<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GreenPoint Financial Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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:
Notes:
<PAGE>
90 Park Avenue
New York, NY 10016
GreenPoint [LOGO] Financial
March 26, 1999
Dear Fellow Stockholder:
I hope you will be able to join us at our annual stockholders meeting on
Friday, May 7, 1999. The meeting will be held at Terrace on the Park, 52-11
111th Street, in Flushing, New York, and will begin at 10:00 a.m.
Attached is the formal notice of the meeting and a proxy statement that
fully describes the business that will take place. The major business will be
the election of directors, ratification of PricewaterhouseCoopers LLP as our
auditors and approval of two benefit arrangements that are described in detail
in the proxy statement.
Officers of the Corporation as well as representatives of
PricewaterhouseCoopers will be present to answer any questions you may have
regarding the business of the meeting.
The Directors believe that the matters you will be asked to vote on at the
meeting are in the best interest of our Corporation, and we urge you to vote
"FOR" all of them. Our reasons are fully explained in the proxy statement.
It is important that your shares be represented at the meeting whether or
not you are present. Please be sure to complete and mail the enclosed proxy
card in the postage-paid return envelope--even if you plan to attend in
person.
On behalf of the Directors and our employees, let me thank you once again
for your support.
Sincerely yours,
/s/ Thomas S. Johnson
Thomas S. Johnson
Chairman and Chief Executive Officer
<PAGE>
- -------------------------------------------------------------------------------
GREENPOINT FINANCIAL CORP.
90 Park Avenue
New York, New York 10016
(212) 834-1710
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 7, 1999
- -------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of GreenPoint Financial Corp. (the "Corporation"), will be held at
Terrace on the Park, 52-11 111th Street, Flushing, New York, on Friday, May 7,
1999 at 10:00 a.m., local time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1.The election of four Directors of the Corporation.
2. The ratification of the appointment of PricewaterhouseCoopers LLP as the
Corporation's independent auditors for the year ending December 31,
1999.
3.The approval of the GreenPoint Financial Corp. 1999 Stock Incentive Plan.
4.The approval of the GreenPoint Financial Corp. 1999 Annual Incentive
Plan.
5. The transaction of such other matters as may properly come before the
Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before the
Meeting.
Action may be taken on any of the foregoing proposals at the Meeting on the
date specified above or on any date or dates to which the Meeting may be
adjourned. Stockholders of record as of the close of business on March 10,
1999 are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
You are requested to complete and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
postage-paid return envelope. The proxy will not be used if you attend and
vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Howard C. Bluver
Howard C. Bluver
Secretary
New York, New York
March 26, 1999
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
PROXY STATEMENT
of
GREENPOINT FINANCIAL CORP.
90 Park Avenue
New York, New York 10016
(212) 834-1710
ANNUAL MEETING OF STOCKHOLDERS
May 7, 1999
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GENERAL
- -------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of GreenPoint Financial Corp.
(the "Corporation") to be used at the Annual Meeting of Stockholders of the
Corporation (the "Meeting") which will be held at Terrace on the Park, 52-11
111th Street, Flushing, New York, on Friday, May 7, 1999 at 10:00 a.m., local
time. The accompanying Notice of Annual Meeting and this Proxy Statement are
being first mailed to stockholders on or about March 26, 1999.
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VOTING AND REVOCABILITY OF PROXIES
- -------------------------------------------------------------------------------
Proxies solicited by the Board will be voted in accordance with the
directions given therein. Where no instructions are indicated, proxies will be
voted for the nominees for Directors set forth below and in favor of the
proposals set forth in this Proxy Statement for consideration at the Meeting.
The proxy confers discretionary authority on the persons named therein to vote
with respect to the election of any person as a Director where the nominee is
unable to serve or for good cause will not serve, and matters incident to the
conduct of the Meeting. Proxies marked as abstentions will not be counted as
votes cast. In addition, shares held in street name which have been designated
by brokers on proxies as not voted will not be counted as votes cast. Proxies
marked as abstentions or as broker non-votes, however, will be treated as
shares present for purposes of determining whether a quorum is present.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of the Corporation's common stock, par value
$.01 per share ("Common Stock"), entitled to vote is necessary to constitute a
quorum at the Meeting. In the event that there are not sufficient votes for a
quorum or to approve or ratify any proposal at the time of the Meeting, the
Meeting may be adjourned in order to permit the further solicitation of
proxies.
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted
at the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to Howard C. Bluver, Secretary of the Corporation, at the address shown
above, by filing a later dated proxy prior to a vote being taken on a
particular proposal at the Meeting, or by attending the Meeting and voting in
person.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
- -------------------------------------------------------------------------------
Stockholders of record as of the close of business on March 10, 1999 are
entitled to one vote for each share then held. As of March 10, 1999, the
Corporation had 94,987,441 shares of Common Stock issued and outstanding.
As provided in the Corporation's Certificate of Incorporation (the
"Certificate of Incorporation"), holders of Common Stock who beneficially own
in excess of 10% of the outstanding shares of Common Stock (the "Limit") are
not entitled to any vote in respect of the shares held in excess of the Limit.
A person or entity is
<PAGE>
deemed the beneficial owner of shares owned by an affiliate of, and by persons
acting in concert with, such person or entity. The Certificate of
Incorporation authorizes the Board to (i) make all determinations necessary to
implement and apply the Limit, including determining whether persons or
entities are acting in concert, and (ii) demand that any person who is
reasonably believed to beneficially own Common Stock in excess of the Limit
supply information to the Corporation to enable the Board to implement and
apply the Limit. The Certificate of Incorporation provides that neither the
GreenPoint Bank Employee Stock Ownership Plan (the "ESOP") nor the trustee of
the ESOP (the "ESOP Trustee") may be deemed, for purposes of applying the
Limit, to beneficially own any Common Stock held by the ESOP.
Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Based upon such
reports, the following table sets forth, as of December 31, 1998, certain
information as to the Common Stock beneficially owned by persons owning in
excess of 5% of the outstanding Common Stock. Management knows of no person,
except as listed below, who owned more than 5% of the outstanding Common Stock
as of December 31, 1998.
<TABLE>
<CAPTION>
Amount and Nature Percent of
Name and Address of Beneficial Outstanding
of Beneficial Owner Ownership (1) Common Stock
------------------- ----------------- ------------
<S> <C> <C>
GreenPoint Bank Employee Stock Ownership Plan
90 Park Avenue
New York, New York 10016....................... 16,182,247(2) 17.10%
Fidelity Management and Research Corporation
82 Devonshire Street
Boston, Massachusetts 02109.................... 6,688,000 7.07%
</TABLE>
- --------
(1) In accordance with Rule 13d-3 promulgated under the Exchange Act, a person
is deemed to be the beneficial owner, for purposes of this table, of any
shares of Common Stock if such person has shared voting or investment
power with respect to such shares, or has a right to acquire beneficial
ownership at any time within sixty days of March 10, 1999. As used herein,
"voting power" is the power to vote or direct the voting of shares and
"investment power" is the power to dispose or direct the disposition of
shares.
(2) In accordance with the ESOP, the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and the Internal Revenue Code of 1986, as
amended (the "Code"), the ESOP Trustee must vote all allocated shares of
Common Stock held in the ESOP in accordance with the instructions of the
participating employees. Pursuant to the ESOP, unallocated shares of
Common Stock will be voted by the ESOP Trustee in a manner calculated to
reflect most accurately the instructions the ESOP Trustee has received
from participants regarding the allocated shares of Common Stock.
Notwithstanding the foregoing, all unallocated shares of Common Stock must
be voted by the ESOP Trustee in accordance with the ESOP Trustee's
responsibilities under provisions of ERISA. As of March 10, 1999,
3,246,348 shares of Common Stock were allocated under the ESOP, excluding
shares of Common Stock distributed from the ESOP to former ESOP
participants.
2
<PAGE>
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PROPOSAL 1--ELECTION OF DIRECTORS
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The Board is currently composed of thirteen members. Pursuant to the
Certificate of Incorporation, the Board is divided into three classes which
must be as nearly equal in number as possible. The term of one class of
Directors expires at each Meeting. The Certificate of Incorporation provides
that Directors are to be elected for terms of three years and until their
successors are elected and qualified.
Four Directors will be elected at the Meeting to serve for a three-year
period and until their respective successors have been elected and qualified.
The Board has nominated to serve as Directors Dan F. Huebner, Thomas S.
Johnson, Susan J. Kropf and Jules Zimmerman, all of whom are currently members
of the Board. It is intended that the persons named in the proxies solicited
by the Board will vote for the election of the named nominees. If any nominee
is unable to serve, the shares represented by all valid proxies which have not
been revoked will be voted for the election of such substitute as the Board
may recommend. At this time, the Board knows of no reason why any nominee
might be unavailable to serve.
A plurality of the votes cast by stockholders present at the Meeting, in
person or by proxy, and entitled to vote is required for the election of
Directors. Stockholders may not vote their shares of Common Stock cumulatively
for the election of Directors.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED IN THIS
PROXY STATEMENT.
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Information with Respect to Nominees and Continuing Directors
- -------------------------------------------------------------------------------
Nominees for Election as Directors for the Term Expiring in 2002
Dan F. Huebner, 67, has been a Director of the Corporation since its
formation in August 1993. A graduate of the University of Minnesota, Mr.
Huebner also holds both a masters and professional degree in aeronautics from
the California Institute of Technology. He is the retired Vice Chairman and a
Director of Grumman Corporation. Mr. Huebner is presently a Trustee of the
Atlantic Mutual Insurance Co. and the Vesterheim Norwegian American Museum,
and a Director of the Centennial Insurance Co. and the Atlantic Specialty
Insurance Co.
Thomas S. Johnson, 58, has been Chairman and Chief Executive Officer of the
Corporation since joining the Corporation in August 1993. He was also
President of the Corporation from August 1993 to October 1997. Mr. Johnson has
served as President of both Chemical Bank and Manufacturers Hanover Trust
Company. He is a Director of RR Donnelley & Sons, Inc., a printing company,
Online Resources & Communications Corporation and Alleghany Corporation, and a
number of not-for-profit organizations, including The Institute of
International Education, The Asia Society, The United States Japan Foundation,
The Cancer Research Institute of America and WNET Channel 13, New York. He is
Chairman of the Board of Trustees of Trinity College. A graduate of Trinity,
he also has a masters degree in business administration from Harvard
University.
Susan J. Kropf, 50, has been a Director of the Corporation since July 1994.
Ms. Kropf has served as Executive Vice President/President, North America of
Avon Products, Inc. ("Avon") since March, 1997. She served as Senior Vice
President/President New and Emerging Markets of Avon from July 1996 to
February 1997. She served as Senior Vice President Global Product and Business
Development/President-Eastern Europe of Avon from 1994 to July 1996. She
served as Senior Vice President Global Product Management of Avon from 1993 to
1994, and Group Vice President, U.S. Product Marketing Group of Avon from 1992
to 1993. Ms. Kropf is a Director of Avon and Mead Corporation. A graduate of
St. John's University, Ms. Kropf received a masters degree in business
administration from New York University.
Jules Zimmerman, 64, has been a Director of the Corporation since its
formation in August 1993. A graduate of Hofstra University, Mr. Zimmerman is
the retired President and Chief Executive Officer of Hickok
3
<PAGE>
Associates, Incorporated, a consulting firm. He was a senior officer with Avon
Products, Inc. from 1976 to 1985 and Chief Financial Officer from 1985 to
1988. Mr. Zimmerman was the New York Chapter President of The National
Association of Corporate Directors and is a member of The American Institute
of Certified Public Accountants and the New York State Society of Certified
Public Accountants. He is a member of the Board of Directors of Vidikron
Technologies Group, Inc., an electronics marketing company, and the Associated
Blind.
Directors Whose Term Expires in 2000
William M. Jackson, 50, has been a Director of the Corporation since its
formation in August 1993. A graduate of Harvard College, Mr. Jackson received
a law degree from George Washington University Law School. Mr. Jackson is a
partner with Satterlee, Stephens, Burke & Burke, L.L.P., a law firm in New
York City. Mr. Jackson is a member of the Board of Trustees and serves on the
Executive Committee of the Rippowam Cisqua School, in Bedford, New York.
Charles B. McQuade, 57, has been a Director of the Corporation since its
formation in August 1993. A graduate of Fordham College, Mr. McQuade also
obtained a masters degree in business administration at the Bernard M. Baruch
Graduate Business School. Mr. McQuade is the President and Chief Executive
Officer of the Securities Industry Automation Corporation. Mr. McQuade is a
Director with the Brooklyn Bureau of Community Service and serves on the
Advisory Boards of the Center for Advanced Technology in Telecommunications
(Polytechnic Institute) and The Stanton Heiskell Center for Public Policy in
Telecommunications and Information Systems (City University of New York).
Alvin N. Puryear, 61, has been a Director of the Corporation since its
formation in August 1993. A graduate of Yale University, he received masters
and doctorate degrees from Columbia University's Graduate School of Business
Administration. Dr. Puryear is a Professor of Management at Bernard M. Baruch
College of the City University of New York. He is a Director of the Bank of
Tokyo-Mitsubishi Trust Company, American Capital Strategies, Ltd., a buyout
and specialty finance company, the Presbyterian Church (U.S.A.) Investment and
Loan Corporation, and The Interracial Council for Business Opportunity. Dr.
Puryear is also a Trustee of the Pittsburgh Theological Seminary.
Robert P. Quinn, 62, has been a Director of the Corporation since its
formation in August 1993. A graduate of the University of Notre Dame, Mr.
Quinn was a General Partner and Managing Director of the investment banking
firm of Salomon Brothers Inc, where he continues as an Honorary Director. Mr.
Quinn is also a Trustee of G.E. Funds, a registered investment management
company. Mr. Quinn is the former Chairman and present member of the Board of
Directors of St. Francis-Mercy Corporation, Roslyn, New York.
Directors Whose Term Expires in 2001
Bharat B. Bhatt, 55, has been a Director of the Corporation since October
1997. Mr. Bhatt joined the Corporation in June 1995 as Vice Chairman and was
appointed as the Corporation's President and Chief Operating Officer in
October 1997. A graduate of the University of Bombay, Mr. Bhatt also attended
the Management Program at the Harvard Business School. Mr. Bhatt served as the
Chief Financial Officer of Shawmut National Corporation from 1992 to 1994, as
a Senior Vice President at Mellon Bank from 1989 to 1992 and held various
positions at Chemical Bank from 1971-1989. Mr. Bhatt is a member of The
Institute of Chartered Accountants.
Robert M. McLane, 69, has been a Director of the Corporation since its
formation in August 1993. A graduate of Yale University, Mr. McLane is a
retired Senior Vice President of Marsh & McLennan, Inc., an insurance
brokerage corporation. He is presently a Director of several private
corporations and is a Trustee of Greenwood Cemetery, Brooklyn, New York.
Edward C. Schmults, 68, has been a Director of the Corporation since July
1994. Mr. Schmults served as Senior Vice President and General Counsel of GTE
Corporation from February 1984 to June 1994. A graduate
4
<PAGE>
of Yale University, Mr. Schmults received a law degree from Harvard Law
School. Mr. Schmults held various positions in government, including service
as Deputy Attorney General of the United States and Under Secretary of the
United States Treasury Department. Mr. Schmults was a partner with White &
Case, a law firm in New York City. Mr. Schmults is a Director of The Germany
Fund, The Central European Equity Fund, Deutsche Portfolio and Deutsche Funds,
Inc., and Chairman of the Board of Trustees of The Edna McConnell Clark
Foundation.
Wilfred O. Uhl, 71, has been a Director of the Corporation since its
formation in August 1993. A graduate of The Cooper Union School of
Engineering, Mr. Uhl is the retired President of The Long Island Lighting
Company, and a member of The New York Society of Professional Engineers and
The Institute of Electrical and Electronic Engineers. Mr. Uhl is also
Treasurer of The Interdenominational Housing Project in Great Neck, New York,
and a Director of Wartburg Lutheran Services, Brooklyn, New York, a provider
of services to the elderly.
Robert F. Vizza, 65, has been a Director of the Corporation since its
formation in August 1993. He is the retired President and Chief Executive
Officer of St. Francis Hospital, Roslyn, New York, and held the position of
Dean of the School of Business of Manhattan College, in New York, for 18
years, prior to joining St. Francis Hospital. He is presently President and
Chief Executive Officer of the Lustgarten Foundation for Cancer Research.
Having earned a doctorate degree from the New York University Graduate School
of Business Administration, Dr. Vizza also received an Honorary Doctorate of
Laws degree from LaSalle College in Philadelphia, and is a Fellow of the
International Academy of Management. He is a Director of the Phoenix Home Life
Mutual Insurance Company, and chairs its Audit Committee, and is on the
Planning Board of the Village of Old Brookville.
Director to be Appointed Upon Consummation of the Headlands Mortgage Company
Acquisition
On December 8, 1998, the Corporation entered into a definitive agreement to
acquire Headlands Mortgage Company ("Headlands"), a specialty mortgage banking
company, headquartered in Larkspur, California. It is anticipated that the
acquisition will be consummated on March 31, 1999. Once the acquisition is
consummated, Mr. Peter T. Paul, Chairman, Chief Executive Officer and
President of Headlands, will be appointed as a member of the Board and will be
in the class of Directors whose term expires in 2000. In addition, Mr. Paul
will become a member of the Corporation's management as a Vice Chairman. Mr.
Paul, age 55, is the founder and major shareholder of Headlands and has been
since it began operations in 1986. Having earned degrees in business
administration from the University of New Hampshire and Boston University, Mr.
Paul has over 25 years experience in the mortgage banking industry. Mr. Paul
is a Director of the California Mortgage Bankers Association.
5
<PAGE>
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Securities Owned by Directors and Executive Officers
- -------------------------------------------------------------------------------
The following table sets forth, as of March 10, 1999, certain information as
to the Common Stock beneficially owned by each Director, by each executive
officer named in the Summary Compensation Table and by all Directors and
executive officers of the Corporation as a group. No Director or executive
officer beneficially owns directly or indirectly more than 1% of the
outstanding Common Stock, other than Mr. Johnson. All Directors and executive
officers of the Corporation as a group beneficially own 3.56% of the
outstanding Common Stock.
<TABLE>
<CAPTION>
Shares of Common Stock
Name or Beneficially Owned as
Identity of March 10,
of Group 1999(1)(2)(3)
-------- ----------------------
<S> <C>
Bharat B. Bhatt................................... 315,285
Dan F. Huebner.................................... 69,610
S.A. Ibrahim...................................... 61,247
William M. Jackson................................ 53,400
Thomas S. Johnson................................. 1,329,262
Susan J. Kropf.................................... 28,000
Robert M. McLane.................................. 75,182
Charles B. McQuade................................ 74,000
Alvin N. Puryear.................................. 66,570
Robert P. Quinn................................... 83,378
Charles P. Richardson............................. 356,244
Edward C. Schmults................................ 37,000
Ramesh N. Shah.................................... 118,951
Wilfred O. Uhl.................................... 54,182
Robert F. Vizza................................... 61,206
Jules Zimmerman................................... 40,206
All Directors and Executive Officers as a Group
(23 Persons)..................................... 3,384,766
</TABLE>
- --------
(1) For the definition of beneficial ownership, see footnote (1) to the table
in "Voting Securities and Principal Holders Thereof."
(2) Includes certain shares of Common Stock owned by spouses, or as a
custodian or trustee or by spouses as a custodian or trustee, over which
shares of Common Stock such Director or executive officer effectively
exercises sole or shared voting and/or investment power, unless otherwise
indicated.
(3) Includes certain shares of Common Stock allocated to executive officers
under the ESOP, over which shares of Common Stock such officers
effectively exercise sole or shared voting power.
Stock Ownership Guidelines
The Board of Directors has adopted stock ownership guidelines for Directors
and executive officers in order to encourage substantial equity ownership in
the Corporation by those individuals who are in the best position to work to
maximize stockholder value. Pursuant to these guidelines, each Director is
expected to own Common Stock equal in value to 5 times the annual retainer. In
addition, the Chairman of the Board and Chief Executive Officer is expected to
own Common Stock equal in value to 5 times salary, the President and Chief
Operating Officer is expected to own Common Stock equal in value to 3 times
salary, and certain other officers are expected to own Common Stock equal in
value to a multiple of salary depending on their positions. In all cases,
eligible shares for purposes of the guidelines exclude stock options, but
include shares obtained through the Corporation's employee benefit plans. The
guidelines also provide an appropriate transition period for the shares to be
obtained.
6
<PAGE>
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Meetings and Committees of the Board
- -------------------------------------------------------------------------------
The Board conducts business through meetings of the Board and of its
committees. During the fiscal year ended December 31, 1998, the Board held
fourteen meetings. No Director attended fewer than 75% in the aggregate of the
total number of meetings of the Board or committees on which such Director
served during this period.
The Audit Committee of the Board (the "Audit Committee") meets with both
independent and internal auditors of the Corporation to review the plans and
reports of such auditors and to recommend the appointment of independent
auditors. The Audit Committee currently consists of Mr. Zimmerman, as Chair,
Messrs. McLane, McQuade and Uhl, and Dr. Puryear. During the fiscal year ended
December 31, 1998, the Audit Committee held five meetings.
The Nominating Committee of the Board (the "Nominating Committee")
recommends to the Board nominees for election to the Board. The Nominating
Committee currently consists of Mr. Jackson, as Chair, Ms. Kropf and Mr. Uhl.
During the fiscal year ended December 31, 1998, the Nominating Committee did
not meet.
The Compensation Committee of the Board (the "Compensation Committee")
reviews the performance and compensation of the officers of the Corporation,
as well as the human resources policies of the Corporation, and makes
recommendations to the Board with respect thereto. The Compensation Committee
currently consists of Mr. Schmults, as Chair, Ms. Kropf and Messrs. Huebner,
Jackson and Quinn. During the fiscal year ended December 31, 1998, the
Compensation Committee held five meetings.
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Directors' Compensation
- -------------------------------------------------------------------------------
Directors' Fee Arrangements
Employees of the Corporation or any subsidiary of the Corporation who are
Directors receive no compensation for their service on the Board or the Board
of Directors of GreenPoint Bank (the "Bank Board"). Directors who are not
officers or employees of the Corporation or any subsidiary of the Corporation
("Non-Employee Directors") receive an annual retainer of $30,000 payable in
shares of Common Stock and fees of $1,000 per Board meeting and $800 per
committee meeting. The Board and the Bank Board are identically constituted,
and Non-Employee Director fees cover service on both the Board and the Bank
Board. Non-Employee Directors are offered the option of participation in the
medical insurance plan of GreenPoint Bank (the "Bank") which is available to
the Bank's eligible employees. The Bank has also implemented a retirement plan
for Non-Employee Directors. The maximum annuity benefit under this retirement
plan is equal to the annual retainer fee paid to Non-Employee Directors. Only
Non-Employee Directors who have accumulated ten or more years of service as a
Director of the Bank and who retire from the Bank Board at age sixty-five or
older or whose service as a Non-Employee Director is terminated because of
disability, are eligible to receive the maximum annuity benefit.
Non-Employee Directors Stock Option Plan
Under the GreenPoint Financial Corp. Non-Employee Directors Stock Option
Plan (the "Directors Stock Option Plan"), Non-Employee Directors are eligible
to receive stock options. The Directors Stock Option Plan is administered by
the Compensation Committee. However, grants of stock options to participants,
and the amount, nature and timing of such grants, are automatically determined
and are not subject to the determination of the Compensation Committee.
The total number of shares of Common Stock for which options may be granted
may not exceed 1,450,000 shares while the plan is in effect, subject to
certain adjustments. Non-Employee Directors receive a non-qualified stock
option to purchase 10,000 shares of Common Stock at a price equal to the fair
market value at the time of
7
<PAGE>
the grant upon becoming a Director. In addition, during the term of the
Directors Stock Option Plan, on the day following the Corporation's Annual
Meeting each year, each Non-Employee Director receives a non-qualified stock
option to purchase 4,000 shares of Common Stock at a price equal to the fair
market value at the time of the grant, provided such individual continues to
be a Non-Employee Director.
The term of each stock option is ten years from the date of grant. The
Directors Stock Option Plan will terminate on December 31, 2004.
- -------------------------------------------------------------------------------
Compensation Committee Report on Executive Compensation
- -------------------------------------------------------------------------------
The Compensation Committee (the "Committee") has responsibility for review
and oversight of the Corporation's compensation programs, and for
administering executive salary and incentive compensation plans. The following
report discusses executive compensation objectives and policies and their
relationship to corporate performance. Also, the report specifically discusses
the Committee's bases for compensation of the Chief Executive Officer in 1998.
Executive Compensation Objectives and Policies
The Corporation's executive compensation program is designed to be closely
linked to corporate performance and returns to stockholders. The Corporation
has developed an overall compensation strategy and specific compensation plans
that tie a significant portion of executive compensation to the Corporation's
success in meeting specified performance goals. The overall objectives of this
strategy are to attract and retain the best possible executive talent, to
motivate these executives to achieve the goals contained in the Corporation's
business strategy, to link executive and stockholder interests through equity-
based plans, and to provide a compensation package that recognizes and rewards
individual contributions, as well as overall business results. The Committee
is of the view that compensation should be designed to stimulate performance
improvement and profitable growth and should reward exceptional performance
with remuneration that is commensurate with such performance. To this end,
total compensation for executive officers is designed to be, over time,
approximately at the 75th percentile of the Corporation's peer group, as
defined below, with the majority of compensation being at risk to performance.
Each year the Committee conducts a full review of the Corporation's
executive compensation. This review includes a comprehensive assessment of the
effectiveness of the Corporation's compensation program in stimulating growth
and maximizing total return to stockholders through performance-based
incentives. This review also includes a comparative analysis, produced by
independent compensation and benefits consultants, of the Corporation's
executive compensation, corporate performance and total return to stockholders
compared to a peer group representing the Corporation's most direct
competitors for executive talent. The strongest competitors for executive
talent for most positions are believed to be the largest thrift institutions,
specialty finance companies and mortgage banks throughout the country, as well
as medium size commercial banks.
The Committee determines the compensation of all of the executive officers
of the Corporation, including the named executive officers whose compensation
is detailed in this Proxy Statement. In reviewing the individual performance
of the executives whose compensation is detailed in this Proxy Statement
(other than Mr. Johnson), the Committee gives weight to the recommendations of
Mr. Johnson.
The key elements of the Corporation's executive compensation program consist
of base salary, annual and long-term performance-based cash incentives, and
stock-based incentives such as stock options and restricted stock. In
addition, while these elements of compensation are considered separately, the
Committee's policies take into account the total compensation package of each
executive officer, including pension benefits, supplemental retirement
benefits, insurance and other benefits.
Compensation of Chief Executive Officer
In evaluating Mr. Johnson's performance for 1998, the Committee is of the
opinion that Mr. Johnson's work throughout 1998 was critical to the
achievement of a very successful year for the Corporation, including record
8
<PAGE>
financial performance and the successful implementation of major components of
the Corporation's long-term strategic plan. Specifically, although the
Corporation encountered a much more competitive mortgage origination market
during 1998, net income was a record $149,534,000 or $1.92 per share.
Excluding non-recurring items, net income was also a record $154,702,000 or
$1.99 per share. The Committee is of the opinion that this performance is
largely attributable to significant improvement during 1998 in the most
important aspects of the Company's business, including an uncompromising
commitment to credit quality and risk management, increased focus on non-
interest income from the Corporation's consumer banking operations, and tight
control of operating expenses in the face of substantial growth. In addition,
the Committee believes that the acquisition of the manufactured home loan
business of BankAmerica Corporation that was initiated and consummated in 1998
and entering into a definitive agreement during 1998 to acquire Headlands
Mortgage Company, were critical components in implementing the Corporation's
long-term strategic plan.
The Corporation's employment arrangement with Mr. Johnson provides him with
a competitive package at approximately the 75th percentile of the
Corporation's peer group. This package is described in detail in the
"Executive Compensation" section of this Proxy Statement. The Committee
designed this package after consulting with and receiving the advice of its
independent compensation and benefits consultants. Consistent with the
Corporation's overall compensation policy, the Corporation's employment
arrangement with Mr. Johnson is largely performance-based. Specifically, the
arrangement is based on performance-based plans that link compensation to
several measures of financial performance selected by the Committee.
Consequently, a substantial percentage of Mr. Johnson's compensation is at
risk and is directly linked to performance measures, which may include return
on equity, return on assets, net income, cash earnings, earnings per share,
total return to stockholders, and earnings growth. The arrangement also
provides that Mr. Johnson is to receive stock incentives intended to tie Mr.
Johnson's compensation directly to future stockholder value. See footnote (3)
to the "Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values" table of this Proxy Statement for a description of the amount
and terms of stock options provided to Mr. Johnson.
For 1998, Mr. Johnson received $650,000 in base salary and an annual
performance award of $800,000. The Committee determined the amount of the
performance award based on measures of financial performance of the
Corporation, including net income and cash earnings. In addition, the
Committee considered the fact that this record financial performance was
achieved without compromise on credit quality, risk management or expense
control. In this regard, the Committee noted particularly that non-performing
loan levels declined throughout 1998 and ended the year at the lowest level
seen in the 1990's. Also, in order to acknowledge the role of Mr. Johnson in
personally pursuing and ultimately achieving the BankAmerica Housing Services
acquisition and the agreement to acquire Headlands Mortgage Company, two key
acquisitions critical to the Corporation's strategic plan, the Committee
awarded Mr. Johnson a non tax deductible special recognition bonus in the
amount of $1 million. In addition, Mr. Johnson received a payout of $1,795,000
pursuant to the Corporation's 1994 Long-Term Incentive Plan, based on the
Corporation's achievement during 1998 and for the period 1995 through 1998 of
specific levels of long-term performance criteria previously established by
the Committee for such periods.
Deductibility of Executive Officer Compensation
The Committee's policy with respect to the tax deductibility of executive
compensation above $1 million is to structure benefit plans in a manner that
permits the deductibility of such compensation under Section 162(m) of the
Code when the Corporation can do so without materially compromising the
objectives of its overall compensation program.
THE COMPENSATION COMMITTEE
Edward C. Schmults, Chair
Susan J. Kropf William M. Jackson
Dan F. Huebner Robert P. Quinn
9
<PAGE>
- -------------------------------------------------------------------------------
Executive Compensation
- -------------------------------------------------------------------------------
Summary Compensation Table
The following table sets forth the compensation paid by the Corporation
during each of the years ended December 31, 1998, 1997 and 1996, respectively,
to the Corporation's Chief Executive Officer and its four next highest paid
executive officers.
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------
Annual Compensation(1) Awards Payouts
-------------------------------------- ----------------------- ---------
Securities
Other Annual Restricted Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Stock Options/SARs Payouts Compensation
Position(s) Year ($) ($) ($)(2) ($)(3)(4) (#) ($)(5) ($)(6)
------------------ ---- ------- --------- ------------ ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas S. Johnson........ 1998 650,000 1,800,000(7) 53,500 -- 230,000 1,795,000 77,100
Chairman and 1997 650,000 850,000 53,500 -- 230,000 625,000 79,309
Chief Executive Officer 1996 575,000 600,000 53,500 3,693,750 -- 1,250,000 68,162
Bharat B. Bhatt.......... 1998 450,000 925,000(7) -- -- 160,000 -- 77,100
President and 1997 450,000 460,000 -- 832,500 160,000 -- 77,041
Chief Operating Officer 1996 325,000 300,000 -- -- -- -- 65,511
S.A. Ibrahim............. 1998 266,154 250,000 -- -- 50,000 -- 56,500
Executive Vice President 1997 195,000 200,000 -- -- 130,000 -- 818
1996 -- -- -- -- -- -- --
Charles P. Richardson.... 1998 260,000 215,000 -- -- 50,000 215,400 73,507
Executive Vice President 1997 260,000 200,000 -- -- 50,000 75,000 75,697
1996 250,000 125,000 -- 1,846,875 -- 150,000 64,454
Ramesh N. Shah........... 1998 256,538 200,000 -- -- 60,000 -- 58,821
Executive Vice President 1997 229,904 180,000 -- -- 50,000 -- 44,540
1996 129,808 64,000 -- -- 110,000 -- 2,482
</TABLE>
- --------
(1) Annual compensation includes deferred compensation. Bonus amounts include
all bonus payments earned for the years ended December 31, 1998, 1997 and
1996, including amounts paid in 1999, 1998 and 1997, respectively.
(2) For each of the years ended December 31, 1998, 1997 and 1996,
respectively, there were not (i) perquisites over the lesser of $50,000 or
10% of the individual's total salary and bonus for the year for anyone
other than Mr. Johnson; (ii) payments of above-market preferential
earnings on deferred compensation; (iii) payments of earnings with respect
to long-term incentive plans prior to settlement or maturation; (iv) tax
payment reimbursements; or (v) preferential discounts on stock. Mr.
Johnson's perquisites in each of 1998, 1997 and 1996 consisted of a
$50,000 housing allowance and $3,500 for personal use of an automobile
owned by the Corporation.
(3) On January 28, 1996, Mr. Johnson was granted 300,000 shares of restricted
Common Stock ("Restricted Stock") and Mr. Richardson was granted 150,000
shares of Restricted Stock. These grants vest at a rate of 20% per year
beginning one year from the date of grant. On January 29, 1997, Mr. Bhatt
was granted 30,000 shares of Restricted Stock, which vests at a rate of
25% per year beginning one year from the date of grant. The rate at which
the Restricted Stock vests is subject to acceleration upon the occurrence
of certain specified events. At December 31, 1998, Mr. Johnson held
180,000 shares of Restricted Stock having a value of $6,322,500, Mr. Bhatt
held 22,500 shares of Restricted Stock having a value of $790,313 and Mr.
Richardson held 90,000 shares of Restricted Stock having a value of
$3,161,250.
(4) Whenever Restricted Stock is paid to a named executive officer, the
executive officer is entitled to receive, with respect to each share of
Restricted Stock paid, an amount attributable to any cash dividends and a
number of shares of Common Stock equal to any stock dividends declared and
paid with respect to a share of Common Stock (including an appropriate
amount of net earnings, if any) between the date the relevant Restricted
Stock award was granted and the date the Restricted Stock is paid, unless
any such dividend is paid to a named executive officer on a current basis.
(5) LTIP payouts include payouts earned for the one-year and four-year periods
ended December 31, 1998, the one-year period ended December 31, 1997 and
the two-year period ended December 31, 1996, and paid in 1999, 1998 and
1997, respectively.
(6) Includes (i) $66,000, $68,209 and $59,612, which is the value of shares of
Common Stock allocated under the ESOP based on 1998, 1997 and 1996
compensation, respectively, for Mr. Johnson, $66,000, $68,209 and $59,565,
which is the value of shares of Common Stock allocated under the ESOP
based on 1998, 1997 and 1996 compensation, respectively, for Mr. Bhatt,
$50,018, which is the value of shares of Common Stock allocated under the
ESOP based on 1998 compensation for Mr. Ibrahim, $66,000, $68,209 and
$59,612, which is the value of shares of Common Stock allocated under the
ESOP based on 1998, 1997 and 1996 compensation, respectively, for Mr.
Richardson, and $50,018 and $38,313, which is the value of shares of
Common Stock allocated under the ESOP based on 1998 and 1997 compensation,
respectively, for Mr. Shah; (ii) the Bank's contributions to its 401(k)
Savings Plan of $4,800, $4,800 and $2,250 for each of Messrs. Johnson and
Bhatt for 1998, 1997 and 1996, respectively, of $4,800 for Mr. Ibrahim for
1998, and of $4,800, $4,800 and $2,250 for each of Messrs. Richardson and
Shah for 1998, 1997 and 1996, respectively; and (iii) the value of the
life insurance
10
<PAGE>
premiums paid by the Corporation of $6,300, $6,300 and $6,300 for Mr.
Johnson for 1998, 1997 and 1996, respectively, $6,300, $4,032 and $3,696 for
Mr. Bhatt for 1998, 1997 and 1996, respectively, $1,682 and $818 for Mr.
Ibrahim for 1998 and 1997, respectively, $2,707, $2,688 and $2,592 for Mr.
Richardson for 1998, 1997 and 1996, respectively, and $4,003, $1,427 and
$232 for Mr. Shah for 1998, 1997 and 1996, respectively.
(7) Includes a special recognition bonus of $1 million for Mr. Johnson and
$500,000 for Mr. Bhatt awarded to acknowledge the critical role each of
them played in both the BankAmerica Housing Services and Headlands
Mortgage Company acquisitions, two critical components in the
Corporation's strategic plan.
Fiscal 1998 Stock Option Grants
The following table contains information concerning the grant of options to
purchase Common Stock to the named executive officers during the year ended
December 31, 1998. The table also sets forth the hypothetical gains that would
exist for the options at the end of their ten-year terms, assuming compound
rates of stock appreciation of 5% and 10%. The actual future value of the
options will depend on the market value of the Common Stock. The Corporation
has not granted any freestanding stock appreciation rights ("SARs") to the
named executive officers.
<TABLE>
<CAPTION>
Individual Grants(1)
-----------------------------------------
Potential Realizable
Value at Assumed
% of Annual
Total Rates of Stock Price
Number of Options Appreciation for
Shares Granted Option
Underlying to Term(3)
Option Employees Exercise Expiration --------------------
Name Grants in 1998 Price(2) Date 5% 10%
---- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas S. Johnson....... 230,000 14.64% $33.65625 01/13/08 4,868,234 12,337,061
Bharat B. Bhatt......... 160,000 10.18% $33.65625 01/13/08 3,386,598 8,582,303
S.A. Ibrahim............ 50,000 3.18% $33.65625 01/13/08 1,058,312 2,681,970
Charles P. Richardson... 50,000 3.18% $33.65625 01/13/08 1,058,312 2,681,970
Ramesh N. Shah.......... 60,000 3.81% $33.65625 01/13/08 1,269,974 3,218,364
</TABLE>
- --------
(1) The options shown were granted on January 13, 1998 and are exercisable at
a rate of 33 1/3% per year beginning one year from the date of grant.
(2) The exercise price per share for each option is equal to the fair market
value of the Common Stock on the date of grant.
(3) The potential realizable value is calculated in accordance with the
disclosure rules promulgated by the Securities and Exchange Commission
(the "Commission"). The hypothetical gains shown are based on compound
annual rates of stock price appreciation of 5% and 10% from the date of
grant to the expiration date. The assumed rates of growth are prescribed
by the Commission and are for illustrative purposes only. They are not
intended to predict future Common Stock prices. Actual realized value, if
any, will depend on the market value of the Common Stock at the time of
exercise, and no gain to the optionee is possible without an increase in
the Common Stock price.
11
<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information on the aggregate number of
unexercised options to purchase Common Stock granted in all years to the named
executive officers and held by them as of December 31, 1998 and the value of
unexercised in-the-money options (i.e., options that had a positive spread
between the exercise price and the fair market value of Common Stock) as of
December 31, 1998. None of the named executive officers exercised options
during the fiscal year ended December 31, 1998 other than Messrs. Richardson
and Shah. The Corporation has not granted any free-standing SARs to the named
executive officers.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Number of Unexercised Options In -the-Money Options
Shares at 12/31/98(3) at 12/31/98(2)(3)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas S. Johnson....... 0 0 586,666 553,334 $12,901,036 $5,580,514
Bharat B. Bhatt......... 0 0 165,833 304,167 $ 3,054,630 $1,908,761
S.A. Ibrahim............ 0 0 20,000 160,000 $ 187,500 $1,104,685
Charles P. Richardson... 145,100 $3,443,184 16,666 133,334 $ 122,911 $1,528,648
Ramesh N. Shah.......... 6,666 $ 134,987 65,000 148,334 $ 1,095,632 $1,440,835
</TABLE>
- --------
(1) The value realized as shown represents the difference between the fair
market value of the Common Stock on the date of exercise and the exercise
price of the option.
(2) The value of unexercised in-the-money options as shown represents the
difference between the fair market value of the Common Stock on December
31, 1998 and the exercise price of the options.
(3) On January 28, 1995, Messrs. Johnson and Richardson were each granted an
option to purchase 680,000 and 200,000 shares of Common Stock,
respectively. On June 19, 1995, Mr. Bhatt was granted an option to
purchase 150,000 shares of Common Stock. On June 3, 1996, Mr. Shah was
granted an option to purchase 110,000 shares of Common Stock. On January
29, 1997, Messrs. Johnson, Bhatt, Richardson and Shah were each granted an
option to purchase 230,000, 160,000, 50,000 and 50,000 shares of Common
Stock, respectively. On March 31, 1997, Mr. Ibrahim was granted an option
to purchase 130,000 shares of Common Stock. On January 13, 1998, Messrs.
Johnson, Bhatt, Ibrahim, Richardson and Shah were each granted an option
to purchase 230,000, 160,000, 50,000, 50,000 and 60,000 shares of Common
Stock, respectively. On January 21, 1999, Messrs. Johnson, Bhatt, Ibrahim,
Richardson and Shah were each granted on option to purchase 310,000,
155,000, 65,000, 60,000 and 60,000 shares of Common Stock, respectively.
Pursuant to the GreenPoint Financial Corp. Amended and Restated 1994 Stock
Incentive Plan (the "1994 Stock Incentive Plan"), the options were granted
at fair market value and expire after ten years. The options granted
during 1995 and 1996 vest over four years and the options granted during
1997, 1998 and 1999 vest over three years. The period over which the
options vest is subject to acceleration upon the occurrence of certain
specified events. The options granted during 1999 are not reflected in
this table.
Fiscal Year-End Long-Term Incentive Plan Awards
The following table sets forth target and maximum payout opportunities under
the GreenPoint Financial Corp. 1994 Long-Term Incentive Plan (the "Long-Term
Incentive Plan") for the four-year performance period ended December 31, 1998.
<TABLE>
<CAPTION>
Performance or Estimated Future Payouts Under
Number of Other Period Non-Stock Price-Based Plans(1)(2)
Shares, Units Until Maturation ---------------------------------
Name or Other Rights or Payout Threshold($) Target($) Maximum($)
- ---- --------------- ---------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Thomas S. Johnson....... -- 1995-1998 -- 2,500,000 3,750,000
Charles P. Richardson... -- 1995-1998 -- 300,000 450,000
</TABLE>
- --------
(1) Under the Long-Term Incentive Plan, payments are to be made in cash, based
on the Corporation's return on equity or total stockholder return
performance over a period of four years relative to the performance of a
selected comparable group of companies. For each of the 1995-1997
performance periods, no awards would be paid unless target performance was
achieved by the Corporation, although target awards not earned in one
performance period are carried over to the next performance period and
could be earned if target performance is achieved in that or a subsequent
performance period. An award for above target performance can only be paid
in connection with the 1998 performance period. Messrs. Bhatt, Ibrahim and
Shah are not participants in the Long-Term Incentive Plan.
(2) Payouts for the one-year and four-year performance periods ended December
31, 1998, the one-year performance period ended December 31, 1997 and the
two-year performance period ended December 31, 1996 are reflected in the
Summary Compensation Table.
12
<PAGE>
Stock Performance Graph
The following graph shows a comparison of cumulative total stockholder
return on the Common Stock from January 28, 1994 to December 31, 1998, with
the cumulative total returns of both a broad-market index and a peer group
index. The broad-market index chosen was the S&P 500 Total Return Index
produced by SNL Securities ("SNL"), and the peer group index chosen was all
publicly-traded thrift institutions with total assets in excess of $5 billion
also produced by SNL. The Common Stock began trading on January 28, 1994. The
graph depicts a limited period of time. As a result, the graph may not be
indicative of possible future performance of the Common Stock.
<TABLE>
<CAPTION>
Period Ending
<S> <C> <C> <C> <C> <C> <C>
Index 1/28/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
----------------------------------------------------
GreenPoint Financial
Corp. ................... 100.00 111.63 149.65 272.27 422.59 415.90
S&P 500................... 100.00 98.60 135.66 166.67 222.29 285.81
SNL $5B+ Thrifts.......... 100.00 91.31 150.34 201.85 341.98 300.13
</TABLE>
Employment Agreements
The Corporation has an employment agreement with Mr. Johnson as Chairman and
Chief Executive Officer of the Corporation (the "Employment Agreement"). The
Employment Agreement provides for a base salary of not less than $500,000 per
year and an annual performance award of between 0% and 180% of base salary
with a target award of 90%, with a greater or lesser award percentage being
paid based on performance. He was also entitled to participate in the Long-
Term Incentive Plan with a target award for the four-year cycle 1995 through
1998 of $2.5 million, with greater or lesser awards being paid based on
performance.
Under the Employment Agreement, the Corporation will provide Mr. Johnson
with a supplemental retirement benefit, after offset of all other retirement
benefits received by him and social security, of 60% of his final average pay
which is defined as the average of his highest three years of salary and
annual performance awards. The Employment Agreement provides Mr. Johnson with
termination benefits under defined circumstances of $2 million, plus any
accrued but unpaid base salary and a pro rata annual performance award. The
Employment Agreement also provides Mr. Johnson with certain disability and
death benefits.
Mr. Johnson is entitled to a change in control payment if, subsequent to a
change in control (as defined in the Employment Agreement), his employment is
terminated by the Corporation without cause, or if he terminates
13
<PAGE>
his employment for good reason. Any termination by Mr. Johnson during the
thirty-day period immediately following the first anniversary of a change in
control constitutes termination for good reason. The change in control payment
consists of all accrued but unpaid base salary and a pro rata portion of Mr.
Johnson's annual performance award for the year in which the termination
occurs, plus an amount equal to three times the sum of Mr. Johnson's base
salary and annual performance award, plus an additional amount determined
pursuant to any retirement or supplemental retirement plan in which Mr.
Johnson participates.
The Employment Agreement also provides that if Mr. Johnson's employment is
terminated for cause, he will not compete with the Corporation or the Bank for
a period of one year thereafter. The Employment Agreement has a three-year
term that is extended on a rolling basis.
The Corporation also has an employment agreement with Mr. Bhatt as President
and Chief Operating Officer (the "Agreement"). The Agreement provides for an
annual base salary of not less than $325,000 and an annual performance award
of between 0% and 160% of base salary with a target award of 80%, with a
greater or lesser award percentage being paid based on performance. The
Agreement has a three-year term that is extended on a rolling basis. Under the
Agreement, the Corporation will provide Mr. Bhatt with a supplemental
retirement benefit, after offset of all other retirement benefits received by
him and social security, of 60% of his final average pay which is defined as
the average of his highest three years of salary and annual performance
awards.
The Agreement provides Mr. Bhatt with termination benefits under defined
circumstances. In addition, a termination payment is payable upon a
termination by Mr. Bhatt of his employment for any reason during the thirty-
day period immediately following a change of control (as defined in the
Agreement). The termination payment under these circumstances consists of all
accrued but unpaid base salary and a pro rata portion of Mr. Bhatt's annual
performance award for the year in which the termination occurs, plus an amount
equal to three times the sum of Mr. Bhatt's base salary and annual performance
award, plus an additional amount determined pursuant to any retirement or
supplemental retirement plan in which Mr. Bhatt participates. The Agreement
also provides Mr. Bhatt with certain disability and death benefits.
The Corporation also has entered into Change in Control Agreements with each
of Messrs. Ibrahim, Richardson and Shah (the "Change in Control Agreements",
collectively and the "Change in Control Agreement", individually). The Change
in Control Agreements have a three-year term that is extended on an annual
basis. The Change in Control Agreements provide each officer with a
termination payment upon the occurrence of a change in control (as defined in
the Change in Control Agreements) followed at any time during the term of the
Change in Control Agreements by the involuntary termination or certain
voluntary terminations of the officer's employment, other than for cause. Mr.
Richardson's termination payment consists of all accrued but unpaid base
salary and a pro rata portion of Mr. Richardson's annual performance award for
the year in which the termination occurs, plus an amount equal to three times
the sum of Mr. Richardson's base salary and annual performance award, plus an
additional amount determined pursuant to any retirement or supplemental
retirement plan in which Mr. Richardson participates. The termination payment
to each of Messrs. Ibrahim and Shah consists of an amount equal to three times
the sum of the officer's then base salary and annual bonus plus the amount of
any contributions made to any employee benefit plan by the Corporation on
behalf of the officer for three years after his termination of employment. In
addition, under each of the Change in Control Agreements, each of the officers
will be permitted to continue coverage under certain of the plans maintained
by the Corporation.
Under the Employment Agreement, the Agreement and the Change in Control
Agreements, payments in the event of a change in control, including other
payments that might be made as a result of the change in control, may
constitute an excess parachute payment under Section 280G of the Code,
resulting in the imposition of an excise tax (under Section 4999 of the Code)
on the recipient and denial of the deduction for such excess amounts to the
Corporation. The Employment Agreement, the Agreement and Mr. Richardson's
Change in Control Agreement contain gross-up provisions with respect to any
excise tax the executive may incur as a result of an excess parachute payment.
14
<PAGE>
1994 Stock Incentive Plan
The 1994 Stock Incentive Plan is intended to help the Corporation attract,
retain and provide appropriate incentives for management personnel. Awards
under the 1994 Stock Incentive Plan may be granted in any one or a combination
of stock options, limited rights and Restricted Stock. The Compensation
Committee administers the plan and authorizes the employees to whom awards are
granted, the number of awards granted and the specific terms and conditions of
each grant, subject to the provisions of the plan. Awards under the plan must
have an exercise price of not less than fair market value at the date of
grant. In each calendar year, no individual may be granted stock options on
more than 800,000 shares of Common Stock. In Proposal 3 described in this
Proxy Statement, the Corporation is proposing the approval of the GreenPoint
Financial Corp. 1999 Stock Incentive Plan (the "1999 Stock Incentive Plan")
under which, among other things, 4,700,000 shares of Common Stock would be
available for grant, which includes 200,000 of the shares that remain
available for grant under the 1994 Stock Incentive Plan.
The 1994 Stock Incentive Plan will terminate on January 28, 2004. Awards
granted and outstanding when the plan terminates are not affected or impaired
by the termination.
1994 Annual Incentive Plan
Under the GreenPoint Financial Corp. 1994 Annual Incentive Plan (the "1994
Annual Incentive Plan"), certain executive officers of the Corporation are
eligible to receive additional annual cash compensation based on performance.
The executive officers eligible to participate in this plan are the Chief
Executive Officer and any other officer whose compensation is required to be
disclosed in the annual proxy statement pursuant to rules promulgated under
the Exchange Act. The plan is intended to provide participating executive
officers with financial incentives to meet and exceed predetermined
performance goals. Under the plan, performance criteria are selected by the
Compensation Committee each year from one or more of the following: (i) return
on equity, (ii) return on assets, (iii) earnings per share, (iv) net income
and (v) achievement of predetermined strategic milestones. Target levels may
be specified relative to budgeted or other internal goals, or relative to
performance of one or more peer groups. In addition, goals may be stated as
alternatives, or as combinations. The maximum amount payable annually to each
of the eligible officers is $1,250,000. During 1998, Messrs. Johnson, Bhatt
and Richardson participated in this plan. In Proposal 4 described in this
Proxy Statement, the Corporation is proposing the approval of the GreenPoint
Financial Corp. 1999 Annual Incentive Plan (the "1999 Annual Incentive Plan")
which upon stockholder approval will replace the 1994 Annual Incentive Plan
for annual incentive compensation paid for 1999 and subsequent years.
Other Benefit Plans
Pension Plan. As of May 6, 1996, the benefit formula under the Corporation's
defined benefit plan (the "Pension Plan") was changed to a cash balance
formula. An account balance was established for each participant equal to the
then present value of the participant's benefit earned to date. For service
periods after May 5, 1996, this account balance is to be increased by interest
at a specified rate and a contribution credit equal to a percentage of the
participant's eligible base salary. Generally, the interest credit percentage
will represent the average of the one-year U.S. Treasury bill rate during
February, May, August and November of the previous year plus 1%. The
contribution credit percentage ranges from 3% to 6% depending on the
participant's years of service with the Corporation. Employees who were
participants on May 6, 1996 who had at least ten years of service with the
Corporation and who were at least age 50 or whose age plus years of service
totaled at least 75 will receive the greater of their account balance or the
benefit derived from the "grandfathered" formula. The grandfathered formula is
equal to 2% of the participant's average annual compensation during the 60
consecutive calendar months within the participant's 120 consecutive calendar
months of participation affording the highest such average, multiplied by the
participant's years of credited service, limited to 60% of the final three
years of average annual compensation.
Employees are enrolled in the Pension Plan following the completion of one
year of service. The normal retirement age is the later of age 65 and the
fifth anniversary of the employee's date of hire, although earlier options are
available. The Pension Plan has a five-year vesting provision, and
participants who are vested may
15
<PAGE>
receive their account balance or annuity equivalent if they leave the employ
of the Corporation before retirement. Annual pension benefits attributable to
amounts in excess of the limits imposed under the Code are provided under the
Corporation's Supplemental Executive Retirement Plan and not under the Pension
Plan. As of December 31, 1998, the estimated annual Pension Plan benefit
payable upon normal retirement age (assuming the individual continues to work
to age 65 at the current rate of compensation and a 6% interest credit
percentage) for Mr. Johnson, Mr. Bhatt, Mr. Ibrahim, Mr. Richardson and Mr.
Shah was $12,200, $10,200, $22,700, $22,600 and $16,000, respectively.
Incentive Compensation Plan. The Corporation maintains an incentive
compensation plan for certain officers of the Corporation (the "Incentive
Plan"). Generally, officers with the title of Vice President and above are
eligible to participate in the Incentive Plan, including Messrs. Ibrahim and
Shah. The Incentive Plan provides for cash payments to these officers based
upon the Corporation's performance relative to predetermined financial goals,
as well as the performance of the business unit or the staff unit to which
each officer is assigned and the individual performance of each officer.
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Transactions with Certain Related Persons
- -------------------------------------------------------------------------------
The Corporation's policies require that all transactions between the
Corporation and its executive officers, Directors, holders of 10% or more of
its Common Stock and affiliates thereof, contain terms no less favorable to
the Corporation than could have been obtained by it in arms-length
negotiations with unaffiliated persons. In addition, with respect to loans,
the Corporation's policies prohibit the granting of loans at an interest rate
discount or with any other favorable features to officers at and above the
Senior Vice President level and further require that loans to any such person
must be approved by the Board. As of March 10, 1999, no such loans had been
made.
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Beneficial Ownership Reports
- -------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the
Corporation's officers and Directors and persons who own more than 10% of the
Common Stock are required to file reports detailing their ownership and
changes of ownership in the Common Stock and to furnish the Corporation with
copies of all such ownership reports that are filed. Based solely on the
Corporation's review of the copies of such ownership reports which it has
received in the past fiscal year or the current fiscal year, or written
representations from such persons that no annual report of change in
beneficial ownership was required, the Corporation believes that all persons
subject to such reporting requirements have complied with such reporting
requirements.
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PROPOSAL 2--RATIFICATION OF APPOINTMENT OF AUDITORS
- -------------------------------------------------------------------------------
The Board has appointed PricewaterhouseCoopers LLP
("PricewaterhouseCoopers") to perform the audit of the Corporation's financial
statements for the year ending December 31, 1999, subject to ratification by
the Corporation's stockholders at the Meeting. PricewaterhouseCoopers served
as the independent auditors of the Corporation for the year ended December 31,
1998. Representatives from PricewaterhouseCoopers will be present at the
Meeting and will be given the opportunity to make a statement if they so
desire, and will be available to respond to appropriate questions from
stockholders.
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The affirmative vote of the holders of a majority of the Common Stock
present at the Meeting, in person or by proxy, and entitled to vote is
required to ratify the appointment of PricewaterhouseCoopers as the
Corporation's independent auditors for the year ending December 31, 1999.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS AS THE CORPORATION'S INDEPENDENT AUDITORS FOR THE YEAR
ENDING DECEMBER 31, 1999.
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PROPOSAL 3--APPROVAL OF THE GREENPOINT FINANCIAL CORP. 1999 STOCK INCENTIVE
PLAN
- -------------------------------------------------------------------------------
Introduction
In February 1999, the Board adopted the 1999 Stock Incentive Plan, subject
to approval by the Corporation's stockholders. The 1999 Stock Incentive Plan
will become effective immediately upon approval by the Corporation's
stockholders and will terminate ten years after its effective date. Similar to
the 1994 Stock Incentive Plan, the purpose of the 1999 Stock Incentive Plan is
to give the Corporation a competitive advantage in attracting, retaining and
motivating officers, employees and/or consultants and to continue to provide
the Corporation with the ability to provide incentives more directly linked to
the profitability of the Corporation's businesses and increases in stockholder
value.
Description
Set forth below is a summary of certain important features of the 1999 Stock
Incentive Plan, which summary is qualified in its entirety by reference to the
actual plan attached as Appendix A to this Proxy Statement:
Administration. The 1999 Stock Incentive Plan will be administered by the
Compensation Committee or such other committee of the Board as the Board may
from time to time designate (the "Committee"). Among other things, the
Committee will have the authority to select officers, employees and/or
consultants to whom awards may be granted, to determine the type of award as
well as the number of shares of Common Stock to be covered by each award, and
to determine the terms and conditions of any such awards.
Eligibility. Officers, employees and consultants of the Corporation or any
of its subsidiaries or affiliates (and prospective employees and consultants
who have accepted offers of employment or consultancy from the Corporation or
its subsidiaries or affiliates) who are or will be responsible for or
contribute to the management, growth or profitability of the Corporation or
its subsidiaries or affiliates are eligible to be granted awards under the
1999 Stock Incentive Plan. No grant will be made under the plan to a Director
who is not an officer or a salaried employee of the Corporation or any of its
subsidiaries or affiliates.
Plan Features. The 1999 Stock Incentive Plan authorizes the issuance of up
to 4,700,000 shares of Common Stock pursuant to the grant or exercise of stock
options, including incentive stock options ("ISOs"), nonqualified stock
options, stock appreciation rights ("SARs"), restricted stock, performance
units and other Common Stock-based awards, which number of shares includes
200,000 of the shares of Common Stock remaining available for awards as of the
date of adoption of the plan under the 1994 Stock Incentive Plan. The number
of shares authorized for issuance under the plan takes into consideration the
fact that upon the consummation of the acquisition of Headlands Mortgage
Company (as described in the "Director to be Appointed Upon Consummation of
the Headlands Mortgage Company Acquisition" section of this Proxy Statement)
Common Stock awards also may be made under the plan to eligible Headlands
employees. No single participant may be granted stock options and SARs
pursuant to the 1999 Stock Incentive Plan covering in excess of 800,000 shares
of Common Stock in any calendar year. Subject to the foregoing limits, the
shares available under the 1999 Stock Incentive Plan can be divided among the
various types of awards and participants as determined by the Committee. The
shares subject to grant under the 1999 Stock Incentive Plan are to be made
available from authorized but unissued shares or from treasury shares as
determined from time to time by the Board. Awards may be granted for such
terms as the Committee may determine, except that the term of a stock
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option may not exceed ten years from its date of grant. Awards outstanding on
the termination date of the 1999 Stock Incentive Plan shall not be affected or
impaired by such termination. Awards will not be transferable, except by will
and the laws of descent and distribution and, in the case of nonqualified
stock options, if permitted under the option agreement between a participant
and the Corporation, pursuant to a transfer to such optionee's immediate
family (as that term is defined under the plan). Under the plan and subject to
the limitations thereunder, the Committee has broad authority to fix the terms
and conditions of individual agreements with participants.
As indicated above, several types of stock grants can be made under the 1999
Stock Incentive Plan. A summary of these grants is set forth below:
Stock Options. The Committee is authorized to grant options to purchase
the Common Stock at an exercise price which cannot be less than 100% of the
fair market value of such stock on the date of grant. Subject to
adjustments otherwise permitted under the plan, the Committee may not
reduce the exercise price or cancel and regrant a stock option previously
granted. The plan permits optionees, with the approval of the Committee, to
pay the exercise price of options in cash, shares of Common Stock (valued
at their fair market value on the date of exercise) or a combination
thereof, or by "cashless exercise" through a broker or the Corporation. The
term of options shall be as determined by the Committee, but not longer
than 10 years from the date of grant. The Committee also has the discretion
to cash out options when they are exercised. The Committee will determine
when and subject to what conditions options will become exercisable, and
the extent to which they will be exercisable after the option holder's
employment terminates. Generally, options terminate upon the option
holder's termination of employment for Cause (as defined in the 1999 Stock
Incentive Plan) and will remain exercisable for not more than one year
after the option holder's death, Disability or Retirement (as those terms
are defined in the plan), and not more than three months after the option
holder's employment terminates for any other reason. The principal
difference between ISOs and nonqualified stock options is their tax
treatment. See "Federal Income Tax Consequences" below.
At the discretion of the Committee, an option may include a right to
receive a replacement or "reload" option when a participant delivers shares
of Common Stock to pay for the exercise price of an option. A reload option
will be a nonqualified stock option for the number of shares of Common
Stock equal to the number of shares that were delivered to satisfy the
exercise price of the option that was exercised, will have an exercise
price equal to the fair market value of a share of Common Stock on the date
of grant of the reload option, will vest and become exercisable six months
after the date of grant and will expire on the same day as the option that
was exercised was otherwise due to expire.
SARs. The Committee is authorized to grant SARs in conjunction with all
or part of any stock option. A SAR entitles the optionee, in lieu of
exercising the option, to receive the excess of the fair market value of a
share of stock on the date of exercise over the option price multiplied by
the number of shares as to which the optionee is exercising the SAR. Such
amount will be paid to the holder in Common Stock (valued at its fair
market value on the date of exercise), cash or a combination thereof, as
the Committee may determine. Since a SAR is an alternative to an option,
the option will be cancelled to the extent that the SAR is exercised and
the SAR will be cancelled to the extent the option is exercised.
Restricted Stock. The Committee is authorized to grant restricted stock
to individuals with such restriction periods as the Committee may
designate. The Committee may also provide at the time of grant that
restricted stock cannot vest unless applicable performance goals are
satisfied. These performance goals must be based on the attainment of one
or any combination of the following: return on equity, return on assets,
earnings per share, net income and/or achievement of predetermined
strategic milestones. The performance goals may be stated in the
alternative or in combination. The performance goals based on the foregoing
factors are referred to as "Performance Goals". No shares of restricted
stock will vest prior to three years (one year in the case of restricted
stock the vesting of which is conditioned on the attainment of
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<PAGE>
Performance Goals) from the date of grant, although in the event of a
Change in Control (as that term is defined in the plan), the restrictions
applicable to restricted stock will lapse. However, the Committee will have
discretion to permit vesting of shares of restricted stock prior to these
restriction period minimums in the event of a participant's termination of
employment by reason of Retirement, Disability or death, or under other
limited circumstances if the Committee determines that such earlier vesting
is necessary to fulfill a legitimate corporate purpose such as the hiring
or retention of a key employee; provided, however, that the Committee shall
be permitted to exercise its discretion in these other limited
circumstances with respect to shares of restricted stock which in the
aggregate do not exceed 10% of the maximum number of shares of stock
authorized for issuance under the plan. The provisions of restricted stock
awards (including any applicable Performance Goals) need not be the same
with respect to each participant. During the restriction period, the
Committee may require that the stock certificates evidencing restricted
shares be held by the Corporation. Restricted stock may not be sold,
assigned, transferred, pledged or otherwise encumbered, and is forfeited
upon termination of employment, unless otherwise provided by the Committee.
Other than these restrictions on transfer and any other restrictions the
Committee may impose, the participant will have all the rights of a holder
of stock as to such restricted stock.
Performance Units. The Committee is authorized to grant performance units
payable in cash or shares of Common Stock, conditioned upon continued
service and/or the attainment of Performance Goals (as described in the
section entitled "Restricted Stock" above). An award cycle consists of a
period of consecutive fiscal years or portions thereof designated by the
Committee over which performance units are to be earned. At the conclusion
of an award cycle, the Committee will determine the number of performance
units earned by a participant and will deliver to such participant (i) the
number of shares of Common Stock equal to the number of performance units
determined by the Committee to have been earned and/or (ii) cash equal to
the fair market value of such shares of Common Stock. The Committee is
authorized to determine the officers, employees and/or consultants to whom
performance units will be awarded and any other terms and conditions of an
award. No performance units may be earned prior to three years from the
date of grant (or one year from the date of grant if the settlement thereof
is conditioned upon the attainment of Performance Goals), other than in the
event of a Change in Control. However, the Committee will have discretion
to permit performance units to be earned and payable in full in the event
of a participant's termination of employment by reason of Disability or
death. In the event that a participant's employment is terminated for any
reason during the award cycle the Committee will have the discretion to
waive, in whole or in part, any or all remaining payment limitations,
provided, however, that the satisfaction of any applicable Performance
Goals by an employee who has been determined by the Committee to be subject
to Section 162(m) of the Code (see "Federal Income Tax Consequences" below)
cannot be waived unless such employee's employment is terminated by death,
Disability or Change in Control (as those terms are defined in the 1999
Stock Incentive Plan). No more than 100,000 shares of Common Stock may be
granted as Qualified Performance-Based Awards (as defined under the plan)
to any participant in any calender year.
Tax Offset Bonuses. At the time an award is made under the plan or at any
time thereafter, the Committee may grant to the participant receiving such
award the right to receive a cash payment in an amount specified by the
Committee to be paid if the award results in compensation income to the
participant.
Amendment and Discontinuance. The 1999 Stock Incentive Plan may be
amended, altered or discontinued by the Board, but no amendment, alteration
or discontinuance may be made that would impair the rights of an optionee
under an option or a recipient of a SAR, restricted stock award or
performance unit award previously granted without the optionee's or
recipient's consent, except such an amendment made to comply with
applicable law, stock exchange rules or accounting rules. In addition, no
such amendment shall be made without the approval of the Company's
stockholders to the extent such approval is required by applicable law or
stock exchange rules. Stockholder approval will also be required for any
amendment which increases the maximum number of shares for which awards may
be granted under the plan, reduces the exercise price at which stock
options may be granted, extends the period during which
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<PAGE>
stock options may be granted or exercised beyond the times originally
prescribed, changes the persons eligible to participate in the plan, or
materially increases the benefits accruing to participants under the plan.
The 1999 Stock Incentive Plan provides that in the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, spin-off or other distribution
of property, or any reorganization or partial or complete liquidation of the
Corporation, the Committee or Board may make such substitution or adjustment
in the aggregate number and kind of shares reserved for issuance under the
plan, in the individual limits under the plan, in the number, kind and option
price of shares subject to outstanding stock options and SARs, and in the
number and kind of shares subject to other outstanding awards granted under
the plan as may be determined to be appropriate by the Committee or Board, in
its sole discretion. The plan also provides that in the event of a Change in
Control, (i) any SARs and stock options outstanding as of the date of the
change in control, which are not then exercisable and vested will become fully
exercisable and vested, (ii) the restrictions and deferral limitations
applicable to restricted stock will lapse and such restricted stock will
become free of all restrictions and fully vested, (iii) all performance units
will be considered to be earned and payable in full in cash (or, in certain
circumstances, an equivalent number of shares of Common Stock) and any
restrictions will lapse, and (iv) if the stock option agreement so provides,
such stock option may be surrendered, subject to certain limitations, at any
time during the 60-day period following a Change in Control, for a cash
payment (or, in certain circumstances, an equivalent number of shares of
Common Stock) equal to the spread between the exercise price of the option and
the Change in Control Price (as defined in the 1999 Stock Incentive Plan).
Federal Income Tax Consequences
The following discussion is intended only as a brief summary of the federal
income tax rules that are generally relevant to stock options and SARs. The
laws governing the tax aspects of awards are highly technical and such laws
are subject to change.
Nonqualified Options and SARs. Upon the grant of a nonqualified option (with
or without a SAR), the optionee will not recognize any taxable income and the
Corporation will not be entitled to a deduction. Upon the exercise of such an
option or a SAR, the excess of the fair market value of the shares acquired on
the exercise of the option over the option price (the "spread"), or the
consideration paid to the optionee upon exercise of the SAR, will constitute
compensation taxable to the optionee as ordinary income. The Corporation, in
computing its federal income tax, will generally be entitled to a deduction in
an amount equal to the compensation taxable to the optionee.
ISOs. An optionee will not recognize taxable income on the grant or exercise
of an ISO. However, the spread at exercise will constitute an item includible
in alternative minimum taxable income, and thereby may subject the optionee to
the alternative minimum tax. Upon the disposition of shares of stock acquired
pursuant to the exercise of an ISO after the later of (i) two years from the
date of grant of the ISO or (ii) one year after the transfer of the shares to
the optionee (the "ISO Holding Period"), the optionee will recognize long-term
capital gain or loss, as the case may be, measured by the difference between
the Common Stock's selling price and the exercise price. The Corporation is
not entitled to any tax deduction by reason of the grant or exercise of an
ISO, or by reason of a disposition of Common Stock received upon exercise of
an ISO if the ISO Holding Period is satisfied. Different rules apply if the
optionee disposes of the shares of Common Stock acquired pursuant to the
exercise of an ISO before the expiration of the ISO Holding Period.
Section 162(m) of the Code. The 1999 Stock Incentive Plan has been designed
to take into account provisions of the Code that impose limits on the ability
of a public corporation to claim tax deductions for compensation paid to
certain highly compensated executives. Section 162(m) of the Code generally
denies a corporate tax deduction for annual compensation exceeding $1 million
paid to the Chief Executive Officer and the four other most highly compensated
officers of a public corporation. Certain types of compensation, including
options granted with a fair market value exercise price, and performance-based
stock awards, are generally excluded from this deduction limit. So that
options under the 1999 Stock Incentive Plan will qualify for the
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exclusion for performance-based compensation, and to permit the Compensation
Committee to grant other awards under the 1999 Stock Incentive Plan that will
also so qualify, the 1999 Stock Incentive Plan is being submitted to
stockholders for approval at the Meeting. By approving the 1999 Stock
Incentive Plan, the stockholders will be approving, among other things, the
performance measures, eligibility requirements and limits on various stock
awards contained therein for purposes of Section 162(m)of the Code. The
Compensation Committee will have the authority to grant awards (other than
options) under the 1999 Stock Incentive Plan that are not subject to
performance goals and therefore will not qualify as performance-based
compensation for purposes of Section 162(m)of the Code. In addition, under
certain circumstances such as death, Disability and Change in Control, awards
that would otherwise so qualify may result in the payment of compensation that
is not qualified under Section 162(m)of the Code.
New Plan Benefits
While it cannot be determined at this time what benefits or amounts, if any,
will be received by or allocated to any person or group of persons under the
1999 Stock Incentive Plan if the 1999 Stock Incentive Plan is approved by
stockholders, the Corporation believes that if the 1999 Stock Incentive Plan
had been in effect for 1998, the executive officers of the Corporation named
in this Proxy Statement would have received stock option grants in the same
amounts as are shown in the Summary Compensation Table of this Proxy Statement
for 1998.
The affirmative vote of the holders of a majority of the Common Stock
present at the Meeting, in person or by proxy, and entitled to vote is
required to approve the 1999 Stock Incentive Plan.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE GREENPOINT FINANCIAL CORP.
1999 STOCK INCENTIVE PLAN.
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PROPOSAL 4--APPROVAL OF THE GREENPOINT FINANCIAL CORP. 1999 ANNUAL INCENTIVE
PLAN
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In February 1999, the Board adopted the 1999 Annual Incentive Plan, subject
to approval by the Corporation's stockholders. The Plan will become effective
immediately upon approval by the Corporation's stockholders and thereafter
will be effective with respect to cash awards paid thereunder for the year
ending December 31, 1999 and subsequent years. Under the 1999 Annual Incentive
Plan, certain executive officers of the Corporation will be eligible to
receive annual incentive compensation based on performance. The plan is
intended to provide the Corporation's most senior executive officers with
financial incentives to meet and exceed predetermined goals for specified
performance criteria selected by the Compensation Committee each year. Set
forth below is a summary of certain important features of the 1999 Annual
Incentive Plan, which summary is qualified in its entirety by reference to the
actual plan attached as Appendix B to this Proxy Statement:
As described in Proposal 3 above, Section 162(m) of the Code generally
denies a corporate tax deduction for annual compensation exceeding $1 million
paid to the Chief Executive Officer and the four other most highly compensated
officers of a public corporation. Compensation is generally exempt from the
limitations of Section 162(m) of the Code if it satisfies the exemption for
"qualified performance-based compensation", which, among other things,
requires that the compensation is payable on account of the attainment of one
or more objective performance goals and that the material terms under which
the compensation is to be paid are disclosed to and approved by stockholders.
In order to qualify the compensation paid to the eligible executives under
Section 162(m) of the Code, the Corporation is seeking stockholder approval of
the 1999 Annual Incentive Plan.
In 1994, when Section 162(m)of the Code became effective, the Board adopted
and stockholders approved the 1994 Annual Incentive Plan which utilized only
objective performance criteria for determining the maximum bonus awards for
certain executive officers. Under Section 162(m) of the Code, stockholder
approval of the 1994 Annual Incentive Plan helped to preserve the ability of
the Corporation to deduct cash bonuses for covered executives until 1999. Cash
awards under the 1994 Annual Incentive Plan earned after 1998 will no longer
be excluded from the deduction limit under Section 162(m) of the Code.
Accordingly, the Board has adopted the
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1999 Annual Incentive Plan, subject to stockholder approval, to continue to
preserve the potential tax deductibility of these cash bonuses. Like the 1994
Annual Incentive Plan, the 1999 Annual Incentive Plan will use only objective
performance goals as the criteria for determining maximum bonus awards for
certain executive officers.
Under the 1999 Annual Incentive Plan, cash awards are paid to eligible
participants for the achievement of target levels of specified performance
criteria selected by the Compensation Committee each year from one or more of
the following criteria: (i) return on equity ("ROE"), (ii) return on assets,
(iii) earnings per share ("EPS"), (iv) net income and (v) achievement of
predetermined strategic milestones. Target levels may be specified relative to
budgeted or other internal goals, or relative to the performance of one or
more peer groups. In addition, performance goals may be stated as
alternatives, such as the achievement of either ROE or EPS, or as
combinations, such as the achievement of both ROE and EPS.
The executive officers eligible to participate in the 1999 Annual Incentive
Plan are the Chief Executive Officer and any other officer whose compensation
is required to be disclosed in the annual proxy statement pursuant to Rules
promulgated under the Exchange Act.
The 1999 Annual Incentive Plan will be administered by the Compensation
Committee. The Compensation Committee, may in its discretion, reduce the
amount of any cash award determined pursuant to the provisions of the 1999
Annual Incentive Plan when the Compensation Committee's consideration of
subjective factors, such as its judgment of a participant's performance, so
warrants. However, the Compensation Committee may not increase the amount of
any cash award determined pursuant to the 1999 Annual Incentive Plan. In no
event may an award under the plan for any calendar year to any participant
exceed $3 million.
Cash awards for a calendar year will be payable to 1999 Annual Incentive
Plan participants following the close of such year, but not earlier than the
date on which the Compensation Committee certifies in writing the degree to
which the applicable performance goals have been achieved.
While the amount that may be awarded to any 1999 Annual Incentive Plan
participant cannot be determined, the Corporation believes that if the 1999
Annual Incentive Plan had been in effect for 1998, the executive officers of
the Corporation named in this Proxy Statement and who received awards under
the 1994 Annual Incentive Plan would have received cash awards in the same
amounts as were shown in the Summary Compensation Table for 1998, excluding
amounts awarded as special recognition bonuses.
The affirmative vote of the holders of a majority of the Common Stock
present at the Meeting, in person or by proxy, and entitled to vote is
required to approve the 1999 Annual Incentive Plan under Section 162(m) of the
Code.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE GREENPOINT FINANCIAL CORP.
1999 ANNUAL INCENTIVE PLAN.
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OTHER MATTERS
- -------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described in this Proxy Statement. However,
if any other matters should properly come before the Meeting, it is intended
that proxies in the accompanying form will be voted in respect thereof in
accordance with the judgment of the person or persons voting the proxies.
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MISCELLANEOUS
- -------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Corporation. In addition
to the solicitation of proxies by mail, D.F. King & Co., Inc. will assist the
Corporation in soliciting proxies for the Meeting and will be paid a fee of
$11,000 plus reimbursement for out-of-pocket expenses. The Corporation will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material to the
beneficial owners of Common Stock. In addition to solicitations by mail,
Directors, officers and regular employees of the Corporation may solicit
proxies personally or by telephone, telegram or other means of communication
without additional compensation.
The Corporation's 1998 Annual Report to Stockholders, including financial
statements, was mailed to all stockholders with the Proxy Statement. Any
stockholder who has not received a copy of such Annual Report may obtain a
copy by writing to the Secretary of the Corporation. Such Annual Report is not
to be treated as a part of the proxy solicitation material nor as having been
incorporated herein by reference.
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STOCKHOLDER PROPOSALS
- -------------------------------------------------------------------------------
In order to be eligible for inclusion in the Corporation's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to
take action at such meeting must be received at the Corporation's main office
at 90 Park Avenue, New York, New York 10016, no later than November 27, 1999.
Any such proposal shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Howard C. Bluver
Howard C. Bluver
Secretary
New York, New York
March 26, 1999
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ANNUAL REPORT ON FORM 10-K
- -------------------------------------------------------------------------------
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR 1998 FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, WILL BE FURNISHED TO STOCKHOLDERS WITHOUT CHARGE UPON
REQUEST. WRITTEN REQUESTS SHOULD BE DIRECTED TO THE SECRETARY OF THE
CORPORATION AT THE ADDRESS STATED HEREIN.
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APPENDIX A
GREENPOINT FINANCIAL CORP.
1999 STOCK INCENTIVE PLAN
SECTION 1
PURPOSE; DEFINITIONS
The purpose of the Plan is to give the Company a competitive advantage in
attracting, retaining and motivating officers, employees and/or consultants
and to provide the Company and its Subsidiaries and Affiliates with a stock
plan providing incentives directly linked to the profitability of the
Company's businesses and increases in the Company's shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
a. "Affiliate" means a corporation or other entity controlled by,
controlling or under common control with the Company and designated by the
Committee from time to time as such.
b. "Award" means a Stock Appreciation Right, Stock Option, Restricted Stock,
Performance Unit, or other stock-based award.
c. "Award Cycle" shall mean a period of consecutive fiscal years or portions
thereof designated by the Committee over which Performance Units are to be
earned.
d. "Board" means the Board of Directors of the Company.
e. "Cause" means, unless otherwise provided by the Committee, (1) "Cause" as
defined in any Individual Agreement to which the participant is a party, or
(2) if there is no such Individual Agreement or if it does not define Cause:
an intentional failure to perform stated duties, willful misconduct, breach of
a fiduciary duty involving personal profit, or acts or omissions of personal
dishonesty, any of which results in material loss to the Company or any of its
Subsidiaries or Affiliates or, any willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final cease-
and-desist order which results in material loss to the Company or any of its
Subsidiaries or Affiliates. The Committee shall, unless otherwise provided in
an Individual Agreement with the participant, have the sole discretion to
determine whether "Cause" exists, and its determination shall be final.
f. "Change in Control" and "Change in Control Price" have the meanings set
forth in Sections 11(b) and (c), respectively.
g. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
h. "Commission" means the Securities and Exchange Commission or any
successor agency.
i. "Committee" means the Committee referred to in Section 2.
j. "Common Stock" means common stock, par value $.01 per share, of the
Company (or as may be converted pursuant to Section 3 hereof).
k. "Company" means GreenPoint Financial Corp., a bank holding company
registered under federal law and incorporated in Delaware.
l. "Covered Employee" means a participant designated prior to the grant of
Restricted Stock or Performance Units by the Committee who is or may be a
"covered employee" within the meaning of Section 162(m)(3) of the Code in the
year in which Restricted Stock or Performance Units are expected to be taxable
to such participant.
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m. "Disability" means, unless otherwise provided by the Committee,
disability as defined in the Company's retirement plan, or if not so defined,
shall mean the permanent and total inability of a participant by reason of
mental or physical infirmity, or both, to perform the work customarily
assigned to him or her. In order to qualify as a Disability, a medical doctor
selected or approved by the Board, and knowledgeable in the field of such
infirmity, must advise the Committee either that it is not possible to
determine when such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of said participant's
lifetime.
n. "Eligible Individuals" mean officers, employees and consultants of the
Company or any of its Subsidiaries or Affiliates, and prospective employees
and consultants who have accepted offers of employment or consultancy from the
Company or its Subsidiaries or Affiliates, who are or will be responsible for
or contribute to the management, growth or profitability of the business of
the Company, or its Subsidiaries or Affiliates.
o. "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
p. "Fair Market Value" means, as of any given date, the closing price on
such date or, if there are no reported sales on such date, on the last day
prior to such date on which there were sales of the Common Stock on the New
York Stock Exchange or, if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or on NASDAQ. If there
is no regular public trading market for such Common Stock, the Fair Market
Value of the Common Stock shall be determined by the Committee in good faith.
q. "Incentive Stock Option" means any Stock Option designated as, and
qualified as, an "incentive stock option" within the meaning of Section 422 of
the Code.
r. "Individual Agreement" means an employment, consulting or similar
agreement between a participant and the Company or one of its Subsidiaries or
Affiliates.
s. "NonQualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
t. "Qualified Performance-Based Award" means an Award of Restricted Stock or
Performance Units designated as such by the Committee at the time of grant,
based upon a determination that (i) the recipient is or may be a "covered
employee" within the meaning of Section 162(m)(3) of the Code in the year in
which the Company would expect to be able to claim a tax deduction with
respect to such Restricted Stock or Performance Units and (ii) the Committee
wishes such Award to qualify for the Section 162(m) Exemption.
u. "Performance Goals" means the performance goals established by the
Committee in connection with the grant of Restricted Stock or Performance
Units. In the case of Qualified Performance-Based Awards, (i) such goals shall
be based on the attainment of specified levels of one or more of the following
measures: return on equity, return on assets, earnings per share, net income
and/or achievement of predetermined strategic milestones and (ii) such
Performance Goals shall be set by the Committee within the time period
prescribed by Section 162(m) of the Code and related regulations. Performance
Goals may be stated in the alternative or in combination.
v. "Performance Units" means an Award granted under Section 8.
w. "Plan" means the GreenPoint Financial Corp. 1999 Stock Incentive Plan, as
set forth herein and as hereinafter amended from time to time.
x. "Restricted Stock" means an Award granted under Section 7.
y. "Retirement" means retirement from the employ of the Company or its
Subsidiaries or Affiliates at the normal or early retirement date as set forth
in any tax-qualified retirement/pension plan of the Company.
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z. "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
aa. "Section 162(m) Exemption" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(C) of the Code.
bb. "Stock Appreciation Right" means an Award granted under Section 6.
cc. "Stock Option" means an Award granted under Section 5.
dd. "Subsidiary" means any corporation, partnership, joint venture or other
entity during any period in which at least a 50% voting or profits interest is
owned, directly or indirectly, by the Company or any successor to the Company.
ee. "Termination of Employment" means the termination of the participant's
employment with, or performance of services for, the Company and any of its
Subsidiaries or Affiliates. A participant employed by, or performing services
for, a Subsidiary or an Affiliate shall also be deemed to incur a Termination
of Employment if the Subsidiary or Affiliate ceases to be such a Subsidiary or
an Affiliate, as the case may be, and the participant does not immediately
thereafter become an employee of, or service-provider for, the Company or
another Subsidiary or Affiliate. Temporary absences from employment because of
illness, vacation or leave of absence and transfers among the Company and its
Subsidiaries and Affiliates shall not be considered Terminations of
Employment. For purposes of the Plan, a participant's employment shall be
deemed to have terminated at the close of business on the day preceding the
first date on which he or she is no longer for any reason whatsoever employed
by the Company or any of its Subsidiaries or Affiliates.
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
SECTION 2
ADMINISTRATION
The Plan shall be administered by the Compensation Committee or such other
committee of the Board as the Board may from time to time designate (the
"Committee"), which shall be composed of not less than two directors, and
shall be appointed by and serve at the pleasure of the Board.
The Committee shall have plenary authority to grant Awards pursuant to the
terms of the Plan to Eligible Individuals.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) To select the Eligible Individuals to whom Awards may from time to time
be granted;
(b) To determine whether and to what extent Incentive Stock Options,
NonQualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Units and other stock-based awards or any combination thereof are
to be granted hereunder;
(c) To determine the number of shares of Common Stock to be covered by each
Award granted hereunder;
(d) To determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)),
any vesting condition, restriction or limitation (which may be related to the
performance of the participant, the Company or any Subsidiary or Affiliate)
and any vesting acceleration or forfeiture waiver regarding any Award and the
shares of Common Stock relating thereto, based on such factors as the
Committee shall determine;
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(e) To modify, amend or adjust the terms and conditions of any Award, at any
time or from time to time, including but not limited to Performance Goals;
provided, however, that the Committee may not (i) subject to the last
paragraph of Section 3, reduce the exercise price or cancel and regrant a
Stock Option theretofore granted and (ii) adjust upwards the amount payable
with respect to a Qualified Performance-Based Award or waive or alter the
Performance Goals associated therewith;
(f) To determine to what extent and under what circumstances Common Stock
and other amounts payable with respect to an Award shall be deferred; and
(g) To determine under what circumstances an Award may be settled in cash or
Common Stock under Sections 5(j), 6(b)(ii) and 8(b)(iv).
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the Committee may, except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, allocate all or any portion
of its responsibilities and powers to any one or more of its members and may
delegate all or any part of its responsibilities and powers to any person or
persons selected by it; provided that no such delegation may be made that
would cause Awards or other transactions under the Plan to cease to be exempt
from Section 16(b) of the Exchange Act or cause an Award designated as a
Qualified Performance-Based Award not to qualify for the Section 162(m)
Exemption. Any such allocation or delegation may be revoked by the Committee
at any time.
Any determination made by the Committee or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award shall be made
in the sole discretion of the Committee or such delegate at the time of the
grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Committee or any
appropriately delegated officer pursuant to the provisions of the Plan shall
be final and binding on all persons, including the Company and Plan
participants.
Any authority granted to the Committee may also be exercised by the full
Board, except to the extent that the grant or exercise of such authority would
cause any Award or transaction to become subject to (or lose an exemption
under) the short-swing profit recovery provisions of Section 16 of the
Exchange Act or cause an Award designated as a Qualified Performance-Based
Award not to qualify for, or to cease to qualify for, the Section 162(m)
Exemption. To the extent that any permitted action taken by the Board
conflicts with action taken by the Committee, the Board action shall control.
SECTION 3
COMMON STOCK SUBJECT TO PLAN
The maximum number of shares of Common Stock that may be delivered to
participants and their beneficiaries under the Plan shall be 4,700,000, which
number includes 200,000 of the shares of Common Stock remaining available for
awards as of the date of adoption of this Plan under the Company's Amended and
Restated 1994 Stock Incentive Plan. No participant may be granted Stock
Options and Stock Appreciation Rights covering in excess of 800,000 shares of
Common Stock in any calendar year. Shares subject to an Award under the Plan
may be authorized and unissued shares or may be treasury shares.
If any Award is forfeited, or if any Stock Option (and related Stock
Appreciation Right, if any) terminates, expires or lapses without being
exercised, or if any Stock Appreciation Right is exercised for cash, shares of
Common Stock subject to such Awards shall again be available for distribution
in connection with Awards under the Plan.
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In the event of any change in corporate capitalization (including, but not
limited to, a change in the number of shares of Common Stock outstanding),
such as a stock split or a corporate transaction, such as any merger,
consolidation, separation, including a spin-off, or other distribution of
stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code) or any partial or complete liquidation of the Company, the Committee or
Board may make such substitution or adjustments in the aggregate number and
kind of shares reserved for issuance under the Plan, and the maximum
limitation upon Stock Options and Stock Appreciation Rights and Qualified
Performance-Based Awards to be granted to any participant, in the number, kind
and option price of shares subject to outstanding Stock Options, Stock
Appreciation Rights and Restricted Stock, in the number and kind of shares
subject to other outstanding Awards granted under the Plan and/or such other
equitable substitution or adjustments as it may determine to be appropriate in
its sole discretion; provided, however, that the number of shares subject to
any Award shall always be a whole number. Such adjusted option price shall
also be used to determine the amount payable by the Company upon the exercise
of any Stock Appreciation Right associated with any Stock Option.
SECTION 4
ELIGIBILITY
Awards may be granted under the Plan to Eligible Individuals. No grant shall
be made under this Plan to a director who is not an officer or a salaried
employee of the Company or its Subsidiaries or Affiliates.
SECTION 5
STOCK OPTIONS
Stock Options may be granted alone or in addition to other Awards granted
under the Plan and may be of two types: Incentive Stock Options and
NonQualified Stock Options. Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee Incentive Stock
Options, NonQualified Stock Options or both types of Stock Options (in each
case with or without Stock Appreciation Rights); provided, however, that
grants hereunder are subject to the aggregate limit on grants to individual
participants set forth in Section 3. Incentive Stock Options may be granted
only to employees of the Company and its subsidiaries or parent corporation
(within the meaning of Section 424(f) of the Code). To the extent that any
Stock Option is not designated as an Incentive Stock Option or even if so
designated does not qualify as an Incentive Stock Option on or subsequent to
its grant date, it shall constitute a NonQualified Stock Option.
Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
NonQualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an Eligible Individual to receive a grant
of a Stock Option, determines the number of shares of Common Stock to be
subject to such Stock Option to be granted to such Eligible Individual and
specifies the terms and provisions of the Stock Option. The Company shall
notify an Eligible Individual of any grant of a Stock Option, and a written
option agreement or agreements shall be duly executed and delivered by the
Company to the participant. Such agreement or agreements shall become
effective upon execution by the Company and the participant.
Stock Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions as the
Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock purchasable
under a Stock Option shall be determined by the Committee and set forth in the
option agreement, and shall not be less than the Fair Market Value of the
Common Stock subject to the Stock Option on the date of grant.
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(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than 10 years after
the date the Stock Option is granted.
(c) Exercisability. Except as otherwise provided herein, Stock Options shall
be exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee. If the Committee provides that any
Stock Option is exercisable only in installments, the Committee may at any
time waive such installment exercise provisions, in whole or in part, based on
such factors as the Committee may determine. In addition, the Committee may at
any time accelerate the exercisability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this Section 5, Stock
Options may be exercised, in whole or in part, at any time during the option
term by giving written notice of exercise to the Company specifying the number
of shares of Common Stock subject to the Stock Option to be purchased.
Such notice shall be accompanied by payment in full of the purchase price by
certified or bank check or such other instrument as the Company may accept. If
approved by the Committee, payment, in full or in part, may also be made in
the form of unrestricted Common Stock (by delivery of such shares or by
attestation) already owned by the optionee of the same class as the Common
Stock subject to the Stock Option (based on the Fair Market Value of the
Common Stock on the date the Stock Option is exercised); provided, however,
that, in the case of an Incentive Stock Option, the right to make a payment in
the form of already owned shares of Common Stock of the same class as the
Common Stock subject to the Stock Option may be authorized only at the time
the Stock Option is granted and provided, further, that such already owned
shares have been held by the optionee for at least six months at the time of
exercise or had been purchased on the open market.
If approved by the Committee, payment in full or in part may also be made by
delivering a properly executed exercise notice to the Company, together with a
copy of irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds necessary to pay the purchase
price, and, if requested, reduced by the amount of any federal, state, local
or foreign withholding taxes. To facilitate the foregoing, the Company may
enter into agreements for coordinated procedures with one or more brokerage
firms.
In addition, if approved by the Committee, payment in full or in part may
also be made by instructing the Committee to withhold a number of such shares
having a Fair Market Value on the date of exercise equal to the aggregate
exercise price of such Stock Option.
No shares of Common Stock shall be issued until full payment therefor has
been made. Except as otherwise provided in Section 5(l) below, an optionee
shall have all of the rights of a shareholder of the Company holding the class
or series of Common Stock that is subject to such Stock Option (including, if
applicable, the right to vote the shares and the right to receive dividends),
when the optionee has given written notice of exercise, has paid in full for
such shares and, if requested, has given the representation described in
Section 14(a).
If determined by the Committee at or, with respect to a NonQualified Stock
Option, subsequent to the date of grant of a Stock Option, in the event an
optionee who has not incurred a Termination of Employment pays the option
price of such Stock Option (in whole or in part) by delivering (or attesting
to ownership of) shares of Common Stock previously owned by the optionee, such
optionee shall automatically be granted a reload Stock Option (a "Reload
Option") for the number of shares of Common Stock used to pay the option
price. Unless otherwise determined by the Committee, the Reload Option shall
be subject to the same terms and conditions as the Stock Option, except that
the Reload Option shall be a NonQualified Stock Option, have an option price
equal to the Fair Market Value of the Common Stock on the date the Reload
Option is granted, expire the same date as the expiration date of the Stock
Option so exercised, shall vest and become exercisable 6 months following the
date of grant of such Reload Option and shall not have the rights set forth in
Section 5(k) hereof. Additional Reload Options may only be granted upon
exercise of a Reload Option if the Fair Market Value of the Common Stock on
the date of such exercise is 25% or more higher than the Fair Market Value of
the Common Stock on the date of grant of the Reload Option being exercised.
Reload Options shall not be treated as grants for purposes of the limitations
set forth in the second sentence of Section 3 of the Plan.
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(e) Nontransferability of Stock Options. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of descent
and distribution; or (ii) in the case of a NonQualified Stock Option, as
otherwise expressly permitted by the Committee including, if so permitted,
pursuant to a transfer to such optionee's immediate family, whether directly
or indirectly or by means of a trust or partnership or otherwise. For purposes
of this Plan, unless otherwise determined by the Committee, "immediate family"
shall mean the optionee's children, spouse and grandchildren. All Stock
Options shall be exercisable, subject to the terms of this Plan, only by the
optionee, the guardian or legal representative of the optionee, or any person
to whom such option is transferred pursuant to this paragraph, it being
understood that the term "holder" and "optionee" include such guardian, legal
representative and other transferee.
(f) Additional Rules for Incentive Stock Options. Notwithstanding anything
contained herein to the contrary, no Stock Option which is intended to qualify
as an Incentive Stock Option may be granted to an Eligible Employee who at the
time of such grant owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any Subsidiary,
unless at the time such Stock Option is granted the option price is at least
110% of the Fair Market Value of a share of Common Stock and such Stock Option
by its terms is not exercisable after the expiration of five years from the
date such Stock Option is granted. In addition, the aggregate Fair Market
Value of the Common Stock (determined at the time a Stock Option for the
Common Stock is granted) for which Incentive Stock Options are exercisable for
the first time by an optionee during any calendar year, under all of the
incentive stock option plans of the Company and of any Subsidiary, may not
exceed $100,000. To the extent a Stock Option that by its terms was intended
to be an Incentive Stock Option exceeds this $100,000 limit, the portion of
the Stock Option in excess of such limit shall be treated as a NonQualified
Stock Option.
(g) Termination by Death. Unless otherwise determined by the Committee, if
an optionee incurs a Termination of Employment by reason of death, any Stock
Option held by such optionee may thereafter be exercised, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, for
a period of one year (or such other period as the Committee may specify in the
option agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(h) Termination by Reason of Disability or Retirement. Unless otherwise
determined by the Committee, if an optionee incurs a Termination of Employment
by reason of Disability or Retirement, any Stock Option held by such optionee
may thereafter be exercised by the optionee, to the extent it was exercisable
at the time of termination, or on such accelerated basis as the Committee may
determine, for a period of one year (or such other period as the Committee may
specify in the option agreement) from the date of such Termination of
Employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such period, continue to be exercisable to
the extent to which it was exercisable at the time of death for a period of 12
months from the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is the shorter. In the event of
Termination of Employment by reason of Disability or Retirement, if an
Incentive Stock Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422 of the Code, such Stock Option
will thereafter be treated as a NonQualified Stock Option.
(i) Other Termination. Unless otherwise determined by the Committee: (A) if
an optionee incurs a Termination of Employment for Cause, all Stock Options
held by such optionee shall thereupon terminate; and (B) if an optionee incurs
a Termination of Employment for any reason other than death, Disability,
Retirement or for Cause, any Stock Option held by such optionee, to the extent
it was then exercisable at the time of termination, or on such accelerated
basis as the Committee may determine, may be exercised for the lesser of three
months from the date of such Termination of Employment or the balance of such
Stock Option's term; provided, however, that if the optionee dies within such
three-month period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such three-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for
a period of 12 months from the date of such death
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or until the expiration of the stated term of such Stock Option, whichever
period is the shorter. Notwithstanding any other provision of this Plan to the
contrary, in the event an optionee incurs a Termination of Employment other
than for Cause during the 24-month period following a Change in Control, any
Stock Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of termination,
including on such accelerated basis as provided in Section 11(a), for (x) the
longer of (i) one year from such date of termination or (ii) such other period
as may be provided in the Plan for such Termination of Employment or as the
Committee may provide in the option agreement, or (y) until expiration of the
stated term of such Stock Option, whichever period is the shorter. If an
Incentive Stock Option is exercised after the expiration of the post-
termination exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a NonQualified Stock
Option.
(j) Cashing Out of Stock Option. On receipt of written notice of exercise,
the Committee may elect to cash out all or part of the portion of the shares
of Common Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Common Stock, equal to the excess of the Fair
Market Value of the Common Stock over the option price times the number of
shares of Common Stock for which the Option is being exercised on the
effective date of such cash-out.
(k) Change in Control Cash-Out. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), if the Committee shall determine at the time of grant or
thereafter, an optionee shall have the right, whether or not the Stock Option
is fully exercisable and in lieu of the payment of the option price for the
shares of Common Stock being purchased under the Stock Option and by giving
notice to the Company, to elect (within the Exercise Period) to surrender all
or part of the Stock Option to the Company and to receive cash, within 5 days
of such election, in an amount equal to the amount by which the Change in
Control Price per share of Common Stock on the date of such election shall
exceed the exercise price per share of Common Stock under the Stock Option
multiplied by the number of shares of Common Stock granted under the Stock
Option as to which the right granted under this Section 5(k) shall have been
exercised. Notwithstanding the foregoing, if any right granted pursuant to
this Section 5(k) would make a Change in Control transaction ineligible for
pooling-of-interests accounting under APB No. 16 that but for the nature of
such grant would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute for the cash payable pursuant
to such right Common Stock with a Fair Market Value (as of the date of such
election) equal to the cash that would otherwise be payable hereunder or, if
necessary to preserve such accounting treatment, otherwise modify or eliminate
such right.
(l) Deferral of Option Shares. The Committee may from time to time establish
procedures pursuant to which an optionee may elect to defer, until a time or
times later than the exercise of an Option, receipt of all or a portion of the
shares of Common Stock subject to such Option and/or to receive cash at such
later time or times in lieu of such deferred shares, all on such terms and
conditions as the Committee shall determine. If any such deferrals are
permitted, then notwithstanding Section 5(d) above, an optionee who elects
such deferral shall not have any rights as a stockholder with respect to such
deferred shares unless and until shares are actually delivered to the optionee
with respect thereto, except to the extent otherwise determined by the
Committee.
SECTION 6
STOCK APPRECIATION RIGHTS
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In
the case of a NonQualified Stock Option, such rights may be granted either at
or after the time of grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of grant of such
Stock Option. A Stock Appreciation Right shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 6(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in
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the manner prescribed in Section 6(b). Stock Options which have been so
surrendered shall no longer be exercisable to the extent the related Stock
Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to such
terms and conditions as shall be determined by the Committee, including the
following:
(i) Stock Appreciation Rights shall be exercisable only at such time or
times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 5 and this
Section 6.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee shall
be entitled to receive an amount in cash, shares of Common Stock or both,
in value equal to the excess of the Fair Market Value of one share of
Common Stock over the option price per share specified in the related Stock
Option multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable only to permitted
transferees of the underlying Stock Option in accordance with Section 5(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock Option or
part thereof to which such Stock Appreciation Right is related shall be
deemed to have been exercised for the purpose of the limitation set forth
in Section 3 on the number of shares of Common Stock to be issued under the
Plan, but only to the extent of the number of shares covered by the Stock
Appreciation Right at the time of exercise based on the value of the Stock
Appreciation Right at such time.
SECTION 7
RESTRICTED STOCK
(a) Administration. Shares of Restricted Stock may be awarded either alone
or in addition to other Awards granted under the Plan. The Committee shall
determine the Eligible Individuals to whom and the time
or times at which grants of Restricted Stock will be awarded, the number of
shares to be awarded to any Eligible Individual, the conditions for vesting,
the time or times within which such Awards may be subject to forfeiture and
any other terms and conditions of the Awards, in addition to those contained
in Section 7(c); provided, however, that, subject to Section 7(c)(i) and
Section 11(a)(ii), no shares of Restricted Stock shall vest prior to three
years from the date of grant. Notwithstanding the previous sentence, the
Committee shall have discretion to permit vesting of shares of Restricted
Stock prior to three years from the date of grant in the event of a
participant's Termination of Employment by reason of Retirement, Disability or
death, or under other limited circumstances if the Committee determines that
such earlier vesting is necessary to fulfill a legitimate corporate purpose
such as the hiring or retention of a key employee; provided, however, that the
Committee shall exercise its discretion (under this Section 7(a) and Section
7(c)(i)) in these other limited circumstances with respect to shares of
Restricted Stock which in the aggregate do not exceed 10% of the maximum
number of shares of Common Stock authorized for issuance in Section 3.
(b) Awards and Certificates. Shares of Restricted Stock shall be evidenced
in such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates. Any certificate
issued in respect of shares of Restricted Stock shall be registered in the
name of such participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award, substantially in
the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the GreenPoint Financial Corp. 1999 Stock Incentive Plan
and a Restricted Stock Agreement. Copies of such Plan and Agreement are
on file at the offices of GreenPoint Financial Corp., 90 Park Avenue,
New York, New York 10016-1303."
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The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
(c) Terms and Conditions. Shares of Restricted Stock shall be subject to the
following terms and conditions:
(i) The Committee may, prior to or at the time of grant, designate an
Award of Restricted Stock as a Qualified Performance-Based Award, in which
event it shall condition the grant or vesting, as applicable, of such
Restricted Stock upon the attainment of Performance Goals. If the Committee
does not designate an Award of Restricted Stock as a Qualified Performance-
Based Award, it may also condition the grant or vesting thereof upon the
attainment of Performance Goals. Subject to Section 11(a)(ii), no shares of
Restricted Stock, the vesting of which is conditioned upon the attainment
of Performance Goals, shall vest prior to one year from the date of grant.
Notwithstanding the previous sentence, the Committee shall have discretion
to permit vesting of shares of Restricted Stock, the vesting of which is
conditioned upon the attainment of Performance Goals, prior to one year
from the date of grant in the event of a participant's Termination of
Employment by reason of Retirement, Disability or death, or under other
limited circumstances if the Committee determines that such earlier vesting
is necessary to fulfill a legitimate corporate purpose such as the hiring
or retention of a key employee; provided, however, that the Committee shall
exercise its discretion (under this Section 7(c)(i) and Section 7(a)) in
these other limited circumstances with respect to shares of Restricted
Stock which in the aggregate do not exceed 10% of the maximum number of
shares of Common Stock authorized for issuance in Section 3. Regardless of
whether an Award of Restricted Stock is a Qualified Performance-Based
Award, the Committee may also condition the grant or vesting thereof upon
the continued service of the participant. The conditions for grant or
vesting and the other provisions of Restricted Stock Awards (including
without limitation any applicable Performance Goals) need not be the same
with respect to each recipient. The Committee may at any time, in its sole
discretion, accelerate or waive, in whole or in part, any of the foregoing
restrictions, other than the restriction period minimums described in
Section 7(a) and this Section 7(c)(i); provided, however, that in the case
of Restricted Stock that is a Qualified Performance-Based Award, the
applicable Performance Goals have been satisfied with respect to each
participant who is a Covered Employee (other than in the case of the
participant's Disability or death).
(ii) Subject to the provisions of the Plan and the Restricted Stock
Agreement referred to in Section 7(c)(vi), during the period, if any, set
by the Committee, commencing with the date of such Award for which such
participant's continued service is required (the "Restriction Period"), and
until the later of (A) the expiration of the Restriction Period and (B) the
date the applicable Performance Goals (if any) are satisfied, the
participant shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber shares of Restricted Stock.
(iii) Except as provided in Section 7(c)(i) through 7(c)(iii), the
Restricted Stock Agreement, or as otherwise determined by the Committee,
the participant shall have, with respect to the shares of Restricted Stock,
all of the rights of a stockholder of the Company holding the class or
series of Common Stock that is the subject of the Restricted Stock,
including, if applicable, the right to vote the shares and the right to
receive any cash dividends. If so determined by the Committee in the
applicable Restricted Stock Agreement and subject to Section 14(e) of the
Plan, (A) cash dividends on the class or series of Common Stock that is the
subject of the Restricted Stock Award shall be automatically deferred and
reinvested in additional Restricted Stock, held subject to the vesting of
the underlying Restricted Stock, or held subject to meeting Performance
Goals applicable only to dividends, and (B) dividends payable in Common
Stock shall be paid in the form of Restricted Stock of the same class as
the Common Stock with which such dividend was paid, held subject to the
vesting of the underlying Restricted Stock, or held subject to meeting
Performance Goals applicable only to dividends.
(iv) Except to the extent otherwise provided in the applicable Restricted
Stock Agreement or Section 7(c)(i), 7(c)(ii) or 11(a)(ii), upon a
participant's Termination of Employment for any reason during the
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Restriction Period or before the applicable Performance Goals are
satisfied, all shares still subject to restriction shall be forfeited by
the participant; provided, however, that the Committee shall have the
discretion to waive, in whole or in part, any or all remaining restrictions
(other than the restriction period minimums set forth in Sections 7(a) and
7(c)(i), and, in the case of Qualified Performance-Based Awards with
respect to which a participant is a Covered Employee, satisfaction of the
applicable Performance Goals unless the participant's employment is
terminated by reason of death or Disability) with respect to any or all of
such participant's shares of Restricted Stock.
(v) If and when any applicable Performance Goals are satisfied and the
Restriction Period expires without a prior forfeiture of the Restricted
Stock, unlegended certificates for such shares shall be delivered to the
participant upon surrender of the legended certificates.
(vi) Each Award shall be confirmed by, and be subject to, the terms of a
Restricted Stock Agreement.
SECTION 8
PERFORMANCE UNITS
(a) Administration. Performance Units may be awarded either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the Eligible Individuals to whom and the time or times at which Performance
Units shall be awarded, the number of Performance Units to be awarded to any
Eligible Individual, the duration of the Award Cycle and any other terms and
conditions of the Award, in addition to those contained in Section 8(b).
(b) Terms and Conditions. Performance Units Awards shall be subject to the
following terms and conditions:
(i) The Committee may, prior to or at the time of the grant, designate
Performance Units as Qualified Performance-Based Awards, in which event it
shall condition the settlement thereof upon the attainment of Performance
Goals. If the Committee does not designate Performance Units as Qualified
Performance-Based Awards, it may also condition the settlement thereof upon
the attainment of Performance Goals. Regardless of whether Performance
Units are Qualified Performance-Based Awards, the Committee may also
condition the settlement thereof upon the continued service of the
participant. The provisions of such Awards (including without limitation
any applicable Performance Goals) need not be the same with respect to each
recipient. Subject to the provisions of the Plan and the Performance Units
Agreement referred to in Section 8(b)(v), Performance Units may not be
sold, assigned, transferred, pledged or otherwise encumbered during the
Award Cycle. Subject to Section 11(a)(iii), no Performance Units may be
earned prior to three years from the date of grant (or one year from the
date of grant if the settlement thereof is conditioned upon the attainment
of Performance Goals). Notwithstanding the previous sentence, the Committee
shall have the discretion to permit Performance Units to be earned and
payable in full in the event the participant's employment is terminated by
reason of Disability or death. No more than 100,000 shares of Common Stock
may be granted as Qualified Performance-Based Awards to any participant in
any calendar year.
(ii) Except to the extent otherwise provided in the applicable
Performance Units Agreement or Section 8(b)(iii) or 11(a)(iii), upon a
participant's Termination of Employment for any reason during the Award
Cycle or before any applicable Performance Goals are satisfied, all rights
to receive cash or stock in settlement of the Performance Units shall be
forfeited by the participant; provided, however, that the Committee shall
have the discretion to waive, in whole or in part, any or all remaining
payment limitations (other than the restriction period minimums set forth
in Section 8(b)(i), and, in the case of Performance Units that are
Qualified Performance-Based Awards, satisfaction of the applicable
Performance Goals unless the participant's employment is terminated by
reason of Disability or death) with respect to any or all of such
participant's Performance Units.
(iii) A participant may elect to further defer receipt of cash or shares
in settlement of Performance Units for a specified period or until a
specified event, subject in each case to the Committee's approval and to
such terms as are determined by the Committee. Subject to any exceptions
adopted by the Committee, such election must generally be made prior to
commencement of the Award Cycle for the Performance Units in question.
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(iv) At the expiration of the Award Cycle, the Committee shall evaluate
the Company's performance in light of any Performance Goals for such Award,
and shall determine the number of Performance Units granted to the
participant which have been earned, and the Committee shall then cause to
be delivered (A) a number of shares of Common Stock equal to the number of
Performance Units determined by the Committee to have been earned, or (B)
cash equal to the Fair Market Value of such number of shares of Common
Stock to the participant, as the Committee shall elect (subject to any
deferral pursuant to Section 8(b)(iii)).
(v) Each Award shall be confirmed by, and be subject to, the terms of a
Performance Units Agreement.
SECTION 9
TAX OFFSET BONUSES
At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the participant receiving such Award the right to
receive a cash payment in an amount specified by the Committee, to be paid at
such time or times (if ever) as the Award results in compensation income to
the participant, for the purpose of assisting the participant to pay the
resulting taxes, all as determined by the Committee and on such other terms
and conditions as the Committee shall determine.
SECTION 10
OTHER STOCK-BASED AWARDS
Other Awards of Common Stock and other Awards that are valued in whole or in
part by reference to, or are otherwise based upon, Common Stock, including
(without limitation) dividend equivalents and convertible debentures, may be
granted either alone or in conjunction with other Awards granted under the
Plan. In the event that an Award is granted under this Section 10 to a
participant who is an officer, the Award shall be granted in lieu of
additional cash compensation to the officer for services.
SECTION 11
CHANGE IN CONTROL PROVISIONS
(a) Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control:
(i) Any Stock Options and Stock Appreciation Rights outstanding as of the
date such Change in Control is determined to have occurred, and which are
not then exercisable and vested, shall become fully exercisable and vested
to the full extent of the original grant.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free
of all restrictions and become fully vested and transferable to the full
extent of the original grant.
(iii) All Performance Units shall be considered to be earned and payable
in full based upon maximum performance, and any deferral or other
restriction shall lapse and such Performance Units shall be settled in cash
(or shares of Common Stock at the Committee's election) as promptly as is
practicable.
(iv) The Committee may also make additional adjustments and/or
settlements of outstanding Awards as it deems appropriate and consistent
with the Plan's purposes.
(b) Definition of Change in Control. For purposes of the Plan, a "Change in
Control" shall mean the happening of any of the following events:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
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promulgated under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change in Control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or
(4) any acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) of this Section
11(b); or
(ii) Individuals who, as of the effective date of the Plan, constitute
the Board (the "Incumbent Board") cease for any reason not to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the effective date of the Plan whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business Combination
(including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or through one
or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except
to the extent that such ownership existed prior to the Business Combination
and (C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or
of the action of the Board, providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(c) Change in Control Price. For purposes of the Plan, "Change in Control
Price" means the higher of (i) the highest reported sales price, regular way,
of a share of Common Stock in any transaction reported on the New York Stock
Exchange Composite Tape or other national exchange on which such shares are
listed or on NASDAQ during the 60-day period prior to and including the date
of a Change in Control or (ii) if the Change in Control is the result of a
tender or exchange offer or a Corporate Transaction, the highest price per
share of Common Stock paid in such tender or exchange offer or Corporate
Transaction; provided, however, that in the case of Incentive Stock Options
and Stock Appreciation Rights relating to Incentive Stock Options, the Change
in Control Price shall be in all cases the Fair Market Value of the Common
Stock on the date such Incentive Stock Option or Stock Appreciation Right is
exercised. To the extent that the consideration paid in any such transaction
described above consists all or in part of securities or other noncash
consideration, the value of such securities or other noncash consideration
shall be determined in the sole discretion of the Board.
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SECTION 12
TERM, AMENDMENT AND TERMINATION
The Plan will terminate on the tenth anniversary of the effective date of
the Plan. Under the Plan, Awards outstanding as of such date shall not be
affected or impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of
an optionee under a Stock Option or a recipient of a Stock Appreciation Right,
Restricted Stock Award, Performance Unit Award or other stock-based Award
theretofore granted without the optionee's or recipient's consent, except such
an amendment made to comply with applicable law, stock exchange rules or
accounting rules. In addition, no such amendment shall be made without the
approval of the Company's stockholders to the extent such approval is required
by applicable law or stock exchange rules; provided, however, that stockholder
approval shall be required for any amendment which (i) increases the maximum
number of shares for which Awards may be granted under the Plan (subject,
however, to the provisions of Section 3 hereof), (ii) reduces the exercise
price at which Stock Options may be granted (subject, however, to the
provisions of Section 3 hereof), (iii) extends the period during which Stock
Options may be granted or exercised beyond the times originally prescribed,
(iv) changes the persons eligible to participate in the Plan, or (v)
materially increases the benefits accruing to participants under the Plan.
Subject to the repricing restrictions in Section 2(e)(i) and the restriction
period minimums described in Sections 7(a), 7(c)(i) and 8(b)(i), the Committee
may amend the terms of any Stock Option or other Award theretofore granted,
prospectively or retroactively, but no such amendment shall cause a Qualified
Performance-Based Award to cease to qualify for the Section 162(m) Exemption
or impair the rights of any holder without the holder's consent except such an
amendment made to cause the Plan or Award to comply with applicable law, stock
exchange rules or accounting rules.
Subject to the above provisions, the Board shall have authority to amend the
Plan to take into account changes in law and tax and accounting rules as well
as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
SECTION 13
UNFUNDED STATUS OF PLAN
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation
of trusts or other arrangements to meet the obligations created under the Plan
to deliver Common Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
SECTION 14
GENERAL PROVISIONS
(a) The Committee may require each person purchasing or receiving shares
pursuant to an Award to represent to and agree with the Company in writing
that such person is acquiring the shares without a view to the distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
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Notwithstanding any other provision of the Plan or agreements made pursuant
thereto, the Company shall not be required to issue or deliver any certificate
or certificates for shares of Common Stock under the Plan prior to fulfillment
of all of the following conditions:
(1) Listing or approval for listing upon notice of issuance, of such
shares on the New York Stock Exchange, Inc., or such other securities
exchange as may at the time be the principal market for the Common Stock;
(2) Any registration or other qualification of such shares of the Company
under any state or federal law or regulation, or the maintaining in effect
of any such registration or other qualification which the Committee shall,
in its absolute discretion upon the advice of counsel, deem necessary or
advisable; and
(3) Obtaining any other consent, approval, or permit from any state or
federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be necessary
or advisable.
(b) Nothing contained in the Plan shall prevent the Company or any
Subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) The Plan shall not constitute a contract of employment, and adoption of
the Plan shall not confer upon any employee any right to continued employment,
nor shall it interfere in any way with the right of the Company or any
Subsidiary or Affiliate to terminate the employment of any employee at any
time.
(d) No later than the date as of which an amount first becomes includible in
the gross income of the participant for federal income tax purposes with
respect to any Award under the Plan, the participant shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Company, withholding obligations may be settled with Common Stock, including
Common Stock that is part of the Award that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its
Subsidiaries and Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
participant. The Committee may establish such procedures as it deems
appropriate, including making irrevocable elections, for the settlement of
withholding obligations with Common Stock.
(e) Reinvestment of dividends in additional Restricted Stock at the time of
any dividend payment shall only be permissible if sufficient shares of Common
Stock are available under Section 3 for such reinvestment (taking into account
then outstanding Stock Options and other Awards).
(f) The Committee shall establish such procedures as it deems appropriate
for a participant to designate a beneficiary to whom any amounts payable in
the event of the participant's death are to be paid or by whom any rights of
the participant, after the participant's death, may be exercised.
(g) In the case of a grant of an Award to any employee of a Subsidiary of
the Company, the Company may, if the Committee so directs, issue or transfer
the shares of Common Stock, if any, covered by the Award to the Subsidiary,
for such lawful consideration as the Committee may specify, upon the condition
or understanding that the Subsidiary will transfer the shares of Common Stock
to the employee in accordance with the terms of the Award specified by the
Committee pursuant to the provisions of the Plan. All shares of Common Stock
underlying Awards that are forfeited or canceled should revert to the Company.
(h) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of laws.
(i) Except as otherwise provided in Section 5(e) or 6(b)(iii) or by the
Committee, Awards under the Plan are not transferable except by will or by the
laws of descent and distribution.
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(j) In the event an Award is granted to an Eligible Individual who is
employed or providing services outside the United States and who is not
compensated from a payroll maintained in the United States, the Committee may,
in its sole discretion, modify the provisions of the Plan as they pertain to
such individual to comply with applicable foreign law.
SECTION 15
EFFECTIVE DATE OF PLAN
The Plan shall be effective as of the date it is adopted by the Board,
subject to the approval of the Company's stockholders.
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APPENDIX B
GREENPOINT FINANCIAL CORP. 1999 ANNUAL INCENTIVE PLAN
I
PURPOSE
The GreenPoint Financial Corp. 1999 Annual Incentive Plan (the "Plan"),
which, subject to approval by the Company's stockholders, shall be effective
as of January 1, 1999, is designed to provide a significant and variable
economic opportunity to selected officers and employees of the Company as a
reflection of their individual and group contributions to the success of
GreenPoint Financial Corp. and its subsidiaries (the "Company"). The payments
pursuant to Article IX of the Plan are intended to qualify under
Section 162(m)(4)(C) of the Code (as defined below) as excluded from the term
"applicable employee remuneration".
II
DEFINITIONS
For purposes of the Plan, the following terms are defined as set forth
below. In addition, certain other terms used herein have the definitions given
to them in the first place in which they are used.
"Board" shall mean the Board of Directors of the Company.
"Bonus" shall mean a cash award payable to a Participant pursuant to the
terms of the Plan, including an Incentive Award (as defined in Article IX
hereof).
"Cause" shall mean personal dishonesty, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform
stated duties, or any willful violation of any law, rule, regulation (other
than traffic violations or similar offenses) or final cease and desist order.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Committee referred to in Article III hereof.
"Covered Employees" shall mean Participants (as defined in Article IV
hereof) designated by the Committee who are or are expected to be "covered
employees" within the meaning of Section 162(m)(3) of the Code for the year in
which a Bonus hereunder is payable.
"Disinterested Person" means a member of the Board who qualifies as an
"outside director" for purposes of Section 162(m) of the Code.
"Payment Date" shall mean the date following the conclusion of a particular
Measurement Period (as such term is defined in Article IX) on which the
Committee certifies that applicable Performance Objectives (as such term is
defined in Article IX) have been satisfied and authorizes payment of
corresponding Incentive Awards.
"Target Bonus" shall mean the amount determined by the Committee at the time
of grant in its sole discretion, which need not be the same for each
Participant.
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III
ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the Board or
such other committee of the Board, composed of not less than two Disinterested
Persons, each of whom shall be appointed by and serve at the pleasure of the
Board.
In administering the Plan, the Committee may at its option employ
compensation consultants, accountants and counsel (who may be the independent
auditors and outside counsel and compensation consultants of the Company) and
other persons to assist or render advice to the Committee, all at the expense
of the Company.
IV
ELIGIBILITY
The Committee shall, in its sole discretion, determine each fiscal year
those officers and employees of the Company who shall be eligible to
participate in the Plan (the "Participants") for such fiscal year based upon
such Participants' opportunity to have a substantial impact on the Company's
operating results. Nothing contained in the Plan shall be construed as or be
evidence of any contract of employment with any Participant for a term of any
length nor shall participation in the Plan in any year by any Participant
require continued participation by such Participant in any subsequent year.
V
DETERMINATION OF BONUS
Subject to Article IX hereof, the form and amount of each Bonus award to a
Participant shall be determined by and in the discretion of the Committee.
Subject to Article IX, the Committee may condition the earning of a Bonus upon
the attainment of specified performance goals measured over a period not
greater than one year relating to the Participant or the Company or
subsidiary, division or department of the Company for or within which the
Participant is primarily employed, or upon such other factors or criteria as
the Committee shall determine, which goals may be different for each award
recipient. Bonuses under the Plan will consist of an award, payable in cash
from the Company, based upon a percentage or multiple of the Target Bonus,
payable based upon the degree of achievement of such predetermined performance
objectives over the specified Measurement Period. Bonuses under this Plan for
Covered Employees shall be subject to pre-established performance goals in
accordance with Article IX hereof. Subject to Article IX, the Committee may,
in its sole discretion, increase or decrease the amount of any Bonus payable
to a Participant and may award Bonuses to Participants (other than Covered
Employees) even though the Bonuses are not earned. Bonuses earned or otherwise
awarded will be paid on the Payment Date.
VI
TERMINATION OF EMPLOYMENT
In the event that a Participant's employment with the Company terminates for
any reason prior to the Payment Date with respect to any Bonus, the balance of
any Bonus which remains unpaid at the time of such termination, shall be
payable to the Participant, or forfeited by the Participant, in accordance
with the terms of the award established by the Committee at the time of grant;
provided, however, that in the case of a Covered Employee, no amount shall be
payable unless the Performance Objectives (as defined below) are satisfied
unless the termination of employment of the Covered Employee is due to the
death or disability of the Participant. Participants who remain employed
through the Measurement Period but are terminated prior to the Payment Date
shall be entitled to receive Bonuses payable with respect to such Measurement
Period, unless terminated for Cause.
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VII
AMENDMENT AND TERMINATION
The Board shall have the right to amend, modify or terminate the Plan from
time to time but no such amendment or modification shall, without prior
approval of the stockholders, change Article IX of this Plan so as to alter
the business criteria on which the Performance Objectives are based or to
increase the amount set forth in Section (e) of Article IX, materially
increase the amount available for awards, materially increase the benefits
accruing to Participants who are Covered Employees hereunder, materially
modify the requirements regarding eligibility for participation in the Plan
or, without the consent of the Participant affected, impair any award made
prior to the effective date of the amendment, modification or termination.
VIII
MISCELLANEOUS
Bonus payments shall be made from the general funds of the Company and no
special or separate fund shall be established or other segregation of assets
made to assure payment. No Participant or other person shall have under any
circumstances any interest in any particular property or assets of the
Company. The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to its principles of conflict of
laws.
IX
PROCEDURES FOR CERTAIN DESIGNATED EMPLOYEES
Bonuses under the Plan to Participants who are Covered Employees shall be
subject to pre-established performance goals as set forth herein.
Notwithstanding Article V hereof, the Committee shall not have discretion to
modify the terms of awards to such Participants except as specifically set
forth in this Article IX.
(a) Target Bonus. Prior to the commencement of a Measurement Period (as
defined below), the Committee shall grant bonus award opportunities
("Incentive Awards") to such of the Participants who may be Covered Employees
payment of which shall be conditioned upon satisfaction of specific
Performance Objectives (as defined below) measured over a period not greater
than one year established by the Committee in writing at the time of grant. An
Incentive Award shall consist of an award payable in cash from the Company,
based upon a percentage or multiple of a Target Bonus. The extent, if any, to
which an Incentive Award based upon the Target Bonus will be payable will be
based upon the degree of achievement of predetermined Performance Objectives
(as defined below) over a specified Measurement Period (as defined below);
provided, however, that the Committee may, in its sole discretion, reduce the
amount which would otherwise be payable upon expiration of the Measurement
Period (under which circumstances the Participant will have no right to
receive the amount of such reduction even if the Performance Objectives are
met).
(b) Measurement Period. The measurement period will be a period of one
fiscal year, unless a shorter period is otherwise selected and established in
writing by the Committee at the time the Performance Objectives are
established with respect to a particular Incentive Award (the period so
specified being hereinafter referred to as the "Measurement Period").
(c) Performance Objectives. The performance objectives ("Performance
Objectives") established by the Committee at the time the Incentive Award is
granted will be based on return on equity, return on assets, earnings per
share, net income and/or achievement of predetermined strategic milestones
during the Measurement Period. Performance Objectives may be specified
relative to budgeted or other internal goals, or relative to the performance
of one or more peer groups. Performance Objectives may be stated in the
alternative or in combination.
B-3
<PAGE>
(d) Payment of an Incentive Award. At the time the Incentive Award is
granted, the Committee shall prescribe a formula to determine the percentage
of the Target Bonus which may be payable based upon the degree of attainment
of the Performance Objectives which shall be determined as of the last day of
the Measurement Period. If the minimum Performance Objectives established by
the Committee are not met, no Incentive Award payment will be made to the
Participant. To the extent that the minimum Performance Objectives are
surpassed and upon written certification by the Committee that the Performance
Objectives have been satisfied to a particular extent and any other material
terms and conditions of the Incentive Awards have been satisfied, payment
shall be made on the Payment Date in accordance with the prescribed formula
based upon a percentage or multiple of the Target Bonus unless the Committee
determines, in its sole discretion, to reduce the payment to be made. The
Committee may provide in writing at the time of grant that Incentive Awards
shall be payable at a fixed time following a Measurement Period and it may
impose forfeiture or vesting requirements. In no event shall an Incentive
Award be paid to a Covered Employee unless and until the Plan has been
approved by the Company's stockholders.
(e) Maximum Payable. The maximum amount payable to a Covered Employee is
$3,000,000.
X
DEFERRAL ELECTIONS
The Committee may at its option establish procedures pursuant to which
Participants are permitted to defer the receipt of Bonuses payable hereunder.
B-4
<PAGE>
GreenPoint Financial Corp.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS--MAY 7, 1999
The undersigned hereby appoints Thomas S. Johnson, Charles P. Richardson and
Ramesh Shah, and each of them, with full power of substitution, for and in the
name of the undersigned, to vote all common stock, par value $.01 per share, of
GreenPoint Financial Corp., a Delaware corporation, that the undersigned would
be entitled to vote if personally present at the 1999 Annual Meeting of
Stockholders to be held at Terrace on the Park, 52-11 111th Street, Flushing,
New York, on Friday, May 7, 1999 at 10:00 a.m., local time, and at any
adjournment thereof, upon the matters described in the accompanying Notice of
Annual Meeting of Stockholders and Proxy Statement, receipt of which is hereby
acknowledged, subject to any direction indicated on the reverse side of this
card, and upon any other business that may properly come before the meeting or
any adjournment thereof, hereby revoking any proxy heretofore executed by the
undersigned to vote at said meeting.
This proxy is being solicited by the Board of Directors of GreenPoint Financial
Corp. THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4 AND, WITH RESPECT TO ITEM 5, AS
SAID PROXIES, AND EACH OF THEM, MAY DETERMINE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
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FOLD AND DETACH HERE
<PAGE>
Please mark
your votes as [X]
indicated in
this example
The Board of Directors recommends a vote FOR Proposals 1, 2, 3 and 4
---
1. Election of Directors
Nominees: FOR all nominees WITHHOLD
(except as noted authority to
to the contrary vote for all
below) nominees
Dan F. Huebner, Thomas S. Johnson, [ ] [ ]
Susan J. Kropf and Jules Zimmerman
(Instruction: To withohold authority to vote for any individual
nominee write that nominee's name on the space provided below.
_______________________________________________________________________
<TABLE>
<CAPTION> <C> <C> <C>
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
2. Ratification of appointment of PricewaterhouseCoopers LLP as the [ ] [ ] [ ]
Corporation's independent auditors for the year ending December 31, 1999.
3. Approval of the GreenPoint Financial Corp. 1999 Stock [ ] [ ] [ ]
Incentive Plan.
4. Approval of the GreenPoint Financial Corp. 1999 Annual Incentive Plan. [ ] [ ] [ ]
5. In their discretion on such other matters as may properly come before the
meeting or any adjournment thereof.
</TABLE>
Please sign and date below and return in enclosed envelope promptly.
Signature(s)________________________Date:_______________________, 1999
NOTE: Please date and sign this proxy exactly as your name appears hereon. In
case of joint owners, each joint owner should sign. When signing in a fiduciary
or representative capacity, please give your full title. If this proxy is
submitted by a corporation or partnership, it should be executed in the full
corporate or partnership name by a duly authorized person.
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FOLD AND DETACH HERE
