corporate Secretary of Astoria
G R Financial Corporation prior to my death, and that it is subject to all of
N E the terms and conditions of the Option Conversion Agreement. I also
understand that an effective Beneficiary designation revokes my prior
designation(s) with respect to all outstanding Converted Options.
______________________________________________ ________________________
Your Signature Date
- --------------------------------------------------------------------------------
- --------------------------------INTERNAL USE ONLY-------------------------------
- --------------------------------------------------------------------------------
This Beneficiary Designation was received by Comments
Astoria Financial Corporation on the date
indicated.
By___________________________ __________
Authorized Signature Date
- --------------------------------------------------------------------------------
Page 12 of 12
EXHIBIT 4.2
Form of Advisory Board Option Agreement by and between Astoria Financial
Corporation and Former Director of Long Island Bancorp, Inc. dated September 30,
1998.
<PAGE>
EXHIBIT 4.2
-----------
Form of Advisory Board Opinion Agreement by and between Astoria Financial
Corporation and Former Director of Long Island Bancorp, Inc.
dated September 30, 1998.
ADVISORY BOARD OPTION AGREEMENT
-------------------------------
This OPTION AGREEMENT ("Agreement") is made and entered into as of the
___ day of ________, 1998 by and between ASTORIA FINANCIAL CORPORATION, a
corporation organized and existing under the laws of the State of Delaware and
having an office at One Astoria Federal Plaza, Lake Success, New York 11042-1085
("Corporation") and ___________________ residing at _______________________
("Advisory Director").
W I T N E S S E T H :
--------------------
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
April 2, 1998, by and between the Corporation and Long Island Bancorp, Inc., as
amended ("Merger Agreement"), the Corporation will purchase all of the
outstanding common stock of Long Island Bancorp, Inc. ("Seller") and will cause
the Seller to be merged with and into the Corporation; and
WHEREAS, pursuant to the Merger Agreement, the Corporation has agreed
to cause certain members of the Seller's board of directors as of April 2, 1998
who are willing to serve to be elected or appointed as members of a newly formed
advisory board of the Corporation and to provide compensation for such services
in part through a grant of options as hereinafter provided; and
WHEREAS, the Advisory Director was a member of the Seller's board of
directors as of April 2, 1998 and is willing to serve in such position;
NOW, THEREFORE, the Advisory Director and the Corporation agree as
follows:
SECTION 1. GRANT OF OPTION.
The Corporation hereby grants, and the Advisory Director hereby
accepts the Corporation's grant of, an option, on the terms and conditions
hereinafter set forth, to purchase 4,000 shares of the Corporation's common
stock, par value $.01 per share (each, an "Optioned Share") at an exercise price
equal to the closing sales price for a share of the Corporation's common stock,
par value $.01 per share ("Common Stock") on September 30, 1998, as reported in
the New York City edition of THE WALL STREET JOURNAL ("Exercise Price"). It is
not intended that any of the Options granted hereunder qualify as incentive
stock options described in section 422 of the Internal Revenue Code of 1986
("Code").
<PAGE>
-2-
SECTION 2. TERM AND EXERCISE OF OPTIONS.
(a) Each Option shall be exercisable as to an Optioned Share at any
time beginning on the date of this Agreement and ending on the date ten years
after the date of this Agreement ("Expiration Date").
(b) The Option shall be exercisable in whole or in part; PROVIDED,
HOWEVER, that no partial exercise of the Option shall be for an aggregate
Exercise Price of less than One Thousand Dollars ($1,000). The partial exercise
of an Option shall not cause the expiration, termination or cancellation of the
remaining portion thereof. Upon the partial exercise of the Option, this
Agreement, marked with any notations deemed appropriate by the Corporation,
shall be returned to the Advisory Director together with the delivery of the
certificates described in section 2(e) hereof.
(c) The Option shall be exercised by delivering notice to the
Corporation's principal office to the attention of its Corporate Secretary. Such
notice shall be accompanied by this Agreement, shall specify the number of
Optioned Shares with respect to which the Option is being exercised and shall be
signed by the Advisory Director. The effective date of the proposed exercise
shall be as soon as practicable following the date on which the properly
completed notice is delivered to the Corporate Secretary and shall be in no
event later than three business days after such date. Payment for Optioned
Shares purchased upon the exercise of the Option shall be made on the effective
date of such exercise either (i) in cash, by certified check, bank cashier's
check or wire transfer or (ii) subject to the approval of the Corporation, in
shares of Common Stock owned by the Advisory Director and valued at their Fair
Market Value (as defined in section 8 hereof) on the effective date of such
exercise, or partly in shares of Common Stock with the balance in cash, by
certified check, bank cashier's check or wire transfer. Any payment in shares of
Common Stock shall be effected by the delivery of such shares to the Corporate
Secretary of the Corporation, duly endorsed in blank or accompanied by stock
powers duly executed in blank, together with any other documents and evidences
as the Corporate Secretary of the Corporation shall require from time to time.
(d) During the life of the Advisory Director, the Option shall be
exercisable only by him. The Option shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
(e) Certificates for shares of Common Stock purchased upon the
exercise of the Option shall be issued in the name of the Advisory Director (or
in the name of the person(s) designated by the Advisory Director) and delivered
to the Advisory Director (or the person(s) designated by the Advisory Director)
as soon as practicable following the effective date on which the Option is
exercised.
(f) The exercise of all or any portion of the Option shall have the
effect of reducing the number of Optioned Shares by the number of shares of
Common Stock acquired upon such exercise. At the close of business on the
Expiration Date, the number of Optioned Shares available for purchase shall be
reduced to zero.
<PAGE>
-3-
SECTION 3. CERTAIN ADJUSTMENTS IN THE OPTION.
(a) Subject to any required action by the shareholders of the
Corporation, in the event of any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
of Common Stock or the payment of a stock dividend (but only in shares of Common
Stock), or any other increase or decrease in the number of such shares effected
without receipt of consideration by the Corporation, the Corporation shall
proportionally adjust the number of shares of Common Stock subject to the Option
and the Exercise Price per Optioned Share.
(b) Subject to any required action by the shareholders of the
Corporation, in the event that the Corporation shall be the surviving
corporation in any merger or consolidation (except a merger or consolidation as
a result of which the holders of shares of Common Stock receive securities of
another corporation), the Option, to the extent outstanding on the date of such
merger or consolidation, shall pertain to and apply to the securities which a
holder of the number of shares of Common Stock subject to such Option on such
date would have received in such merger or consolidation, and an appropriate
adjustment shall be made in the Exercise Price.
(c) In the event of (i) a dissolution or liquidation of the
Corporation, (ii) a sale of all or substantially all of the Corporation's
assets, (iii) a merger or consolidation involving the Corporation in which the
Corporation is not the surviving corporation or (iv) a merger or consolidation
involving the Corporation in which the Corporation is the surviving corporation
but the holders of shares of Common Stock receive securities of another
corporation and/or other property, including cash, the Corporation shall either:
(A) cancel, effective immediately prior to the occurrence of
such event, the Option and, in full consideration of such
cancellation, pay to the Advisory Director an amount in cash, for
each Optioned Share then subject to the Option, equal to the excess
of (I) the value, as determined by the Corporation in its absolute
discretion, of the property (including cash) received by the holder
of a share of Common Stock as a result of such event over (II) the
Exercise Price; or
(B) provide for the exchange of the Option for an option on some
or all of the property for which the Common Stock of the Corporation
is exchanged and, incident thereto, make an equitable adjustment as
determined by the Corporation in its absolute discretion in the
Exercise Price, or the number of shares or amount of property subject
to the Option, or both, or, if appropriate, provide for a cash
payment to the Advisory Director in partial consideration for the
exchange of the Option.
The Corporation shall take the same action under this section 3(c) as it takes
under any similar provision of the stock options granted to executive officers
of the Corporation.
(d) In the event of any change in the capitalization of the
Corporation or corporate change other than those specifically referred to in
sections 3(a), (b), or (c) hereof, the Corporation shall make such adjustments
in the number and class of shares subject to the Option outstanding on the date
on which such change occurs and in the Exercise Price as is appropriate to
prevent dilution or enlargement of rights.
<PAGE>
-4-
(e) Except as expressly provided herein, the Advisory Director shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any dividend, any increase or decrease in the
number of shares of stock of any class or any dissolution, liquidation, merger
or consolidation of the Corporation or any other corporation. Except as
expressly provided herein, no issuance by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of Optioned Shares.
SECTION 4. RIGHTS AS A STOCKHOLDER.
No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to the Option until the date of
the issuance of a stock certificate with respect to such shares. Except as
otherwise expressly provided in section 3 hereof, no adjustment to the Option
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.
SECTION 5. WITHHOLDING TAXES.
(a) Whenever shares of Common Stock are to be issued upon the exercise
of the Option, the Corporation shall have the right to require the Advisory
Director to remit to the Corporation in cash an amount sufficient to satisfy
federal, state and local withholding tax requirements, if any, attributable to
such exercise payment prior to the delivery of any certificate or certificates
for such shares.
(b) At the election of the Advisory Director, but subject to the
approval of the Corporation, when shares of Common Stock are to be issued upon
the exercise of the Option, in lieu of the remittance required by section 5(a)
hereof, the Advisory Director may tender to the Corporation a number of shares
of Common Stock determined by him, the Fair Market Value (as defined in section
8 hereof) of which at the tender date the Corporation determines to be
sufficient to satisfy the federal, state and local withholding tax requirements,
if any, attributable to such exercise, occurrence or grant and not greater than
the Advisory Director's estimated total federal, state and local tax obligations
associated with such exercise.
(c) At the election of the Advisory Director, but subject to the
approval of the Corporation, when shares of Common Stock are to be issued upon
the exercise of the Option, in lieu of the remittance required by section 5(a)
hereof, the Corporation shall withhold a number of such shares determined by the
Advisory Director, the Fair Market Value (as defined in section 8 hereof) of
which at the exercise date the Corporation determines to be sufficient to
satisfy the federal, state and local withholding tax requirements, if any,
attributable to such exercise and not greater than the Advisory Director's
estimated total federal, state and local tax obligations associated with such
exercise.
<PAGE>
-5-
SECTION 6. NO OBLIGATION TO EXERCISE.
The grant to the Advisory Director of the Option shall impose no
obligation to exercise such Option.
SECTION 7. TRANSFERS UPON DEATH.
Upon the death of the Advisory Director, the Option may be exercised
only by the executors or administrators of the Advisory Director's estate or by
any person or persons who shall have acquired such right to exercise by will or
by the laws of descent and distribution. No transfer by will or the laws of
descent and distribution shall be effective to bind the Corporation unless the
Corporation shall have been furnished with (a) written notice thereof and with a
copy of the will and/or such evidence as the Corporation may deem necessary to
establish the validity of the transfer and (b) an agreement by the transferee to
comply with all the terms and conditions of the Option that are or would have
been applicable to the Advisory Director and to be bound by the acknowledgments
made by the Advisory Director in connection with the grant of the Option. Except
as provided in this section 7, the Option shall not be transferable and may only
be exercised during the Advisory Director's lifetime by the Advisory Director.
SECTION 8. DEFINITION OF FAIR MARKET VALUE.
The "Fair Market Value" of a share of Common Stock on any date means:
(i) the average of the highest and lowest reported sales prices on the date in
question (or if there is no reported sale on such date, on the last preceding
date on which any reported sale occurred) as reported in the principal
consolidated reporting system with respect to securities listed or admitted to
trading on the principal United States securities exchange (including the Nasdaq
Stock Market as a national securities exchange for this purpose) on which the
shares of Common Stock are then listed or admitted to trading; or (ii) if shares
of Common Stock are not listed or admitted to trading on any such exchange, the
average of the closing high bid and low asked quotations with respect to a share
of Common Stock on such date on the National Association of Securities Dealers
Automated Quotations System, or, if no such quotation is provided, on another
similar system, selected by the Corporation, then in use; or (iii) if sections
8(i) and (ii) are not applicable, the fair market value of a share of Common
Stock as the Corporation may determine in good faith.
SECTION 9. REGISTRATION AND DELIVERY OF OPTIONED SHARES.
The Corporation's obligation to deliver shares of Common Stock under
this Agreement shall, if the Corporation so requests, be conditioned upon the
receipt of a representation as to the investment intention of the person to whom
such shares are to be delivered, in such form as the Corporation shall determine
to be necessary or advisable to comply with the provisions of applicable
federal, state or local law. It may be provided that any such representation
shall become inoperative upon a registration of the shares of Common Stock or
upon the occurrence of any other event eliminating the necessity of such
representation. The Corporation shall not be required to
<PAGE>
-6-
deliver any shares of Common Stock under this Agreement prior to (a) the
admission of such shares of Common Stock to listing on any stock exchange on
which Common Stock may then be listed, or (b) the completion of such
registration or other qualification under any state or federal law, rule or
regulations as the Corporation shall determine to be necessary or advisable. In
the event that the Corporation refuses, pursuant to the preceding sentence, to
deliver shares of its Common Stock upon the exercise of the Option, the
Corporation shall pay to the Advisory Director in a lump sum in cash not later
than the proposed exercise date an amount, for each share of Common Stock with
respect to which the Option was proposed to be exercised, in cancellation of
such Option with respect to such share, equal to the excess of (i) the Fair
Market Value (determined pursuant to section 8) of a share of Common Stock on
the proposed exercise date over (ii) the Exercise Price of the Option.
SECTION 10. REGISTRATION RIGHTS.
At or as soon as practicable following the effective date provided for
in the Merger Agreement, the Corporation shall prepare and file with the
Securities and Exchange Commission on Form S-8 (or another substantially
equivalent form promulgated by the Securities and Exchange Commission and
available to the Corporation) a registration statement covering the issuance of
the Optioned Shares in compliance with applicable laws, rules and regulations.
Following such filing, the Corporation shall take such actions as are necessary
to maintain the effectiveness of such registration through the Expiration Date
or, if earlier, the date on which no Optioned Shares remain available for
purchase hereunder. Notwithstanding anything contained herein to the contrary,
the Corporation's obligations under this section will not require the
Corporation to incur any unreasonable expenses.
SECTION 11. NOTICES.
Any communication required or permitted to be given hereunder,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally or five (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other party:
(a) If to the Corporation:
Astoria Financial Corporation
One Astoria Federal Plaza
Lake Success, New York 11042-1085
Attention: Corporate Secretary
-------------------
(b) If to the Advisory Director, to the Advisory Director's address
first above written or specified in any subsequent notice to the
Corporation.
No notice given to any party shall be deemed effective as to such party until
actually received.
<PAGE>
-7-
SECTION 12. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and shall be binding upon
the Corporation and the Advisory Director and their respective heirs, successors
and assigns.
SECTION 13. CONSTRUCTION OF LANGUAGE.
Whenever appropriate in the Agreement, words used in the singular may
be read in the plural, words used in the plural may be read in the singular, and
words importing the masculine gender may be read as referring equally to the
feminine or the neuter. Any reference to a section shall be a reference to a
section of this Agreement, unless the context clearly indicates otherwise. The
headings of sections in this Agreement are for convenience of reference only and
are not intended to qualify the meaning of any section.
SECTION 14. AMENDMENT.
This Agreement may be amended, in whole or in part, at any time and
from time to time, by written agreement between the Corporation and the Advisory
Director.
SECTION 15. SEVERABILITY.
A determination that any provision of this Agreement, in whole or in
part, is invalid or unenforceable shall not affect the validity or
enforceability of any other provision hereof or of any part of the provision in
question not determined to be unenforceable.
SECTION 16. WAIVER.
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
SECTION 17. COUNTERPARTS.
This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same Agreement.
<PAGE>
-8-
SECTION 18. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York without giving effect to the
conflict of law principles of such laws.
SECTION 19. ENTIRE AGREEMENT.
This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof.
SECTION 20. DISPUTE RESOLUTION.
Any controversy or claim arising out of or relating to this Agreement,
or the breach hereof, shall be settled by arbitration in accordance with the
Commercial Rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitral tribunal may be entered in any court having
jurisdiction thereof. The arbitration shall be held in Nassau County, New York,
or at such other place as may be selected by mutual agreement. The arbitration
shall be conducted before a panel of three neutral arbitrators, all of whom
shall be members of the Bar of the State of New York, actively engaged in
practice of law for at least ten (10) years. Within fifteen (15) days after the
commencement of the arbitration, each party shall select one person to act as
arbitrator, and the two selected shall select a third arbitrator within ten (10)
days after their appointment; if the arbitrators selected by the parties hereto
are unable or fail to agree upon the third arbitrator, the third arbitrator
shall be selected by the President of the American Arbitration Association or
his designee. Either party may, without inconsistency with this Agreement, seek
from a court any interim or provisional relief that may be necessary to protect
the rights or property of that party pending the arbitral tribunal's
determination of the merits of the controversy. Neither party nor the
arbitrators may disclose the existence, content, or results of any arbitration
hereunder without the prior written consent of both parties. The prevailing
party shall be entitled to an award of reasonable attorneys' fees.
SECTION 21. ACCEPTANCE BY ADVISORY DIRECTOR.
By executing this Agreement and returning a fully executed copy hereof
to the Corporation at the address specified in section 11, the Advisory Director
(i) acknowledges receipt of this Agreement and agrees to be bound by the terms
and conditions of this Agreement and (ii) acknowledges receipt of the Prospectus
dated September 30, 1998 pursuant to which shares of Common Stock which may be
acquired upon exercise of options are being offered. If a fully executed copy of
this Agreement is not received by the Corporation within forty-five (45) days
after the date first above written, the Corporation may revoke the option
granted, and thereby avoid all obligations, hereunder.
<PAGE>
-9-
IN WITNESS WHEREOF, the Advisory Director has executed, and the
Corporation has caused its duly authorized representative to execute, this
Agreement as of the date first above written.
ASTORIA FINANCIAL CORPORATION
By:_________________________________
Signature
Title:______________________________
Date:_______________________________
ATTEST:
_________________________________
Secretary
[SEAL]
[INSERT NAME OF ADVISORY DIRECTOR]
____________________________________
Signature
Date:_______________________________
<PAGE>
APPENDIX A TO ADVISORY BOARD OPTION AGREEMENT
STOCK OPTIONS GRANTED PURSUANT TO SECTION 4.13(C)
OF THE AGREEMENT AND PLAN OF MERGER DATED APRIL 2, 1998 (AS AMENDED)
BETWEEN ASTORIA FINANCIAL CORPORATION AND LONG ISLAND BANCORP, INC.
NOTICE OF EXERCISE OF STOCK OPTION
USE THIS NOTICE TO INFORM THE AFC COMMITTEE ADMINISTERING THE STOCK OPTIONS
GRANTED PURSUANT TO SECTION 4.13(C) OF THE AGREEMENT AND PLAN OF MERGER DATED
APRIL 2, 1998, AS AMENDED, BY AND BETWEEN ASTORIA FINANCIAL CORPORATION AND LONG
ISLAND BANCORP, INC. THAT YOU ARE EXERCISING YOUR RIGHT TO PURCHASE SHARES OF
COMMON STOCK OF ASTORIA FINANCIAL CORPORATION ("AFC") PURSUANT TO AN OPTION
("ADVISORY BOARD OPTION") GRANTED UNDER THE PLAN. IF YOU ARE NOT THE PERSON TO
WHOM THE OPTION WAS GRANTED ("OPTION RECIPIENT"), YOU MUST ATTACH TO THIS NOTICE
PROOF OF YOUR RIGHT TO EXERCISE THE OPTION GRANTED UNDER THE ADVISORY BOARD
OPTION AGREEMENT ENTERED INTO BY AFC AND THE OPTION RECIPIENT ("ADVISORY BOARD
OPTION AGREEMENT"). THIS NOTICE SHOULD BE PERSONALLY DELIVERED OR MAILED BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED TO: ASTORIA FINANCIAL CORPORATION, ONE
ASTORIA FEDERAL PLAZA, LAKE SUCCESS, NEW YORK 11042, ATTENTION: CAROL O'REILLY.
THE EFFECTIVE DATE OF THE EXERCISE OF THE OPTION SHALL BE THE EARLIEST DATE
PRACTICABLE FOLLOWING THE DATE THIS PROPERLY COMPLETED NOTICE IS RECEIVED BY
AFC, BUT IN NO EVENT MORE THAN THREE BUSINESS DAYS AFTER SUCH DATE ("EFFECTIVE
DATE"). EXCEPT AS SPECIFICALLY PROVIDED TO THE CONTRARY HEREIN, CAPITALIZED
TERMS SHALL HAVE THE MEANINGS ASSIGNED TO THEM UNDER THE OPTION CONVERSION. THIS
NOTICE IS SUBJECT TO ALL OF THE TERMS AND CONDITIONS OF THE ADVISORY BOARD
OPTION AGREEMENT.
OPTION INFORMATION Identify below the Option that you are exercising by
providing the following information from the Advisory Board
Option Agreement.
NAME OF OPTION HOLDER: ___________________________________
EXERCISE PRICE PER SHARE: $_________.____
EXERCISE PRICE Compute the exercise price below and select a method
of payment.
TOTAL EXERCISE PRICE _______________ x $_________.______ = $__________
(No. of Shares) (Exercise Price)
METHOD OF PAYMENT
/ / I enclose a certified check, money order, or bank draft payable to the
order of Astoria Financial Corporation in the amount of the Total
Exercise Price
/ / Net Exercise (subject to approval by the AFC Committee) in which the
Option is cancelled as to a number of Shares with an Aggregate Fair
Market Value equal to the Total Exercise Price of the Option with the
remainder being issued to the Option Holder
ISSUANCE OF CERTIFICATES
I hereby direct that the stock certificates representing the shares of AFC
Common Stock purchased pursuant to section 2 above be issued to the
following person(s) in the amount specified below:
NAME AND ADDRESS SOCIAL SECURITY NO. NO. OF SHARES
________________________________________
_______-______-_______ _____________
________________________________________
________________________________________
_______-______-_______ _____________
________________________________________
COMPLIANCE WITH TAX AND SECURITIES LAWS
S H I understand that I must rely on, and consult with, my own tax and legal
I E counsel (and not Astoria Financial Corporation) regarding the application
G R of all laws -- particularly tax and securities laws -- to the transactions
N E to be effected pursuant to my Option and this Notice. I understand that I
will be responsible for paying any federal, state and local taxes that may
become due upon the sale (including a sale pursuant to a "cashless
exercise") or other disposition of shares of AFC Common Stock issued
pursuant to this Notice and that I must consult with my own tax advisor
regarding how and when such income will be reportable.
______________________________________________ ________________________
Signature Date
_______________________________________________________________________________
Address
- --------------------------------------------------------------------------------
- --------------------------------INTERNAL USE ONLY-------------------------------
- --------------------------------------------------------------------------------
ASTORIA FINANCIAL CORPORATION
Received [CHECK ONE]: / / By Hand / / By Mail Post Marked
______________________
DATE OF POST MARK
By _________________________________________________ ______________________
AUTHORIZED SIGNATURE DATE OF RECEIPT
- --------------------------------------------------------------------------------
<PAGE>
APPENDIX B TO ADVISORY BOARD OPTION AGREEMENT
STOCK OPTIONS GRANTED PURSUANT TO SECTION 4.13(C)
OF THE AGREEMENT AND PLAN OF MERGER DATED APRIL 2, 1998 (AS AMENDED)
BETWEEN ASTORIA FINANCIAL CORPORATION AND LONG ISLAND BANCORP, INC.
BENEFICIARY DESIGNATION FORM
- --------------------------------------------------------------------------------
GENERAL
INFORMATION USE THIS FORM TO DESIGNATE THE BENEFICIARY(IES) WHO MAY EXERCISE
ADVISORY BOARD OPTIONS OUTSTANDING TO YOU AT THE TIME OF YOUR
DEATH UNDER THE ADVISORY BOARD OPTION AGREEMENT DATED SEPTEMBER
30, 1998 BETWEEN ASTORIA FINANCIAL CORPORATION AND THE OPTION
HOLDER NAMED BELOW.
Name of Person
Making Designation _________________________ Social Security Number ___-__-____
Name of
Option Holder ______________________________ Social Security Number ___-__-____
BENEFICIARY COMPLETE SECTIONS A AND B. IF NO PERCENTAGE SHARES ARE SPECIFIED,
DESIGNATION EACH BENEFICIARY IN THE SAME CLASS (PRIMARY OR CONTINGENT) SHALL
HAVE AN EQUAL SHARE. IF ANY DESIGNATED BENEFICIARY PREDECEASES
YOU, THE SHARES OF EACH REMAINING BENEFICIARY IN THE SAME CLASS
(PRIMARY OR CONTINGENT) SHALL BE INCREASED PROPORTIONATELY.
A PRIMARY BENEFICIARY(IES). I hereby designate the following person(s) as my
primary Beneficiary(ies) under the Advisory Board Option Agreement, reserving
the right to change or revoke this designation at any time prior to my death:
NAME ADDRESS RELATIONSHIP BIRTHDATE SHARE
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________ Total=100%
B CONTINGENT BENEFICIARY(IES). I hereby designate the following person(s) as my
contingent Beneficiary(ies) under the Advisory Board Option Agreement to receive
benefits only if all of my primary Beneficiaries should predecease me, reserving
the right to change or revoke this designation at any time prior to my death as
to all outstanding Advisory Board Options:
NAME ADDRESS RELATIONSHIP BIRTHDATE SHARE
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________
________________________
__________________ ____________ _________ _________%
________________________ Total=100%
S H I understand that this Beneficiary Designation shall be effective only if
I E properly completed and received by the Corporate Secretary of Astoria
G R Financial Corporation prior to my death, and that it is subject to all of
N E the terms and conditions of the Advisory Board Option Agreement. I also
understand that an effective Beneficiary designation revokes my prior
designation(s) with respect to all outstanding Advisory Board Options.
__________________________________________ _____________________________
YOUR SIGNATURE DATE
- --------------------------------------------------------------------------------
- --------------------------------INTERNAL USE ONLY-------------------------------
- --------------------------------------------------------------------------------
This Beneficiary Designation was received by Comments
Astoria Financial Corporation on the date
indicated.
By___________________________ __________
Authorized Signature Date
- --------------------------------------------------------------------------------
EXHIBIT 5./EXHIBIT 23.1
Opinion of Thacher Proffitt & Wood, counsel for Registrant,
as to the legality of the securities being registered
Consent of Thacher Proffitt & Wood
<PAGE>
EXHIBIT 5./EXHIBIT 23.1
-----------------------
Opinion of Thacher Proffitt & Wood, counsel for Registrant,
as to the legality of the securities being registered
Consent of Thacher Proffitt & Wood
[LETTERHEAD OF THACHER PROFFITT & WOOD]
September 30, 1998
Astoria Financial Corporation
One Astoria Federal Plaza
Lake Success, New York 11042
Re: Option Plan Consisting of Advisory Board Option Agreements
and Option Conversion Agreements with Former Officers
and Directors of Long Island Bancorp, Inc.
-----------------------------------------------------
Dear Sirs:
We have acted as counsel for Astoria Financial Corporation, a Delaware
corporation (the "Corporation"), in connection with the filing of a registration
statement on Form S-8 under the Securities Act of 1933, as amended
("Registration Statement") with respect to 1,649,330 shares of its common stock,
par value $.01 per share (the "Shares"), which have been reserved for issuance
("Original Issue Shares") upon the exercise of stock options (i) granted
pursuant to the Advisory Board Option Agreements with former Directors of Long
Island Bancorp, Inc. ("LISB") and (ii) granted under Section 1.04 of the
Agreement and Plan of Merger, dated as of the 2nd day of April, as amended by
and between the Corporation and LISB (together, the "Plan"). In rendering the
opinion set forth below, we do not express any opinion concerning law other than
the federal law of the United States and the corporate law of the State of
Delaware.
We have examined originals or copies, certified or otherwise
identified, of such documents, corporate records and other instruments as we
have deemed necessary or advisable for purposes of this opinion. As to matters
of fact, we have examined and relied upon the Plan described above and, where we
have deemed appropriate, representations or certificates of officers of the
Corporation or public officials. We have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents submitted to us as copies.
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Astoria Financial Corporation
September 30, 1998 Page 2
Based on the foregoing, we are of the opinion that the Original Issue
Shares that are being registered pursuant to the Registration Statement have
been duly authorized and, when issued and paid for in accordance with the terms
of the Plan, such Original Issue Shares will be validly issued, fully paid and
non-assessable.
In rendering the opinion set forth above, we have not passed upon and
do not purport to pass upon the application of "doing business" or securities or
"blue-sky" laws of any jurisdiction (except federal securities laws).
This opinion is given solely for the benefit of the Corporation and
purchasers of Shares under the Plan, and no other person or entity is entitled
to rely hereon without express written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our Firm's name therein.
Very truly yours,
THACHER PROFFITT & WOOD
By:/s/ W. Edward Bright
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W. Edward Bright
EXHIBIT 23.2
Consent of KPMG Peat Marwick LLP
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EXHIBIT 23.2
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[Consent of KPMG Peat Marwick LLP]
Independent Auditors' Consent
The Board of Directors
Astoria Financial Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Astoria Financial Corporation of our report dated January 22, 1998,
relating to the consolidated statements of financial condition of Astoria
Financial Corporation and subsidiary as of December 31, 1997 and 1996, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for each of the years in the three-year period ended December 31,
1997, which report appears in the December 31, 1997 Annual Report on Form 10- K,
as amended on Form 10-K/A, of Astoria Financial Corporation.
/s/ KPMG Peat Marwick LLP
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KPMG Peat Marwick LLP
New York, New York
September 30, 1998
