<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant (Sec)240.14a-11(c) (Sec)240.14a-12
Astoria Financial Corporation
------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 17, 2000
The Annual Meeting of Shareholders of Astoria Financial Corporation will be
held on Wednesday, May 17, 2000, at 9:30 a.m., Eastern time, at the New Hyde
Park Inn, 214 Jericho Turnpike, New Hyde Park, New York 11040. The meeting will
be held to consider and act upon the following matters:
1. The election of five directors for terms of three years each;
2. The ratification of the appointment of independent auditors; and
3. Such other matters as may properly come before the Annual Meeting or
any adjournment or postponement thereof.
Holders of record of Astoria Financial Corporation common stock, as of the
close of business on March 24, 2000, are entitled to notice of and to vote at
the Annual Meeting and any adjournment or postponement thereof. A list of
shareholders entitled to vote at the Annual Meeting will be available at the
meeting, and at Astoria Financial Corporation, One Astoria Federal Plaza, Lake
Success, New York 11042 and at Astoria Federal Savings and Loan Association,
Mortgage Center, 2000 Marcus Avenue, New Hyde Park, New York 11042 for a period
of ten days prior to the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE AS SOON AS
POSSIBLE.
By Order of the Board of Directors,
/s/ William K. Sheerin
William K. Sheerin
Executive Vice President & Secretary
Dated: April 10, 2000
<PAGE>
ASTORIA FINANCIAL CORPORATION
One Astoria Federal Plaza
Lake Success, New York 11042-1085
-----------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 17, 2000
-----------------------------
General Information
This Proxy Statement and the accompanying proxy card are being furnished to
holders of Astoria Financial Corporation, or AFC, common stock in connection
with the solicitation of proxies by the Board of Directors of AFC, or the Board,
for use at the AFC Annual Meeting of Shareholders to be held on May 17, 2000,
and at any adjournment or postponement thereof, or the Annual Meeting. The
Annual Meeting will be held at 9:30 a.m., Eastern time, at the New Hyde Park
Inn, 214 Jericho Turnpike, New Hyde Park, New York 11040. Only holders of record
of AFC's issued and outstanding common stock, par value $0.01 per share, or AFC
Common Stock, as of the close of business on March 24, 2000, or the Record Date,
are entitled to vote at the Annual Meeting. The 1999 Annual Report on Form 10-K,
which includes the consolidated financial statements of AFC for the fiscal year
ended December 31, 1999, accompanies this Proxy Statement and the proxy card
which are first being mailed or given to shareholders of record on or about
April 10, 2000.
Voting and Quorum Requirements
As of the Record Date, there were 51,354,749 shares of AFC Common Stock
issued and outstanding and entitled to vote at the Annual Meeting. Each share of
AFC Common Stock outstanding on the Record Date entitles the holder thereof to
one vote on each matter to properly come before the Annual Meeting, except as
described below. The presence, either in person or by proxy, of the holders of a
majority of all of the shares of AFC Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum at the Annual Meeting.
The election of directors shall be by a plurality of votes cast by the
holders of AFC Common Stock present, in person or by proxy, and entitled to vote
thereon. Holders of AFC Common Stock may not vote their shares cumulatively with
respect to the election of directors. The ratification of the appointment of
independent auditors and any other matters as may properly come before the
Annual Meeting each requires the affirmative vote of a majority of the votes
cast by the holders of AFC Common Stock present, in person or by proxy, and
entitled to vote thereon.
Shares of AFC Common Stock as to which the "ABSTAIN" box has been selected
on the proxy card, with respect to the ratification of the appointment of KPMG
LLP as independent auditors for AFC, will be counted as present and entitled to
vote and will have the effect of a vote against the proposal so indicated. In
contrast, shares of AFC Common Stock underlying broker non-votes will not be
counted as present and entitled to vote and will have no effect on the vote on
each matter presented.
Every properly executed proxy card that is received timely by AFC will be
voted in accordance with the instructions contained therein unless otherwise
revoked. Properly executed unmarked proxies will be voted FOR the election of
the Board's nominees as directors and FOR the ratification of the appointment of
independent auditors. If you are a shareholder whose shares are not registered
in your own name, you will need an assignment of voting rights from the
shareholder of record to vote personally at the Annual Meeting.
1
<PAGE>
Pursuant to the Certificate of Incorporation of AFC, no record shareholder
of AFC Common Stock which is beneficially owned, directly or indirectly, by a
shareholder who as of the Record Date beneficially owns more than ten percent
(10%) of AFC Common Stock outstanding on such date will be entitled or permitted
to vote any shares of AFC Common Stock in excess of ten percent (10%) of AFC
Common Stock outstanding as of the Record Date. For purposes of this limitation,
neither the Astoria Federal Savings and Loan Association, or the Association,
Employee Stock Ownership Plan, or the ESOP, The Long Island Savings Bank, FSB,
or LISB, Employee Stock Ownership Plan, or the LISB ESOP, nor the trustees of
such plans are considered the beneficial owner of the AFC Common Stock held by
the ESOP or the LISB ESOP.
Revocation of Proxies
Any shareholder who executes a proxy has the right to revoke it at any time
before it is voted. A proxy may be revoked by delivering to the Secretary of
AFC, at its principal office, either a written revocation or a proxy, duly
executed, bearing a later date, or by attending the Annual Meeting and voting in
person.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information, as of the Record Date,
with respect to the beneficial ownership of AFC Common Stock by each person or
group of persons, as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended, or the Exchange Act, known to AFC to be the beneficial
owner of more than 5% of AFC voting stock. For purposes of the Annual Meeting,
the AFC Common Stock is the only AFC voting stock outstanding.
<TABLE>
Name & Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class
------------------- -------------------- ----------
<S> <C> <C>
J. P. Morgan & Co., Inc. 5,082,701 (1) 9.9
60 Wall Street
New York, New York 10260
State Street Bank and Trust 2,750,632 (2) 5.4
Company, Trustee
225 Franklin Street
Boston, Massachusetts 02110
</TABLE>
- ----------------------------
(1) According to a filing on Schedule 13G (Amendment No. 2) filed as of
February 2, 2000, J. P. Morgan & Co., Inc., or J.P. Morgan, holds in the
aggregate 3,738,733 shares of AFC Common Stock as to which J. P. Morgan has
sole voting power and 5,082,301 shares of AFC Common Stock as to which J.
P. Morgan has sole dispositive power.
(2) According to a filing on Schedule 13G filed as of February 7, 2000, State
Street holds in the aggregate 2,746,487 shares of AFC Common Stock as to
which State Street has sole voting power, 347,738 shares of AFC Common
Stock as to which State Street has sole dispositive power and 2,402,894
shares of AFC Common Stock as to which State Street has shared dispositive
power. State Street Bank and Trust Company, or State Street, is the trustee
of the ESOP, which is administered by the ESOP Committee consisting of four
(4) officers of the Association, one of whom is an executive officer of
AFC. As of December 31, 1999, State Street held 2,401,294 shares of AFC
Common Stock for the benefit of the participants of the ESOP. Under the
terms of the ESOP, the Trustee votes the shares held by the ESOP Trust
based upon directions received from the participants as "named fiduciaries"
in the ESOP. As of December 31, 1999, approximately 1,132,132 shares of AFC
Common Stock were allocated to participants in the ESOP. For voting
purposes, each participant as a "named fiduciary" will be eligible to
direct the Trustee how to vote at the Annual Meeting as to the number of
shares of AFC Common Stock which have been allocated to his or her account
under the ESOP. The remaining unallocated shares and any allocated shares
with respect to which no voting instructions have been received, will be
voted by the Trustee at the Annual Meeting in the same manner and
proportion as the allocated shares, with respect to which voting
instructions have been received, so long as such vote is in accordance with
the provisions of the Employee Retirement Income Security Act of 1974, as
amended, or ERISA. Due to the requirements of ERISA, the Trustee is deemed
to have shared voting power as to all shares held in the ESOP Trust.
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<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board consists of fourteen (14) directors divided into three classes:
two of five directors each and one of four directors. Upon election by the
shareholders, the directors of each class serve for a term of three years, with
the directors of one class elected each year.
In all cases, directors serve until their respective successors are duly
elected and qualified. Pursuant to the Bylaws of AFC, no person is eligible for
election or appointment as a director who is seventy-five (75) years of age or
older, and no person shall continue to serve as a director after the regular
Board meeting immediately preceding such director's seventy-fifth (75th)
birthday. Mr. William J. Fendt, a director of AFC, will reach mandatory
retirement age following the regular board meeting held in April 2000. Effective
upon his retirement following the April Board meeting, the Board has reduced its
number to thirteen (13).
The directors whose terms expire at the Annual Meeting are Andrew M.
Burger, Denis J. Connors, Thomas J. Donahue, Gerard C. Keegan and Donald D.
Wenk. Each of these directors (singularly the "Board Nominee" and collectively
the "Board Nominees") has been nominated by the Board to stand for reelection,
and, if elected, to serve for a term expiring at the annual meeting of
shareholders of AFC to be held in 2003. Each Board Nominee has consented to
being named in this Proxy Statement and to serve if elected.
If any Board Nominee should refuse or be unable to serve, the proxies will
be voted for such person as shall be designated by the Board to replace such
nominee. The Board presently has no knowledge that any of the Board Nominees
will refuse or be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE BOARD NOMINEES FOR
---------------------------
ELECTION AS DIRECTORS OF AFC FOR TERMS OF THREE YEARS EACH.
Board Nominees, Directors and Executive Officers
The following table sets forth certain information regarding the Board
Nominees for election and members of the Board.
<TABLE>
<CAPTION>
Name Age (1) Positions Held with AFC (2) Director Since Term Expires
---- ------- --------------------------- -------------- ------------
<S> <C> <C> <C>
George L. Engelke, Jr. 61 Director, Chairman of the Board, President, 1993 2002
Chief Executive Officer
John J. Conefry, Jr. 55 Director and Vice Chairman 1998 2001
Gerard C. Keegan 53 Director, Vice Chairman and Chief 1997 2000
Administrative Officer and Nominee
Andrew M. Burger 65 Director and Nominee 1993 2000
Denis J. Connors 58 Director and Nominee 1993 2000
Robert J. Conway 64 Director 1998 2002
Thomas J. Donahue 59 Director and Nominee 1993 2000
William J. Fendt 74 Director 1993 2001 (3)
Peter C. Haeffner, Jr. 61 Director 1997 2002
Ralph F. Palleschi 53 Director 1996 2002
Lawrence W. Peters 70 Director 1998 2001
Thomas V. Powderly 62 Director 1995 2001
Leo J. Waters 65 Director 1998 2002
Donald D. Wenk 69 Director and Nominee 1998 2000
</TABLE>
- -----------------------------
(1) As of the Record Date.
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<PAGE>
(2) All directors of AFC also serve as directors of the Association.
(3) Mr. Fendt will reach mandatory retirement age following the regular board
meeting held in April 2000. Effective upon his retirement, the Board has
reduced its number to thirteen (13).
The following table sets forth certain information regarding the non-
director executive officers of AFC.
<TABLE>
Name Age (1) Positions Held With AFC
---- ------- -----------------------
<S> <C> <C>
Thomas W. Drennan 55 Executive Vice President
Alan P. Eggleston 46 Executive Vice President, Assistant Secretary & General Counsel
Arnold K. Greenberg 59 Executive Vice President & Assistant Secretary
Monte N. Redman 49 Executive Vice President & Chief Financial Officer
William K. Sheerin 64 Executive Vice President & Secretary
</TABLE>
(1) As of the Record Date.
All executive officers of AFC are elected annually and serve until their
respective successors have been chosen, subject to their removal as officers at
any time by the affirmative vote of a majority of the authorized number of
directors then constituting the Board. See "Executive Compensation - Employment
Agreements."
Biographical Information
The following is a brief description of the business experience of the
directors, Board Nominees and executive officers for at least the past five
years and their respective directorships, if any, with other public companies
that are subject to the reporting requirements of the Exchange Act.
Directors and Board Nominees
George L. Engelke, Jr. has been President, Chief Executive Officer and a
director of AFC since its formation in 1993. He has served as Chairman of the
Board and Chairman of the Board of Directors of the Association since April
1997. A certified public accountant, he joined the Association in 1971 as Vice
President and Treasurer. He was named Executive Vice President and Treasurer in
1974, Chief Operating Officer in 1986 and President and Chief Executive Officer
in 1989. He has served as a director of the Association since 1983. Mr. Engelke
serves as a director of the Community Preservation Corporation and the Advisory
Board of Neighborhood Housing Services of New York City, Inc. He is a director
of the Federal Home Loan Bank of New York and a member of the Thrift
Institutions Advisory Panel to the Federal Reserve Bank of New York. He is a
member of the Board of Trustees of Long Island University. He is a past Chairman
and currently a director of the Community Bankers Association of New York State
and a member of the Government Affairs Steering Committee, the Government
Affairs Council and a former director of America's Community Bankers. Mr.
Engelke previously served as a member of the Financial Accounting Standards
Advisory Council.
John J. Conefry, Jr. has served as Vice Chairman and a director of AFC
since September 30, 1998 when he joined AFC following the acquisition of Long
Island Bancorp, Inc., or LIB, and the merger of LIB with and into AFC and the
merger of LIB's wholly owned subsidiary, LISB, with and into the Association,
referred to as the LIB Acquisition. Prior to joining AFC, Mr. Conefry served as
Chief Executive Officer of LISB from 1993 and of LIB from 1994 through the
consummation of the LIB Acquisition. He was named President of LIB and LISB in
1996. Mr. Conefry served as a director of LISB from 1980 and of LIB from 1993.
He was named Vice Chairman of LISB in 1993. He served as Chairman of the Board
of Directors of LIB and of LISB from 1994. Prior to joining LISB in 1993, Mr.
Conefry was employed by Merrill Lynch, Pierce, Fenner & Smith, Inc., where he
served as a Senior Vice President from 1981 to 1993. Prior to that, he was a
partner in the public accounting firm of Deloitte Haskins & Sells, the
predecessor of Deloitte & Touche LLP. Mr. Conefry also serves on a number of
boards of not-for-profit organizations. He serves as Chairman of the Board of
Trustees of Hofstra University.
4
<PAGE>
Gerard C. Keegan has been Vice Chairman, Chief Administrative Officer and a
director of AFC and the Association since September 30, 1997, when he joined AFC
following the acquisition of The Greater New York Savings Bank, or The Greater,
and its merger with and into the Association, referred to as The Greater
Acquisition. Prior to joining AFC, Mr. Keegan served from 1991 to 1997 as
Chairman, President and Chief Executive Officer of The Greater. From 1988 to
1991, he served as President and Chief Operating Officer of The Greater. He
served as a director of The Greater from 1988 to 1997. He is a member of the
Board of Trustees of St. Francis College.
Andrew M. Burger has been a director of AFC since its formation in 1993 and
is the former President of Atlantic Iron Works, Inc. He has served as a director
of the Association since 1975.
Denis J. Connors has been a director of AFC since its formation in 1993 and
is the former Chairman and Chief Executive Officer of Curran & Connors, Inc., a
designer and publisher of annual reports. He has served as a director of the
Association since 1990.
Robert J. Conway has been a director of AFC since September 30, 1998,
following completion of the LIB Acquisition. Prior to the LIB Acquisition, he
served as a director of LIB since 1993. He became a director of LISB in 1983.
Mr. Conway was employed by AMF Bowling, Inc. for 29 years. His last position
with AMF Bowling, Inc. was Corporate Vice President and Group Executive of the
Worldwide Bowling Products Group. He has worked as a professional equities
trader.
Thomas J. Donahue, a certified public accountant, has been a director of
AFC since its formation in 1993 and retired as a partner of Peat, Marwick,
Mitchell & Co., the predecessor of KPMG LLP, in 1986. Following his retirement
and prior to becoming a director of the Association, Mr. Donahue served as
president and a director of other savings institutions from 1987 to 1990.
Presently, Mr. Donahue is self-employed as a financial consultant. He has served
as a director of the Association since 1990.
William J. Fendt has been a director of AFC since its formation in 1993 and
is a retired executive of New York Telephone Company, a predecessor of Bell
Atlantic Corporation. He has served as a director of the Association since 1976.
Peter C. Haeffner, Jr. has been a director of AFC and the Association since
September 30, 1997 following The Greater Acquisition and is Senior Director,
Financial Services Group, of Cushman & Wakefield, Inc., a real estate firm. Mr.
Haeffner served as Senior Managing Director, Financial Services Group, Corporate
Advisory and Finance Division of Cushman & Wakefield, Inc. from December 1997 to
December 1998 and as its Eastern Regional Director, Financial Services Group
from May 1994 to December 1997. Previously, Mr. Haeffner was President and
Managing Director of Sonnenblick-Goldman Company, a real estate firm, for eight
years. Mr. Haeffner also serves as a director of Stewart Title Insurance Company
of New York and of World Mae Association LLC, a global mortgage banking firm.
Mr. Haeffner served as a director of The Greater from 1992 to 1997.
Ralph F. Palleschi, a certified public accountant, has been a director of
AFC and the Association since 1996. In 1983, he co-founded First Long Island
Investors, Inc., a registered investment advisor pursuant to the Investment
Advisors Act of 1940, as amended, and a registered broker/dealer with the
National Association of Securities Dealers, Inc. He continues to serve as a
director and is President and Chief Operating Officer of such company. He has
also served from 1993 to 1997 as Chief Operating Officer of the New York
Islanders hockey team. From 1977 to 1983, he served as Vice President - Finance
and Chief Financial Officer of Entenmann's Inc., a publicly traded food products
company. From 1968 to 1977, he was employed by Peat, Marwick, Mitchell & Co.,
the predecessor of KPMG LLP.
Lawrence W. Peters has been a director of AFC and the Association since
September 30, 1998, following the completion of the LIB Acquisition. Prior to
the LIB Acquisition, he served as a director of LIB since 1993. He joined LISB
in 1989 as a Senior Executive Vice President and Chief Lending Officer. Mr.
Peters retired from his
5
<PAGE>
management position with LISB in 1995 and rejoined LIB and LISB as President and
Chief Operating Officer in 1997. Prior to initially joining LISB, Mr. Peters was
employed by The Dime Savings Bank of New York, F.S.B. as Vice Chairman and a
director, and was in charge of all lending functions.
Thomas V. Powderly has been a director of AFC and the Association since
January 31, 1995, following the acquisition of Fidelity New York, F.S.B., or
Fidelity, by the Association, referred to as the Fidelity Acquisition. He served
Fidelity in a variety of capacities prior to the Fidelity Acquisition. From 1986
to 1990, he served as Executive Vice President. In 1990, he was appointed
President and Chief Operating Officer and in 1992 was named Chief Executive
Officer. He was named Chairman of the Board of Directors of Fidelity in 1993.
From 1993 until January, 1995, he served as Chairman and Chief Executive
Officer. Prior to 1986, Mr. Powderly held positions with Edward S. Gordon, Inc.,
a commercial real estate brokerage and management firm, and with several thrift
institutions.
Leo J. Waters has been a director of AFC and the Association since
September 30, 1998, following completion of the LIB Acquisition. Prior to the
LIB Acquisition, he served as a director of LIB since 1993. He became a director
of LISB in 1990. Mr. Waters is the President of a private investment consulting
firm.
Donald D. Wenk has been a director of AFC and the Association since
September 30, 1998, following completion of the LIB Acquisition. Prior to the
LIB Acquisition, he served as a director of LIB since 1993. He became a director
of LISB in 1974. From 1992 until 1994, Mr. Wenk served as Chairman of the Board
of Directors of LISB. From 1994 until 1996, Mr. Wenk served as Chairman of the
Executive Committee of the Boards of Directors of LIB and LISB. He is the
Chairman of the Board of Directors of American Casting & Manufacturing
Corporation.
Executive Officers Who Are Not Directors
Thomas W. Drennan, a certified public accountant, has served as Executive
Vice President of AFC since December 1997 and as Senior Vice President from its
formation in 1993 to 1997. He is the senior lending officer of the Association.
He joined the Association in 1986 as Senior Vice President, Mortgage Services.
Alan P. Eggleston has served as Executive Vice President and General
Counsel of AFC since December 1997. He served as Senior Vice President and
General Counsel of AFC from 1996 to 1997. He joined the Association in 1993 as
Vice President and General Counsel. In 1994, he was named Vice President and
General Counsel of AFC. In 1995, he became First Vice President and General
Counsel of AFC and the Association. Prior to joining the Association, he served
as an executive officer and counsel to several thrift institutions.
Arnold K. Greenberg has served as Executive Vice President of AFC since
December 1997, and as Senior Vice President from its formation in 1993 to 1997.
He is responsible for banking office and retail operations of the Association.
He joined the Association in 1975 as Vice President and was appointed Senior
Vice President in 1979 and as Executive Vice President in 1997. In 1986, Mr.
Greenberg became Senior Vice President, Administration and Operations, and in
January of 1993, Senior Vice President, Consumer Services.
Monte N. Redman has served as Executive Vice President and Chief Financial
Officer of AFC since December 1997. He served as Senior Vice President,
Treasurer and Chief Financial Officer of AFC from its formation in 1993 to 1997.
He joined the Association in 1977. In 1979, he was named Assistant Controller,
and, in 1982, Assistant Vice President. Mr. Redman became Vice President,
Investment Officer in 1985, in 1989 was appointed Senior Vice President,
Treasurer and Chief Financial Officer and, in 1997 was appointed Executive Vice
President and Chief Financial Officer.
William K. Sheerin has served as Executive Vice President and Secretary of
AFC since December 1997. He served as Senior Vice President and Secretary of AFC
from its formation in 1993 to 1997. He is responsible for the human resources,
auditing, general services, facilities and security functions. He joined the
Association in 1956. He was named Assistant Treasurer and promoted to Branch
Manager in 1966. In 1974, he was promoted to Secretary and
6
<PAGE>
head of Savings Operations. In 1979, he was named Vice President and, in 1986,
he was appointed Senior Vice President, Consumer Services. In 1993, Mr. Sheerin
became Senior Vice President, Administrative Services, and in 1997 became
Executive Vice President and Secretary.
There is no family relationship between any director, any Board Nominee,
any officer or any significant employee of AFC, except that Mr. Connors' spouse
is the first cousin of Mr. Sheerin and Mr. Conefry's spouse is the niece of the
sister-in-law of Mr. Conway.
Committees and Meetings of the Board
The Board meets on a monthly basis and may have additional special meetings
upon the request of the Chairman, President and Chief Executive Officer or any
three (3) members of the Board. During the fiscal year ended December 31, 1999,
the Board met twelve (12) times. No director attended less than 75% of the total
number of meetings held by the Board and its committees on which such director
served. The Board has established three (3) standing committees.
The Compensation Committee, as of the Record Date, consisted of Mr. Fendt,
as Chairman, and Messrs. Burger, Connors, Donahue and Palleschi. Mr. Engelke
serves ex officio as a non-voting member of the Compensation Committee. The
function of the Compensation Committee is to review the performance and
compensation of the officers of AFC, make recommendations to the Board with
respect thereto and administer the Astoria Financial Corporation 1993 Incentive
Stock Option Plan, or the Incentive Option Plan, the 1996 Stock Option Plan for
Officers and Employees of Astoria Financial Corporation, or the 1996 Officer
Option Plan, the 1999 Stock Option Plan for Officers and Employees of Astoria
Financial Corporation, or the 1999 Officer Option Plan, including the granting
of options pursuant thereto, the 1996 Stock Option Plan for Outside Directors of
Astoria Financial Corporation, or the 1996 Directors Option Plan, and the 1999
Stock Option Plan for Outside Directors of Astoria Financial Corporation or the
1999 Directors Option Plan. This committee meets as needed and met two (2) times
during 1999.
The Nominating Committee currently consists of Messrs. Engelke, Conway,
Haeffner, Palleschi and Waters. The purpose of this committee is to recommend to
the Board nominees for election to the Board with respect to those directorships
which become vacant or whose terms expire at the next annual meeting of
shareholders, to review any nominations for election to the Board made by any
shareholder of AFC and to determine compliance with the provisions of the Bylaws
of AFC applicable thereto. See "Additional Information - 'Shareholders
Proposals' and 'Notice of Business to be Conducted at an Annual Meeting'." The
committee meets as needed and met one (1) time during 1999.
The Audit Committee, as of the Record Date, consisted of Mr. Donahue, as
Chairman, and Messrs. Burger, Connors, Fendt, Haeffner and Powderly. The
function of the Audit Committee is to review the scope and results of the audits
and reviews performed by the internal and the independent auditors of AFC, the
internal controls and accounting systems and policies of AFC, the basis for
certain reports to the Association's regulatory authorities and reports of
examination of AFC and the Association issued by the Office of Thrift
Supervision or other regulatory authorities. This committee meets, at a minimum,
on a quarterly basis, and met four (4) times during 1999.
Transactions with Certain Related Persons
It is the policy of AFC and the Association that all transactions,
including loans, between AFC or the Association and its directors, executive
officers, members of their families, holders of 10% or more of the shares of any
class of its common stock, and affiliates thereof, will be made in the ordinary
course of AFC's and the Association's business and contain terms no less
favorable to AFC or the Association than could have been obtained in arms-length
negotiations with unaffiliated persons and will be approved by a majority of
independent outside directors of AFC or the Association, respectively, not
having any interest in the transaction or, as allowed by law, are benefits
provided generally to all full time employees of the Association on a
nondiscriminatory basis and such benefits have been similarly approved by the
Board. Loans may not involve more than the normal risk of collection or present
other
7
<PAGE>
unfavorable features. All loans outstanding to the directors, Board Nominees or
executive officers of AFC or members of their immediate families were made in
conformity with the Association's policy in this regard and have not been
disclosed as non-accrual, past due, restructured or potential problem loans.
In connection with the LIB Acquisition, AFC agreed that Mr. John J.
Conefry, Jr. would be employed by AFC as Vice Chairman and Messrs. Conefry,
Conway, Peters, Waters and Wenk would be elected as directors of AFC and the
Association by the Board and the Board of Directors of the Association,
respectively. In connection with The Greater Acquisition, AFC agreed that Mr.
Gerard C. Keegan would be employed by AFC and the Association as Vice Chairman
and Chief Administrative Officer and Messrs. Keegan and Haeffner would be
elected as directors of AFC and the Association by the Board and the Board of
Directors of the Association, respectively.
For a discussion of the compensation received by directors, Board Nominees
and executive officers, see "Director Compensation" and "Executive
Compensation."
Security Ownership of Management
The following table sets forth certain information concerning the interests
in AFC Common Stock as of the Record Date of each director or Board Nominee of
AFC, each executive officer of AFC named in the Summary Compensation Table and
all directors and executive officers of AFC as a group. For purposes of the
Annual Meeting, AFC Common Stock is the only AFC voting stock outstanding.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial Owner of Beneficial Ownership (1) Percent of Class (2)
------------------------ --------------------------- --------------------
<S> <C> <C>
George L. Engelke, Jr. 977,110 (3)(16) 1.89
John J. Conefry, Jr. 381,308 (4)(16)
Gerard C. Keegan 191,553 (5)(16)
Andrew M. Burger 106,315 (16)
Denis J. Connors 116,902 (6)(16)
Robert J. Conway 94,572 (16)
Thomas J. Donahue 119,966 (7)(16)
William J. Fendt 108,474 (16)
Peter C. Haeffner, Jr. 16,448 (8)(16)
Ralph F. Palleschi 15,000 (16)
Lawrence W. Peters 58,840 (9)(16)
Thomas V. Powderly 82,132 (10)(16)
Leo J. Waters 52,503 (11)(16)
Donald D. Wenk 157,623 (12)(16)
Monte N. Redman 260,704 (13)(16)
Thomas W. Drennan 242,343 (14)(16)
All directors, Board Nominees and executive
officers as a group (19 persons) 3,420,000 (15)(16) 6.45
</TABLE>
- -----------------------------
(1) Except as otherwise indicated, each person listed has sole voting and
investment power with respect to the shares of AFC Common Stock indicated.
(2) Except as otherwise indicated, the percent of class beneficially owned does
not exceed one percent (1.00%).
(3) Included are 247,119 shares of AFC Common Stock as to which Mr. Engelke has
shared voting and investment power, 8,960 shares of AFC Common Stock as to
which he has shared voting and no investment power, and 8,740 shares of AFC
Common Stock as to which he has shared voting and sole investment power.
(4) Included are 5,625 shares of AFC Common Stock as to which Mr. Conefry has
shared voting and investment power, 4,276 shares of AFC Common Stock as to
which he has shared voting and no investment power, and 1,511 shares of AFC
Common Stock as to which he has shared voting and sole investment power.
(5) Included are 26,607 shares of AFC Common Stock as to which Mr. Keegan has
shared voting and investment power and 3,195 shares of AFC
8
<PAGE>
Common Stock as to which he has shared voting and no investment power.
(6) Included are 23,000 shares of AFC Common Stock as to which Mr. Connors has
shared voting and investment power.
(7) Included are 24,813 shares of AFC Common Stock as to which Mr. Donahue has
shared voting and investment power.
(8) Included are 300 shares of AFC Common Stock as to which Mr. Haeffner has
shared voting and investment power.
(9) Included are 2,514 shares of AFC Common Stock as to which Mr. Peters has
shared voting and no investment power.
(10) Included are 6,784 shares of AFC Common Stock as to which Mr. Powderly has
shared voting and investment power.
(11) Included are 285 shares of AFC Common Stock as to which Mr. Waters has
shared voting and investment power.
(12) Included are 1,150 shares of AFC Common Stock as to which Mr. Wenk has
shared voting and investment power.
(13) Included are 941 shares of AFC Common Stock as to which Mr. Redman has
shared voting and investment power, 8,960 shares of AFC Common Stock as to
which he has shared voting and no investment power, and 9,565 shares of AFC
Common Stock as to which he has shared voting and sole investment power.
(14) Included are 55,383 shares of AFC Common Stock as to which Mr. Drennan has
shared voting and investment power, 8,960 shares of AFC Common Stock as to
which he has shared voting and no investment power, and 10,343 shares of
AFC Common Stock as to which he has shared voting and sole investment
power.
(15) Included are 423,793 shares of AFC Common Stock as to which directors,
Board Nominees and executive officers, as a group, have shared voting and
investment power, 61,623 shares of AFC Common Stock as to which they have
shared voting and no investment power, and 45,268 shares of AFC Common
Stock as to which they have shared voting and sole investment power.
(16) Included are shares of AFC Common Stock which could be acquired within 60
days of the Record Date pursuant to options to acquire AFC Common Stock as
follows: Mr. Engelke (401,100 shares), Mr. Conefry (249,917 shares), Mr.
Keegan (128,500 shares), Mr. Burger (76,314 shares), Mr. Connors (63,314
shares), Mr. Conway (71,087 shares), Mr. Donahue (83,314 shares), Mr. Fendt
(31,314 shares), Mr. Haeffner (10,000 shares), Mr. Palleschi (12,000
shares), Mr. Peters (31,001 shares), Mr. Powderly (22,132 shares), Mr.
Waters (41,807 shares), Mr. Wenk (99,911 shares), Mr. Redman (140,282
shares), Mr. Drennan (100,282 shares), and all directors, Board Nominees
and executive officers as a group (1,650,565 shares).
Director Compensation
Directors' and Other Fee Arrangements
All non-employee directors of AFC receive an annual retainer of $15,000. No
additional fees for attendance at Board or committee meetings are paid. All
members of the Board also serve as directors of the Association. All non-
employee directors of the Association receive an annual retainer of $30,000. No
additional fees for attendance at Association Board of Directors or committee
meetings are paid.
Directors' Option Plans
AFC maintains the AFC 1993 Stock Option Plan for Outside Directors, or the
1993 Directors Option Plan, and the 1996 Directors Option Plan, pursuant to
which options were previously granted to directors, but which have remained
frozen by the Board since 1996 and 1999, respectively. AFC also maintains the
1999 Directors Option Plan pursuant to which non-employee directors of AFC and
the Association are granted options on terms previously approved by the
shareholders of AFC.
Pursuant to the 1999 Director Option Plan, each person who first becomes a
non-employee director of AFC or the Association after May 19, 1999 is granted,
on the 15th day of the month following the month in which he becomes a non-
employee director, an option to purchase 4,000 shares of AFC Common Stock at an
exercise price per share equal to the closing bid quotation for AFC Common Stock
on The Nasdaq Stock Market on the date of grant. In addition, on January 15th of
each succeeding year, each person who is then a non-employee director receives a
grant of an option to purchase an additional 2,000 shares of AFC Common Stock at
an exercise price per share equal to the closing bid quotation for AFC Common
Stock on The Nasdaq Stock Market on the date of grant. All options granted
pursuant to the 1999 Director Option Plan vest and become exercisable upon
grant.
All options granted under the 1993 Directors Option Plan, the 1996
Directors Option Plan or the 1999 Directors Option Plan expire upon the earlier
of 10 years following the date of grant or one year following the date the
director ceases to be a director for any reason other than removal for cause, in
which case the director's options immediately terminate.
9
<PAGE>
Directors' Retirement Plan
This plan provides retirement benefits for directors, who are not and have
not been employees of AFC, the Association or any of their predecessors in
interest, with at least 10 years of service as a director. The annual benefit is
a life annuity payable beginning in the month following termination of service
as a director or attainment of age 65, whichever is later. The annual benefit
amount is equal to 100% of the annualized aggregate rate of fees paid for
service as a non-employee director of AFC or the Association for the last month
of service prior to retirement, reduced by 5% for each year that the director's
years of service is less than 20 years. In the event of a change of control of
AFC or the Association, each director may require the Association or its
successor to pay either (1) a lump sum payment equal to the actuarially
determined present value of the future benefits payable to the director or (2)
an amount into a grantor trust adequate to fund the benefits as they become due.
Pursuant to the terms of the plan, the LIB Acquisition constituted a change of
control of AFC. In March 1999, AFC and the Association amended this plan to
provide that no director who first joins the Board or the Board of Directors of
the Association after March 1, 1999 will be eligible to participate in the plan.
Directors Deferred Compensation Plan
Pursuant to this plan, outside directors of either AFC or the Association
may elect to defer receipt of all or any part of their directors' fees. Deferred
fees are carried on the books of AFC as an unfunded obligation and are credited
with interest quarterly at a rate equal to the average of AFC's consolidated
cost of funds and yield on investments for the preceding quarter, unless the
cost of funds exceeds the yield on investments, in which case the rate is based
upon the preceding quarter's consolidated yield on investments. In the event of
a change of control of AFC or the Association, each participating director may
elect that his fees, with accrued interest, be placed in a grantor trust
established for the benefit of the director, applied to the purchase of an
insurance company annuity contract or be paid directly by AFC or its successor.
Directors' Death Benefit
This plan provides that if a non-employee director dies while in service as
a director of AFC or the Association, the decedent's designated beneficiary will
receive from AFC a payment equal to the decedent's aggregate directors' fees for
the last month of service as a director of AFC and the Association annualized.
If a director leaves the service of AFC and the Association for any reason other
than death, all rights to any benefit under this plan cease.
Executive Compensation
The Report of the Compensation Committee on Executive Compensation and the
Stock Performance Chart shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933, as amended, or the Securities Act, or
the Exchange Act, except to the extent that AFC specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Report of the Compensation Committee on Executive Compensation
Under rules established by the SEC, AFC is required to provide certain data
and information regarding the compensation and benefits provided to AFC's Chief
Executive Officer and certain other executives of AFC. The disclosure
requirements for the Chief Executive Officer and such other executives include
the use of tables and a report explaining the rationale and considerations that
led to fundamental compensation decisions affecting those individuals. In
fulfillment of this requirement, the Compensation Committee of AFC, at the
direction of the Board, has prepared the following report for inclusion in this
proxy statement.
General. The compensation of the executive officers of AFC for fiscal year
1999 was reviewed by the Compensation Committee of AFC in December 1998 and
March 1999 and was ratified and approved by the Board.
10
<PAGE>
The Compensation Committee of AFC met on two (2) occasions during fiscal
1999. In March 1999, it met to review and recommend to the Board the adoption of
the Astoria Financial Corporation Executive Officer Incentive Plan, or the
Executive Incentive Plan, and, subject to the approval of such plan by the
shareholders of AFC, to establish target awards, performance goals and corporate
performance measures to be utilized with respect to the executive officers
pursuant to the Executive Incentive Plan for 1999. The Executive Incentive Plan,
which was approved by the shareholders, was adopted in part to maintain the
deductibility of that portion of the compensation paid to the executive officers
as described later in this report. In addition, in December 1999, the Committee
met and granted stock options under the 1999 Officer Option Plan to, among
others, executive officers, and established compensation levels for the
executive officers of AFC for fiscal year 2000.
Executive Compensation Philosophy. The primary objective of the executive
compensation program of AFC and the Association is to attract and retain highly
skilled and motivated executive officers who will manage AFC in a manner to
promote its growth and profitability and advance the interests of its
shareholders. The compensation program is designed to provide levels of
compensation which are competitive and reflective of the organization's
performance in achieving its goals and objectives, both financial and non-
financial, as determined in its business plan. The program aligns the interests
of the executives with those of the shareholders of AFC by providing a
proprietary interest in AFC, the value of which can be significantly enhanced by
the appreciation of AFC Common Stock. The program also seeks to adequately
provide for the needs of the executive upon retirement based upon the length of
service provided to AFC and the Association and the appreciation of AFC Common
Stock.
In structuring its executive compensation program, AFC considers the before
and after tax financial impact the program will have on AFC and the Association.
Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code,
places a limitation of $1 million on the deductibility by AFC of certain
elements of compensation earned by each of the executives named in the "Summary
Compensation Table" on page 15, referred to individually a Named Executive or
collectively as the Named Executives. This limitation does not apply to all
institutions within AFC's industry or to all companies from which it would
recruit executive personnel. As noted above, AFC in 1999 submitted the Executive
Incentive Plan to its shareholders for approval in order to maintain the
deductibility of payments made to the Named Executives pursuant to the Executive
Incentive Plan. As a result of the approval of the Executive Incentive Plan
during 1999 and based upon the level and composition of the compensation of its
executive officers, the limitations contained in Section 162(m) of the Code did
not impact the financial condition or results of operations of AFC for the year
ended December 31, 1999.
In 1998, in view of the significant expansion of AFC's operations as a
result of the LIB Acquisition and The Greater Acquisition, the Compensation
Committee retained the services of William M. Mercer, Inc., and undertook a
comprehensive study of the compensation structure employed by AFC for its
executive and senior officers. This study included both a review of current
compensation techniques and practices as well a peer group review and comparison
to determine whether the level of overall and specific components of
compensation were appropriate. The results of the study indicated that no
significant adjustments were needed to the overall structure and philosophy of
executive compensation. Salary levels for executive officers were, at that time,
determined to be slightly below peers, but not by significant amounts. It was
found that short-term incentive compensation opportunities for AFC's executive
officers fell, in most cases, significantly below AFC's peer group. The study
also undertook to determine the appropriate level of long-term incentives,
primarily stock option grants, that would be appropriate at various officer
levels. Based upon this study, the Executive Incentive Plan and the 1999 Officer
Option Plan were implemented.
The executive compensation program of AFC consists of four (4) elements:
base salary, short-term incentive compensation, long-term incentive compensation
and retirement benefits. The following is a discussion of each of these
components.
Base Salary. Salary levels are designed to be competitive with cash
compensation levels paid to similar executives at banking and thrift
institutions of similar size and standing, giving due consideration to the
marketplace in which AFC and the Association operate. Base salary is considered
in conjunction with the short-term incentive
11
<PAGE>
compensation component of the executive compensation program. Base salary is set
at a level to provide a reasonably competitive level of base compensation even
if AFC, due to factors outside of the control of the executives, fails to meet
its minimum threshold targets such that no awards are made under the short-term
incentive component of the compensation program.
To determine whether or not base salary and short-term incentive
compensation, discussed below, for 1999 were set at levels that were
competitive, the Compensation Committee reviewed, in addition to the study
conducted by William M. Mercer, Inc. described above, a number of sources of
information, including the SNL Executive Compensation Review 1998, Thrift
Institutions, and the SNL Executive Compensation Review 1998, Commercial Banks.
Particular emphasis was placed on those institutions that were of similar asset
size and standing to that of AFC.
As a result of their analysis, the Compensation Committee in December 1998
approved, and the Board ratified, total 1999 base salary compensation for the
eight (8) executive officers of $3,315,000, compared to $3,104,231 paid to such
officers for 1998. In September 1998, the Chief Executive Officer, in
anticipation of the closing of the LIB Acquisition, received a salary increase
to $750,000. No further increase was approved for the Chief Executive Officer
for 1999. The remaining seven (7) executive officers received increases for 1999
averaging 5.99%, ranging from a high of 12.90% to a low of 0.0%. All such
increases reflected contributions to the goals and objectives of AFC and the
increased cost of living within the market from which AFC draws its work force.
Short-term Incentive Compensation. Short-term incentive compensation
consists of awards paid pursuant to the Executive Incentive Plan. The Board and
Compensation Committee of AFC recognize that the operation of AFC is
substantially affected by the environment in which it operates. It is expected
that its executives will maintain systems in place to monitor that environment
and will take steps to foresee and manage the various risks that such
environment presents. The Board and the Compensation Committee also believe that
to be effective, the attainment of targets established under the short-term
incentive component of the compensation program should be both attainable, yet
challenging.
The Executive Incentive Plan for 1999 provided for a target incentive equal
to sixty-five percent (65%) of base salary for the Chief Executive Officer,
fifty-five and seventy-two one-hundredths percent (55.72%) of base salary for
Mr. Conefry and forty percent (40%) of each executive's base salary in the case
of the other executive officers.
The performance measurement utilized for 1999 was the diluted earnings per
share of AFC Common Stock. A series of achievement levels was established, with
each level assigned a percentage award from zero percent (0%) up to two hundred
percent (200%). The zero percent (0%) award represented performance below a
reasonable threshold level of achievement. The Compensation Committee of AFC,
which administers the plan, has discretion under the Executive Incentive Plan to
reduce an award, but not to increase it.
For fiscal year 1999, AFC's financial performance prior to adjustment by
the Compensation Committee would have resulted in awards of two hundred percent
(200%) of the target incentive. The Compensation Committee reduced the awards to
one hundred seventy percent (170%) of the applicable target incentive.
Long-term Incentive Compensation. The long-term incentive compensation
portion of AFC's and the Association's compensation program consists of the
Association Recognition and Retention Plan for Officers and Employees, or the
Officer RRP, the Incentive Option Plan, the 1996 Officer Option Plan and the
1999 Officer Option Plan. These plans are designed to provide incentives for
long-term positive performance of the executive and other officers and to align
their financial interests with those of AFC shareholders by providing the
opportunity to participate in AFC Common Stock price appreciation, if any, which
may occur after the date of grant of such award or option.
The Compensation Committee of the Association administers the Officer RRP,
determines which eligible employees will be granted plan share awards (the "Plan
Share Awards") and grants Plan Share Awards. Officer RRP Plan Share Awards,
which are non-transferable and non-assignable, are granted in the form of shares
of AFC Common
12
<PAGE>
Stock and are held in trust until the Plan Share Awards vest. The Officer RRP
was terminated in March 2000. As of the Record Date, all outstanding awards
under the Officer RRP have vested and been distributed to participants. See the
"Summary Compensation Table" on page 15 for description of the Plan Share Awards
outstanding to the Named Executives as of December 31, 1999. See the table on
page 8 related to the beneficial ownership of AFC Common Stock by the directors,
Board Nominees and executive officers of AFC and "Executive Compensation -
Incentive Option Plans" on page 17 for further information regarding options
related to the Named Executives.
Retirement Benefits. Retirement benefits are designed to provide for an
adequate level of income to the executive officer following his or her
retirement from AFC and the Association based upon length of service and to
support the goals and objectives of the rest of the compensation program. The
retirement benefits are provided through the ESOP, the LISB ESOP, the
Association Incentive Savings Plan, the Association Employees' Pension Plan, or
the Pension Plan, the Association Excess Benefit Plan, or the Excess Plan, and
the Association Supplemental Benefit Plan, or the Supplemental Plan. See
"Executive Compensation - Pension Plans" for a description of the Pension Plan,
the Excess Plan and the Supplemental Plan which are all defined benefit pension
plans.
The Association maintains the ESOP and ESOP Trust and the LISB ESOP and
LISB ESOP Trust for the benefit of the salaried employees of AFC and the
Association. The ESOP provides for the allocation of shares of AFC Common Stock
and other contributions, if any, based on payments by the Association of loans
made by AFC in 1993 to the ESOP and by LIB in 1994 to the LISB ESOP to fund the
acquisition of 2,642,354 shares of AFC Common Stock and 2,070,000 shares of LIB
common stock which upon the completion of the LIB Acquisition were converted
into 2,380,500 shares of AFC Common Stock. As part of the LIB Acquisition, the
Association became the sponsor of the LISB ESOP. Currently all executive
officers are participants in the ESOP. Mr. Conefry is also a participant in the
LISB ESOP. See the "Summary Compensation Table" on page 15 and the table on page
8 related to the beneficial ownership of AFC Common Stock by the directors,
Board Nominees and executive officers of AFC for further information regarding
the ownership of AFC Common Stock by the Named Executives.
Compensation of the Chief Executive Officer. The Compensation Committee met
in December 1998 to review the performance of the executive officers during
1998, to establish recommended compensation levels for such officers for 1999
and to commence discussions regarding appropriate goals and participation levels
with respect to such officers' participation in a redesigned short-term
incentive compensation plan.
At the December 1998 meeting, the projected financial performance of AFC
and the accomplishments of financial and non-financial goals and objectives of
AFC and the Association, as set forth in the prior year business plan, were
reviewed as was the performance of the executive officers of AFC. Mr. Engelke
provided to the Committee his insights as to both his own performance and that
of the other executive officers.
The Compensation Committee, based upon these discussions and the
Committee's review of the study conducted by William M. Mercer, Inc. described
above, determined the level of salary for the executive officers, including the
Chief Executive Officer, to take effect January 1, 1999. As a part of that
determination, the Committee utilized relative information provided in the SNL
Executive Compensation Review 1998, Thrift Institutions and the SNL Executive
Compensation Review 1998, Commercial Banks. As noted above, the Compensation
Committee in September 1998 recommended and the Board approved that the
compensation of the Chief Executive Officer be increased, in anticipation of the
closing of the LIB Acquisition, to $750,000. This increase reflected both the
performance of Mr. Engelke and the increased level of responsibility associated
with the larger institution that resulted from the LIB Acquisition. No further
increase in salary for the Chief Executive Officer was approved for 1999.
Compensation Committee of AFC
William J. Fendt, Chairman Thomas J. Donahue
Andrew M. Burger Ralph F. Palleschi
Denis J. Connors George L. Engelke, Jr. (ex officio)
13
<PAGE>
Compensation Committee Interlock and Insider Participation.
Recommendations to the Compensation Committee of AFC with respect to both
executive officers' and non- executive officers' salaries are presented by Mr.
Engelke. Mr. Engelke also provides insight to the Compensation Committee
regarding his and the performance of the other officers of AFC, both executive
and non-executive, and provides other recommendations regarding executive
officer compensation. Mr. Engelke is an ex officio member of the Compensation
Committee and does not participate in the Committee's deliberations or approval
of compensation issues relating to himself. There are no interlocking
relationships requiring disclosure hereunder between any executive officers of
AFC, members of the Compensation Committee of AFC and any other entity.
Stock Performance Chart.
The following graph shows a comparison of cumulative total shareholder
return on AFC Common Stock for its last five fiscal years commencing with the
close of The Nasdaq Stock Market on December 31, 1994, with the cumulative total
returns of both a broad market index, The Nasdaq Market (U.S.) Index produced by
the Center for Research in Security Prices, or CRSP, and a peer group index, The
Nasdaq Financial Stock Index also produced by CRSP. In addition, for comparison
purposes, total shareholder returns have been included for the same period for
both the SNL Thrift Index and the SNL $5B+ Thrift Asset-Size Index. The peer
group index set forth in the graph below consists of a different set of
institutions than that considered by the Compensation Committee or the Board in
determining the compensation of the executive officers.
Comparison of Cumulative Total Return of
AFC Common Stock and Market, Peer Group and Other Indices (1)
[GRAPH]
14
<PAGE>
<TABLE>
<CAPTION>
AFC Common Nasdaq Market Nasdaq Financial SNL Thrift SNL $5B+ Thrift
---------- ------------- ---------------- ---------- ---------------
Stock (U.S.) Index Stock Index Index Asset-Size Index
----- ------------ ----------- ----- ----------------
<S> <C> <C> <C> <C> <C>
Dec. 30, 1994 $100.000 $100.000 $100.000 $100.000 $100.000
Dec. 29, 1995 175.406 141.394 145.685 155.740 164.660
Dec. 31, 1996 287.774 173.892 187.027 202.920 221.070
Dec. 31, 1997 440.317 213.073 286.108 345.280 374.540
Dec. 31, 1998 367.580 300.248 277.729 303.680 328.710
Dec. 31, 1999 250.836 542.430 274.634 248.070 252.440
</TABLE>
- -------------------------------
(1) Assumes $100 invested on December 31, 1994 and all dividends reinvested
through the end of AFC's fiscal year ended December 31, 1999.
Summary Compensation Table
The following table shows, for the fiscal years ended December 31, 1999,
1998 and 1997, the cash compensation paid by AFC and the Association, as well as
certain other compensation paid or accrued for those years, to the Chief
Executive Officer and the four highest paid executive officers of AFC and the
Association who received salary and bonuses in excess of $100,000 for the 1999
fiscal year.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
-------------------------------- -----------------------------------------
Awards Payouts
---------------------------- -----------
Other Securities All
Annual Restricted Underlying Other
Compen- Stock Options/ LTIP Compen-
Name and Salary Bonus sation Awards SARs Payouts sation
Principal Positions Year ($) ($) (3) ($) ($) (4) (#) (7) ($) ($) (8)
- ------------------- ---- ------------ ------- -------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
George L. Engelke, Jr. 1999 750,000 828,750 -- -- 113,000 -- 33,398
Chairman, President, 1998 684,231 245,230 -- -- 86,000 -- 60,614
CEO and Director 1997 600,000 252,000 -- -- 30,000 -- 77,188
John J. Conefry, Jr. (1) 1999 700,000 663,000 -- -- 90,400 -- 23,986
Vice Chairman 1998 175,000 49,046 -- 421,250 (5) 444,294 (5) -- 9,689
and Director 1997 0 0 -- -- -- -- 0
Gerard C. Keegan (2) 1999 350,000 238,000 -- -- 28,000 -- 27,523
Vice Chairman, 1998 350,000 94,765 -- -- 20,000 -- 54,173
Chief Administrative 1997 87,500 21,875 -- 754,687 (6) 151,090 (6) -- 67,140
Officer and Director
Monte N. Redman 1999 375,000 255,000 -- -- 40,000 -- 33,398
Executive Vice 1998 320,000 86,640 -- -- 35,000 -- 60,614
President and Chief 1997 295,000 81,000 -- -- 17,500 -- 77,188
Financial Officer
Thomas W. Drennan 1999 350,000 238,000 -- -- 30,000 -- 33,398
Executive Vice 1998 310,000 83,935 -- -- 24,000 -- 60,614
President 1997 285,000 78,000 -- -- 17,500 -- 77,188
</TABLE>
- -------------------------------
(1) Amounts indicated reflect amounts paid for 1998 and 1999 by AFC and do not
include amounts paid to Mr. Conefry by LIB or LISB prior to the LIB
Acquisition.
(2) Amounts indicated reflect amounts paid for 1997, 1998 and 1999 by AFC and
the Association and do not include amounts paid to Mr. Keegan by The
Greater prior to The Greater Acquisition.
15
<PAGE>
(3) For 1997 and 1998, consists of payments pursuant to the Astoria Financial
Corporation and Astoria Federal Savings and Loan Association Annual
Incentive Plan for Select Executives and, for 1999, consists of payments
pursuant to the Executive Incentive Plan. These plans are short-term
incentive plans. See "Executive Compensation - Report of the Compensation
Committee on Executive Compensation."
(4) Represents the value, based upon the closing price of AFC Common Stock as
quoted on The Nasdaq Stock Market on the date of the award, of awards
pursuant to the Officer RRP of 15,000 shares of AFC Common Stock made to
Mr. Keegan on September 30, 1997 and 10,000 shares of AFC Common Stock made
to Mr. Conefry on September 30, 1998. As to the award reflected in the
table and remaining unvested, Messrs. Conefry and Keegan will each vest and
have distributed 5,000 shares of AFC Common Stock, respectively, on January
10, 2000. Pursuant to the Officer RRP, as of December 31, 1999, Messrs.
Conefry and Keegan each had outstanding grants of restricted stock of 5,000
shares of AFC Common Stock. Each of these outstanding awards, based upon
the closing price of AFC Common Stock of $30.438 as quoted on The Nasdaq
Stock Market on December 31, 1999, had a value of $152,190. Dividends paid
with respect to shares of AFC Common Stock awarded to participants and
remaining held in the Officer RRP are held in and for the account of such
participants and are distributed, together with earnings thereon, at the
time the related shares of AFC Common Stock vest and are distributed to the
participant.
(5) Restricted stock and options, excluding options to acquire 68,800 shares of
AFC Common Stock, were awarded or granted in connection with the LIB
Acquisition. Options granted in connection with the LIB Acquisition reflect
the grant of an option to acquire 25,000 shares of AFC Common Stock granted
upon consummation of the LIB Acquisition and the grant of options the
effect of which was to convert outstanding options to acquire the common
stock of LIB into options to acquire AFC Common Stock.
(6) Restricted stock and options, excluding an option to acquire 3,500 shares
of AFC Common Stock, were awarded or granted in connection with The Greater
Acquisition. Options granted in connection with The Greater Acquisition
reflect the grant of options the effect of which was to convert outstanding
options to acquire the common stock of The Greater into options to acquire
AFC Common Stock.
(7) Options with limited stock appreciation rights, or LSARs, attached were
granted to the Named Executives during 1999, 1998 and 1997, except for Mr.
Conefry who received grants of option with LSARs attached from AFC only
during 1999 and 1998. No freestanding stock appreciation rights, or SARs,
have been granted to the Named Executives. See "Executive Compensation -
Incentive Option Plans" on page 17.
(8) Represents the fair market value of AFC Common Stock and cash which was
allocated under the ESOP and the LISB ESOP to the account of the Named
Executive during the year ended December 31, 1999, 1998, and 1997,
respectively, except for Mr. Conefry who received allocations under the
ESOP and LISB ESOP from AFC only during 1999 and 1998, based upon the
closing price per share of AFC Common Stock of $30.438, $45.75, and $55.75
as quoted on The Nasdaq Stock Market on December 31, 1999, 1998 and 1997,
respectively.
Employment Agreements
AFC and the Association have entered into employment agreements with each
of the executive officers, except Mr. Conefry, whose agreement is with AFC only.
The employment agreements each provide for a three-year term. The Association's
agreements each run from January 1st. Prior to January 1st each year, the Board
of Directors of the Association may extend the agreements with the Association
for an additional year such that the remaining terms shall be 3 years. Prior to
January 1, 2000, such employment agreements were so extended. The agreements
with AFC automatically extend daily, so as to maintain their original term,
unless written notice of non-renewal is given by the Board. No such notice has
been given to any Named Executive. The term of Mr. Conefry's employment
agreement will cease to automatically extend on December 29, 2000.
The employment agreements provide for minimum salaries and the executives'
participation in retirement plans, group life, medical and disability insurance
plans and any other employee benefit programs. The employment agreements also
provide that AFC and the Association will maintain for the benefit of the Named
Executives directors' and officers' liability insurance and will indemnify the
Named Executives on prescribed terms for claims and related costs and
liabilities, arising from the services provided pursuant to the employment
agreements for a period of six years beyond the termination of such agreements.
The employment agreements provide for termination of each of the
executives' employment at any time by AFC or the Association with or without
cause. The executive would be entitled to a severance payment in the event the
executive's employment terminates (1) due to AFC's or the Association's
respective (A) failure to re-elect the executive to his current office, and in
Messrs. Engelke's, Conefry and Keegan's agreements, to the Board; (B) failure by
whatever cause to vest in the executive the functions, duties or
responsibilities prescribed for the executive in such agreement; (C) material
breach of the employment agreements or reduction of the executive's base salary
or other change to the terms and conditions of the executive's compensation and
benefits which either individually or in the aggregate, as to such executive,
has a material adverse effect on the aggregate value of the total compensation
package provided to such executive; or (D) relocation of the executive's
principal place of employment outside of Nassau or Queens Counties of New York;
or (2) for reasons other than (A) for cause; (B) voluntary resignation, except
as a result of the actions specified under clause (1) above or following a
change of control, as defined in the agreements; (C) following the executive's
attainment of mandatory retirement age for executive officers (currently 70
years of age); (D) death; (E) long term disability or (F) expiration of the term
of the agreement.
16
<PAGE>
The severance payment to which a Named Executive would be entitled
includes: (1) continued life, medical and disability insurance benefits for the
remainder of the contract term; (2) a lump sum payment equal to the salary,
potential incentive compensation, present value of pension benefits, and the
profit-sharing and ESOP benefits the executive would have earned during the
remainder of the contract term; (3) accelerated vesting of all outstanding
options and restricted stock awards; and (4) a cash settlement, at the election
of AFC or the Association, of all outstanding options and restricted stock
awards.
For any taxable year in which the executive would be liable for the payment
of excise taxes under Section 4999 of the Code with respect to any compensation
paid by AFC or any of its affiliated companies, AFC will pay to or on behalf of
the executive, an amount, in addition to the severance payment, sufficient to
maintain the after-tax severance benefit as though the excise tax specified in
Section 4999 of the Code did not apply.
The Association also maintains change of control severance agreements with
its senior vice presidents. These agreements, which are guaranteed by AFC,
provide for severance benefits and payments to such officers in the event of a
change of control, as defined in the agreements, of AFC or the Association.
These entitlements would include (1) continued life, medical and disability
insurance benefits for a period of two years and (2) a lump sum payment equal to
two (2) times both the annual salary and potential incentive compensation to
which the officer would have been entitled. In addition, for any taxable year in
which the officer would be liable for the payment of excise taxes under Section
4999 of the Code with respect to any compensation paid by AFC or any of its
affiliated companies, AFC will pay to or on behalf of the executive, an amount,
in addition to the severance payment, sufficient to maintain the after-tax
severance benefit as though the excise tax specified in Section 4999 of the Code
did not apply. In the event of a change of control, the Association agrees to
maintain for the benefit of the officer directors' and officers' liability
insurance and will indemnify the officer on prescribed terms for claims and
related costs and liabilities, arising from the services provided pursuant to
the severance agreements for a period of six years beyond the termination of
such agreements.
Incentive Option Plans
The following table sets forth all grants of options (and limited SARs)
under the 1999 Officer Option Plan to the Named Executives during 1999 and
contains certain information about the potential value of these options based
upon certain assumptions as to the appreciation of AFC Common Stock over the
life of the option. During 1999, no options or SARs were granted pursuant to
either the Incentive Option Plan or the 1996 Officer Option Plan, nor did AFC
adjust or amend the exercise price of any stock options or SARs previously
awarded to any of the Named Executives.
17
<PAGE>
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of Stock
Price
Appreciation
Individual Grants for Option Term (3)
----------------------------------------------- -------------------------
% of Total
Options/
Securities SARs
Underlying Granted to Exercise
Options/ Employees or Base
SARs in Fiscal Price Per Expiration
Granted (1) Year Share (2) Date 5% 10%
----------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
George L. Engelke, Jr. 113,000 20.12% $29.875 12/14/2009 $2,123,070 $5,380,275
John J. Conefry, Jr. 90,400 16.09% $29.875 12/14/2009 $1,698,456 $4,304,220
Gerard C. Keegan 28,000 4.98% $29.875 12/14/2009 $ 526,070 $1,333,166
Monte N. Redman 40,000 7.12% $29.875 12/14/2009 $ 751,529 $1,904,522
Thomas W. Drennan 30,000 5.34% $29.875 12/14/2009 $ 563,647 $1,428,392
</TABLE>
- -------------------------
(1) Of the options granted, each Named Executive received the grant of an
option to purchase 3,347 shares of AFC Common Stock which are intended to
qualify as incentive stock options. The remainder are non-qualified stock
options. All options granted to the Named Executives have a ten year term
and vest on January 10, 2003. See "Executive Compensation - Employment
Agreements" on page 16. All such options also vest and become immediately
exercisable upon death, disability, retirement or in the event of a change
of control or threatened change of control, as defined in the 1999 Officer
Option Plan. All such options were granted in tandem with LSARs which
provide that, in the event of a change of control, during the period
commencing on the change of control and ending at the latter of six (6)
months following such date or thirty (30) days following the earliest date
on which the Named Executive may exercise the LSAR without subjecting
himself to liability under Section 16 of the Exchange Act, the Named
Executive may, in lieu of exercising the option, surrender the option and
receive a payment in cash, on a per share basis, equal to the difference
between the exercise price per share and the greater of (1) the highest
price paid per share of AFC Common Stock by any person who initiated or
sought to effect the change of control during the one year period ending on
the date of the change of control or (2) the average of the fair market
value per share as defined in the 1999 Officer Option Plan over the last
ten trading days preceding the date of exercise of the LSAR.
(2) The exercise price may be paid in whole or in part in cash, through the
surrender of previously held shares of AFC Common Stock, or the surrender
of options granted pursuant to the 1999 Officer Option Plan.
(3) The amounts stated assume the specified annual rates of appreciation only.
Actual experience is dependent on the future performance of AFC Common
Stock and overall stock market conditions. There can be no assurance that
the amounts reflected in this table will be achieved.
The following table provides certain information with respect to options
exercised by the Named Executives during 1999 and the number of shares of AFC
Common Stock represented by outstanding stock options held by the Named
Executives as of December 31, 1999. Also reported are the values for "in-the-
money" options, which represent the positive spread between the exercise price
of any outstanding stock options and the closing price per share of AFC Common
Stock of $30.438 as quoted on The Nasdaq Stock Market on December 31, 1999.
18
<PAGE>
Fiscal Year End Option/SAR Values
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised in-the-Money
Options/SARS Options/SARs
at Fiscal Year- at Fiscal Year-
End (#) End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized (1) Unexercisable Unexercisable (2)
- ------------------------ --------------- ----------------- ------------- ---------------------
<S> <C> <C> <C> <C>
George L. Engelke, Jr. 93,000 $2,084,500 401,100 / 199,000 $6,298,032 / $ 63,619
John J. Conefry, Jr. 125,000 $4,732,220 249,917 / 159,200 $3,933,074 / $ 50,895
Gerard C. Keegan 11,250 $ 417,656 128,500 / 48,000 $1,989,906 / $ 15,764
Monte N. Redman 30,000 $ 825,630 140,282 / 75,000 $2,023,084 / $ 22,520
Thomas W. Drennan 38,000 $1,130,260 100,282 / 54,000 $1,305,564 / $ 16,890
</TABLE>
- -------------------------
(1) Represents the fair market value per share of AFC Common Stock as quoted on
The Nasdaq Stock Market on the day the option was exercised minus the
exercise price per share of the option exercised times the number of shares
of AFC Common Stock as to which the option was exercised.
(2) Represents the fair market value per share of AFC Common Stock at fiscal
year end based upon the closing price of $30.438, as quoted on The Nasdaq
Stock Market on December 31, 1999, minus the exercise price per share of
the options outstanding times the number of shares of AFC Common Stock as
to which the option relates. Excluded are options with an exercise price in
excess of $30.438.
Pension Plans
The Employees' Pension Plan is a non-contributory defined benefit pension
plan for the benefit of eligible employees. The Excess Plan is a non-qualified
plan that provides benefits that would have been provided under the Employees'
Pension Plan but for the maximum annual benefit limitation in Section 415 of the
Code ($121,500 for 1999, payable in the form of a ten-year certain and
continuous annuity at age 65) and the maximum annual compensation limitation in
Section 401(a)(17) of the Code ($160,000 for 1999). The Supplemental Plan is a
non-qualified plan under which selected participants in the Employees' Pension
Plan receive the retirement benefits that would have been provided under the
Employees' Pension Plan had the benefit formula in effect immediately prior to
January 1, 1989 remained in effect.
The following tables set forth the estimated annual benefits payable under
the defined benefit pension plans described above upon retirement at age 65 in
calendar year 1999, expressed in the form of a ten-year certain and continuous
annuity, for the highest five-year average annual base wage (referred to in the
table as remuneration) and years of service classifications specified.
19
<PAGE>
Pension and Excess Plans
Creditable Years of Service at Age 65 (1)
------------------------------------------------
Remuneration (2) 15 20 25 30 35 (3)
- ------------ -------- -------- -------- -------- --------
$ 125,000 $ 27,000 $ 36,000 $ 45,100 $ 54,100 $ 54,100
150,000 33,000 44,000 55,100 66,100 66,100
175,000 39,000 52,000 65,100 78,100 78,100
200,000 45,000 60,000 75,100 90,100 90,100
225,000 51,000 68,000 85,100 102,100 102,100
250,000 57,000 76,000 95,100 114,100 114,100
300,000 69,000 92,000 115,100 138,100 138,100
400,000 93,000 124,000 155,100 186,100 186,100
450,000 105,000 140,000 175,100 210,100 210,100
500,000 117,000 156,000 195,100 234,100 234,100
750,000 177,000 236,000 295,100 354,100 354,100
1,000,000 237,000 316,000 395,100 474,100 474,100
1,250,000 297,000 396,000 495,100 594,100 594,100
Pension, Excess and Supplemental Plans
Creditable Years of Service at Age 65 (1)
------------------------------------------------
Remuneration (2) 15 20 25 30 35 (3)
- ------------ -------- -------- -------- -------- --------
$ 125,000 $ 32,000 $ 42,600 $ 53,300 $ 64,000 $ 64,000
150,000 39,500 52,600 65,800 79,000 79,000
175,000 47,000 62,600 78,300 94,000 94,000
200,000 54,500 72,600 90,800 109,000 109,000
225,000 62,000 82,600 103,300 124,000 124,000
250,000 69,500 92,600 115,800 139,000 139,000
300,000 84,500 112,600 140,800 169,000 169,000
400,000 114,500 152,600 190,800 229,000 229,000
450,000 129,500 172,600 215,800 259,000 259,000
500,000 144,500 192,600 240,800 289,000 289,000
750,000 219,500 292,600 365,800 439,000 439,000
1,000,000 294,500 392,600 490,800 589,000 589,000
1,250,000 369,500 492,600 615,800 739,000 739,000
- ----------------------
(1) The benefits listed in the retirement benefits tables are not subject to
any Social Security or other offset amounts.
(2) Remuneration under the Employees' Pension Plan, the Excess Plan and the
Supplemental Plan is calculated based upon the amount shown in the column
of the "Summary Compensation Table" entitled "Salary" and does not include
amounts shown in the column entitled "Bonus." The Employees' Pension Plan
is a qualified plan and is subject to the compensation limit, described
above, contained in Section 401(a)(17) of the Code for calculating the
participant's benefit.
(3) Benefits do not accrue for service in excess of 30 years.
The Named Executives, as of December 31, 1999, had the following credited
service (i.e., benefit service): George L. Engelke, Jr., 28 years 6 months; John
J. Conefry, Jr., 6 years 4 months; Gerard C. Keegan, 28 years 9 months; Monte N.
Redman, 22 years 7 months; Thomas W. Drennan, 13 years 6 months; and Arnold K.
Greenberg, 24 years 7 months.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
AFC's independent auditors for the fiscal year ended December 31, 1999 were
KPMG LLP. The Board has reappointed KPMG LLP as independent auditors for AFC and
the Association for the year ending December 31, 2000, subject to ratification
of such appointment by the holders of the voting stock of AFC. Representatives
of KPMG LLP
20
<PAGE>
will be present at the Annual Meeting. They will be given an opportunity to make
a statement if they desire to do so and will be available to respond to
appropriate questions from shareholders present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION
---------------------
OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF AFC.
Additional Information
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires AFC's directors and executive
officers, among others, to file reports of ownership and changes in ownership of
their equity securities of AFC with the Securities and Exchange Commission and
The Nasdaq Stock Market and to furnish AFC with copies of all such reports.
Based solely upon a review of the copies of these Form 3, 4, and 5 reports
and amendments thereto received by AFC, AFC believes that all applicable filing
requirements were complied with for 1999, and AFC does not know of any such
persons who may have failed to file on a timely basis any required form, except
for Mr. Andrew Burger, a director of AFC, did not file timely a Form 4
reflecting the sale of 5,000 shares of AFC Common Stock on May 7, 1999, which
form was subsequently filed on or about November 30, 1999..
Cost of Proxy Solicitation
The cost of solicitation of proxies by AFC, which is expected to be less
than $80,000, will be borne by AFC. Georgeson Shareholder Communications Inc.,
or GSC, has been retained to assist in the solicitation of proxies under a
contract providing for payment of a fee of $7,000 plus reimbursement for its
expenses. In addition to solicitations by mail, GSC, or a number of officers and
employees of AFC and the Association, may solicit proxies in person, by mail or
by telephone, but none of these persons will receive any compensation for their
solicitation activities in addition to their regular compensation. Arrangements
will also be made with brokerage houses and other custodians, nominees, and
fiduciaries for forwarding solicitation material to the beneficial owners of AFC
Common Stock held of record by such fiduciaries, and AFC will reimburse them for
their reasonable expenses in accordance with the rules of the SEC and The Nasdaq
Stock Market.
Shareholder Proposals
To be considered for inclusion in AFC's proxy statement and form of proxy
relating to the annual meeting of shareholders to be held in 2001, a shareholder
proposal, including a recommendation of a director nominee, must be received by
the Secretary of AFC at the address set forth on the first page of this Proxy
Statement not later than December 11, 2000. Any such proposal will be subject to
17 C.F.R. (S)240.14a-8 promulgated by the SEC under the Exchange Act.
Notice of Business to be Conducted at an Annual Meeting
The Bylaws of AFC provide an advance notice procedure for a shareholder to
properly bring business before an annual meeting or to nominate any person for
election to the Board. The shareholder must give written advance notice to the
Secretary of AFC not less than ninety (90) days before the date originally fixed
for such meeting; provided, however, that in the event that less than one
hundred (100) days notice or prior public disclosure of the date of the meeting
is given or made to shareholders, notice by the shareholder, to be timely, must
be received not later than the close of business on the tenth (10th) day
following the date on which AFC's notice to shareholders of the annual meeting
date was mailed or such public disclosure was made. The advance notice by
shareholders must include the shareholder's name and address, as they appear on
AFC's record of shareholders, the class and number of shares of AFC's capital
stock that are beneficially owned by such shareholder, a brief description of
the proposed business or the names of the person(s) the shareholder proposes to
nominate, and, as to business which the shareholder seeks to
21
<PAGE>
bring before an annual meeting, the reason for conducting such business at the
annual meeting and any material interest of such shareholder in the proposed
business. In the case of nominations for election to the Board, certain
information regarding the nominee must also be provided. Such nominations and
related information would be reviewed by the Nominating Committee of the Board
as described in "Committees and Meetings of the Board" on page 7. Nothing in
this paragraph shall be deemed to require AFC to include in its proxy statement
and proxy relating to an annual meeting any shareholder proposal which does not
meet all of the requirements for inclusion established by the SEC in effect at
the time such proposal is received or any shareholder nomination.
Other Matters Which May Properly Come Before the Meeting
The Board knows of no business which will be presented for consideration at
the Annual Meeting other than as stated in the Notice of Annual Meeting of
Shareholders. If, however, other matters are properly brought before the Annual
Meeting, the dates by which shareholder proposals and notices of business to be
conducted at an Annual Meeting having been previously disclosed, it is the
intention of the persons named in the accompanying proxy to vote the shares
represented thereby on such matters as directed by the Board.
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are present at the Annual
Meeting and wish to vote your shares in person, your proxy may be revoked by
voting at the Annual Meeting.
An additional copy of AFC's annual report on Form 10-K (without exhibits)
for the year ended December 31, 1999, as filed with the SEC, will be furnished
without charge to any shareholder upon written request to Astoria Financial
Corporation, Investor Relations Department, One Astoria Federal Plaza, Lake
Success, New York 11042-1085.
By order of the Board of Directors,
/s/ William K. Sheerin
William K. Sheerin
Executive Vice President and Secretary
Lake Success, New York
April 10, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
22
<PAGE>
ASTORIA FINANCIAL CORPORATION
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ASTORIA
FINANCIAL CORPORATION FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON MAY 17, 2000 AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
The undersigned shareholder of Astoria Financial Corporation hereby
authorizes and appoints John M. Graham, Jr., William M. Thomas, Jr. or either of
them proxy of the undersigned, with full power of substitution, to attend and
act as proxy for the undersigned and to vote as designated below all shares of
common stock of Astoria Financial Corporation which the undersigned may be
entitled to vote at the Annual Meeting of Shareholders of Astoria Financial
Corporation, to be held on May 17, 2000 at 9:30 a.m., Eastern time, at the New
Hyde Park Inn, 214 Jericho Turnpike, New Hyde Park, New York, 11040, and at any
adjournment or postponement thereof.
(Continued on reverse side. Please complete, sign and date on the reverse
side and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a vote
"FOR" all nominees in Proposal No. 1 and "FOR" Proposal No. 2.
[X] Please mark
your votes
like this
1. The election of nominees Gerard C. Keegan, Andrew M. Burger, Denis J.
Connors, Thomas J. Donahue and Donald D. Wenk as directors for terms of
three years each.
FOR WITHHOLD
[ ] [ ]
To withhold authority to vote FOR any particular nominee, line or strike
out that nominee's name and then check the appropriate box as to the remaining
nominees.
2. The ratification of the appointment of KPMG LLP as independent auditors of
Astoria Financial Corporation for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
All proposals listed above in this revocable proxy were proposed by Astoria
Financial Corporation. Astoria Financial Corporation is not currently aware of
any other business that may come before the Annual Meeting. The persons named as
proxies herein will vote the shares represented hereby as directed by the Board
of Directors of Astoria Financial Corporation upon such other business as may
properly come before the Annual Meeting, and any adjournment or postponement
thereof, including, without limitation, a motion to postpone or adjourn the
Annual Meeting.
THIS PROXY IS REVOCABLE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL NO. 1 AND FOR
PROPOSAL NO. 2.
The undersigned hereby acknowledges receipt, prior to the execution of this
proxy, of a Notice of Annual Meeting of Shareholders of Astoria Financial
Corporation, a Proxy Statement dated April 10, 2000 for the Annual Meeting and a
1999 Annual Report on Form 10-K of Astoria Financial Corporation.
Please sign and date below and return promptly in the enclosed postage-paid
envelope.
X_________________ X____________________ Date: ___________________, 2000
Please sign name exactly as it appears hereon. If shares are registered in more
than one name, all should sign, but if one signs, it binds the others. When
signing as attorney, executor, administrator, trustee or guardian, please give
your full title as such. If a corporation, please sign in full corporate name by
an authorized officer. If a partnership, please sign in partnership name by an
authorized person.
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE EMPLOYEE STOCK OWNERSHIP PLAN COMMITTEE, AS PLAN
ADMINISTRATOR,
FOR THE ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION EMPLOYEE STOCK OWNERSHIP
PLAN
As a named fiduciary, the undersigned participant, former
participant or beneficiary of a deceased former participant in the Astoria
Federal Savings and Loan Association Employee Stock Ownership Plan (the "ESOP")
hereby provides the voting instructions hereinafter specified to State Street
Bank & Trust Company, the trustee of the ESOP (the "Trustee"), which
instructions shall be taken into account by the Trustee in voting, in person, by
limited or general power of attorney or by proxy, the shares and fractional
shares of common stock of Astoria Financial Corporation that are held by the
Trustee, in its capacity as Trustee, as of March 24, 2000, at the Annual Meeting
of Shareholders of Astoria Financial Corporation to be held on May 17, 2000 at
9:30 a.m., Eastern time, at the New Hyde Park Inn, 214 Jericho Turnpike, New
Hyde Park, New York, 11040, and at any adjournment or postponement thereof.
As to the proposals listed below which are more particularly
described in the Proxy Statement dated April 10, 2000, the Trustee will vote the
common stock of Astoria Financial Corporation held by the ESOP Trust to reflect
the voting instructions on this Confidential Voting Instruction, in the manner
described in the accompanying letter dated April 10, 2000 from the ESOP
Committee.
If the duly executed Confidential Voting Instruction is returned,
but no instruction is given, for purposes of providing voting instructions, such
shares shall be treated as described in the letter dated April 10, 2000 from the
ESOP Committee.
(Continued on reverse side. Please complete, sign and date on the
reverse side and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a
vote "FOR"all nominees in Proposal No. 1 and "FOR" Proposal No. 2. The
directions, if any, given in this Confidential Voting Instruction will be kept
confidential from all directors, officers and employees of Astoria Financial
Corporation or Astoria Federal Savings and Loan Association.
Please mark
[X] your votes
like this
1. The election of nominees Gerard C. Keegan, Andrew M. Burger, Denis
J. Connors, Thomas J. Donahue and Donald D. Wenk as directors for
terms of three years each.
FOR WITHHOLD
[ ] [ ]
To withhold authority to vote FOR any particular nominee, line or
strike out that nominee's name and then check the appropriate box as
to the remaining nominees.
2. The ratification of the appointment of KPMG LLP as independent
auditors of Astoria Financial Corporation for the fiscal year ending
December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the Annual Meeting and any adjournment or
adjournments thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction
were proposed by Astoria Financial Corporation.
The undersigned hereby instructs the Trustee to vote in accordance
with the voting instruction indicated above and hereby acknowledges receipt,
prior to the execution of this Confidential Voting Instruction, of a Notice of
Annual Meeting of Shareholders, a Proxy Statement dated April 10, 2000 for the
Annual Meeting and a 1999 Annual Report on Form 10-K of Astoria Financial
Corporation.
Please sign and date below and return promptly in the enclosed
postage-paid envelope.
_____________________________________ Date:_____________________ , 2000
Signature of participant, former participant or designated beneficiary of
deceased former participant.
Please sign name exactly as it appears herein. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such.
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION, AS PLAN
ADMINISTRATOR,
FOR THE ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION INCENTIVE SAVINGS PLAN
The undersigned participant, former participant or beneficiary of a
deceased former participant in the Astoria Federal Savings and Loan Association
Incentive Savings Plan (the "401K Plan") as a named fiduciary hereby provides
the voting instructions hereinafter specified to ChaseMellon Shareholder
Services, L.L.C., as the designee of Astoria Federal Savings and Loan
Association, as Plan Administrator (the "Plan Administrator"), which
instructions shall be taken into account in directing the trustee of the 401K
Plan (the "Trustee") to vote in person, by limited or general power of attorney
or by proxy the shares and fractional shares of common stock of Astoria
Financial Corporation that are held by the Trustee, in its capacity as Trustee,
as of March 24, 2000, at the Annual Meeting of Shareholders of Astoria Financial
Corporation to be held on May 17, 2000 at 9:30 a.m., Eastern time, at the New
Hyde Park Inn, 214 Jericho Turnpike, New Hyde Park, New York, 11040, and at any
adjournment or postponement thereof.
As to the proposals listed below which are more particularly described in
the Proxy Statement dated April 10, 2000, the Plan Administrator of the 401K
Plan, will give voting directions to the Trustee. Such directions will reflect
the voting instructions on this Confidential Voting Instruction, in the manner
described in the accompanying letter from the Plan Administrator dated April 10,
2000.
If the duly executed Confidential Voting Instruction is returned, but no
instruction is given, for purposes of providing voting instructions, such shares
shall be treated as described in the letter from the Plan Administrator dated
April 10, 2000.
(Continued on reverse side. Please complete, sign and date on the reverse
side and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a vote
"FOR" all nominees in Proposal No. 1 and "FOR" Proposal No. 2. The directions,
if any, given in this Confidential Voting Instruction will be kept confidential
from all directors, officers and employees of Astoria Financial Corporation or
Astoria Federal Savings and Loan Association.
[X] Please mark
your votes
like this
1. The election of nominees Gerard C. Keegan, Andrew M. Burger, Denis J.
Connors, Thomas J. Donahue and Donald D. Wenk as directors for terms of
three years each.
FOR WITHHOLD
[ ] [ ]
To withhold authority to vote FOR any particular nominee, line or strike
out that nominee's name and then check the appropriate box as to the remaining
nominees.
2. The ratification of the appointment of KPMG LLP as independent auditors of
Astoria Financial Corporation for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the Annual Meeting and any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction were
proposed by Astoria Financial Corporation.
The undersigned hereby instructs the Plan Administrator to direct the
Trustee to vote in accordance with the voting instruction indicated above and
hereby acknowledges receipt, prior to execution of this Confidential Voting
Instruction, of a Notice of Annual Meeting of Shareholders, a Proxy Statement
dated April 10, 2000 for the Annual Meeting and a 1999 Annual Report on Form 10-
K of Astoria Financial Corporation.
Please sign and date below and return promptly in the enclosed postage-paid
envelope.
______________________________________ Date:____________________________, 2000
Signature of participant, former participant or designated beneficiary of
deceased former participant.
Please sign name exactly as it appears herein. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such.
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE EMPLOYEE STOCK OWNERSHIP PLAN COMMITTEE, AS PLAN ADMINISTRATOR,
FOR THE LISB EMPLOYEE STOCK OWNERSHIP PLAN
The undersigned participant, former participant, beneficiary of a deceased
former participant or alternative payee in The LISB Employee Stock Ownership
Plan (the "ESOP") as a named fiduciary hereby provides the voting instructions
hereinafter specified to CG Trust Company, the trustee of the ESOP (the
"Trustee"), which instructions shall be taken into account by the Trustee in
voting, in person, by limited or general power of attorney or by proxy, the
shares and fractional shares of common stock of Astoria Financial Corporation
that are held by the Trustee, in its capacity as Trustee, as of March 24, 2000,
at the Annual Meeting of Shareholders of Astoria Financial Corporation to be
held on May 17, 2000 at 9:30 a.m., Eastern time, at the New Hyde Park Inn, 214
Jericho Turnpike, New Hyde Park, New York, 11040, and at any adjournment or
postponement thereof.
As to the proposals listed below which are more particularly described in
the Proxy Statement dated April 10, 2000, the Trustee will vote the common stock
of Astoria Financial Corporation held by the ESOP Trust to reflect the voting
instructions received by the Trustee from ChaseMellon Shareholder Services, LLC.
in the manner described in the accompanying letter dated April 10, 2000 from the
ESOP Committee.
If the duly executed Confidential Voting Instruction is returned, but no
instruction is given, for purposes of providing voting instructions, such shares
shall be treated as described in the letter dated April 10, 2000 from the ESOP
Committee.
(Continued on reverse side. Please complete, sign and date on the reverse
side and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a vote
"FOR"all nominees in Proposal No. 1 and "FOR" Proposal No. 2. The directions, if
any, given in this Confidential Voting Instruction will be kept confidential
from all directors, officers and employees of Astoria Financial Corporation or
Astoria Federal Savings and Loan Association.
[X] Please mark
your votes
like this
1. The election of nominees Gerard C. Keegan, Andrew M. Burger, Denis J.
Connors, Thomas J. Donahue and Donald D. Wenk as directors for terms of
three years each.
FOR WITHHOLD
[ ] [ ]
To withhold authority to vote FOR any particular nominee, line or strike
out that nominee's name and then check the appropriate box as to the remaining
nominees.
2. The ratification of the appointment of KPMG LLP as independent auditors of
Astoria Financial Corporation for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
All proposals listed above in this Confidential Voting Instruction were
proposed by Astoria Financial Corporation.
The undersigned hereby instructs the Trustee to vote in accordance with the
voting instruction indicated above and hereby acknowledges receipt, prior to the
execution of this Confidential Voting Instruction, of a Notice of Annual Meeting
of Shareholders, a Proxy Statement dated April 10, 2000 for the Annual Meeting
and a 1999 Annual Report on Form 10-K of Astoria Financial Corporation.
Please sign and date below and return promptly in the enclosed postage-paid
envelope.
__________________________________________ Date:__________________, 2000
Signature of participant, former participant, designated beneficiary of deceased
former participant or alternative payee under a Qualified Domestic Relations
Order.
Please sign name exactly as it appears herein. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such.
<PAGE>
ASTORIA FINANCIAL CORPORATION
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION, AS PLAN
ADMINISTRATOR, FOR THE LONG ISLAND SAVINGS BANK 401(K) SAVINGS
PLAN
The undersigned participant, former participant, beneficiary of a
deceased former participant or alternate payee in The Long Island Savings Bank
401(k) Savings Plan (the "401K Plan") as a named fiduciary hereby provides the
voting instructions hereinafter specified to ChaseMellon Shareholder Services,
L.L.C., as the designee of Astoria Federal Savings and Loan Association, as Plan
Administrator (the "Plan Administrator"), which instructions shall be taken into
account by the trustee of the 401K Plan (the "Trustee") in voting in person, by
limited or general power of attorney or by proxy the shares and fractional
shares of common stock of Astoria Financial Corporation that are held by the
Trustee, in its capacity as Trustee, as of March 24, 2000, at the Annual Meeting
of Shareholders of Astoria Financial Corporation to be held on May 17, 2000 at
9:30 a.m., Eastern time, at the New Hyde Park Inn, 214 Jericho Turnpike, New
Hyde Park, New York, 11040, and at any adjournment or postponement thereof.
As to the proposals listed below which are more particularly
described in the Proxy Statement dated April 10, 2000, the 401K Plan
Administrator's designee will give voting directions to the Trustee. Such
directions will reflect the voting instructions on this Confidential Voting
Instruction, in the manner described in the accompanying letter from the Plan
Administrator dated April 10, 2000.
If the duly executed Confidential Voting Instruction is returned,
but no instruction is given, for purposes of providing voting instructions, such
shares shall be treated as described in the letter from the Plan Administrator
dated April 10, 2000.
(Continued on reverse side. Please complete, sign and date on the
reverse side and promptly return in the enclosed postage-paid envelope.)
<PAGE>
The Board of Directors of Astoria Financial Corporation recommends a
vote "FOR" all nominees in Proposal No. 1 and "FOR" Proposal No. 2. The
directions, if any, given in this Confidential Voting Instruction will be kept
confidential from all directors, officers and employees of Astoria Financial
Corporation or Astoria Federal Savings and Loan Association.
Please mark
[X] your votes
like this
1. The election of nominees Gerard C. Keegan, Andrew M. Burger, Denis
J. Connors, Thomas J. Donahue and Donald D. Wenk as directors for
terms of three years each.
FOR WITHHOLD
[ ] [ ]
To withhold authority to vote FOR any particular nominee, line or
strike out that nominee's name and then check the appropriate box as
to the remaining nominees.
2. The ratification of the appointment of KPMG LLP as independent
auditors of Astoria Financial Corporation for the fiscal year ending
December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
All proposals listed above in this Confidential Voting Instruction
were proposed by Astoria Financial Corporation.
The undersigned hereby instructs the Plan Administrator to direct
the Trustee to vote in accordance with the voting instruction indicated above
and hereby acknowledges receipt, prior to execution of this Confidential Voting
Instruction, of a Notice of Annual Meeting of Shareholders, a Proxy Statement
dated April 10, 2000 for the Annual Meeting and a 1999 Annual Report on Form
10-K of Astoria Financial Corporation.
Please sign and date below and return promptly in the enclosed
postage-paid envelope.
______________________________________ Date:___________________ , 2000
Signature of participant, former participant, designated beneficiary of deceased
former participant or alternate payee under a Qualified Domestic Relations
Order. Please sign name exactly as it appears herein. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such.
