<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
[X] Filed by the Registrant
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
HUDSON CITY BANCORP, INC.
- --------------------------------------------------------------------------------
Name of Registrant as Specified in its Charter
- --------------------------------------------------------------------------------
(Name(s) of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed 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
09-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[HCBK Logo] [HUDSON CITY BANCORP, INC. LOGO]
December 6, 1999
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders of
Hudson City Bancorp, Inc., the holding company for Hudson City Savings Bank,
which will be held on January 13, 2000 at 10:00 a.m., Eastern Time, at the
Woodcliff Lake Hilton, 200 Tice Boulevard, Woodcliff Lake, New Jersey 07675.
The attached Notice of Special Meeting of Stockholders and Proxy Statement
describe the business to be transacted at the special meeting. Directors and
officers of Hudson City Bancorp will be present at the meeting to respond to
appropriate questions.
The Board of Directors of Hudson City Bancorp has determined that a vote
"FOR" each matter to be considered at the special meeting is in the best
interests of Hudson City Bancorp and its stockholders and unanimously recommends
that you vote "FOR" each of these matters.
Please complete, sign and return the enclosed proxy card promptly whether
or not you plan to attend the special meeting. YOUR VOTE IS IMPORTANT REGARDLESS
OF THE NUMBER OF SHARES YOU OWN. VOTING BY PROXY WILL NOT PREVENT YOU FROM
VOTING IN PERSON AT THE SPECIAL MEETING, BUT WILL ASSURE THAT YOUR VOTE IS
COUNTED IF YOU ARE UNABLE TO ATTEND. IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE
NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER TO ATTEND AND TO VOTE PERSONALLY AT THE SPECIAL MEETING.
EXAMPLES OF SUCH DOCUMENTATION INCLUDE A BROKER'S STATEMENT, LETTER OR OTHER
DOCUMENT CONFIRMING YOUR OWNERSHIP OF SHARES OF HUDSON CITY BANCORP.
On behalf of the Board of Directors and the employees of Hudson City
Bancorp and Hudson City Savings Bank, we thank you for your continued support.
Sincerely yours,
/s/ Leonard S. Gudelski
Leonard S. Gudelski
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
HUDSON CITY BANCORP, INC.
WEST 80 CENTURY ROAD
PARAMUS, NEW JERSEY 07652
(201) 967-1900
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 13, 2000
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Hudson
City Bancorp, Inc. will be held at the Woodcliff Lake Hilton, 200 Tice
Boulevard, Woodcliff Lake, New Jersey 07675, on January 13, 2000, at 10:00 a.m.,
Eastern Time, to consider and vote upon the following matters:
1. Approval of the Hudson City Bancorp, Inc. 2000 Stock Option Plan;
2. Approval of the Hudson City Bancorp, Inc. 2000 Recognition and
Retention Plan; and
3. Authorization of the Board of Directors, in its discretion, to
direct the vote of proxies upon such matters incident to the
conduct of the special meeting as may properly come before the
special meeting, and any adjournment or postponement thereof,
including, without limitation, a motion to adjourn the special
meeting. Please note that at this time we are not aware of any such
business.
In accordance with the Bylaws of Hudson City Bancorp, no business shall be
transacted and no corporate action shall be taken at the special meeting other
than that stated in this Notice of Special Meeting.
The Board of Directors has fixed November 26, 1999 as the record date for
the determination of stockholders entitled to notice of and to vote at the
special meeting and any adjournment or postponement thereof. Only stockholders
of record at the close of business on that date will be entitled to notice of
and to vote at the special meeting and any adjournment or postponement thereof.
A list of stockholders entitled to vote at the special meeting will be available
for inspection at West 80 Century Road, Paramus, New Jersey, for a period of ten
days prior to the special meeting. This list will also be available at the
special meeting.
By Order of the Board of Directors,
/s/ John M. Tassillo
John M. Tassillo
Executive Vice President,
Treasurer and Secretary
Paramus, New Jersey
December 6, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU OWN. THE BOARD
OF DIRECTORS URGES YOU TO SIGN, DATE AND MARK THE ENCLOSED PROXY CARD PROMPTLY
AND RETURN IT IN THE ENCLOSED ENVELOPE. RETURNING THE PROXY CARD WILL NOT
PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE SPECIAL MEETING.
<PAGE> 4
HUDSON CITY BANCORP, INC.
PROXY STATEMENT FOR THE
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 13, 2000
GENERAL INFORMATION
GENERAL
This proxy statement and accompanying proxy card are being furnished to the
stockholders of Hudson City Bancorp, Inc. in connection with the solicitation of
proxies by the Board of Directors of Hudson City Bancorp from holders of the
shares of Hudson City Bancorp's issued and outstanding common stock, par value
$.01 per share, as of the close of business on November 26, 1999, for use at the
special meeting of stockholders of Hudson City Bancorp to be held on January 13,
2000 at the Woodcliff Lake Hilton, 200 Tice Boulevard, Woodcliff Lake, New
Jersey 07675 at 10:00 a.m., Eastern Time and at any adjournment or postponement
thereof. This proxy statement, together with the enclosed proxy card, is first
being mailed to stockholders on or about December 6, 1999.
Hudson City Bancorp, a Delaware corporation, operates as a bank holding
company for its wholly owned subsidiary, Hudson City Savings Bank. As used in
this proxy statement, "we", "us" and "our" refer to Hudson City Bancorp, Inc. or
Hudson City Bancorp, Inc. and its consolidated subsidiaries, depending on the
context. The term "special meeting," as used in this proxy statement, includes
any adjournment or postponement of such meeting.
WHO CAN VOTE
The Board of Directors has fixed the close of business on November 26, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the special meeting. Accordingly, only holders of record of
shares of common stock at the close of business on such date will be entitled to
vote at the special meeting. On November 26, 1999, there were 115,638,300 shares
of common stock issued and outstanding. The presence, in person or by proxy, of
the holders of at least a majority of the total number of outstanding shares of
common stock entitled to vote at the special meeting is necessary to constitute
a quorum at the meeting.
HOW MANY VOTES YOU HAVE
Each holder of shares of common stock outstanding on November 26, 1999 will
be entitled to one vote for each share held of record (other than excess shares,
as defined below) at the special meeting. As provided in Hudson City Bancorp's
certificate of incorporation, record holders of common stock who beneficially
own in excess of 10% of the issued and outstanding shares of common stock,
exclusive of those owned by Hudson City, MHC, are excess shares, and shall be
entitled to cast one-hundredth of one vote per share for each excess share. A
person or entity is deemed to beneficially own shares owned by an affiliate or
associate as well as by persons acting in concert with such person or entity.
Hudson City Bancorp's certificate of incorporation authorizes the Board of
Directors to interpret and apply the provisions of the certificate of
incorporation and bylaws governing excess shares, and to determine on the basis
of information known to them after reasonable inquiry all facts necessary to
ascertain compliance with the certificate of incorporation, including, without
limitation, (1) the number of shares of common stock beneficially owned by any
person or purported owner, (2) whether a person or purported owner is an
affiliate or associate of, or is acting in concert with, any other person or
purported owner and (3) whether a person or purported owner has an agreement,
arrangement or understanding with any person or purported owner as to the voting
or disposition of any shares of common stock.
<PAGE> 5
HOW TO VOTE
All properly executed proxies received by Hudson City Bancorp will be voted
in accordance with the instructions marked on the proxy card. IF YOU RETURN AN
EXECUTED PROXY CARD WITHOUT MARKING YOUR INSTRUCTIONS, YOUR EXECUTED PROXY WILL
BE VOTED FOR THE PROPOSALS IDENTIFIED IN THE NOTICE OF SPECIAL MEETING. In
accordance with the bylaws of Hudson City Bancorp, Hudson City Bancorp will not
transact any business or take any corporate action at the special meeting other
than that stated in the Notice of Special Meeting.
IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME,
YOU WILL NEED APPROPRIATE DOCUMENTATION FROM YOUR STOCKHOLDER OF RECORD TO VOTE
PERSONALLY AT THE SPECIAL MEETING. Examples of such documentation would include
a broker's statement, letter or other document that will confirm your ownership
of shares of Hudson City Bancorp.
VOTE BY HUDSON CITY, MHC
On July 13, 1999, Hudson City Bancorp became the holding company for Hudson
City Savings Bank upon completion of the reorganization and conversion of Hudson
City Savings from mutual to stock form and the acquisition by Hudson City, MHC
of 61,288,300 shares of Hudson City Bancorp which is a majority of Hudson City
Bancorp's common stock. As indicated under "Security Ownership of Certain
Beneficial Owners," Hudson City, MHC owns 61,288,300 shares, or 53% of the
outstanding shares, of common stock of Hudson City Bancorp. All shares of common
stock owned by Hudson City, MHC will be voted in accordance with the
instructions of the Board of Directors of Hudson City MHC, the members of which
are identical to the members of the Board of Directors of Hudson City Bancorp.
Hudson City, MHC is expected to vote such shares "FOR" Proposal 3. While Hudson
City, MHC also intends to vote FOR Proposal 1 and Proposal 2, the adoption of
these proposals require the approval of a majority of the total votes of the
common stock issued and outstanding exclusive of the shares owned by Hudson
City, MHC. Accordingly, any vote by Hudson City, MHC will have no effect upon
the outcome of Proposal 1 or Proposal 2.
VOTE REQUIRED
In order to implement each of Proposal 1 and Proposal 2, the holders of a
majority of the outstanding shares of our common stock that are not held by
Hudson City, MHC must be voted "FOR" each proposal. Under this voting standard,
we must treat an abstention or a failure to vote the same as a vote "AGAINST" a
proposal. Shares for which no vote is cast or which the "ABSTAIN" box has been
selected on the proxy card, including shares held by a broker who submits a
proxy card but fails to cast a vote on Proposal 1 or Proposal 2, will be treated
the same as a vote "AGAINST" each proposal.
In order to implement Proposal 3, we must obtain the affirmative vote of
the holders of a majority of the shares of our common stock represented in
person or by proxy at the special meeting and entitled to vote on the proposal.
Under this voting standard, shares as to which the "ABSTAIN" box has been
selected on the proxy card will count as shares represented and entitled to vote
and will be treated as votes "AGAINST" the proposal. Shares for which no vote is
cast, including shares held by a broker who submits a proxy card but fails to
cast a vote on this proposal, will be treated as shares that are not represented
and will have no effect on the outcome of the vote. Because Hudson City, MHC
owns more than 50% of Hudson City Bancorp's outstanding shares, we expect that
Hudson City, MHC will control the outcome of any vote on Proposal 3.
For a discussion of Hudson City, MHC's effect on the vote, please see "Vote
by Hudson City, MHC" above.
2
<PAGE> 6
REVOCABILITY OF PROXIES
You may revoke your grant of proxy at any time before it is voted by:
- filing a written revocation of the proxy with our Secretary;
- submitting a signed proxy card bearing a later date;
- attending and voting in person at the special meeting, but you also
must file a written revocation with the secretary of the special
meeting prior to the voting.
We are soliciting proxies only for the special meeting. If you grant us a proxy
to vote your shares, the proxy will only be exercised at the special meeting.
SOLICITATION OF PROXIES
Our officers, members of our Board of Directors and employees may solicit
proxies on our behalf by telephone or through other forms of communication. We
will also request persons, firms and corporations holding shares in their names
or in the name of their nominees, which are beneficially owned by others, to
send proxy materials to and obtain proxies from such beneficial owners, and will
reimburse such holders for reasonable expenses incurred in connection therewith.
We have also hired Morrow & Co., Inc. to assist in the solicitation of proxies,
for a fee of $7,500 plus reimbursement of reasonable out-of-pocket expenses. We
will bear all costs of solicitation.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Our directors, officers and employees will be granted stock options under
the Hudson City Bancorp, Inc. 2000 Stock Option Plan being presented for
stockholder approval in Proposal 1, if our stockholders approve Proposal 1. Our
directors, officers and employees will be awarded restricted stock under the
Hudson City Bancorp, Inc. 2000 Recognition and Retention Plan being presented
for stockholder approval in Proposal 2, if our stockholders approve Proposal 2.
As a result, our directors, officers and employees have a personal interest in
the outcome of the vote on Proposals 1 and 2.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of October 31, 1999, certain information
as to common stock beneficially owned by persons owning in excess of 5% of the
outstanding shares of our common stock. We know of no person, except as listed
below, who beneficially owned more than 5% of the outstanding shares of our
common stock as of October 31, 1999. Except as otherwise indicated, the
information provided in the following table was obtained from filings with the
Securities and Exchange Commission and with Hudson City Bancorp pursuant to the
Securities Exchange Act of 1934, as amended. Addresses provided are those listed
in the filings as the address of the person authorized to receive notices and
communications. For purposes of the table below and the table set forth under
"Security Ownership of Management," in accordance with Rule 13d-3 under the
Exchange Act, a person is deemed to be the beneficial owner, for purposes of
this table, of any shares of common stock (1) over which he has or shares,
directly or indirectly, voting or investment power, or (2) of which he has the
right to acquire beneficial ownership at any time within 60 days after October
31, 1999. As used herein, "voting power" is the power to vote or direct the
voting of shares and "investment power" includes the power to dispose or direct
the disposition of shares.
3
<PAGE> 7
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT
- ------------------------------------ -------------------- -------
<S> <C> <C>
Hudson City, MHC........................... 61,288,300 53.00%
West 80 Century Road
Paramus, NJ 07652
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information about the shares of common stock
beneficially owned by each director of Hudson City Bancorp, by each named
executive officer of Hudson City Bancorp identified in the Summary Compensation
Table included elsewhere herein, and all directors and executive officers of
Hudson City Bancorp or Hudson City Bancorp's wholly owned subsidiary, Hudson
City Savings, as a group as of October 31, 1999. Except as otherwise indicated,
each person and each group shown in the table has sole voting and investment
power with respect to the shares of common stock indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
POSITION WITH OF BENEFICIAL COMMON STOCK
NAME THE COMPANY OWNERSHIP(1)(2)(3) OUTSTANDING
- ---- ------------- ------------------ ------------
<S> <C> <C> <C>
Leonard S. Gudelski.......... Director, Chairman of the 120,584(4) *
Board and Chief Executive
Officer
Ronald E. Hermance, Jr. ..... Director, President and 57,762(5) *
Chief Operating Officer
Verne S. Atwater............. Director 5,000 *
John D. Birchby.............. Director 688,000(6) *
Kenneth L. Birchby........... Director 100,000(7) *
Victoria H. Bruni............ Director 5,000 *
William J. Cosgrove.......... Director 10,000 *
Andrew J. Egner, Jr.......... Director 40,000(8) *
John W. Klie................. Director 10,000(9) *
Donald O. Quest.............. Director 20,500(10) *
Arthur V. Wynne, Jr.......... Director 103,350(11) *
John M. Tassillo............. Executive Vice President, 31,011 *
Treasurer and Secretary
James C. Kranz............... First Vice President and 23,209 *
Investment Officer of
Hudson City Savings
Michael B. Lee............... First Vice President and 11,968(12) *
Secretary of Hudson City
Savings
All directors and executive
officers as a group (16
persons)................... 2,407,338 2.1%
</TABLE>
- -------------------------
* Less than one percent
(footnotes on following page)
4
<PAGE> 8
(1) See "Principal Stockholders of the Company" for a definition of "beneficial
ownership." All persons shown in the above table have sole voting and
investment power, except as otherwise indicated.
(2) The figures shown include the following shares that have been allocated as
of September 30, 1999 to individual accounts of participants in Hudson City
Bancorp, Inc. Employee Stock Ownership Plan: Mr. Gudelski, 583 shares; Mr.
Hermance, 583 shares; Mr. Tassillo, 583 shares; Mr. Kranz, 583 shares; Mr.
Lee, 416 and all directors and executive officers as a group, 3,558 shares.
Such persons have voting power (subject to the legal duties of the ESOP
Trustee) but no investment power, except in limited circumstances, as to
such shares. The figures shown for Messrs. Gudelski, Hermance, Tassillo,
Kranz and Lee do not include 1,130,033 shares held in trust pursuant to the
ESOP that have not been allocated as of October 31, 1999 to any
individual's account and as to which Messrs. Gudelski, Hermance, Tassillo,
Kranz and Lee share voting power with other ESOP participants. The figure
shown for all directors and executive officers as a group includes such
1,130,033 shares as to which the members of Hudson City Bancorp's
Compensation Committee (consisting of Messrs. Cosgrove and Quest and Ms.
Bruni) may be deemed to have sole investment power, except in limited
circumstances, thereby causing each such committee member to be deemed a
beneficial owner of such shares. Each of the members of the Compensation
Committee disclaims beneficial ownership of such shares and, accordingly,
such shares are not attributed to the members of the Compensation Committee
individually. See "Compensation of Directors and
Officers -- Benefits -- Employee Stock Ownership Plan and Trust."
(3) The figures shown include the following shares held as of September 30,
1999 in individual accounts of participants in the Profit Incentive Bonus
Plan of Hudson City Savings Bank: Mr. Gudelski, 0 shares; Mr. Hermance,
49,209 shares; Mr. Tassillo, 27,927 shares; Mr. Kranz 12,625 shares; Mr.
Lee 10,351 shares; and all directors and executive officers as a group,
133,646 shares. Such persons have sole voting power and sole investment
power as to such shares. See "Compensation of Directors and Executive
Officers -- Benefits -- Profit Incentive Bonus Plan."
(4) Includes 60,000 shares as to which Mr. Gudelski may be deemed to share
voting and investment power.
(5) Includes 7,500 shares as to which Mr. Hermance may be deemed to share
voting and investment power.
(6) Includes 328,040 shares as to which Mr. Birchby may be deemed to share
voting and investment power. Also includes 75,000 shares as to which Mr.
Birchby holds as custodian for his minor son and has sole voting and
investment power.
(7) Includes 50,000 shares as to which Mr. Birchby may be deemed to share
voting and investment power.
(8) Includes 20,000 shares as to which Mr. Egner may be deemed to share voting
and investment power.
(9) Includes 7,500 shares as to which Mr. Klie may be deemed to share voting
and investment power.
(10) Includes 8,500 shares as to which Dr. Quest may be deemed to share voting
and investment power.
(11) Includes 50,000 shares as to which Mr. Wynne may be deemed to share voting
and investment power.
(12) Includes 1,200 shares as to which Mr. Lee may be deemed to share voting and
investment power.
5
<PAGE> 9
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS' COMPENSATION
Fee Arrangements. To date, Hudson City Savings has compensated its
directors and executive officers for their services. Hudson City Bancorp does
not pay any additional compensation. We expect to continue this practice until
we have a business reason to establish separate compensation programs. Until
then we expect Hudson City Bancorp to reimburse Hudson City Savings for a part
of the compensation paid to each director and executive officer that is
proportionate to the amount of time which he or she devotes to performing
services for Hudson City Bancorp. Hudson City Savings pays a fee to each of its
non-management directors for attendance at each board meeting of Hudson City
Bancorp or Hudson City Savings and each meeting of a committee of which they are
members. A single fee is paid when Hudson City Bancorp and Hudson City Savings
hold joint board meetings. The following table sets forth the meeting fees in
effect for 1999:
<TABLE>
<CAPTION>
POSITION 1999
-------- ------
<S> <C> <C>
Board of Hudson City Bancorp and Hudson City Savings... Member $3,000
Executive Committee of Hudson City Bancorp and Hudson
City Savings......................................... Member 540
Audit Committee of Hudson City Bancorp and Hudson City
Savings.............................................. Member 490
Chair 555
Compensation Committee of Hudson City Bancorp.......... Member 800
Chair 860
Human Resources Committee of Hudson City Savings....... Member 800
Chair 860
Asset Management Committee of Hudson City Savings...... Member 800
Chair 860
Nominating Committee of Hudson City Bancorp and Hudson
City Savings......................................... Member 800
Chair 860
</TABLE>
Outside Directors Consultation Plan. This plan provides continued
compensation following termination of service as a director to eligible outside
directors who agree to serve as consultants to Hudson City Savings. A director
is eligible if he or she retires after attaining age 65 and completing 10 years
of service as an outside director. The monthly consulting fee is equal to 5% of
the fee for attendance at a meeting of the Board of Directors in effect at the
date of termination of service as a director multiplied by the number of full
years of service as an outside director, to a maximum of 20 years. A director's
consulting arrangement will continue for 120 months or until an earlier date
when the director withdraws from the performance of consulting services. If a
change of control occurs, this plan will terminate and all of its obligations
will be settled by lump sum payment. In computing these lump sums, each
non-employee director will be presumed to have attained age 65 and completed 20
years of service.
Agreements for the Deferral of Directors Fees. These allow the deferral of
fees for service on the Board of Directors and its committees. Deferred amounts
bear interest, credited quarterly, at the highest interest rate which Hudson
City Savings paid to its customers on savings and time deposits during the
quarter. Hudson City Savings pays the deferred amounts plus accrued interest
following the director's termination of service. These benefits are general,
unsecured obligations of Hudson City Savings and are not separately funded.
6
<PAGE> 10
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table provides information about
the compensation paid for services rendered in all capacities for 1998 to our
Chief Executive Officer and to the four other most highly compensated executive
officers whose total annual salary and bonus for 1998 was at least $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- ---------------------------------
OTHER ANNUAL LTIP PAYOUTS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)(2) ($)(3) COMPENSATION($)(4)
- --------------------------- ---- --------- ----------- ------------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Leonard S. Gudelski....... 1998 754,770 286,435 -- 1,248,912 68,165
Chairman and Chief
Executive Officer
Ronald E. Hermance, Jr.... 1998 305,308 104,555 -- 425,796 23,438
President and Chief
Operating Officer
John M. Tassillo.......... 1998 203,231 61,462 -- 237,048 13,444
Executive Vice President
and Treasurer
James Kranz............... 1998 155,293 7,775 -- 111,258 8,439
First Vice President and
Investment Officer
Michael B. Lee............ 1998 109,908 5,420 -- 78,078 6,123
First Vice President and
Secretary
</TABLE>
- -------------------------
(1) Includes the following employer contributions to the Hudson City Savings
Bank Profit Incentive Bonus Plan, a tax-qualified profit-sharing plan, which
the executive officer could have elected to receive in cash: Mr. Gudelski,
$8,000; Mr. Hermance, $8,000; Mr. Tassillo, $8,000; Mr. Kranz, $7,775; and
Mr. Lee, $5,420. Also includes the following bonuses under the Hudson City
Savings Bank Annual Incentive Plan, a non-qualified performance-based
compensation plan, earned for 1998 and paid in 1999: Mr. Gudelski, $278,435;
Mr. Hermance, $96,555; and Mr. Tassillo, $53,462.
(2) Hudson City Savings provides its executive officers with certain non-cash
benefits and perquisites, such as the use of employer-owned or leased
automobiles. Management of Hudson City Savings believes that the aggregate
value of these benefits for 1998 did not, in the case of any executive
officer, exceed $50,000 or 10% of the aggregate salary and annual bonus
reported for him in the Summary Compensation Table.
(3) Represents amounts payable in 1999 under the Hudson City Savings Bank
Long-Term Incentive Plan, a non-qualified performance-based compensation
plan, based on achievement of performance goals established for the
three-year period ended December 31, 1998. This plan has been administered
so that payments have been made once every three years. Includes amounts
which may have been deferred by the executive officer pursuant to an
individual non-qualified deferred compensation arrangement.
(4) Includes the following components: (1) employer contributions to the Hudson
City Savings Bank Profit Incentive Bonus Plan which the executive officer
could not elect to receive in cash -- Mr. Gudelski, $8,000; Mr. Hermance,
$8,000; Mr. Tassillo, $8,000; Mr. Kranz, $7,775; and Mr. Lee, $5,420; (2)
amounts accrued under the Hudson City Savings Bank Supplemental Savings
Plan, a non-qualified deferred compensation plan -- Mr. Gudelski, $58,400;
Mr. Hermance, $14,100; and Mr. Tassillo, $4,000; and (3) the premium cost
for life insurance coverage under the Hudson City Savings Bank Supplemental
Death Benefit Plan for Senior Officers -- Mr. Gudelski, $1,765; Mr.
Hermance, $1,338; Mr. Tassillo, $1,444; Mr. Kranz, $664; and Mr. Lee, $703.
7
<PAGE> 11
EMPLOYMENT AGREEMENTS
Hudson City Bancorp and Hudson City Savings have jointly entered into
employment agreements with Messrs. Gudelski, Hermance and Tassillo to secure
their services as officers. The employment agreements became effective on July
13, 1999. They have rolling three-year terms which may convert into fixed
three-year terms upon a decision of the executive or joint decision of Hudson
City Bancorp and Hudson City Savings. These agreements provide for minimum
annual salaries of $784,000, $317,000 and $212,000, respectively, discretionary
cash bonuses, and participation on generally applicable terms and conditions in
other compensation and fringe benefit plans (including cash incentive
compensation under the existing Annual Incentive Plan and Long-Term Incentive
Plan, to the extent that Hudson City Savings continues those plans in the
future). They also guarantee customary corporate indemnification and errors and
omissions insurance coverage throughout the employment term and for six years
after termination of employment.
Hudson City Bancorp and Hudson City Savings may discharge each executive
and each executive may resign, at any time with or without cause. However, in
the event of discharge without cause, Hudson City Bancorp and Hudson City
Savings will owe the executive severance benefits generally equal to the value
of the cash compensation and fringe benefits that the executive would have
received if he had continued working for an additional three years. The same
severance benefits would be payable if the executive resigns during the term
following: a loss of title, office or membership on the Board of Directors;
material reduction in duties, functions or responsibilities; involuntary
relocation of the executive's principal place of employment to a location over
25 miles in distance from Hudson City Savings' principal office in Paramus, New
Jersey and over 25 miles from the executive's principal residence; or other
material breach of contract by Hudson City Bancorp or Hudson City Savings which
is not cured within 30 days. For 60 days after a change of control, each
executive may resign for any reason and collect severance benefits as if he had
been discharged without cause. The employment agreements also provide certain
uninsured death and disability benefits.
If Hudson City Bancorp or Hudson City Savings experiences a change in
ownership, a change in effective ownership or control or a change in the
ownership of a substantial portion of its assets as contemplated by section 280G
of the Internal Revenue Code, a portion of any severance payments under the
employment agreements might constitute an "excess parachute payment" under
current federal tax laws. Federal tax laws impose a 20% excise tax, payable by
the executive, on excess parachute payments. Under the employment agreements,
Hudson City Bancorp would reimburse the executive for the amount of this excise
tax and would make an additional gross-up payment so that, after payment of the
excise tax and all income and excise taxes imposed on the reimbursement and
gross-up payments, the executive would retain approximately the same net-after
tax amounts under the employment agreement that he would have retained if there
was no 20% excise tax. The effect of this provision is that Hudson City Bancorp,
rather than the executive, bears the financial cost of the excise tax. Neither
Hudson City Savings nor Hudson City Bancorp could claim a federal income tax
deduction for an excess parachute payment, excise tax reimbursement payment or
gross-up payment.
CHANGE OF CONTROL AGREEMENTS
Hudson City Bancorp and Hudson City Savings have jointly entered into
two-year change of control agreements with Messrs. Corridon, Kranz, Laird and
Lee. The term of these agreements is perpetual until Hudson City Savings gives
notice of non-extension, at which time the term is fixed for two years.
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<PAGE> 12
Generally, Hudson City Savings may terminate the employment of any officer
covered by these agreements, with or without cause, at any time prior to a
change of control without obligation for severance benefits. However, if Hudson
City Bancorp or Hudson City Savings signs a merger or other business combination
agreement, or if a third party makes a tender offer or initiates a proxy
contest, Hudson City Savings could not terminate an officer's employment without
cause without liability for severance benefits. The severance benefits would
generally be equal to the value of the cash compensation and fringe benefits
that the officer would have received if he or she had continued working for an
additional two years. Hudson City Savings would pay the same severance benefits
if the officer resigns after a change of control following a loss of title,
office or membership on the Board of Directors, material reduction in duties,
functions or responsibilities, involuntary relocation of his or her principal
place of employment to a location over 25 miles from Hudson City Savings'
principal office on the day before the change of control and over 25 miles from
the officer's principal residence or other material breach of contract which is
not cured within 30 days. These agreements also provide certain uninsured death
and disability benefits.
If Hudson City Savings or Hudson City Bancorp experiences a change in
ownership, a change in effective ownership or control or a change in the
ownership of a substantial portion of their assets as contemplated by section
280G of the Internal Revenue Code, a portion of any severance payments under the
change of control agreements might constitute an "excess parachute payment"
under current federal tax laws. Any excess parachute payment would be subject to
a federal excise tax payable by the officer and would be non-deductible by
Hudson City Savings and Hudson City Bancorp for federal income tax purposes. The
change of control agreements do not provide a tax indemnity.
Similar change of control agreements providing severance benefits equal to
one year's compensation and benefits are in effect for the 31 Vice Presidents of
Hudson City Savings.
BENEFIT PLANS
Annual Incentive Plan. This plan provides an opportunity for officers with
titles of Senior Vice President and above to earn cash bonuses each year.
Currently only Messrs. Gudelski, Hermance and Tassillo are eligible for this
plan. The bonuses are a percentage of each officer's annual rate of base salary.
The percentage varies based on the officer's position and Hudson City Savings'
net operating income (before taxes and extraordinary items, but after interest
expense) relative to a target which the Board of Directors establishes during
the first quarter of the year. Hudson City Savings typically pays these bonuses
shortly after the end of the year, but payment may be deferred to a later date
at the election of the participant. Deferred amounts bear interest at prescribed
rates. Deferred amounts plus accrued interest are general, unsecured obligations
of Hudson City Savings and are not separately funded.
Long-Term Incentive Plan. This plan permits employees selected by the
Human Resources Committee of Hudson City Savings to earn additional cash bonuses
based on achievement of performance goals set for periods longer than one year.
Under this plan, the Human Resources Committee grants participation units to
selected employees. Each unit represents a dollar amount that will be paid at
the end of a three-year performance period if specified performance targets are
met. The Human Resources Committee may also establish lower unit values for
performance that exceeds a minimum threshold but is below the target and higher
unit values for performance that exceeds the target. In 1999, Hudson City
Savings made payments for units granted for the three-year period beginning
January 1, 1996 and ending December 31, 1998. Hudson City Savings' performance
relative to target levels of asset growth and return on assets for this period
determined the value of these units. This plan has been administered so that
payments have been made only once every three years.
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<PAGE> 13
Generally, participants must remain employed through the end of the
relevant performance period to receive payment for units. There are exceptions
for death, disability or retirement during the performance period. In addition,
in the event of a change of control, the terms of the plan abbreviate the
performance period for any outstanding units and provide for pro-rated payments
based on performance to the date of the change of control.
Pension Plans. The Hudson City Savings Bank Employees' Retirement Plan is
a tax-qualified plan that covers substantially all salaried employees who are
age 21 and have at least one year of service. The Supplemental Executive
Retirement Plan covers selected executive officers and currently covers Messrs.
Gudelski, Hermance and Tassillo. The following table shows the estimated
aggregate benefits payable under the Employees' Retirement Plan and the
Supplemental Executive Retirement Plan upon retirement at age 65 in 1998 with
various years of service and average final compensation combinations.
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------
AVERAGE FINAL COMPENSATION(1) 15 20 25 30 35(2)
- ----------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 100,000.............................. $ 30,000 $ 40,000 $ 50,000 $ 60,000 $ 60,000
125,000.............................. 37,500 50,000 62,500 75,000 75,000
150,000.............................. 45,000 60,000 75,000 90,000 90,000
160,000.............................. 48,000 64,000 80,000 96,000 96,000
175,000.............................. 52,500 70,000 87,500 105,000 105,000
200,000.............................. 60,000 80,000 100,000 120,000 120,000
300,000.............................. 90,000 120,000 150,000 180,000 180,000
400,000.............................. 120,000 160,000 200,000 240,000 240,000
500,000.............................. 150,000 200,000 250,000 300,000 300,000
750,000.............................. 225,000 300,000 375,000 450,000 450,000
1,000,000.............................. 300,000 400,000 500,000 600,000 600,000
</TABLE>
- -------------------------
(1) Average final compensation is average base salary, as reported in the
"Salary" column of the Summary Compensation Table, for the highest three
consecutive years during the final 10 years of employment. Tax laws impose a
limit ($160,000 for individuals retiring in 1998) on the average final
compensation that may be counted in computing benefits under the Employees'
Retirement Plan. The Employees' Retirement Plan may also pay benefits
accrued as of January 1, 1994 based on tax law limits then in effect. Tax
laws impose a limit ($130,000 for individuals retiring in 1998) on the
annual benefit that the Employees' Retirement Plan may pay. For Messrs.
Gudelski, Hermance and Tassillo, benefits based on average final
compensation in excess of this limit are payable by the Supplemental
Executive Retirement Plan.
(2) The Employees' Retirement Plan and the Supplemental Executive Retirement
Plan do not count service in excess of 30 years in the benefit formula.
The benefits shown in the preceding table are annual benefits payable in
the form of a single life annuity and are not subject to any deduction for
Social Security benefits or other offset amounts. At December 31, 1998, the
average final compensation and estimated years of service of the executive
officers named in the Summary Compensation Table were: Mr. Gudelski: $708,923,
29 years of service; Mr. Hermance: $282,321, 10 years of service; Mr. Tassillo,
$188,417, 29 years of service; Mr. Kranz: $147,317, 15 years of service; and Mr.
Lee: $103,424, 27 years of service.
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<PAGE> 14
Savings Plans. The Profit Incentive Bonus Plan of Hudson City Savings Bank
is a tax-qualified defined contribution plan for substantially all salaried
employees who have attained age 21 and have at least one year of service. Hudson
City Savings had made contributions to this plan equal to 10% of each eligible
employee's base salary. Participants may choose to receive up to 50% of this
contribution currently in cash. The plan holds the balance on a tax deferred
basis. Because it adopted the Employee Stock Ownership Plan in connection with
the reorganization, Hudson City Savings reduced its contributions to the Profit
Incentive Bonus Plan to 5% of base salary paid after March 31, 1999, with a cash
election available for the full amount of the reduced contribution.
This plan has an individual account for each participant's contributions
and allows each participant to direct the investment of his or her account. One
permitted investment is our common stock. Participants will direct the voting of
shares purchased for their plan accounts.
The Supplementary Savings Plan of Hudson City Savings Bank is a
non-qualified plan that provides additional benefits to certain participants
whose benefits under the Profit Incentive Bonus Plan are limited by tax law
limitations applicable to tax-qualified plans.
Employee Stock Ownership Plan. This plan is a tax-qualified plan that
covers substantially all salaried employees who have at least one year of
service and have attained age 21. It was adopted in connection with the
reorganization.
Hudson City Bancorp has committed to lend the plan enough money to purchase
4,348,000 of the shares issued to investors other than Hudson City, MHC (or
3.76% of the total number of shares issued in the reorganization). The plan has
purchased 1,217,500 shares as of October 31, 1999.
Although contributions to this plan will be discretionary, Hudson City
Savings intends to contribute enough money each year to make the required
principal and interest payments on the loan from Hudson City Bancorp. The loan
is for a term of 30 years and calls for level annual payments of principal and
interest. The plan has pledged the shares it purchases as collateral for the
loan and holds them in a suspense account.
The plan released 72,467 of the pledged shares on September 30, 1999. We
expect that 144,933 of the shares will be released annually in years 2000
through 2028, and that the remaining shares will be released in 2029. The plan
will allocate the shares released each year among the accounts of participants
in proportion to their base salary for the year. For example, if a participant's
base salary for a year represents 1% of the total base salaries of all
participants for the year, the plan would allocate to that participant 1% of the
shares released for the year. Participants direct the voting of shares allocated
to their accounts. Shares in the suspense account will usually be voted in a way
that mirrors the votes which participants cast for shares in their individual
accounts.
This plan may purchase additional shares in the future, and may do so using
borrowed funds, cash dividends, periodic employer contributions or other cash
flow.
ESOP Restoration Plan. The ESOP Restoration Plan of Hudson City Savings
Bank is a non-qualified plan that provides supplemental benefits to certain
executives who are prevented from receiving the full benefits contemplated by
the Employee Stock Ownership Plan's benefit formula. The supplemental payments
consist of payments representing shares that cannot be allocated to participants
under the Employee Stock Ownership Plan due to the legal limitations imposed on
tax-qualified plans and, in the case of certain participants who retire before
the repayment in full of the Employee Stock Ownership Plan's stock purchase
loan, payments representing the shares that would have been allocated if
employment had continued through the full term of the loan.
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<PAGE> 15
Post-Retirement Death Benefit for Senior Officers. Hudson City Savings has
entered into approximately 89 post-retirement death benefit agreements with
officers at the assistant vice president level and higher. These agreements
provide a death benefit to each officer's beneficiary if the officer's
employment continues until retirement and he or she dies after retirement. The
amount of the death benefit ranges from $25,000 for assistant vice presidents to
$50,000 for the President or the Chairman. To finance this benefit, Hudson City
Savings has purchased whole life insurance policies on the lives of these
officers. This death benefit is in addition to the benefits provided under the
group life insurance plan generally applicable to all employees.
Stock Option Plan. The Board of Directors of Hudson City Savings has
adopted the Hudson City Bancorp, Inc. 2000 Stock Option Plan. This plan is
subject to the approval of the stockholders at the special meeting. See
"Proposal 1 -- Stock Option Plan."
Recognition and Retention Plan. The Board of Directors of Hudson City
Savings has adopted the Hudson City Bancorp, Inc. 2000 Recognition and Retention
Plan. This plan is subject to the approval of the stockholders at the special
meeting. See "Proposal 2 -- Recognition and Retention Plan."
LIMITATIONS ON FEDERAL TAX DEDUCTIONS FOR EXECUTIVE OFFICER COMPENSATION
As a private entity, Hudson City Savings has been subject to federal tax
rules which permit it to claim a federal income tax deduction for a reasonable
allowance for salaries or other compensation for personal services actually
rendered. Because Hudson City Savings is now a subsidiary of a public company,
federal tax laws may limit this deduction in future years to $1 million each tax
year for each executive officer named in the summary compensation table in
Hudson City Bancorp's proxy statement for that year. This limit will not apply
to non-taxable compensation under various broad-based retirement and fringe
benefit plans, to compensation that is "qualified performance-based
compensation" under applicable law or to compensation that is paid in
satisfaction of commitments that arose before the reorganization. Hudson City
Bancorp expects that the Compensation Committee will take this deduction
limitation into account with other relevant factors in establishing the
compensation levels of their executive officers and in setting the terms of
compensation programs. However, there is no assurance that all compensation paid
to our executive officers will be deductible for federal income tax purposes. To
the extent that compensation paid to any executive officer is not deductible,
the net after-tax cost of providing the compensation will be higher and the net
after-tax earnings of Hudson City Bancorp and Hudson City Savings will be
reduced.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1998, the Compensation Committee
consisted of Ms. Bruni, Mr. Cosgrove and Dr. Quest. There were no interlocks, as
defined under the rules and regulations of the SEC, between members of the
Compensation Committee or executive officers of Hudson City Bancorp and
corporations with respect to which such persons are affiliated, or otherwise.
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<PAGE> 16
- --------------------------------------------------------------------------------
PROPOSAL 1
STOCK OPTION PLAN
- --------------------------------------------------------------------------------
Our Board of Directors has adopted the Hudson City Bancorp, Inc. 2000 Stock
Option Plan, subject to approval by the holders of majority of our outstanding
shares of common stock that are not owned by Hudson City, MHC. We have provided
below a summary of our reasons for adopting this plan and seeking the approval
of our stockholders. The following summary is qualified in its entirety by the
full text of the plan document. The plan document is included at the end of this
proxy statement in Appendix A and is incorporated by reference into this
proposal.
WHY WE ARE ASKING FOR STOCKHOLDER APPROVAL
We are asking our stockholders to approve the Hudson City Bancorp, Inc.
2000 Stock Option Plan so that we will be able to grant stock options to our
directors and officers. Most of the companies with which we compete for
directors and management-level employees are public companies that offer stock
options as part of their director and officer compensation packages. By
approving this plan, our stockholders will enable us to offer a more competitive
compensation package in attracting and retaining highly qualified directors and
officers. In addition, the value of the stock options that we would grant under
this plan relates directly to the market price of our common stock. Adding stock
options to our compensation package would link the financial interests of our
directors and officers with the financial interest of our stockholders.
IF WE DO NOT RECEIVE STOCKHOLDER APPROVAL, WE WILL NOT IMPLEMENT THE PLAN
Applicable federal banking regulations did not permit us to implement a
stock option plan during the first six months after the completion of Hudson
City Savings' stock conversion and our initial public offering. These
regulations permit us to implement a stock option plan after six months and
before the first anniversary of these events only if we obtain the approval of
the holders a majority of our shares of common stock that are not owned by
Hudson City, MHC. If we do not receive this approval, it will not be possible
for us to grant stock options. In this event, we expect that our Board of
Directors will consider substituting other forms of compensation to assure that
our compensation packages for officers and directors are competitive with those
of other publicly traded financial services companies in the New York
metropolitan area.
PURPOSE OF THE OPTION PLAN
The purpose of the option plan is to promote the growth and profitability
Hudson City Bancorp, to provide certain key officers, employees and directors of
Hudson City Bancorp and its affiliates with an incentive to achieve corporate
objectives, to attract and retain individuals of outstanding competence and to
provide such individuals with an equity interest in Hudson City Bancorp.
DESCRIPTION OF THE OPTION PLAN
Administration. A committee of outside directors administers this plan.
Its members are the members of the Compensation Committee of our Board of
Directors who are "disinterested directors" under the federal tax and securities
laws. In general, disinterested directors are directors who (1) are not, and
never were, officers or employees of Hudson City Bancorp or Hudson City Savings;
and (2) do not receive material compensation from Hudson City Bancorp or Hudson
City Savings except for service as a director. The administrative committee must
have at least two members and has broad discretionary powers.
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<PAGE> 17
Stock Subject to the Option Plan. Hudson City Bancorp has reserved
5,435,000 shares of common stock of Hudson City Bancorp for issuance upon the
exercise of options under the plan. Such shares may be authorized and unissued
shares or shares previously issued that Hudson City Bancorp has reacquired. Any
shares subject to grants under the option plan which expire or are terminated,
forfeited or canceled without having been exercised or vested in full, shall be
available for new option grants. As of October 31, 1999, the aggregate fair
market value of the shares reserved for issuance under the plan was $72,353,438,
based on the latest closing sales price per share of common stock of $13.3125 on
The Nasdaq Stock Market.
Eligibility. An administrative committee of Hudson City Bancorp selects
the people who receive stock option grants. Any employee of Hudson City Bancorp,
Hudson City Savings or any affiliate approved by the Board of Directors may be
selected to receive option grants. As of October 31, 1999, there were 154
employees selected by the committee as eligible to receive option grants.
Directors of Hudson City Bancorp, Hudson City Savings or any affiliate approved
by the Board of Directors who are not also employees or officers may be selected
by the committee to receive option grants. As of October 31, 1999, there were 9
such directors selected by the committee to receive option grants.
Terms and Conditions of Options. The administrative committee sets the
terms and conditions of the stock options that it grants. In setting terms and
conditions, it must observe the following restrictions:
- It may not grant options to purchase more than 1,358,750 shares to any
one employee. In addition, it may not grant options to purchase more than
271,750 shares of our common stock to any one non-employee director or
options to purchase more than 1,630,500 shares of our common stock to all
outside directors in the aggregate.
- It may not grant a stock option with a purchase price that is less than
the fair market value of a share of our common stock on the date it
grants the stock option.
- It may not grant a stock option with a term that is longer than 10 years.
- It may not grant options that become exercisable more rapidly than at the
rate of 20% per year measured from the date we receive stockholder
approval for the plan, with acceleration permitted only in cases of death
or disability.
- It may not grant stock options with an effective date that is before the
date that we receive stockholder approval for the plan.
The committee may grant incentive stock options that qualify for special federal
income tax treatment or non-qualified stock options that do not qualify for
special federal income tax treatment. Incentive stock options are subject to
certain additional restrictions under the Internal Revenue Code and the plan.
Upon the exercise of an option, the exercise price of the option must be
paid in full. Payment may be made in cash, common stock of Hudson City Bancorp
already owned by the option holder, shares to be acquired by the option holder
upon exercise of the option, or in such other consideration as the
administrative committee authorizes. Options may be transferred prior to
exercise only to certain family members, certain non-profit organizations, and
on death of the option holder.
Mergers and Reorganizations; Adjustments for Extraordinary Dividends. The
number of shares available under the plan, the maximum limits on option grants
to individual officers and directors and to non-employee directors in the
aggregate, and the number of shares subject to outstanding options will be
adjusted to reflect any merger, consolidation or business reorganization in
which Hudson City Bancorp is the surviving entity, and to reflect any stock
split, stock dividend or other event generally affecting the number of shares.
If a merger, consolidation or other business
14
<PAGE> 18
reorganization occurs and Hudson City Bancorp is not the surviving entity,
outstanding options may be canceled upon 30 days' written notice to the option
holder so long as the option holder receives payment determined by Hudson City
Bancorp's Board of Directors to be of a value equivalent to the value of the
canceled options.
TERMINATION OR AMENDMENT OF THE OPTION PLAN
This plan will be in effect for a ten-year period that will begin on the
date of stockholder approval and will end on the tenth anniversary of the date
of stockholder approval. The Board of Directors of Hudson City Bancorp may
suspend or terminate the plan before then. It may also amend this plan in whole
or in part at any time. However, to the extent required to comply with section
162(m) of the Code, no revision or amendment will be effective if it amends a
material term of the plan, unless approved by a majority of votes cast on a
proposal to approve such an amendment or revision.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended to be a summary and is not a
comprehensive description of the federal tax laws, regulations and policies
affecting Hudson City Bancorp and recipients of stock option grants under the
plan. Any descriptions of the provisions of any law, regulation or policy are
qualified in their entirety by reference to the particular law, regulation or
policy. Any change in applicable law or regulation or in the policies of various
taxing authorities may have a significant effect on this summary. The plan is
not a qualified plan under section 401(a) of the Internal Revenue Code.
Federal Tax Consequences for Option Recipients. Incentive stock options
will not create federal income tax consequences when they are granted. If they
are exercised during employment or within three months after termination of
employment, the exercise will not create federal income tax consequences either.
When the shares acquired on exercise of an incentive stock option are sold, the
seller must pay federal income taxes on the amount by which the sales price
exceeds the purchase price. This amount will be taxed at capital gains rates if
the sale occurs at least two years after the option was granted and at least one
year after the option was exercised. Otherwise, it is taxed as ordinary income.
Incentive stock options that are exercised more than one year after
termination of employment due to death or disability or three months after
termination of employment for other reasons are treated as non-qualified stock
options. Non-qualified stock options will not create federal income tax
consequences when they are granted. When they are exercised, federal income
taxes at ordinary income tax rates must be paid on the amount by which the fair
market value of the shares acquired by exercising the option exceeds the
exercise price. When an option holder sells shares acquired by exercising a
non-qualified stock option, he or she must pay federal income taxes on the
amount by which the sales price exceeds the purchase price plus the amount
included in ordinary income at option exercise. This amount will be taxed at
capital gains rates, which will vary depending upon the time that has elapsed
since the exercise of the option. A cash payment, if directed by the
administrative committee on a merger or other reorganization under the plan's
change of control provisions, is taxed as if it were the exercise of a
non-qualified stock option followed immediately by a resale of the stock
acquired by exercising the option.
Federal Tax Consequences for Hudson City Bancorp. When a non-qualified
stock option is exercised, Hudson City Bancorp may be allowed a federal income
tax deduction for the same amount that the option holder includes in his or her
ordinary income. When an incentive stock option is exercised, there is no tax
deduction unless the shares acquired are resold sooner than two years after the
option was granted or one year after the option was exercised. A cash payment
under the plan's change of control provisions is deductible as if it were the
exercise of a non-qualified stock option. The Internal Revenue Code places an
annual limit of $1 million each on the tax deduction which we
15
<PAGE> 19
may claim in any fiscal year for the compensation of our Chief Executive Officer
and for the compensation of our four next most highly compensated executive
officers whose salary and bonus for the fiscal year in question equals or
exceeds $100,000. There is an exception to this limit for so-called "qualified
performance-based compensation". We have designed this plan with the intention
that the stock options that we grant will constitute qualified performance-based
compensation. As a result, we do not believe that this limit will impair our
ability to claim federal income tax deductions that are otherwise available when
an option holder exercises a non-qualified stock option.
The preceding statements summarize the general principles of current
federal income tax law applicable to options that may be granted under the plan.
State and local tax consequences may also be significant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE HUDSON CITY BANCORP, INC. 2000 STOCK OPTION PLAN.
16
<PAGE> 20
- --------------------------------------------------------------------------------
PROPOSAL 2
RECOGNITION AND RETENTION PLAN
- --------------------------------------------------------------------------------
Our Board of Directors has adopted the Hudson City Bancorp, Inc. 2000
Recognition and Retention Plan, subject to approval by the holders of majority
of our outstanding shares of common stock that are not owned by Hudson City,
MHC. We have provided below a summary of our reasons for adopting this plan and
seeking the approval of our stockholders. The following summary is qualified in
its entirety by the full text of the plan document. The plan document is
included at the end of this proxy statement in Appendix B and is incorporated by
reference into this proposal.
WHY WE ARE ASKING FOR STOCKHOLDER APPROVAL
We are asking our stockholders to approve the Hudson City Bancorp, Inc.
2000 Recognition and Retention Plan so that we will be able to grant stock
awards to our directors and officers. Most of the companies with which we
compete for directors and management-level employees are public companies that
offer stock awards as part of their director and officer compensation packages.
By approving this plan, our stockholders will enable us to offer a more
competitive compensation package in attracting and retaining highly qualified
directors and officers. In addition, the value of the stock awards that we would
grant under this plan relates directly to the market price of our common stock.
Adding stock awards to our compensation package would link the financial
interests of our directors and officers with the financial interest of our
stockholders.
IF WE DO NOT RECEIVE STOCKHOLDER APPROVAL, WE WILL NOT IMPLEMENT THE PLAN
Applicable federal banking regulations did not permit us to implement this
plan during the first six months after the completion of Hudson City Savings'
stock conversion and our initial public offering. These regulations permit us to
implement this plan after six months and before the first anniversary of these
events only if we obtain the approval of the holders of a majority of our shares
of common stock that are not owned by Hudson City, MHC. If we do not receive
this approval, it will not be possible for us to grant stock awards. In this
event, we expect that our Board of Directors will consider substituting other
forms of compensation to assure that our compensation packages for officers and
directors are competitive with those of other publicly traded financial services
companies in the New York metropolitan area.
PURPOSE OF THE RECOGNITION AND RETENTION PLAN
The purpose of the plan is to promote the growth and profitability of
Hudson City Bancorp, to provide certain key officers, employees and directors of
Hudson City Bancorp and its affiliates with an incentive to achieve corporate
objectives, to attract and retain individuals of outstanding competence and to
provide such individuals with an equity interest in Hudson City Bancorp.
DESCRIPTION OF THE RRP
Administration. A committee of outside directors administers this plan.
Its members are the members of the Compensation Committee of our Board of
Directors who are "disinterested directors" under the federal tax and securities
laws. In general, disinterested directors are directors who (1) are not, and
never were, officers or employees of Hudson City Bancorp or Hudson City Savings;
and (2) do not receive material compensation from Hudson City Bancorp or Hudson
City Savings except for service as a director. The administrative committee must
have at least two members and has broad discretionary powers.
17
<PAGE> 21
Stock Subject to the RRP. Hudson City Bancorp will establish a trust and
will contribute certain amounts of money or property to be determined by the
Board of Directors of Hudson City Bancorp, in its discretion. No contributions
by participants will be permitted. The trustee will invest the assets of the
trust primarily in the shares of our Common Stock that will be used to make
restricted stock awards. It is currently anticipated that the trust will
purchase common stock on the open market, or in private transactions. The trust
will not purchase previously authorized but unissued shares from Hudson City
Bancorp. The trust is not authorized to purchase more than 2,174,000 shares of
common stock of Hudson City Bancorp and cannot purchase more than this number.
As of October 31, 1999, the aggregate fair market value of the shares to be
purchased under this plan was $28,941,375, based on the closing sales price per
share of common stock of $13.3125 on The Nasdaq Stock Market on October 29,
1999.
Eligibility. An administrative committee of Hudson City Bancorp selects
the people who receive restricted stock awards under the plan. Any employee of
Hudson City Bancorp, Hudson City Savings or any affiliate approved by the Board
of Directors may be selected to receive stock awards. As of October 31, 1999,
there were 38 employees selected by the committee to receive stock awards.
Directors of Hudson City Bancorp, Hudson City Savings or any affiliate approved
by the Board of Directors who are not also employees or officers may be selected
by the committee to receive stock awards. As of October 31, 1999, there were 9
such directors selected by the committee to receive stock awards.
Terms and Conditions of Awards. On or after January 13, 2000, the
administrative committee may, in its discretion, grant awards of restricted
stock to eligible individuals, up to a maximum of 2,174,000 shares. The
administrative committee will determine at the time of the grant the number of
shares of common stock subject to an award, the vesting schedule applicable to
the award and may, in its discretion, establish other terms and conditions
applicable to the award. In setting terms and conditions, it must observe the
following restrictions:
- It may not grant restricted stock awards for more than 543,500 shares of
our common stock to any one officer or employee, more than 108,700 shares
of our common stock to any one non-employee directors, or more than
652,200 shares to all non-employee directors in the aggregate.
- It may not grant restricted stock awards that become exercisable more
rapidly than at the rate of 20% per year measured from the date we
receive stockholder approval for the plan, with acceleration permitted
only in cases of death or disability.
- It may not grant restricted stock awards with an effective date that is
before the date that we receive stockholder approval for the plan.
As a general rule, shares of our common stock that are subject to a restricted
stock award are held in trust for the benefit of the award recipient until
vested and, when vested, are transferred from the trust to the award recipient.
While the shares are held in the trust, the award recipient receives dividends
and exercises voting rights. In the alternative, the administrative committee
may authorize the immediate distribution of the restricted shares to the award
recipient in the form of a stock certificate bearing a legend containing the
applicable vesting restrictions.
Mergers and Reorganizations. The number of shares available under the
plan, the maximum limits on restricted stock awards to individual officers and
directors and to non-employee directors in the aggregate, and any outstanding
awards will be adjusted to reflect any merger, consolidation or business
reorganization in which Hudson City Bancorp is the surviving entity, and to
reflect any stock split, stock dividend or other event generally affecting the
number of shares. If a merger, consolidation or other business reorganization
occurs and Hudson City Bancorp is not the surviving entity, the trustee will
hold any money, stock, securities or other property received in the trust fund,
18
<PAGE> 22
and adjust any award by allocating such money, stock, securities or other
property to the individual eligible for the award.
TERMINATION OR AMENDMENT
The Board of Directors of Hudson City Bancorp has the authority to suspend
or terminate the plan in whole or in part at any time by giving written notice
to the administrative committee, but the plan may not be terminated while there
are outstanding awards that will vest in the future. Upon the termination of the
plan, the trustee will make distributions from the trust as directed by the
administrative committee and will return any remaining assets of the trust to
Hudson City Bancorp.
The Board of Directors of Hudson City Bancorp has the authority to amend or
revise the plan in whole or part at any time, but may not cause the provisions
of the plan which specifically require stockholder approval to be effective
without stockholder approval.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended to be a summary and is not a
comprehensive description of the federal tax laws, regulations and policies
affecting Hudson City Bancorp and recipients of awards that may be granted under
the plan. Any descriptions of the provisions of any law, regulation or policy
are qualified in their entirety by reference to the particular law, regulation
or policy. Any change in applicable law or regulation or in the policies of
various taxing authorities may have a significant effect on this summary. The
plan is not a qualified plan under Section 401(a) of the Internal Revenue Code.
The stock awards under the plan do not result in federal income tax
consequences to either Hudson City Bancorp or the award recipient. As a general
rule, once the award is vested and the shares subject to the award are
distributed, the award recipient will generally be required to include in
ordinary income, for the taxable year in which the vesting date occurs, an
amount equal to the fair market value of the shares on the vesting date. Hudson
City Bancorp will generally be allowed to claim a deduction, for compensation
expense, in a like amount. If dividends are paid on unvested shares held under
the plan, such dividend amounts will also be included in the ordinary income of
the recipient. Hudson City Bancorp will be allowed to claim a deduction for
compensation expense for this amount as well.
Section 162(m) of the Internal Revenue Code limits Hudson City Bancorp's
deductions for compensation in excess of $1,000,000 per year for the chief
executive officer and the four other most highly paid executives named in its
proxy statement. Compensation amounts resulting from restricted stock awards
will be subject to this deduction limitation if this amount of the restricted
stock awards plus other compensation of the executive that is subject to the
limit exceeds $1,000,000. We expect that the administrative committee will take
these deduction limits into account in setting the size and the terms and
conditions of restricted stock awards. However, the administrative committee may
decide to grant restricted stock awards all or a portion of which will exceed
the deduction limit.
The preceding statements are intended to summarize the general principles
of current federal income tax law applicable to awards that may be granted under
the plan. State and local tax consequences may also be significant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE HUDSON CITY BANCORP, INC. 2000 RECOGNITION AND RETENTION PLAN.
19
<PAGE> 23
NEW PLAN BENEFITS
HUDSON CITY SAVINGS BANK STOCK PLANS
<TABLE>
<CAPTION>
2000 STOCK OPTION
PLAN(1) RRP(2)
-------------------- ------------------------
NAME/POSITION # $ VALUE # $ VALUE(3)
- ------------- --------- ------- --------- -----------
<S> <C> <C> <C> <C>
Leonard S. Gudelski....................... 1,000,000 -- 430,000 $ 5,724,375
Chairman and Chief Executive Officer
Ronald E. Hermance, Jr. .................. 650,000 -- 300,000 3,993,750
President and Chief Operating Officer
John M. Tassillo.......................... 180,000 -- 120,000 1,597,500
Executive Vice President and Treasurer
James Kranz............................... 75,000 -- 40,000 532,500
First Vice President and Investment
Officer
Michael B. Lee............................ 75,000 -- 40,000 532,500
First Vice President and Secretary
Executive Group (7 individuals)........... 2,130,000 -- 1,010,000 13,445,625
All Non-Executive Director Group.......... 900,000 -- 495,000 6,589,688
Non-Executive Officer Employees Group..... 1,421,000 -- 449,500 5,983,969
</TABLE>
- -------------------------
(1) As of October 31, 1999, no grants have been made under the Option Plan. It
is not determinable at this time what benefits, if any, each of the persons
or groups listed will receive under this plan. The numbers in the table
reflect the administrative committee's intentions of grants to be made upon
the date that this plan is effective.
(2) As of October 31, 1999, no grants have been made under the Recognition and
Retention Plan. It is not determinable at this time what benefits, if any,
each of the persons or groups listed will receive under this plan. The
numbers in the table reflect the administrative committee's intentions of
grants to be made upon the date that this plan is effective.
(3) The dollar value is based on a price per share of $13.3125 (the closing
sales price as reported on Nasdaq on October 29, 1999). The actual value of
the benefits under this plan will depend on the fair market value of a share
on the date that the RRP is effective, which is indeterminable at this time.
20
<PAGE> 24
- --------------------------------------------------------------------------------
PROPOSAL 3
AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO
DIRECT THE VOTE OF THE PROXIES UPON SUCH OTHER MATTERS
INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING AS MAY PROPERLY
COME BEFORE THE SPECIAL MEETING, AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION,
A MOTION TO ADJOURN THE SPECIAL MEETING
- --------------------------------------------------------------------------------
GENERAL
The Board of Directors is not aware of any other business that may properly
come before the special meeting. The Board seeks the authorization of the
stockholders of Hudson City Bancorp, in the event matters incident to the
conduct of the special meeting properly come before the meeting, including, but
not limited to, the consideration of whether to adjourn the special meeting once
called to order, to direct the manner in which those shares represented at the
special meeting by proxies solicited pursuant to this proxy statement shall be
voted. As to all such matters, the Board intends that it would direct the voting
of such shares in the manner determined by the Board, in its discretion, and in
the exercise of its duties and responsibilities, to be in the best interests of
Hudson City Bancorp and its stockholders, taken as a whole.
VOTE REQUIRED
The authorization of the Board of Directors, in its discretion, to vote
upon such other business as may properly come before the special meeting
requires the affirmative vote of the holders of a majority of the outstanding
shares of common stock represented in person or by proxy at the special meeting
and entitled to vote thereon. Accordingly, shares as to which the "ABSTAIN" box
has been selected on the proxy card will be counted as present and entitled to
vote and will have the effect of a vote against such proposal. Shares underlying
broker non-votes will not be counted as having been voted in person or by proxy
and will have no effect on the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO DIRECT THE VOTE
OF THE PROXIES UPON SUCH OTHER MATTERS INCIDENT TO THE CONDUCT OF THE SPECIAL
MEETING AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING, AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION, A MOTION TO ADJOURN THE
SPECIAL MEETING.
21
<PAGE> 25
ADDITIONAL INFORMATION
NOTICE OF BUSINESS TO BE CONDUCTED AT ANNUAL MEETING
The bylaws of Hudson City Bancorp provide an advance notice procedure for a
stockholder to properly bring business before an annual meeting or to nominate
any person for election to our Board of Directors. The stockholder must be a
stockholder of record and have given timely notice thereof in writing to our
Secretary. To be timely, a stockholder's notice must be delivered to or received
by the Secretary not later than the following dates: (i) with respect to an
annual meeting of stockholders, ninety (90) days in advance of the anniversary
of the previous year's annual meeting if the current year's meeting is to be
held within thirty (30) days prior to, on the anniversary date of, or after the
anniversary of the previous year's annual meeting; and (ii) with respect to an
annual meeting of stockholders held at a time other than within the time periods
set forth in the immediately preceding clause (i), the close of business on the
tenth (10th) day following the date on which notice of such meeting is first
given to stockholders. Notice shall be deemed to first be given to stockholders
when disclosure of such date of the meeting of stockholders is first made in a
press release reported to Dow Jones News Services, Associated Press or
comparable national news service, or in a document publicly filed by Hudson City
Bancorp with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act. A
stockholder's notice to the Secretary shall set forth such information as
required by the Bylaws of Hudson City Bancorp. Nothing in this paragraph shall
be deemed to require Hudson City Bancorp to include in its proxy statement and
proxy card relating to an annual meeting any stockholder proposal or nomination
which does not meet all of the requirements for inclusion established by the SEC
in effect at the time such proposal or nomination is received. See "-- Date For
Submission of Stockholder Proposals."
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Pursuant to proxy soliciting regulations of the SEC, any stockholder
proposal intended for inclusion in the proxy statement for Hudson City Bancorp's
2000 Annual Meeting of Stockholders must be received by Hudson City Bancorp a
reasonable time before we make our proxy solicitation in connection with such
meeting. Nothing in this paragraph shall be deemed to require Hudson City
Bancorp to include in its proxy statement and proxy card for such meeting any
stockholder proposal which does not meet the requirements of the SEC in effect
at the time. Any such proposal will be subject to 17 C.F.R. sec.240.14a-8 of the
Rules and Regulations promulgated by the SEC under the Exchange Act.
By Order of the Board of Directors,
/s/ John M. Tassillo
John M. Tassillo
Executive Vice President,
Treasurer and Secretary
Paramus, New Jersey
December 6, 1999
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE SPECIAL MEETING
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING
PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
22
<PAGE> 26
APPENDIX A
HUDSON CITY BANCORP, INC.
2000 STOCK OPTION PLAN
------------------------
ADOPTED ON OCTOBER 14, 1999
EFFECTIVE AS OF JANUARY 13, 2000
<PAGE> 27
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
PURPOSE
SECTION 1.1 General Purpose of the Plan................................. A-1
ARTICLE II
DEFINITIONS
SECTION 2.1 Bank........................................................ A-1
SECTION 2.2 Board....................................................... A-1
SECTION 2.3 Change in Control........................................... A-1
SECTION 2.4 Code........................................................ A-2
SECTION 2.5 Committee................................................... A-2
SECTION 2.6 Company..................................................... A-2
SECTION 2.7 Disability.................................................. A-2
SECTION 2.8 Disinterested Board Member.................................. A-2
SECTION 2.9 Effective Date.............................................. A-3
SECTION 2.10 Eligible Director........................................... A-3
SECTION 2.11 Eligible Employee........................................... A-3
SECTION 2.12 Employer.................................................... A-3
SECTION 2.13 Exchange Act................................................ A-3
SECTION 2.14 Exercise Price.............................................. A-3
SECTION 2.15 Fair Market Value........................................... A-3
SECTION 2.16 Family Member............................................... A-3
SECTION 2.17 FDIC Regulations............................................ A-3
SECTION 2.18 Incentive Stock Option...................................... A-3
SECTION 2.19 Non-Profit Organization..................................... A-3
SECTION 2.20 Non-Qualified Stock Option.................................. A-3
SECTION 2.21 Option...................................................... A-4
SECTION 2.22 Option Period............................................... A-4
SECTION 2.23 Person...................................................... A-4
SECTION 2.24 Plan........................................................ A-4
SECTION 2.25 Retirement.................................................. A-4
SECTION 2.26 Share....................................................... A-4
SECTION 2.27 Termination for Cause....................................... A-4
ARTICLE III
AVAILABLE SHARES
SECTION 3.1 Available Shares............................................ A-4
ARTICLE IV
ADMINISTRATION
SECTION 4.1 Committee................................................... A-5
</TABLE>
A-i
<PAGE> 28
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 4.2 Committee Action............................................ A-5
SECTION 4.3 Committee Responsibilities.................................. A-5
ARTICLE V
STOCK OPTION GRANTS
SECTION 5.1 Grant of Options............................................ A-6
SECTION 5.2 Size of Option.............................................. A-6
SECTION 5.3 Exercise Price.............................................. A-6
SECTION 5.4 Option Period............................................... A-6
SECTION 5.5 Required Regulatory Provisions.............................. A-7
SECTION 5.6 Additional Restrictions on Incentive Stock Options.......... A-8
ARTICLE VI
OPTIONS IN GENERAL
SECTION 6.1 Method of Exercise.......................................... A-9
SECTION 6.2 Limitations on Options...................................... A-9
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.1 Termination................................................. A-10
SECTION 7.2 Amendment................................................... A-10
SECTION 7.3 Adjustments in the Event of a Business Reorganization....... A-10
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Status as an Employee Benefit Plan.......................... A-11
SECTION 8.2 No Right to Continued Employment............................ A-11
SECTION 8.3 Construction of Language.................................... A-11
SECTION 8.4 Governing Law............................................... A-11
SECTION 8.5 Headings.................................................... A-12
SECTION 8.6 Non-Alienation of Benefits.................................. A-12
SECTION 8.7 Taxes....................................................... A-12
SECTION 8.8 Notices..................................................... A-12
SECTION 8.9 Required Regulatory Provisions.............................. A-12
SECTION 8.10 Approval of Shareholders.................................... A-12
ARTICLE IX
ADDITIONAL PROVISIONS SUBJECT TO FURTHER SHAREHOLDER APPROVAL
SECTION 9.1 Accelerated Vesting Upon Retirement or Change in Control.... A-13
SECTION 9.2 Discretion to Establish Vesting Schedules................... A-13
SECTION 9.3 No Effect Prior to Shareholder Approval..................... A-13
</TABLE>
A-ii
<PAGE> 29
HUDSON CITY BANCORP, INC.
2000 STOCK OPTION PLAN
ARTICLE I
PURPOSE
SECTION 1.1 General Purpose of the Plan.
The purpose of the Plan is to promote the growth and profitability of
Hudson City Bancorp, Inc., to provide eligible directors, certain key officers
and employees of Hudson City Bancorp, Inc. and its affiliates with an incentive
to achieve corporate objectives, to attract and retain individuals of
outstanding competence and to provide such individuals with an equity interest
in Hudson City Bancorp, Inc.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this Plan, unless
a different meaning is plainly indicated by the context:
SECTION 2.1 Bank means Hudson City Savings Bank, a New Jersey stock
savings bank, and any successor thereto.
SECTION 2.2 Board means the board of directors of the Company.
SECTION 2.3 Change in Control means any of the following events:
(a) the consummation of a reorganization, merger or consolidation of the
Company with one or more other persons, other than a transaction following
which:
(i) at least 51% of the equity ownership interests of the entity
resulting from such transaction are beneficially owned (within the meaning
of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) in substantially the same relative proportions by
persons who, immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the outstanding equity ownership interests in the Company; and
(ii) at least 51% of the securities entitled to vote generally in the
election of directors of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) in substantially the same relative proportions by persons
who, immediately prior to such transaction, beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of
the securities entitled to vote generally in the election of directors of
the Company;
(b) the acquisition of all or substantially all of the assets of the
Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the outstanding securities of the
Company entitled to vote generally in the election of directors by any person or
by any persons acting in concert;
(c) a complete liquidation or dissolution of the Company;
A-1
<PAGE> 30
(d) the occurrence of any event if, immediately following such event, at
least 50% of the members of the Board of Directors of Hudson City Bancorp, Inc.
do not belong to any of the following groups:
(i) individuals who were members of the Board of Directors of Hudson
City Bancorp, Inc. on the Effective Date; or
(ii) individuals who first became members of the Board of Directors of
Hudson City Bancorp, Inc. after the Effective Date either:
(A) upon election to serve as a member of the Board of Directors of
Hudson City Bancorp, Inc. by affirmative vote of three-quarters of the
members of such board, or of a nominating committee thereof, in office
at the time of such first election; or
(B) upon election by the shareholders of the Company to serve as a
member of such board, but only if nominated for election by affirmative
vote of three-quarters of the members of the Board of Directors of
Hudson City Bancorp, Inc., or of a nominating committee thereof, in
office at the time of such first nomination;
provided, however, that such individual's election or nomination did not
result from an actual or threatened election contest (within the meaning of
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents (within the
meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) other than by or on behalf of the Board of Directors of Hudson City
Bancorp, Inc.; or
(e) approval by the stockholders of the Company of any agreement, plan or
arrangement for the consummation of a transaction which, if consummated, would
result in the occurrence of an event described in section 2.3(a), (b), (c) or
(d); or
(f) any event which would be described in section 2.3(a), (b), (c), (d) or
(e) if the term "Bank" were substituted for the terms "Company" or "Hudson City
Bancorp, Inc." therein.
In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this section 2.3, the term "person" shall have the meaning assigned
to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
SECTION 2.4 Code means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).
SECTION 2.5 Committee means the Committee described in section 4.1.
SECTION 2.6 Company means Hudson City Bancorp, Inc., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
SECTION 2.7 Disability means a condition of total incapacity, mental or
physical, for further performance of duty with the Company which the Committee
shall have determined, on the basis of competent medical evidence, is likely to
be permanent.
SECTION 2.8 Disinterested Board Member means a member of the Board who (a)
is not a current employee of the Company or a subsidiary, (b) is not a former
employee of the Company who receives compensation for prior services (other than
benefits under a tax-qualified retirement plan) during the taxable year, (c) has
not been an officer of the Company, (d) does not receive remuneration from the
Company or a subsidiary, either directly or indirectly, in any capacity other
than as a director except in an amount for which disclosure would not be
required pursuant to Item 404(a) of the proxy solicitation rules of the
Securities and Exchange Commission and (e) does
A-2
<PAGE> 31
not possess an interest in any other transaction, and is not engaged in a
business relationship, for which disclosure would be required pursuant to Item
404(a) or (b) of the proxy solicitation rules of the Securities and Exchange
Commission. The term Disinterested Board Member shall be interpreted in such
manner as shall be necessary to conform to the requirements of section 162(m) of
the Code and Rule 16b-3 promulgated under the Exchange Act.
SECTION 2.9 Effective Date means January 13, 2000.
SECTION 2.10 Eligible Director means a member of the board of directors of
an Employer who is not also an employee or an officer of any Employer.
SECTION 2.11 Eligible Employee means any employee whom the Committee may
determine to be a key officer or employee of an Employer and select to receive a
grant of an Option pursuant to the Plan.
SECTION 2.12 Employer means the Company, the Bank and any successor
thereto and, with the prior approval of the Board, and subject to such terms and
conditions as may be imposed by the Board, any other savings bank, savings and
loan association, bank, corporation, financial institution or other business
organization or institution. With respect to any Eligible Employer or Eligible
Director, the Employer shall mean the entity which employs such person or upon
whose board of directors such person serves.
SECTION 2.13 Exchange Act means the Securities Exchange Act of 1934, as
amended.
SECTION 2.14 Exercise Price means the price per Share at which Shares
subject to an Option may be purchased upon exercise of the Option, determined in
accordance with section 5.3.
SECTION 2.15 Fair Market Value means, with respect to a Share on a
specified date:
(a) the final reported sales price on the date in question (or if there is
no reported sale on such date, on the last preceding date on which any reported
sale occurred) as reported in the principal consolidated reporting system with
respect to securities listed or admitted to trading on the principal United
States securities exchange on which the Shares are listed or admitted to
trading; or
(b) if the Shares are not listed or admitted to trading on any such
exchange, the closing bid quotation with respect to a Share on such date on the
National Association of Securities Dealers Automated Quotations System, or, if
no such quotation is provided, on another similar system, selected by the
Committee, then in use; or
(c) if sections 2.15(a) and (b) are not applicable, the fair market value
of a Share as the Committee may determine.
SECTION 2.16 Family Member means the spouse, parent, child or sibling of
an Eligible Director or Eligible Employee.
SECTION 2.17 FDIC Regulations means the rules and regulations of the
Federal Deposit Insurance Corporation.
SECTION 2.18 Incentive Stock Option means a right to purchase Shares that
is granted to Eligible Employees pursuant to section 5.1, that is designated by
the Committee to be an Incentive Stock Option and that is intended to satisfy
the requirements of section 422 of the Code.
SECTION 2.19 Non-Profit Organization means any organization which is
exempt from federal income tax under section 501(c)(3), (4), (5), (6), (7), (8)
or (10) of the Internal Revenue Code.
SECTION 2.20 Non-Qualified Stock Option means a right to purchase Shares
that is either (a) granted to an Eligible Director or (b) granted to an Eligible
Employee and either (i) is not
A-3
<PAGE> 32
designated by the Committee to be an Incentive Stock Option, or (ii) does not
satisfy the requirements of section 422 of the Code.
SECTION 2.21 Option means either an Incentive Stock Option or a
Non-Qualified Stock Option.
SECTION 2.22 Option Period means the period during which an Option may be
exercised, determined in accordance with section 5.4.
SECTION 2.23 Person means an individual, a corporation, a bank, a savings
bank, a savings and loan association, a financial institution, a partnership, an
association, a joint-stock company, a trust, an estate, an unincorporated
organization and any other business organization or institution.
SECTION 2.24 Plan means the Hudson City Bancorp, Inc. 2000 Stock Option
Plan, as amended from time to time.
SECTION 2.25 Retirement means with respect to any individual, termination
of all service for all Employers as a director, officer and employee, at or
after the normal or early retirement date set forth in any tax-qualified
retirement plan of the Bank, whether or not the individual in question actually
participates in any such tax-qualified plan of the Bank.
SECTION 2.26 Share means a share of Common Stock, par value $.01 per
share, of Hudson City Bancorp, Inc.
SECTION 2.27 Termination for Cause means termination of service or removal
from office with the Employer upon the occurrence of any of the following: (a)
the individual intentionally engages in dishonest conduct in connection with his
performance of services for the Employer resulting in his conviction of a
felony; (b) the individual is convicted of, or pleads guilty or nolo contendere
to, a felony or any crime involving moral turpitude; (c) the individual breaches
his fiduciary duties to the Employer for personal profit; or (d) the individual
willfully breaches or violates any law, rule or regulation (other than traffic
violations or similar offenses), or final cease and desist order in connection
with his performance of services for the Employer.
ARTICLE III
AVAILABLE SHARES
SECTION 3.1 Available Shares.
(a) The maximum aggregate number of Shares with respect to which Options
may be granted at any time shall be equal to the excess of:
(i) 5,435,000 Shares; over
(ii) the sum of:
(A) the number of Shares with respect to which previously granted
Options may then or may in the future be exercised; plus
(B) the number of Shares with respect to which previously granted
Options have been exercised;
subject to adjustment pursuant to section 7.3.
(b) Options to purchase an aggregate maximum of 1,630,500 Shares (subject
to adjustment pursuant to section 7.3) may be granted to Eligible Directors, and
Options to purchase a maximum of 271,750 Shares (subject to adjustment pursuant
to section 7.3) may be granted to any one Eligible Director.
A-4
<PAGE> 33
(c) Options to purchase an aggregate maximum of 5,435,000 Shares (subject
to adjustment pursuant to section 7.3) may be granted to Eligible Employees, and
Options to purchase a maximum of 1,358,750 Shares (subject to adjustment
pursuant to section 7.3) may be granted to any one Eligible Employee.
(d) For purposes of this section 3.1, an Option shall not be considered as
having been exercised to the extent that such Option terminates by reason other
than the purchase of related Shares; provided, however, that for purposes of
meeting the requirements of section 162(m) of the Code, no Eligible Employee who
is a covered employee (within the meaning of section 162(m) of the Code) shall
receive grants of Options for an aggregate number of Shares that is in excess of
the amount specified for him under this section 3.1, computed as if any Option
which is canceled or forfeited reduced the maximum number of Shares.
ARTICLE IV
ADMINISTRATION
SECTION 4.1 Committee.
The Plan shall be administered by the members of the Compensation Committee
of Hudson City Bancorp, Inc. who are Disinterested Board Members. If the
Committee consists of fewer than two Disinterested Board Members, then the Board
shall appoint to the Committee such additional Disinterested Board Members as
shall be necessary to provide for a Committee consisting of at least two
Disinterested Board Members.
SECTION 4.2 Committee Action.
The Committee shall hold such meetings, and may make such administrative
rules and regulations, as it may deem proper. A majority of the members of the
Committee shall constitute a quorum, and the action of a majority of the members
of the Committee present at a meeting at which a quorum is present, as well as
actions taken pursuant to the unanimous written consent of all of the members of
the Committee without holding a meeting, shall be deemed to be actions of the
Committee. All actions of the Committee shall be final and conclusive and shall
be binding upon the Company and all other interested parties. Any Person dealing
with the Committee shall be fully protected in relying upon any written notice,
instruction, direction or other communication signed by the Secretary of the
Committee and one member of the Committee, by two members of the Committee or by
a representative of the Committee authorized to sign the same in its behalf.
SECTION 4.3 Committee Responsibilities.
Subject to the terms and conditions of the Plan and such limitations as may
be imposed by the Board, the Committee shall be responsible for the overall
management and administration of the Plan and shall have such authority as shall
be necessary or appropriate in order to carry out its responsibilities,
including, without limitation, the authority:
(a) to interpret and construe the Plan, and to determine all questions that
may arise under the Plan as to eligibility for participation in the Plan, the
number of Shares subject to the Options, if any, to be granted, and the terms
and conditions thereof;
(b) to adopt rules and regulations and to prescribe forms for the operation
and administration of the Plan; and
(c) to take any other action not inconsistent with the provisions of the
Plan that it may deem necessary or appropriate.
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ARTICLE V
STOCK OPTION GRANTS
SECTION 5.1 Grant of Options.
(a) Subject to the limitations of the Plan, the Committee may, in its
discretion, grant to an Eligible Employee or an Eligible Director an Option to
purchase Shares. An Option for Eligible Employees must be designated as either
an Incentive Stock Option or a Non-Qualified Stock Option and, if not designated
as either, shall be a Non-Qualified Stock Option. An Option for an Eligible
Director shall be a Non-Qualified Stock Option.
(b) Any Option granted under this section 5.1 shall be evidenced by a
written agreement which shall:
(i) specify the number of Shares covered by the Option determined in
accordance with section 5.2;
(ii) specify the Exercise Price, determined in accordance with section
5.3, for the Shares subject to the Option;
(iii) specify the Option Period determined in accordance with section
5.4;
(iv) set forth specifically or incorporate by reference the applicable
provisions of the Plan; and
(v) contain such other terms and conditions not inconsistent with the
Plan as the Committee may, in its discretion, prescribe with respect to an
Option granted to an Eligible Employee or an Eligible Director.
SECTION 5.2 Size of Option.
Subject to section 3.1 and such limitations as the Board may from time to
time impose, the number of Shares as to which an Eligible Employee or Eligible
Director may be granted Options shall be determined by the Committee, in its
discretion.
SECTION 5.3 Exercise Price.
The price per Share at which an Option granted to an Eligible Employee or
Eligible Director shall be determined by the Committee, in its discretion;
provided, however, that the Exercise Price shall not be less than the Fair
Market Value of a Share on the date on which the Option is granted.
SECTION 5.4 Option Period.
Subject to section 5.5, the Option Period during which an Option granted to
an Eligible Employee may be exercised shall commence on the date specified by
the Committee in the Option agreement and shall expire on the date specified in
the Option agreement or, if no date is specified, on the earliest of:
(a) in the case of an Option granted to an Eligible Employee:
(i) the close of business on the last day of the three-month period
commencing on the date of the Eligible Employee's termination of
employment with the Employer, other than on account of death or
Disability, Retirement or a Termination for Cause;
(ii) the close of business on the last day of the one-year period
commencing on the date of the Eligible Employee's termination of
employment due to death, Disability or Retirement;
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(iii) the date and time when the Eligible Employee ceases to be an
employee of the Employer due to a Termination for Cause; and
(iv) the last day of the ten-year period commencing on the date on
which the Option was granted; and
(b) in the case of an Option granted to an Eligible Director:
(i) removal for cause in accordance with the Employer's bylaws, or
Termination for Cause; or
(ii) the last day of the ten-year period commencing on the date on
which the Option was granted.
SECTION 5.5 Required Regulatory Provisions.
Notwithstanding anything contained herein to the contrary:
(a) no Option shall be granted to an Eligible Employee or Eligible
Director under the Plan prior to shareholder approval in accordance with
section 8.10;
(b) subject to section 9.2, each Option granted to an Eligible
Employee or Eligible Director shall become exercisable no more rapidly than
as follows:
(i) prior to the first anniversary of the Effective Date, an Option
shall not be exercisable;
(ii) on and after the first anniversary, but prior to the second
anniversary, of the Effective Date, an Option may be exercised as to a
maximum of twenty percent (20%) of the Shares subject to the Option when
granted;
(iii) on and after the second anniversary, but prior to the third
anniversary, of the Effective Date, an Option may be exercised as to a
maximum of forty percent (40%) of the Shares subject to the Option when
granted, including in such forty percent (40%) any optioned Shares
purchased prior to such second anniversary;
(iv) on and after the third anniversary, but prior to the fourth
anniversary, of the Effective Date, an Option may be exercised as to a
maximum of sixty percent (60%) of the Shares subject to the Option when
granted, including in such sixty percent (60%) any optioned Shares
purchased prior to such third anniversary;
(v) on and after the fourth anniversary, but prior to the fifth
anniversary, of the Effective Date, an Option may be exercised as to a
maximum of eighty percent (80%) of the Shares subject to the Option when
granted, including in such eighty percent (80%) any optioned Shares
purchased prior to such fourth anniversary; and
(vi) on and after the fifth anniversary of the Effective Date and
for the remainder of the Option Period, an Option may be exercised as to
the entire number of optioned Shares not theretofore purchased;
provided, however, that such an Option shall become fully exercisable, and
all optioned Shares not previously purchased shall become available for
purchase, on the date of the Option holder's death or Disability while in
the service of an Employer.
(c) The Option Period of any Option granted hereunder, whether or not
previously vested, shall be suspended as of the time and date at which the
Option holder has received notice from the Board that his or her employment
is subject to a possible Termination for Cause, or in the case of an
Eligible Director, removal for cause in accordance with the Employer's
by-laws. Such suspension shall remain in effect until the Option holder
receives official notice from the Board
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<PAGE> 36
that he or she has been cleared of any possible Termination for Cause, or
in the case of an Eligible Director, removal for cause, at which time, the
original Exercise Period shall be reinstated without any adjustment for the
intervening suspended period. In the event that the Option Period under
section 5.4 expires during such suspension, the Company shall pay to the
Eligible Employee, within 30 days after his reinstatement as an employee of
the Company, damages equal to the value of the expired Options (based on
the Fair Market Value of a Share as of the expiration of the Option Period
less the Exercise Price of such Options).
(d) No Option granted to an Eligible Employee or Eligible Director
hereunder, whether or not previously vested, shall be exercised after the
time and date at which the Option holder's services with the Employer are
terminated in a Termination for Cause, or, in the case of an Eligible
Director, removal for cause in accordance with the Employer's by-laws.
SECTION 5.6 Additional Restrictions on Incentive Stock Options.
An Option granted to an Eligible Employee designated by the Committee to be
an Incentive Stock Option shall be subject to the following limitations:
(a) If, for any calendar year, the sum of (i) plus (ii) exceeds
$100,000, where (i) equals the Fair Market Value (determined as of the date
of the grant) of Shares subject to an Option intended to be an Incentive
Stock Option which first become available for purchase during such calendar
year, and (ii) equals the Fair Market Value (determined as of the date of
grant) of Shares subject to any other options intended to be Incentive
Stock Options and previously granted to the same Eligible Employee which
first become exercisable in such calendar year, then that number of Shares
optioned which causes the sum of (i) and (ii) to exceed $100,000 shall be
deemed to be Shares optioned pursuant to a Non-Qualified Stock Option or
Non-Qualified Stock Options, with the same terms as the Option or Options
intended to be an Incentive Stock Option;
(b) The Exercise Price of an Incentive Stock Option granted to an
Eligible Employee who, at the time the Option is granted, owns Shares
comprising more than 10% of the total combined voting power of all classes
of stock of the Company shall not be less than 110% of the Fair Market
Value of a Share, and if an Option designated as an Incentive Stock Option
shall be granted at an Exercise Price that does not satisfy this
requirement, the designated Exercise Price shall be observed and the Option
shall be treated as a Non-Qualified Stock Option;
(c) The Option Period of an Incentive Stock Option granted to an
Eligible Employee who, at the time the Option is granted, owns Shares
comprising more than 10% of the total combined voting power of all classes
of stock of the Company, shall expire no later than the fifth anniversary
of the date on which the Option was granted, and if an Option designated as
an Incentive Stock Option shall be granted for an Option Period that does
not satisfy this requirement, the designated Option Period shall be
observed and the Option shall be treated as a Non-Qualified Stock Option;
(d) An Incentive Stock Option that is exercised during its designated
Option Period but more than:
(i) three (3) months after the termination of employment with the
Company, a parent or a subsidiary (other than on account of disability
within the meaning of section 22(e)(3) of the Code or death) of the
Eligible Employee to whom it was granted; and
(ii) one (1) year after such individual's termination of employment
with the Company, a parent or a subsidiary due to disability (within the
meaning of section 22(e)(3) of the Code) or death;
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<PAGE> 37
may be exercised in accordance with the terms but shall at the time of
exercise be treated as a Non-Qualified Stock Option; and
(e) Except with the prior written approval of the Committee, no
individual shall dispose of Shares acquired pursuant to the exercise of an
Incentive Stock Option until after the later of (i) the second anniversary
of the date on which the Incentive Stock Option was granted, or (ii) the
first anniversary of the date on which the Shares were acquired.
ARTICLE VI
OPTIONS -- IN GENERAL
SECTION 6.1 Method of Exercise.
(a) Subject to the limitations of the Plan and the Option agreement, an
Option holder may, at any time during the Option Period, exercise his or her
right to purchase all or any part of the Shares to which the Option relates;
provided, however, that the minimum number of Shares which may be purchased at
any time shall be 100, or, if less, the total number of Shares relating to the
Option which remain unpurchased. An Option holder shall exercise an Option to
purchase Shares by:
(i) giving written notice to the Committee, in such form and manner as
the Committee may prescribe, of his intent to exercise the Option;
(ii) delivering to the Committee full payment, consistent with section
6.1(b), for the Shares as to which the Option is to be exercised; and
(iii) satisfying such other conditions as may be prescribed in the
Option agreement.
(b) The Exercise Price of Shares to be purchased upon exercise of any
Option shall be paid in full in cash (by certified or bank check or such other
instrument as the Company may accept) or, if and to the extent permitted by the
Committee, by one or more of the following: (i) in the form of Shares already
owned by the Option holder having an aggregate Fair Market Value on the date the
Option is exercised equal to the aggregate Exercise Price to be paid; (ii) by
requesting the Company to cancel without payment Options outstanding to such
Person for that number of Shares whose aggregate Fair Market Value on the date
of exercise, when reduced by their aggregate Exercise Price, equals the
aggregate Exercise Price of the Options being exercised; or (iii) by a
combination thereof. Payment for any Shares to be purchased upon exercise of an
Option 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 to pay the purchase
price. To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
(c) When the requirements of section 6.1(a) and (b) have been satisfied,
the Committee shall take such action as is necessary to cause the issuance of a
stock certificate evidencing the Option holder's ownership of such Shares. The
Person exercising the Option shall have no right to vote or to receive
dividends, nor have any other rights with respect to the Shares, prior to the
date as of which such Shares are transferred to such Person on the stock
transfer records of the Company, and no adjustments shall be made for any
dividends or other rights for which the record date is prior to the date as of
which such transfer is effected, except as may be required under section 7.3.
SECTION 6.2 Limitations on Options.
(a) An Option by its terms shall not be transferable by the Option holder
other than to Family Members or Non-profit Organizations or by will or by the
laws of descent and distribution and shall be exercisable, during the lifetime
of the Option holder, only by the Option holder, a Family Member
A-9
<PAGE> 38
or a Non-profit Organization. Any such transfer shall be effected by written
notice to the Company given in such form and manner as the Committee may
prescribe and shall be recognized only if such notice is received by the Company
prior to the death of the person giving it. Thereafter, the transferee shall
have, with respect to such Option, all of the rights, privileges and obligations
which would attach thereunder to the transferor if the Option were issued to
such transferor. If a privilege of the Option depends on the life, employment or
other status of the transferor, such privilege of the Option for the transferee
shall continue to depend on the life, employment or other status of the
transferor. The Committee shall have full and exclusive authority to interpret
and apply the provisions of this Plan to transferees to the extent not
specifically described herein. Notwithstanding the foregoing, an Incentive Stock
Option is not transferable by an Eligible Employee other than by will or the
laws of descent and distribution, and is exercisable, during his lifetime,
solely by him.
(b) The Company's obligation to deliver Shares with respect to an Option
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Option holder to whom such
Shares are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of applicable federal,
state or local law. It may be provided that any such representation shall become
inoperative upon a registration of the Shares or upon the occurrence of any
other event eliminating the necessity of such representation. The Company shall
not be required to deliver any Shares under the Plan prior to (i) the admission
of such Shares to listing on any stock exchange on which Shares may then be
listed, or (ii) the completion of such registration or other qualification under
any state or federal law, rule or regulation as the Committee shall determine to
be necessary or advisable.
ARTICLE VII
AMENDMENT AND TERMINATION
SECTION 7.1 Termination.
The Board may suspend or terminate the Plan in whole or in part at any time
prior to the tenth anniversary of the Effective Date by giving written notice of
such suspension or termination to the Committee. Unless sooner terminated, the
Plan shall terminate automatically on the day preceding the tenth anniversary of
the Effective Date. In the event of any suspension or termination of the Plan,
all Options theretofore granted under the Plan that are outstanding on the date
of such suspension or termination of the Plan shall remain outstanding and
exercisable for the period and on the terms and conditions set forth in the
Option agreements evidencing such Options.
SECTION 7.2 Amendment.
The Board may amend or revise the Plan in whole or in part at any time;
provided, however, that, to the extent required to comply with section 162(m) of
the Code, no such amendment or revision shall be effective if it amends a
material term of the Plan unless approved by the holders of a majority of the
votes cast on a proposal to approve such amendment or revision.
SECTION 7.3 Adjustments in the Event of a Business Reorganization.
(a) In the event of any merger, consolidation, or other business
reorganization in which the Company is the surviving entity, and in the event of
any stock split, stock dividend or other event generally affecting the number of
Shares held by each Person who is then a holder of record of Shares, the number
of Shares covered by each outstanding Option and the number of Shares available
to any individual or group of individuals pursuant to section 3.1 shall be
adjusted to account for such event. Such adjustment shall be effected by
multiplying such number of Shares by an amount equal to the number of Shares
that would be owned after such event by a Person who, immediately prior to such
event, was the holder of record of one Share, and the Exercise Price of the
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<PAGE> 39
Options shall be adjusted by dividing the Exercise Price by such number of
Shares; provided, however, that the Committee may, in its discretion, establish
another appropriate method of adjustment.
(b) In the event of any merger, consolidation, or other business
reorganization in which the Company is not the surviving entity, any Options
granted under the Plan which remain outstanding shall be converted into options
to purchase voting common equity securities of the business entity which
survives such merger, consolidation or other business reorganization having
substantially the same terms and conditions as the outstanding Options under
this Plan and reflecting the same economic benefit (as measured by the
difference between the aggregate exercise price and the value exchanged for
outstanding Shares in such merger, consolidation or other business
reorganization), all as determined by the Committee prior to the consummation of
such merger; provided, however, that the Committee may, at any time prior to the
consummation of such merger, consolidation or other business reorganization,
direct that all, but not less than all, outstanding Options be canceled as of
the effective date of such merger, consolidation or other business
reorganization in exchange for a cash payment per optioned Share equal to the
excess (if any) of the value exchanged for an outstanding Share in such merger,
consolidation or other business reorganization over the Exercise Price of the
Option being canceled.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Status as an Employee Benefit Plan.
This Plan is not intended to satisfy the requirements for qualification
under section 401(a) of the Code or to satisfy the definitional requirements for
an "employee benefit plan" under section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended. It is intended to be a non-qualified incentive
compensation program that is exempt from the regulatory requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Plan shall be
construed and administered so as to effectuate this intent.
SECTION 8.2 No Right to Continued Employment.
Neither the establishment of the Plan nor any provisions of the Plan nor
any action of the Board or the Committee with respect to the Plan shall be held
or construed to confer upon any Eligible Director or Eligible Employee any right
to a continuation of his or her position as a director or employee of the
Company. The Employers reserve the right to remove any Eligible Director or
dismiss any Eligible Employee or otherwise deal with any Eligible Director or
Eligible Employee to the same extent as though the Plan had not been adopted.
SECTION 8.3 Construction of Language.
Whenever appropriate in the Plan, words used in the singular may be read in
the plural, words used in the plural may be read in the singular, and words
importing the masculine gender may be read as referring equally to the feminine
or the neuter. Any reference to an Article or section number shall refer to an
Article or section of this Plan unless otherwise indicated.
SECTION 8.4 Governing Law.
The Plan shall be construed, administered and enforced according to the
laws of the State of New Jersey without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by federal
law. The Plan shall be construed to comply with applicable FDIC Regulations.
A-11
<PAGE> 40
SECTION 8.5 Headings.
The headings of Articles and sections are included solely for convenience
of reference. If there is any conflict between such headings and the text of the
Plan, the text shall control.
SECTION 8.6 Non-Alienation of Benefits.
The right to receive a benefit under the Plan shall not be subject in any
manner to anticipation, alienation or assignment, nor shall such right be liable
for or subject to debts, contracts, liabilities, engagements or torts.
SECTION 8.7 Taxes.
The Company shall have the right to deduct from all amounts paid by the
Company in cash with respect to an Option under the Plan any taxes required by
law to be withheld with respect to such Option. Where any Person is entitled to
receive Shares pursuant to the exercise of an Option, the Company shall have the
right to require such Person to pay the Company the amount of any tax which the
Company is required to withhold with respect to such Shares, or, in lieu
thereof, to retain, or to sell without notice, a sufficient number of Shares to
cover the minimum amount required to be withheld.
SECTION 8.8 Notices.
Any communication required or permitted to be given under the Plan,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally or five (5) days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other party:
(a) If to the Committee:
Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Corporate Secretary
(b) If to an Option holder, to the Option holder's address as shown in
the Employer's records.
SECTION 8.9 Required Regulatory Provisions.
The grant and settlement of Options under this Plan shall be conditioned
upon and subject to compliance with section 18(k) of the Federal Deposit
Insurance Act, 12 U.S.C. 1828(k), and the rules and regulations promulgated
thereunder.
SECTION 8.10 Approval of Shareholders.
The Plan shall not be effective or implemented prior to July 13, 2000
unless approved by the holders of a majority of the total votes eligible to be
cast at any duly called annual or special meeting of the Company, in which case
the Plan shall be effective as of the later of (a) January 13, 2000 or (b) the
date of such approval. If not effective prior to such one year anniversary, the
Plan shall be effective on such later date as is specified by the Board. No
Option shall be granted prior to the date on which the Plan becomes effective.
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<PAGE> 41
ARTICLE IX
ADDITIONAL PROVISIONS SUBJECT TO FURTHER SHAREHOLDER APPROVAL
SECTION 9.1 Accelerated Vesting Upon Retirement or Change in Control.
Notwithstanding anything in the Plan to the contrary, but subject to
section 9.3: (a) in the event that any Option holder terminates service with the
Employer and such termination constitutes a Retirement, all Options outstanding
to such holder on the date of his Retirement shall, to the extent not already
exercisable, become exercisable upon Retirement; and (b) in the event of a
Change in Control, all Options outstanding under the Plan on the date of the
Change in Control shall, to the extent not already exercisable, become
exercisable on the date of the Change in Control.
SECTION 9.2 Discretion to Establish Vesting Schedules.
Notwithstanding anything in the Plan to the contrary, but subject to
section 9.3, section 5.5(b) shall apply in determining the exercisability of
Options granted to Eligible Employees only if no different vesting schedule is
established by the Committee and specified in the agreement evidencing an
outstanding Option.
SECTION 9.3 No Effect Prior to Shareholder Approval.
Notwithstanding anything contained in this Article IX to the contrary, the
provisions of this Article IX shall not be applied, and shall be of no force or
effect, unless and until the shareholders of the Company shall have approved
such provisions by affirmative vote of the holders of a majority of the Shares
represented in person or by proxy and entitled to vote at a meeting of
shareholders duly called and held after July 13, 2000.
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<PAGE> 42
APPENDIX B
HUDSON CITY BANCORP, INC.
2000 RECOGNITION AND RETENTION PLAN
------------------------
ADOPTED ON OCTOBER 14, 1999
EFFECTIVE AS OF JANUARY 13, 2000
<PAGE> 43
HUDSON CITY BANCORP, INC.
2000 RECOGNITION AND RETENTION PLAN
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
PURPOSE
SECTION 1.1 General Purpose of the Plan................................. B-1
ARTICLE II
DEFINITIONS
SECTION 2.1 Award....................................................... B-1
SECTION 2.2 Award Notice................................................ B-1
SECTION 2.3 Bank........................................................ B-1
SECTION 2.4 Beneficiary................................................. B-1
SECTION 2.5 Board....................................................... B-1
SECTION 2.6 Change of Control........................................... B-1
SECTION 2.7 Code........................................................ B-2
SECTION 2.8 Committee................................................... B-2
SECTION 2.9 Company..................................................... B-2
SECTION 2.10 Disability.................................................. B-2
SECTION 2.11 Disinterested Board Member.................................. B-3
SECTION 2.12 Effective Date.............................................. B-3
SECTION 2.13 Eligible Director........................................... B-3
SECTION 2.14 Eligible Employee........................................... B-3
SECTION 2.15 Employer.................................................... B-3
SECTION 2.16 Exchange Act................................................ B-3
SECTION 2.17 FDIC Regulations............................................ B-3
SECTION 2.18 Person...................................................... B-3
SECTION 2.19 Plan........................................................ B-3
SECTION 2.20 Retirement.................................................. B-3
SECTION 2.21 Share....................................................... B-3
SECTION 2.22 Trust....................................................... B-3
SECTION 2.23 Trust Agreement............................................. B-3
SECTION 2.24 Trust Fund.................................................. B-3
SECTION 2.25 Trustee..................................................... B-4
ARTICLE III
SHARES AVAILABLE UNDER PLAN
SECTION 3.1 Shares Available Under Plan................................. B-4
</TABLE>
B-i
<PAGE> 44
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE IV
ADMINISTRATION
SECTION 4.1 Committee................................................... B-4
SECTION 4.2 Committee Action............................................ B-4
SECTION 4.3 Committee Responsibilities.................................. B-5
ARTICLE V
THE TRUST FUND
SECTION 5.1 Contributions............................................... B-5
SECTION 5.2 The Trust Fund.............................................. B-5
SECTION 5.3 Investments................................................. B-5
ARTICLE VI
AWARDS
SECTION 6.1 To Eligible Directors....................................... B-5
SECTION 6.2 To Eligible Employees....................................... B-6
SECTION 6.3 Awards in General........................................... B-6
SECTION 6.4 Share Allocations........................................... B-6
SECTION 6.5 Dividend Rights............................................. B-6
SECTION 6.6 Voting Rights............................................... B-6
SECTION 6.7 Tender Offers............................................... B-7
SECTION 6.8 Limitations on Awards....................................... B-7
ARTICLE VII
VESTING
SECTION 7.1 Vesting of Awards........................................... B-8
SECTION 7.2 Designation of Beneficiary.................................. B-8
SECTION 7.3 Manner of Distribution...................................... B-9
SECTION 7.4 Taxes....................................................... B-9
ARTICLE VIII
AMENDMENT AND TERMINATION
SECTION 8.1 Termination................................................. B-9
SECTION 8.2 Amendment................................................... B-10
SECTION 8.3 Adjustments in the Event of a Business Reorganization....... B-10
</TABLE>
B-ii
<PAGE> 45
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Status as an Employee Benefit Plan.......................... B-10
SECTION 9.2 No Right to Continued Employment............................ B-10
SECTION 9.3 Construction of Language.................................... B-11
SECTION 9.4 Governing Law............................................... B-11
SECTION 9.5 Headings.................................................... B-11
SECTION 9.6 Non-Alienation of Benefits.................................. B-11
SECTION 9.7 Notices..................................................... B-11
SECTION 9.8 Required Regulatory Provisions.............................. B-11
SECTION 9.9 Approval of Shareholders.................................... B-11
ARTICLE X
ADDITIONAL PROVISIONS SUBJECT TO FURTHER SHAREHOLDER APPROVAL
SECTION 10.1 Accelerated Vesting Upon Retirement or Change in Control.... B-12
SECTION 10.2 Discretion to Establish Vesting Schedules................... B-12
SECTION 10.3 No Effect Prior to Stockholder Approval..................... B-12
</TABLE>
B-iii
<PAGE> 46
HUDSON CITY BANCORP, INC.
2000 RECOGNITION AND RETENTION PLAN
ARTICLE I
PURPOSE
SECTION 1.1 General Purpose of the Plan.
The purpose of the Plan is to promote the growth and profitability of
Hudson City Bancorp, Inc. and its affiliated companies and to provide eligible
directors, certain key officers and employees of Hudson City Bancorp, Inc. and
its affiliated companies with an incentive to achieve corporate objectives, to
attract and retain directors, key officers and employees of outstanding
competence and to provide such directors, officers and employees with an equity
interest in Hudson City Bancorp, Inc. and its affiliated companies.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this Plan, unless
a different meaning is plainly indicated by the context:
SECTION 2.1 Award means a grant of Shares to an Eligible Director or
Eligible Employee pursuant to section 6.1 or 6.2.
SECTION 2.2 Award Notice means, with respect to a particular Award, a
written instrument signed by the Company and the Awards recipient evidencing the
granting of the Award and establishing the terms and conditions thereof.
SECTION 2.3 Bank means Hudson City Savings Bank, a New Jersey stock
savings bank, and any successor thereto.
SECTION 2.4 Beneficiary means the Person designated by an Eligible
Director or Eligible Employee pursuant to section 7.2, to receive distribution
of any Shares available for distribution to such Eligible Director or Eligible
Employee, in the event such Eligible Director or Eligible Employee dies prior to
receiving distribution of such Shares.
SECTION 2.5 Board means the Board of Directors of the Company.
SECTION 2.6 Change of Control means any of the following events:
(a) the consummation of a reorganization, merger or consolidation of the
Company with one or more other persons, other than a transaction following
which:
(i) at least 51% of the equity ownership interests of the entity
resulting from such transaction are beneficially owned (within the meaning
of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) in substantially the same relative proportions by
persons who, immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the outstanding equity ownership interests in the Company; and
(ii) at least 51% of the securities entitled to vote generally in the
election of directors of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) in substantially the same relative proportions by persons
who, immediately prior to such transaction, beneficially owned (within the
meaning of
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Rule 13d-3 promulgated under the Exchange Act) at least 51% of the
securities entitled to vote generally in the election of directors of the
Company;
(b) the acquisition of all or substantially all of the assets of the
Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the outstanding securities of the
Company entitled to vote generally in the election of directors by any person or
by any persons acting in concert;
(c) a complete liquidation or dissolution of the Company;
(d) the occurrence of any event if, immediately following such event, at
least 50% of the members of the board of directors of the Company do not belong
to any of the following groups:
(i) individuals who were members of the board of directors of the
Company on the Effective Date; or
(ii) individuals who first became members of the board of directors of
the Company after the Effective Date either:
(A) upon election to serve as a member of the board of Directors of
the Company by affirmative vote of three-quarters of the members of such
board, or of a nominating committee thereof, in office at the time of
such first election; or
(B) upon election by the shareholders of the Company to serve as a
member of such board, but only if nominated for election by affirmative
vote of three-quarters of the members of the board of directors of the
Company, or of a nominating committee thereof, in office at the time of
such first nomination;
provided, however, that such individual's election or nomination did not
result from an actual or threatened election contest (within the meaning of
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents (within the
meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) other than by or on behalf of the board of directors of the Company;
(e) approval by the stockholders of the Company of any agreement, plan or
arrangement for the consummation of a transaction which, if consummated, would
result in the occurrence of an event described in section 2.6(a), (b), (c) or
(d); or
(f) any event which would be described in section 2.6(a), (b), (c), (d) or
(e) if the term "Bank" were substituted for the term "Company" therein.
In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this section 2.6, the term "person" shall have the meaning assigned
to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.
SECTION 2.7 Code means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).
SECTION 2.8 Committee means the Committee described in section 4.1.
SECTION 2.9 Company means Hudson City Bancorp, Inc., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
SECTION 2.10 Disability means a condition of total incapacity, mental or
physical, for further performance of duty with the Company which the Committee
shall have determined, on the basis of competent medical evidence, is likely to
be permanent.
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SECTION 2.11 Disinterested Board Member means a member of the Board who
(a) is not a current employee of the Company or a subsidiary, (b) does not
receive remuneration from the Company or a subsidiary, either directly or
indirectly, in any capacity other than as a director, except in an amount for
which disclosure would not be required pursuant to Item 404(a) of the proxy
solicitation rules of the Securities and Exchange Commission and (c) does not
possess an interest in any other transaction, and is not engaged in a business
relationship, for which disclosure would be required pursuant to Item 404(a) or
(b) of the proxy solicitation rules of the Securities and Exchange Commission.
The term Disinterested Board Member shall be interpreted in such manner as shall
be necessary to conform to the requirements of Rule 16b-3 promulgated under the
Exchange Act.
SECTION 2.12 Effective Date means January 13, 2000.
SECTION 2.13 Eligible Director means a member of the board of directors of
an Employer who is not also an employee of any Employer.
SECTION 2.14 Eligible Employee means any employee whom the Committee may
determine to be a key officer or employee of the Employer and selects to receive
an Award pursuant to the Plan.
SECTION 2.15 Employer means the Company, the Bank and any successor
thereto and, with the prior approval of the Board of Directors of the Company,
and subject to such terms and conditions as may be imposed by the Board, any
other savings bank, savings and loan association, bank, corporation, financial
institution or other business organization or institution. With respect to any
Eligible Employee or Eligible Director, the Employer shall mean the entity which
employs such person or upon whose board of directors such person serves.
SECTION 2.16 Exchange Act means the Securities and Exchange Act of 1934,
as amended.
SECTION 2.17 FDIC Regulations means the rules and regulations of the
Federal Deposit Insurance Corporation.
SECTION 2.18 Person means an individual, a corporation, a bank, a savings
bank, a savings and loan association, a financial institution, a partnership, an
association, a joint-stock company, a trust, an estate, an unincorporated
organization and any other business organization or institution.
SECTION 2.19 Plan means the Hudson City Bancorp, Inc. 2000 Recognition and
Retention Plan as amended from time to time.
SECTION 2.20 Retirement means, with respect to any individual, termination
of all service for all Employers as a director, officer and employee at or after
the normal or early retirement date set forth in any tax-qualified plan of the
Bank, whether or not the individual in question actually participates in any
such tax-qualified plan of the Bank.
SECTION 2.21 Share means a share of common stock of Hudson City Bancorp,
Inc., par value $.01 per share.
SECTION 2.22 Trust means the legal relationship created by the Trust
Agreement pursuant to which the Trustee holds the Trust Fund in trust. The Trust
may be referred to as the "Recognition and Retention Plan Trust of Hudson City
Bancorp, Inc."
SECTION 2.23 Trust Agreement means the agreement between Hudson City
Bancorp, Inc. and the Trustee therein named or its successor pursuant to which
the Trust Fund shall be held in trust.
SECTION 2.24 Trust Fund means the corpus (consisting of contributions paid
over to the Trustee, and investments thereof), and all earnings, appreciations
or additions thereof and thereto,
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held by the Trustee under the Trust Agreement in accordance with the Plan, less
any depreciation thereof and any payments made therefrom pursuant to the Plan.
SECTION 2.25 Trustee means the Trustee of the Trust Fund from time to time
in office. The Trustee shall serve as Trustee until it is removed or resigns
from office and is replaced by a successor Trustee or Trustees appointed by
Hudson City Bancorp, Inc.
ARTICLE III
SHARES AVAILABLE UNDER PLAN
SECTION 3.1 Shares Available Under Plan.
(a) The maximum number of Shares available for Awards under the Plan shall
be 2,174,000, subject to adjustment pursuant to section 8.3.
(b) An aggregate maximum of 652,200 Shares (subject to adjustment pursuant
to section 8.3) may be granted as Awards to Eligible Directors, and a maximum of
108,700 Shares (subject to adjustment pursuant to section 8.3) may be granted as
Awards to any one Eligible Director.
(c) An aggregate maximum of 2,174,000 Shares (subject to adjustment
pursuant to section 8.3) may be granted as Awards to Eligible Employees, and a
maximum of 543,500 Shares (subject to adjustment pursuant to section 8.3) may be
granted as Awards to any one Eligible Employee.
ARTICLE IV
ADMINISTRATION
SECTION 4.1 Committee.
The Plan shall be administered by the members of the Compensation Committee
of Hudson City Bancorp, Inc. who are Disinterested Board Members. If the
Committee consists of fewer than two Disinterested Board Members, then the Board
shall appoint to the Committee such additional Disinterested Board Members as
shall be necessary to provide for a Committee consisting of at least two
Disinterested Board Members.
SECTION 4.2 Committee Action.
The Committee shall hold such meetings, and may make such administrative
rules and regulations, as it may deem proper. A majority of the members of the
Committee shall constitute a quorum, and the action of a majority of the members
of the Committee present at a meeting at which a quorum is present, as well as
actions taken pursuant to the unanimous written consent of all of the members of
the Committee without holding a meeting, shall be deemed to be actions of the
Committee. All actions of the Committee shall be final and conclusive and shall
be binding upon the Company and all other interested parties. Any Person dealing
with the Committee shall be fully protected in relying upon any written notice,
instruction, direction or other communication signed by the Secretary of the
Committee and one member of the Committee, by two members of the Committee or by
a representative of the Committee authorized to sign the same in its behalf.
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SECTION 4.3 Committee Responsibilities.
Subject to the terms and conditions of the Plan and such limitations as may
be imposed by the Board, the Committee shall be responsible for the overall
management and administration of the Plan and shall have such authority as shall
be necessary or appropriate in order to carry out its responsibilities,
including, without limitation, the authority:
(a) to interpret and construe the Plan, and to determine all questions
that may arise under the Plan as to eligibility for Awards under the Plan,
the amount of Shares, if any, to be granted pursuant to an Award, and the
terms and conditions of such Award;
(b) to adopt rules and regulations and to prescribe forms for the
operation and administration of the Plan; and
(c) to take any other action not inconsistent with the provisions of
the Plan that it may deem necessary or appropriate.
ARTICLE V
THE TRUST FUND
SECTION 5.1 Contributions.
Hudson City Bancorp, Inc. shall contribute, or cause to be contributed, to
the Trust, from time to time, such amounts of money or property as shall be
determined by the Board, in its discretion. No contributions by Eligible
Directors or Eligible Employees shall be permitted.
SECTION 5.2 The Trust Fund.
The Trust Fund shall be held and invested under the Trust Agreement with
the Trustee. The provisions of the Trust Agreement shall include provisions
conferring powers on the Trustee as to investment, control and disbursement of
the Trust Fund, and such other provisions not inconsistent with the Plan as may
be prescribed by or under the authority of the Board. No bond or security shall
be required of any Trustee at any time in office.
SECTION 5.3 Investments.
The Trustee shall invest the Trust Fund in Shares and in such other
investments as may be permitted under the Trust Agreement, including savings
accounts, time or other interest bearing deposits in or other interest bearing
obligations of the Company, in such proportions as shall be determined by the
Committee; provided, however, that in no event shall the Trust Fund be used to
purchase more than 2,174,000 Shares (subject to adjustment pursuant to section
8.3). Notwithstanding the immediately preceding sentence, the Trustee may
temporarily invest the Trust Fund in short-term obligations of, or guaranteed
by, the U.S. Government or an agency thereof, or the Trustee may retain the
Trust Fund uninvested or may sell assets of the Trust Fund to provide amounts
required for purposes of the Plan.
ARTICLE VI
AWARDS
SECTION 6.1 To Eligible Directors.
Subject to the limitations of the Plan and such limitations as the Board
may from time to time impose, the number of Shares as to which an Eligible
Director may be granted an Award shall be determined by the Committee in its
discretion; provided, however, that in no event shall the number
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of Shares allocated to an Eligible Director in an Award exceed the number of
Shares then held in the Trust and not allocated in connection with other Awards.
SECTION 6.2 To Eligible Employees.
Subject to the limitations of the Plan and such limitations as the Board
may from time to time impose, the number of Shares as to which an Eligible
Employee may be granted an Award shall be determined by the Committee in its
discretion; provided, however, that in no event shall the number of Shares
allocated to an Eligible Employee in an Award exceed the number of Shares then
held in the Trust and not allocated in connection with other Awards.
SECTION 6.3 Awards in General.
Any Award shall be evidenced by an Award Notice issued by the Committee to
the Eligible Director or Eligible Employee, which notice shall:
(a) specify the number of Shares covered by the Award;
(b) specify the date of grant of the Award;
(c) specify the dates on which such Shares shall become vested; and
(d) contain such other terms and conditions not inconsistent with the
Plan as the Board or Committee may, in its discretion, prescribe.
SECTION 6.4 Share Allocations.
Upon the grant of an Award to an Eligible Director or Eligible Employee,
the Committee shall notify the Trustee of the Award and of the number of Shares
subject to the Award. Thereafter, until such time as the Shares subject to such
Award become vested or are forfeited, the books and records of the Trustee shall
reflect that such number of Shares have been awarded to such Award recipient.
SECTION 6.5 Dividend Rights.
(a) Unless the Committee determines otherwise with respect to any Award and
specifies such determination in the relevant Award Notice, any cash dividends or
distributions declared and paid with respect to Shares subject to the Award that
are, as of the record date for such dividend, allocated to an Eligible Director
or Eligible Employee in connection with such Award shall be promptly paid to and
retained by such Eligible Director or Eligible Employee. Any cash dividends
declared and paid with respect to Shares that are not, as of the record date for
such dividend, allocated to any Eligible Director or Eligible Employee in
connection with any Award shall, at the direction of the Committee, be held in
the Trust or used to pay the administrative expenses of the Plan, including any
compensation due to the Trustee.
(b) Unless the Committee determines otherwise with respect to any Award and
specifies such determination in the relevant Award Notice, any dividends or
distributions declared and paid in property other than cash with respect to
Shares shall be subject to the same vesting and other restrictions as the Shares
to which the Award relates. Any such dividends declared and paid with respect to
Shares that are not, as of the record date for such dividend, allocated to any
Eligible Director or Eligible Employee in connection with any Award shall, at
the direction of the Committee, be held in the Trust or used to pay the
administrative expenses of the Plan, including any compensation due to the
Trustee or, in the case of a stock dividend, used for future Awards.
SECTION 6.6 Voting Rights.
(a) Each Eligible Director or Eligible Employee to whom an Award has been
made that is not fully vested shall have the right to exercise, or direct the
exercise of, all voting rights appurtenant to unvested Shares related to such
Award. Such a direction for any Shares as to which the Eligible
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Director or Eligible Employee is not the record owner shall be given by
completing and filing, with the inspector of elections, the Trustee or such
other person who shall be independent of the Company as the Committee shall
designate in the direction, a written direction in the form and manner
prescribed by the Committee. If no such direction is given by an Eligible
Director or Eligible Employee, then the voting rights appurtenant to the Shares
allocated to him shall not be exercised.
(b) To the extent that the Trust Fund contains Shares that are not
allocated in connection with an Award, all voting rights appurtenant to such
Shares shall be exercised by the Trustee in such manner as the Committee shall
direct to reflect the voting directions given by Eligible Directors or Eligible
Employees with respect to Shares allocated in connection with their Awards.
(c) The Committee shall furnish, or cause to be furnished, to each Eligible
Director or Eligible Employee who is not the record holder of the Shares
relating to his or her Award all annual reports, proxy materials and other
information furnished by Hudson City Bancorp, Inc., or by any proxy solicitor,
to the holders of Shares.
SECTION 6.7 Tender Offers.
(a) Each Eligible Director or Eligible Employee to whom an Award has been
made that is not fully vested shall have the right to respond, or to direct the
response, with respect to the Shares related to such Award, to any tender offer,
exchange offer or other offer made to the holders of Shares. Such a direction
for any Shares as to which the Eligible Director or Eligible Employee is not the
record owner shall be given by completing and filing, with the inspector of
elections, the Trustee or such other person who shall be independent of the
Company as the Committee shall designate in the direction, a written direction
in the form and manner prescribed by the Committee. If no such direction is
given by an Eligible Director or Eligible Employee, then the Shares shall not be
tendered or exchanged.
(b) To the extent that the Trust Fund contains Shares that are not
allocated in connection with an Award, all responses to tender, exchange and
other offers appurtenant to such Shares shall be given by the Trustee in such
manner as the Committee shall direct to reflect the responses given by Eligible
Directors or Eligible Employees with respect to Shares allocated in connection
with their Awards.
(c) The Committee shall furnish, or cause to be furnished, to each Eligible
Director or Eligible Employee, all information furnished by the offeror to the
holders of Shares.
SECTION 6.8 Limitations on Awards.
(a) No Award shall be granted under the Plan prior to the later of the date
on which the Plan is approved by shareholders pursuant to section 9.9 or January
13, 2000;
(b) No Award granted under the Plan shall become vested more rapidly than
under the following schedule:
(i) prior to January 20th following the first anniversary of the
Effective date on which the Plan is approved by shareholders pursuant to
section 9.9, no part of any Award shall be vested in the absence of the
death or Disability of the Award recipient;
(ii) on and after January 20th following the first anniversary of the
Effective Date and prior to January 20th following the second anniversary
of the Effective Date, an Award will be vested as to a maximum of twenty
percent (20%) of the Shares subject to the Award when granted in the
absence of the death or Disability of the Award recipient;
(iii) on and after January 20th following the second anniversary of
the Effective Date and prior to January 20th following the third
anniversary of the Effective Date, an Award may be
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vested as to a maximum of forty percent (40%) of the Shares subject to the
Award when granted in the absence of the death or Disability of the Award
recipient;
(iv) on and after January 20th following the third anniversary of the
Effective Date and prior to January 20th following the fourth anniversary
of the Effective Date, an Award may be vested as to a maximum of sixty
percent (60%) of the Shares subject to the Award when granted in the
absence of the death or Disability of the Award recipient;
(v) on and after January 20th following the fourth anniversary of the
Effective Date and prior to January 20th following the fifth anniversary of
the Effective Date, an Award may be vested as to a maximum of eighty
percent (80%) of the Shares subject to the Award when granted in the
absence of the death or Disability of the Award recipient; and
(vi) on and after January 20th following the fifth anniversary of the
date on which the Plan is approved by shareholders pursuant to section 9.9,
the Award may be vested as to one hundred percent (100%) of the Shares
subject to the Award when granted; and
(vii) an Award may become fully vested on the date of the Award
holder's death or Disability without regard to the time expired from and
after the Effective Date.
(c) An Award by its terms shall not be transferable by the Eligible
Director or Eligible Employee other than by will or by the laws of descent and
distribution, and the Shares granted pursuant to such Award and held in the
Trust shall be distributable, during the lifetime of the Recipient, only to the
Recipient.
ARTICLE VII
VESTING
SECTION 7.1 Vesting of Awards.
Subject to the terms and conditions of the Plan, unless otherwise
determined by the Committee and specified in the Award Notice relating to an
Award, Shares subject to each Award granted to an Eligible Director or Eligible
Employee under the Plan shall become vested as follows: (i) twenty percent (20%)
of such Shares shall become vested twenty (20) calendar days after the end of
the calendar quarter that includes the first anniversary of the date of grant;
(ii) an additional twenty percent (20%) of such Shares shall become vested
twenty (20) calendar days after the end of the calendar quarter that includes
the second anniversary of the date of grant; (iii) an additional twenty percent
(20%) of such Shares shall become vested twenty (20) calendar days after the end
of the calendar quarter that includes the third anniversary of the date of
grant; (iv) an additional twenty percent (20%) of such Shares shall become
vested twenty (20) calendar days after the end of the calendar quarter that
includes the fourth anniversary of the date of grant; (v) an additional twenty
percent (20%) of such Shares shall become vested twenty (20) calendar days after
the end of the calendar quarter that includes the fifth anniversary of the date
of grant; and provided, further, an Award shall become 100% vested upon the
Award recipient's death or Disability.
SECTION 7.2 Designation of Beneficiary.
An Eligible Director or Eligible Employee who has received an Award may
designate a Beneficiary to receive any undistributed Shares that are, or become,
available for distribution on, or after, the date of his death. Such designation
(and any change or revocation of such designation) shall be made in writing in
the form and manner prescribed by the Committee. In the event that the
Beneficiary designated by an Eligible Director or Eligible Employee dies prior
to the Eligible Director or Eligible Employee, or in the event that no
Beneficiary has been designated, any undistributed Shares that are, or become,
available for distribution on, or after, the Eligible Director's or Eligible
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Employee's death shall be paid to the executor or administrator of the Eligible
Director's or Eligible Employee's estate, or if no such executor or
administrator is appointed within such time as the Committee, in its sole
discretion, shall deem reasonable, to such one or more of the spouse and
descendants and blood relatives of such deceased person as the Committee may
select.
SECTION 7.3 Manner of Distribution.
(a) Except as provided in section 7.3(b), as soon as practicable following
the date any Shares granted pursuant to an Award become vested pursuant to
sections 7.1, the Committee shall take such actions as are necessary to cause
the transfer of record ownership of the Shares that have become vested from the
Trustee to the Award holder and shall cause the Trustee to distribute to the
Award holder all property other than Shares then being held in connection with
the Shares being distributed.
(b) The Committee may, in its discretion, cause the transfer to an Award
recipient of record ownership of the Shares subject to such Award that have not
yet vested. Any such Shares shall be held in certificated form only, and the
certificate therefor shall bear the following or a substantially similar legend:
The securities evidenced hereby are subject to the terms
of an Award Notice dated [DATE] between the issuer and
[NAME OF AWARD RECIPIENT] pursuant to the Hudson City
Bancorp, Inc. 2000 Recognition and Retention Plan, a copy
of which is on file with the issuer and may be inspected
at the issuer's executive offices at West 80 Century Road,
Paramus, New Jersey. No sale, transfer, hypothecation or
other disposition of these securities may be made except
in compliance with the terms of such Award Notice and the
terms of the Plan.
(c) The Company's obligation to deliver Shares with respect to an Award
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Eligible Director or
Eligible Employee or Beneficiary to whom such Shares are to be delivered, in
such form as the Committee shall determine to be necessary or advisable to
comply with the provisions of applicable federal, state or local law. It may be
provided that any such representation shall become inoperative upon a
registration of the Shares or upon the occurrence of any other event eliminating
the necessity of such representation. The Company shall not be required to
deliver any Shares under the Plan prior to (i) the admission of such Shares to
listing on any stock exchange on which Shares may then be listed, or (ii) the
completion of such registration or other qualification under any state or
federal law, rule or regulation as the Committee shall determine to be necessary
or advisable.
SECTION 7.4 Taxes.
The Company, the Committee or the Trustee shall have the right to require
any person entitled to receive Shares pursuant to an Award to pay the amount of
any tax which is required to be withheld with respect to such Shares, or, in
lieu thereof, to retain, or to sell without notice, a sufficient number of
Shares to cover the amount required to be withheld.
ARTICLE VIII
AMENDMENT AND TERMINATION
SECTION 8.1 Termination.
The Board may suspend or terminate the Plan in whole or in part at any time
by giving written notice of such suspension or termination to the Committee;
provided, however, that the Plan may not be terminated while there are
outstanding Awards that may thereafter become vested. Upon the
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termination of the Plan, the Trustee shall make distributions from the Trust
Fund in such amounts and to such persons as the Committee may direct and shall
return the remaining assets of the Trust Fund, if any, to Hudson City Bancorp,
Inc.
SECTION 8.2 Amendment.
The Board may amend or revise the Plan in whole or in part at any time;
provided, however, that no such amendment or revision shall alter the
stockholder approval standard set forth in Article X as a condition precedent to
the effectiveness of Article X or otherwise directly or indirectly give effect
to the substance of the provisions of Article X without compliance with the
stockholder approval requirement set forth therein.
SECTION 8.3 Adjustments in the Event of a Business Reorganization.
(a) In the event of any merger, consolidation, or other business
reorganization (including but not limited to a Change of Control) in which
Hudson City Bancorp, Inc. is the surviving entity, and in the event of any stock
split, stock dividend or other event generally affecting the number of Shares
held by each person who is then a holder of record of Shares, the number of
Shares held or permitted to be held in the Trust Fund, the number of Shares
covered by outstanding Awards, and the number of Shares available as Awards in
total or to particular individuals or groups shall be adjusted to account for
such event. Such adjustment shall be effected by multiplying such number of
Shares by an amount equal to the number of Shares that would be owned after such
event by a person who, immediately prior to such event, was the holder of record
of one Share, unless the Committee, in its discretion, establishes another
appropriate method of adjustment.
(b) In the event of any merger, consolidation, or other business
reorganization (including but not limited to a Change of Control) in which
Hudson City Bancorp, Inc. is not the surviving entity, the Trustee shall hold in
the Trust Fund any money, stock, securities or other property received by
holders of record of Shares in connection with such merger, consolidation, or
other business reorganization. Any Award with respect to which Shares had been
allocated to an Eligible Director or Eligible Employee shall be adjusted by
allocating to the Eligible Director or Eligible Employee receiving such Award
the amount of money, stock, securities or other property received by the Trustee
for the Shares allocated to such Eligible Director or Eligible Employee, and
such money, stock, securities or other property shall be subject to the same
terms and conditions of the Award that applied to the Shares for which it has
been exchanged.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Status as an Employee Benefit Plan.
This Plan is not intended to satisfy the requirements for qualification
under section 401(a) of the Code or to satisfy the definitional requirements for
an "employee benefit plan" under section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended. It is intended to be a non-qualified incentive
compensation program that is exempt from the regulatory requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Plan shall be
construed and administered so as to effectuate this intent.
SECTION 9.2 No Right to Continued Employment.
Neither the establishment of the Plan nor any provisions of the Plan nor
any action of the Board or the Committee with respect to the Plan shall be held
or construed to confer upon any Eligible Director or Eligible Employee any right
to continue in the service of any Employer. The Employers
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reserve the right to dismiss any Eligible Director or Eligible Employee or
otherwise deal with any Eligible Director or Eligible Employee to the same
extent as though the Plan had not been adopted.
SECTION 9.3 Construction of Language.
Whenever appropriate in the Plan, words used in the singular may be read in
the plural, words used in the plural may be read in the singular, and words
importing the masculine gender may be read as referring equally to the feminine
or the neuter. Any reference to an Article or section number shall refer to an
Article or section of this Plan unless otherwise indicated.
SECTION 9.4 Governing Law.
The Plan shall be construed and enforced in accordance with the laws of the
State of New Jersey without giving effect to the conflict of laws principles
thereof, except to the extent that such laws are preempted by the federal laws
of the United States of America. The Plan shall be construed to comply with
applicable FDIC Regulations.
SECTION 9.5 Headings.
The headings of Articles and sections are included solely for convenience
of reference. If there is any conflict between such headings and the text of the
Plan, the text shall control.
SECTION 9.6 Non-Alienation of Benefits.
The right to receive a benefit under the Plan shall not be subject in any
manner to anticipation, alienation or assignment, nor shall such right be liable
for or subject to debts, contracts, liabilities, engagements or torts.
SECTION 9.7 Notices.
Any communication required or permitted to be given under the Plan,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is personally delivered or 5 days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other:
(a) If to the Committee:
Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Corporate Secretary
(b) If to an Eligible Director or Eligible Employee, to the Eligible
Director's or Eligible Employee's address as shown in the Employer's
records.
SECTION 9.8 Required Regulatory Provisions.
The making and payment of Awards under this Plan shall be conditioned upon
and subject to compliance with section 18(k) of the Federal Deposit Insurance
Act, 12 U.S.C. 1828(k), and the rules and regulations promulgated thereunder.
SECTION 9.9 Approval of Shareholders.
The Plan shall not be effective or implemented prior to July 13, 2000
unless approved by the holders of a majority of the total votes eligible to be
cast at any duly called annual or special meeting of the Company, in which case
the Plan shall be effective as of the later of (a) January 13, 2000 or (b) the
date of such approval. If not effective prior to such one year anniversary, the
Plan shall be
B-11
<PAGE> 57
effective on such later date as is specified by the Board. No Award shall be
made prior to the date on which the Plan becomes effective.
ARTICLE X
ADDITIONAL PROVISIONS SUBJECT TO FURTHER SHAREHOLDER APPROVAL
SECTION 10.1 Accelerated Vesting Upon Retirement or Change in Control.
Notwithstanding anything in the Plan to the contrary, but subject to
section 10.3, unless otherwise determined by the Committee and specified in the
Award Notice relating to an Award: (a) in the event that any Award Recipient
terminates service with the Employer and such termination constitutes a
Retirement, all Awards outstanding to such holder on the date of his Retirement
shall, to the extent not already vested, become vested upon Retirement; and (b)
in the event of a Change of Control, all Awards outstanding under the Plan on
the date of the Change of Control shall, to the extent not already vested,
become vested on the date of the Change of Control.
SECTION 10.2 Discretion to Establish Vesting Schedules.
Notwithstanding anything in the Plan to the contrary, but subject to
section 10.3, section 7.1 shall apply in determining the vesting of Awards only
if no different vesting schedule is established by the Committee and specified
in the Award Notice.
SECTION 10.3 No Effect Prior to Stockholder Approval.
Notwithstanding anything contained in this Article X to the contrary, the
provisions of this Article X shall not be applied, and shall be of no force or
effect, unless and until the shareholders of the Company shall have approved
such provisions by affirmative vote of the holders of a majority of the Shares
represented in person or by proxy and entitled to vote at a meeting of
shareholders duly called and held after July 13, 2000.
B-12
<PAGE> 58
REVOCABLE PROXY
HUDSON CITY BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
HUDSON CITY BANCORP, INC.
FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, JANUARY 13, 2000
The undersigned stockholder of Hudson City Bancorp, Inc. hereby appoints
Verne S. Atwater, John W. Klie and Arthur V. Wynne, Jr., or any of them, with
full powers of substitution, to attend and act as proxy for the undersigned and
to vote all shares of common stock of Hudson City Bancorp which the undersigned
may be entitled to vote at the special meeting of stockholders to be held at the
Woodcliff Lake Hilton, 200 Tice Boulevard, Woodcliff Lake, New Jersey, 07675, on
Thursday, January 13, 2000, at 10:00 a.m., Eastern Time, and at any adjournment
or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF YOU DO NOT GIVE US ANY DIRECTION, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS IN ITEMS 1, 2 AND 3.
(Continued on Reverse Side)
PLEASE COMPLETE, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE
AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 59
Please mark
your vote as [X]
indicated in
this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE
PROPOSALS IN ITEMS 1, 2 AND 3.
FOR AGAINST ABSTAIN
1. Approval of the Hudson City Bancorp,
Inc. 2000 Stock Option Plan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
2. Approval of the Hudson City Bancorp,
Inc. 2000 Recognition and Retention Plan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. Authorization of the Board of Directors,
in its discretion, to direct the vote of [ ] [ ] [ ]
proxies upon such matters incident to the
conduct of the special meeting as may
properly come before the special meeting,
and any adjournment or postponement
thereof, including, without limitation, a
motion to adjourn the special meeting.
I will attend the special meeting. [ ]
(Please mark box if you plan to attend the special meeting.) (Important:
If your shares are not registered in your name, you will need additional
documentation to attend the special meeting.)
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Stockholders and the Proxy Statement for the special meeting.
__________________________________________________________________________
Signature(s)
__________________________________________________________________________
Signature(s)
Dated:____________________________________________________________________
Please sign exactly as your name appears on this proxy. Joint owners
should each sign personally. If signing as attorney, executor,
administrator, trustee or guardian, please include your full title.
Corporate or partnership proxies should be signed by an authorized
officer.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 60
[HUDSON CITY SAVINGS BANK LETTERHEAD]
December 7, 1999
TO: ALL EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP") MEMBERS
RE: SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 13, 2000
--------------------------------------------------------------
Dear Members:
As you know, the Bank maintains the Employee Stock Ownership Plan ("ESOP")
for employees of the Bank. The ESOP holds shares of Hudson City Bancorp, Inc.
("the Company") for the benefit of ESOP members. The shares in the ESOP are
held by HSBC Bank USA as trustee ("ESOP Trustee") of the ESOP. Shares purchased
by the ESOP are being held by the ESOP Trustee to be given to ESOP members over
a period of years. The ESOP allows its members (including former members and
beneficiaries) to have certain voting rights at the Company's stockholder
meetings.
In connection with the Special Meeting of Stockholders of Hudson City
Bancorp, Inc. to be held on January 13, 2000, enclosed are the following
documents:
1. Confidential Voting Instruction card for the ESOP (white card); and
2. Proxy Statement dated December 6, 1999, including a Notice of the
Special Meeting of Stockholders.
As a member of the ESOP, you have the right to direct the ESOP Trustee how
to vote the shares held by the ESOP as of November 26, 1999, the record date
for the Special Meeting ("Record Date"), on the proposals to be voted by the
Company's stockholders. You have this right because the ESOP has designated you
a "named fiduciary" of the shares of the Company held in your account. As a
named fiduciary, the law gives you the right to direct the Trustee how to vote
your shares, and requires the Trustee to follow your directions except in
limited circumstances. As a named fiduciary, you, and not the Trustee, will be
responsible for the consequences of the voting directions that you give.
Your rights as a member of the ESOP will vary depending on whether the
matter being voted on is an "Anticipated Proposal" or an "Unanticipated
Proposal."
<PAGE> 61
-2-
ANTICIPATED PROPOSALS.
Each ESOP member has the right to specify how the ESOP Trustee should vote
the shares in his or her ESOP account as of the Record Date. In general, the
ESOP Trustee will vote the shares in your ESOP account by casting votes FOR or
AGAINST or ABSTAIN as to each proposal as you specify on the Confidential Voting
Instruction accompanying this letter. The number of shares in your ESOP account
is shown on the enclosed Confidential Voting Instruction card.
The ESOP Trustee's fiduciary duties require it to vote any shares for which
it receives no voting instructions, as well as any shares not yet given to ESOP
members, in a manner determined to be prudent and solely in the interest of the
members. If you do not direct the ESOP Trustee how to vote the shares in your
ESOP account, the ESOP Trustee will, to the extent consistent with its fiduciary
duties, vote your shares either FOR or AGAINST each proposal in a manner
calculated to most accurately reflect the instructions received from other
members in the ESOP. The same is true of shares not yet placed in anyone's ESOP
account.
UNANTICIPATED PROPOSALS.
It is possible, although very unlikely, that proposals other than those
specified on the Confidential Voting Instruction cards will be presented for
stockholder action at the Special Meeting of Stockholders. If this should
happen, the ESOP Trustee will vote upon such matters in its discretion, or
cause such matters to be voted upon in the discretion of the individuals named
in any proxies executed by it.
* * * * *
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card or cards to signify your direction to the
ESOP Trustee. You should then seal the completed card or cards in the enclosed
envelope and return it directly to the ESOP Trustee using the postage-paid
return envelope provided. The Confidential Voting Instruction card or cards
must be received by the ESOP Trustee no later than January 3, 2000.
PLEASE NOTE THAT THE VOTING INSTRUCTIONS OF INDIVIDUAL MEMBERS ARE TO BE
KEPT CONFIDENTIAL BY THE ESOP TRUSTEE, WHO HAS BEEN INSTRUCTED NOT TO DISCLOSE
THEM TO ANYONE AT THE BANK OR THE COMPANY. IF YOU HAVE ANY QUESTIONS REGARDING
YOUR VOTING RIGHTS OR THE TERMS OF THE ESOP, PLEASE CALL DOUGLAS C. YINGLING AT
(201) 967-1900.
Very truly yours,
THE COMPENSATION COMMITTEE OF
HUDSON CITY SAVINGS BANK
Enclosures
<PAGE> 62
THE BOARD OF DIRECTORS OF HUDSON CITY BANCORP, INC. RECOMMENDS A VOTE
"FOR" PROPOSALS NOS. 1 AND 2. IF THIS CONFIDENTIAL VOTING INSTRUCTION IS SIGNED
BUT NO DIRECTION IS GIVEN, THIS VOTING INSTRUCTION CARD WILL BE DEEMED TO
INSTRUCT VOTES "FOR" PROPOSALS NOS. 1 AND 2. THE DIRECTIONS, IF ANY, GIVEN IN
THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL FROM ALL
DIRECTORS, OFFICERS AND EMPLOYEES OF HUDSON CITY BANCORP, INC. OR OF HUDSON
CITY SAVINGS BANK.
Please mark your votes like this [X]
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. Approval of the Hudson City Bancorp, Inc.
2000 Stock Option Plan [ ] [ ] [ ]
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of the Hudson City Bancorp, Inc.
2000 Recognition and Retention Plan [ ] [ ] [ ]
- -------------------------------------------------------------------------------
In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the Special Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the
discretion of the individuals named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction were
proposed by Hudson City Bancorp, Inc.
The undersigned hereby instructs the Trustee to vote in accordance with
the voting instruction indicated above and hereby acknowledges receipt, prior
to the execution of this Confidential Voting Instruction, of a Voting
Instruction Letter, a Notice of the Special Meeting of Stockholders of Hudson
City Bancorp, Inc. and a Proxy Statement dated December 6, 1999 for the Special
Meeting to be held January 13, 2000.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION MUST BE RECEIVED NO
LATER THAN JANUARY 3, 2000.
Date
-----------------------------------------
Signature
-----------------------------------------
Signature of member, former member or
designated beneficiary of deceased former
member. Please sign name exactly as it
appears herein. When signing as attorney,
executor, administrator, trustee or guardian,
please give your full title as such.
<PAGE> 63
HUDSON CITY BANCORP, INC.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE
OF HUDSON CITY BANCORP, INC.
FOR THE EMPLOYEE STOCK OWNERSHIP PLAN OF HUDSON CITY SAVINGS BANK
The undersigned member, former member or beneficiary of a deceased former
member in the Employee Stock Ownership Plan of Hudson City Savings Bank ("ESOP")
acting as a named fiduciary, hereby provides the voting instructions specified
to the Trustee of the ESOP (the "Trustee"), which instructions shall be taken
into account by the Trustee in voting, in person, by limited or general power of
attorney, by proxy, the shares and fractional shares of common stock of Hudson
City Bancorp, Inc. that are held by the Trustee, in its capacity as Trustee of
the ESOP, as of November 26, 1999 at the Special Meeting of Stockholders of
Hudson City Bancorp, Inc. to be held on January 13, 2000 and at any adjournment
or postponement thereof.
As to the proposals listed on the reverse side, which are more
particularly described in the Proxy Statement dated December 6, 1999, the
Trustee will vote the common stock of Hudson City Bancorp, Inc. held by the
ESOP Trust to reflect the voting instructions on this Confidential Voting
Instruction, in the manner described in the accompanying letter from the
Compensation Committee dated December 7, 1999.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE REVERSE
SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE> 64
[LETTERHEAD]
December 7, 1999
To: All Profit Incentive Bonus Plan ("PIB Plan") Members
Re: Special Meeting of Stockholders to Be Held on January 13, 2000
Dear Members:
As you know, the Profit Incentive Bonus Plan of Hudson City Savings
Bank ("Bank") ("PIB Plan") includes an investment alternative to purchase the
stock of the Bank's parent company, Hudson City Bancorp, Inc. (the "Company")
using funds from your PIB Plan account (the "Employer Stock Fund"). The Employer
Stock Fund of the PIB Plan holds shares of the Company for the benefit of its
members. The shares in the PIB Plan are held by Bankers Trust Company as trustee
("PIB Plan Trustee"). Interests in shares in the Employer Stock Fund are being
held by the PIB Plan Trustee for the benefit of PIB Plan members. The PIB Plan
allows its members (including former members and beneficiaries) to have certain
voting rights at the Company's stockholder meetings.
In connection with the Special Meeting of Stockholders of Hudson City
Bancorp, Inc. to be held on January 13, 2000, enclosed are the following
documents:
1. Confidential Voting Instruction card for the PIB Plan (yellow
card); and,
2. Proxy Statement dated December 6, 1999, including a Notice of
the Special Meeting of Stockholders.
As a member of the PIB Plan, you have the right to direct the PIB Plan
Trustee how to vote the shares held by the PIB Plan as of November 26, 1999, the
record date for the Special Meeting ("Record Date"), on the proposals to be
voted on by the Company's stockholders. You have this right because you are
deemed to be a "named fiduciary" of the shares of the Company held in your
account. As a named fiduciary, the law gives you the right to direct the Trustee
how to vote your shares, and requires the Trustee to follow your directions
except in limited circumstances. As a named fiduciary, you, and not the Trustee,
will be responsible for the consequences of the voting directions that you give.
Your rights as a member of the PIB Plan will vary depending on whether the
matter being voted on is an "Anticipated Proposal" or an "Unanticipated
Proposal."
<PAGE> 65
-2-
Anticipated Proposals.
In general, PIB Plan members have the right to direct how the PIB Plan
Trustee should vote the shares in the Employer Stock Fund. In general, the PIB
Plan Trustee will vote FOR and AGAINST each proposal specified on the
Confidential Voting Instruction card in the same proportions as instructions to
cast votes FOR and AGAINST such proposal are given by PIB Plan members entitled
to give voting instructions. The instructions given by each PIB Plan member will
be weighted according to value of his or her respective interest in the Employer
Stock Fund as of November 26, 1999. For purposes of the PIB Plan, if you ABSTAIN
as to a proposal, or if you do not return your Confidential Voting Instruction
card for the PIB Plan to the PIB Plan Trustee by January 3, 2000, your
instructions will not be counted. This means that, even if you ABSTAIN as to a
proposal or do not return your Confidential Voting Instruction card in a timely
manner, shares for which you had a right to direct the voting will be voted in
the same proportion as instructions to cast votes FOR and AGAINST each proposal
that were given by PIB Plan members entitled to give voting instructions.
Unanticipated Proposals.
It is possible, although very unlikely, that proposals other than those
specified on the Confidential Voting Instruction cards will be presented for
stockholder action at the Special Meeting of Stockholders. If this should
happen, the PIB Plan Trustee will vote upon such matters in its discretion, or
cause such matters to be voted upon in the discretion of the individuals named
in any proxies executed by it.
* * * * *
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card or cards to signify your direction to the
PIB Plan Trustee. You should then seal the completed card or cards in the
enclosed envelope and return it directly to the PIB Plan Trustee using the
postage-paid return envelope provided. The Confidential Voting Instruction card
or cards must be received by the PIB Plan Trustee no later than January 3, 2000.
Please note that the voting instructions of individual members are to
be kept confidential by the PIB Plan Trustee, who has been instructed not to
disclose them to anyone at the Bank or the Company. If you have any questions
regarding your voting rights or the terms of the PIB Plan, please call Douglas
C. Yingling at (201) 967-1900.
Very truly yours,
The Compensation Committee of
Hudson City Savings Bank
Enclosures
<PAGE> 66
HUDSON CITY BANCORP, INC.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE
OF HUDSON CITY BANCORP, INC.
FOR THE PROFIT INCENTIVE BONUS PLAN OF HUDSON CITY SAVINGS BANK
The undersigned member, former member or beneficiary of a deceased
former member in the Profit Incentive Bonus Plan of Hudson City Savings Bank
("PIB Plan"), acting as a named fiduciary, hereby provides the voting
instructions specified to the Trustee of the PIB Plan (the "Trustee"), which
instructions shall be taken into account by the Trustee in voting, in person, by
limited or general power of attorney, or by proxy, the shares and fractional
shares of common stock of Hudson City Bancorp, Inc. that are held by the
Trustee, in its capacity as Trustee of the PIB Plan, as of November 26, 1999 at
the Special Meeting of Stockholders of Hudson City Bancorp, Inc. to be held on
January 13, 2000 and at any adjournment or postponement thereof.
As to the proposals listed on the reverse side, which are more
particularly described in the Proxy Statement dated December 6, 1999, the
Trustee will vote the common stock of Hudson City Bancorp, Inc. held by the PIB
Plan Trust to reflect the voting instructions on this Confidential Voting
Instruction, in the manner described in the accompanying letter from the
Compensation Committee dated December 7, 1999.
(Continued on reverse side. Please complete, sign and date on the
reverse side and promptly return in the enclosed postage-paid envelope.)
<PAGE> 67
The Board of Directors of Hudson City Bancorp, Inc. recommends a vote
"FOR" Proposals Nos. 1 and 2. If this Confidential Voting Instruction is signed
but no direction is given, this voting instruction card will be deemed to
instruct votes "FOR" Proposals Nos. 1 and 2. The directions, if any, given in
this Confidential Voting Instruction will be kept confidential from all
directors, officers and employees of Hudson City Bancorp, Inc. or of Hudson City
Savings Bank.
<TABLE>
<CAPTION>
Please mark your votes like this
|X|
<S> <C> <C> <C> <C>
FOR AGAINST ABSTAIN*
1. Approval of the Hudson City Bancorp, Inc. 2000 Stock Option Plan |_| |_| |_|
- -----------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN*
2. Approval of the Hudson City Bancorp, Inc. 2000 Recognition and Retention |_| |_| |_|
Plan
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For purposes of your PIB Plan account, abstaining is the same as not voting.
In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the Special Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustee.
All proposals listed above in this Confidential Voting Instruction were
proposed by Hudson City Bancorp, Inc.
The undersigned hereby instructs the Trustee to vote in accordance with
the voting instruction indicated above and hereby acknowledges receipt, prior to
the execution of this Confidential Voting Instruction, of a Voting Instruction
Letter, a Notice of the Special Meeting of Stockholders of Hudson City Bancorp,
Inc. and a Proxy Statement dated December 6, 1999 for the Special Meeting to be
held January 13, 2000.
Please sign and date below and return promptly in the enclosed
postage-paid envelope. Your Confidential Voting Instruction must be received no
later than January
3, 2000.
Date
-------------------------------------------
Signature
-------------------------------------------
Signature of member, former member or
designated beneficiary of deceased former
member. Please sign name exactly as it
appears herein. When signing as attorney,
executor, administrator, trustee or
guardian, please give your full title as
such.
