<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
STERLING BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
STERLING BANCORP
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[STERLING BANCORP LOGO] 430 PARK AVENUE / NEW YORK, N.Y. 10022
LOUIS J. CAPPELLI
CHAIRMAN
& CHIEF EXECUTIVE
OFFICER
March 10, 1999
Dear Shareholder:
Sterling's Annual Meeting of Shareholders will be held on Thursday, April 15,
1999, at 9:30 A.M., at The New York Palace Hotel, Reid Salon, 2nd Floor, 455
Madison Avenue, New York, N.Y., and you are invited to attend.
Net income for 1998 grew 17.5% to a record level of $12.8 million and year end
capital reached an all time high of $102.2 million. During 1998, the Common
Share dividend was increased to $.44 per share per annum. As we announced on
February 18, 1999, the dividend was again raised to its new level of $.48 per
share per annum, representing a 12% increase over the rate paid in 1998. This
was the seventh such increase within the last five years. As usual, the Annual
Meeting will provide an opportunity to review with you Sterling's achievements
and give you a chance to meet your directors.
It is important that your shares be represented at the Annual Meeting whether or
not you are personally able to attend. Proxy material for the meeting
accompanies this letter. Please sign and date the enclosed proxy card and return
it in the enclosed envelope promptly.
Thank you for your continued interest and support.
Sincerely,
/s/ Louis Cappelli
<PAGE> 3
[STERLING BANCORP LOGO]
STERLING BANCORP
430 PARK AVENUE, NEW YORK, NY 10022-3505
NOTICE OF ANNUAL MEETING
APRIL 15, 1999
The Annual Meeting of Shareholders of Sterling Bancorp will be held on
Thursday, April 15, 1999, at 9:30 o'clock A.M., New York City time, at The New
York Palace Hotel, Reid Salon, 2nd Floor, 455 Madison Avenue, New York, New
York, to consider and act upon the following matters:
1. Election of 11 directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected.
2. Approval of Stock Incentive Plan Amendment, as described in the
accompanying Proxy Statement.
3. Such other matters as may properly come before the meeting or any
adjournment thereof.
The close of business on March 1, 1999 has been fixed as the record date
for the meeting. Only shareholders of record at that time are entitled to notice
of and vote at the Annual Meeting.
IMPORTANT
WE URGE THAT YOU SIGN, DATE AND SEND IN THE ENCLOSED PROXY AT YOUR EARLIEST
CONVENIENCE, WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING. SENDING IN
YOUR PROXY WILL NOT PREVENT YOU FROM VOTING YOUR SHARES PERSONALLY AT THE
MEETING, SINCE YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
JERROLD GILBERT
Secretary
March 10, 1999
<PAGE> 4
STERLING BANCORP
430 Park Avenue
New York, N.Y. 10022-3505
------------------
PROXY STATEMENT
------------------
MARCH 10, 1999
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Sterling Bancorp ("Company") with respect
to the Annual Meeting of Shareholders of the Company to be held on April 15,
1999. Any proxy given by a shareholder may be revoked at any time before it is
voted by giving appropriate notice to the Secretary of the Company or by
delivering a later dated proxy or by a vote by the shareholder in person at the
Annual Meeting. Proxies in the accompanying form which are properly executed by
shareholders and duly returned to the Company and not revoked will be voted for
all nominees listed under "Election of Directors," for the amendment of the
Company's Stock Incentive Plan, and on other matters in accordance with the
Board of Directors' recommendations, unless the shareholder directs otherwise.
This proxy statement and the accompanying form of proxy are being mailed to
shareholders on or about March 12, 1999.
The outstanding shares of the Company at the close of business on March 1,
1999 entitled to
vote at the Annual Meeting consisted of 8,180,891 Common Shares, $1 par value
("Common Shares"), and 245,159 Preferred Shares, ("Preferred Shares") of which
1,230 are Series B ($5 par value) and 243,929 are Series D ($5 par value). All
outstanding Common Shares and Preferred Shares vote together and not as separate
classes.
The Common Shares and the Preferred Shares are entitled to one vote for
each share on all matters to be considered at the meeting and the holders of a
majority of such shares, present in person or represented by proxy, constitute a
quorum for the transaction of business at the Annual Meeting of Shareholders.
Only shareholders of record at the close of business on March 1, 1999 are
entitled to vote at the Annual Meeting.
Assuming the presence of a quorum, directors are elected by a plurality of
the votes cast; approval of the Stock Incentive Plan Amendment requires the
affirmative vote of a majority of the votes cast on the proposal, provided that
the total votes so cast represent over 50% of the votes entitled to be cast at
the meeting. Accordingly, abstentions and broker non-votes (arising from the
absence of discretionary authority on the part of a broker-dealer to vote shares
held in street name for a customer) will have the effect of a vote cast against
the Stock Incentive Plan Amendment but no effect on other matters.
ELECTION OF DIRECTORS
Eleven directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting of Shareholders to be held on April 15, 1999, to
serve until the next Annual Meeting and until their respective successors have
been elected. It is intended that, unless authority to vote for any nominee or
all nominees is withheld, the accompanying proxy will be voted in favor of the
election as directors of the nominees named below. All nominees are members of
the present Board of Directors, having been elected at the 1998 Annual Meeting
of Shareholders, except for Mr. Robert Abrams, who is a nominee for the Board
for the first time. There is no family relationship between any of the nominees
or executive officers. In the event that any of the nominees shall not be a
candidate, the persons designated as proxies are authorized to substitute one or
more nominees, although there is no reason to anticipate that this will occur.
<PAGE> 5
The information set forth below has been furnished by the nominees:
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION FOR LAST FIVE YEARS, YEAR
BUSINESS EXPERIENCE, DIRECTORSHIP OF THE COMPANY ELECTED A
AND OF STERLING NATIONAL BANK ("BANK"), DIRECTOR
A SUBSIDIARY OF THE COMPANY, AND OTHER INFORMATION AGE OF THE
-------------------------------------------------- --- COMPANY--
<S> <C> <C>
Robert Abrams 60 **
Partner, Stroock & Stroock & Lavan, LLP; former Attorney
General of the State of New York; former Bronx Borough
President
Joseph M. Adamko* 66 1992
Former Managing Director, Manufacturers Hanover Trust Co.
(now Chase Manhattan Bank, N.A.); Vice Chairman of the
Company and of the Bank
Lillian Berkman* 76 1989
President and Chief Executive Officer, General Alarm
Corporation
Louis J. Cappelli * 68 1971
Chairman of the Board and Chief Executive Officer of the
Company; Chairman of the Board of the Bank
Walter Feldesman* 81 1975
Counsel, Baer Marks & Upham
Allan F. Hershfield 67 1994
President, Resources for the 21st Century; former
President, Fashion Institute of Technology
Henry J. Humphreys 70 1994
Chancellor and Chief Operating Officer, American
Association of the Sovereign Military Order of Malta
John C. Millman* 56 1988
President of the Company; President, Chief Executive
Officer of the Bank
Maxwell M. Rabb 88 1989
Counsel, Kramer, Levin, Naftalis & Frankel; former United
States Ambassador to Italy
Eugene T. Rossides 71 1989
Senior Counsel, Rogers & Wells; former Assistant
Secretary, United States Treasury Department
William C. Warren* 90 1988
Of Counsel, Roberts & Holland, LLP; Dean Emeritus,
Columbia University School of Law
</TABLE>
- ---------------
* Member of Executive Committee.
** Nominee for Director for the first time.
Each nominee is a director of the Bank, except for Mr. Abrams, who will be
a nominee for director of the Bank at the Bank's Shareholders' meeting scheduled
for April 15, 1999.
The following nominees hold directorships in public companies: Mr. Adamko,
Tommy Hilfiger Corporation; Mr. Feldesman, Grand Court Lifestyles, Inc.; and Mr.
Rabb, Preferred Employees, Inc. and Eurotech, Ltd.
Reference is made to "Security Ownership of Directors and Executive
Officers and Certain Beneficial Owners" on page 8 for information as to the
nominees' holdings of the Company's equity securities.
2
<PAGE> 6
EXECUTIVE COMPENSATION AND RELATED MATTERS
The following table sets forth information concerning the compensation for
the Company's last three completed fiscal years with respect to its chief
executive officer and the four other most highly compensated executive officers
who served as such at December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL ----------------------------
COMPENSATION RESTRICTED SECURITIES ALL OTHER
-------------------- STOCK UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS($)(1) OPTIONS(#) SATION($)(2)
--------------------------- ---- --------- -------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Cappelli 1998 433,030 385,000 100,000 80,349
Chairman of the Board and 1997 400,000 350,000 75,000 66,813
Chief Executive Officer, 1996 315,577 275,000 625,000 37,245
Sterling Bancorp
Chairman of the Board,
Sterling National Bank
John C. Millman 1998 285,324 190,000 50,000 25,987
President, 1997 265,000 170,000 40,000 17,490
Sterling Bancorp 1996 227,695 135,000 437,500 14,365
President and Chief Executive
Officer,
Sterling National Bank
Jerrold Gilbert 1998 137,500 15,000 15,000 7,839
Executive Vice President 1997 132,500 25,000 15,000 6,074
General Counsel and Secretary 1996 127,500 15,000 62,500 12,000 6,841
Sterling Bancorp and
Sterling National Bank
John A. Aloisio 1998 165,000 25,000 15,000 7,587
Senior Vice President, 1997 150,000 25,000 15,000 5,660
Sterling Bancorp 1996 139,500 20,000 12,000 6,428
Executive Vice President,
Sterling National Bank
John W. Tietjen 1998 140,000 35,000 15,000 7,425
Executive Vice President, 1997 127,500 30,000 12,000 6,122
Treasurer and Chief Financial 1996 122,500 20,000 31,250 9,500 6,560
Officer,
Sterling Bancorp
Executive Vice President
Sterling National Bank
</TABLE>
- ---------------
(1) As of December 31, 1998, Messrs. Cappelli, Millman, Gilbert and Tietjen,
respectively, owned in the aggregate 50,000, 35,000, 5,000 and 2,500 Common
Shares valued at $1,141,000, $798,000, $114,000 and $57,000, and as to which
dividends are payable, which Common Shares were subject to restrictions on
the date of grant, January 3, 1996. Such restrictions lapse as to 25 percent
thereof on the first, second, third and fourth anniversaries of the date of
grant. Accordingly, as of January 3, 1999, 37,500, 26,250, 3,750 and 1,875
Common Shares owned by Messrs. Cappelli, Millman, Gilbert and Tietjen,
respectively, were no longer subject to restrictions.
(2) Represents for each executive the term life insurance premiums paid by the
Company on his behalf, and as to Mr. Cappelli, includes premiums paid by the
Company for split-dollar life insurance policies insuring the joint lives of
him and his spouse. This insuring of joint lives reduces the premiums paid
for the coverage. Premiums paid by the Company will be refunded to the
Company on termination of the split-dollar policies. The imputed income with
respect to the premium for the term life insurance provided under the
split-dollar policies and included in the figure for 1998 was $852. The
value of the benefits to Mr. Cappelli of the remainder of the premiums paid
by the Company on the split-dollar policies and included in the figure for
1998 was $22,611. Also represents for each executive, his allocable share of
the Company's Employee Stock Ownership Plan ("ESOP") compensation expense,
and as to Messrs. Cappelli and Millman, $33,101 and $17,680, respectively,
accruing to them for 1998 under the Company's supplemental pension benefit
plan (see "Retirement Plans" below) as compensation for Internal Revenue
Code limitations on contributions to the ESOP for them.
3
<PAGE> 7
Employment Contracts. The Company has agreements with Messrs. Cappelli and
Millman which currently provide for terms extending until December 31, 2003 and
December 31, 2001, respectively, and contain change of control provisions
entitling the executive to a lump-sum cash payment in an amount equal to three
times the executive's average annual compensation during the Company's three
fiscal years preceding the date of termination and the continuation of health
and similar benefits for a period of 36 months following termination if the
executive is terminated within two years of a change in control. These
agreements also provide for cash payments in amounts necessary to insure that
the foregoing payments are not subject to reduction due to the imposition of
excise taxes payable under I.R.S. Code Section 4999 or any similar tax. The
executive also has thirteen months after a change of control to terminate his
employment for any reason and receive the severance benefits. These agreements
were entered into upon the recommendation of the Board's Compensation Committee
in 1993 and amended in 1998.
Retirement Plans. In November 1984, (1) the Sterling Bancorp/Sterling
National Bank Employees' Retirement Plan ("New Plan"), a defined benefit plan
which covers all of their respective eligible employees, was adopted and (2) the
separate defined benefit plans ("Old Plans") previously maintained by Sterling
National Bank and Standard Financial Corporation (since merged into the Company)
were terminated, vesting the benefits of the participants in the Old Plans for
all years of credited service. The New Plan gives credit for credited service
under the Old Plans but provides, in substance, for a participant's vested
benefits under the Old Plans to be offset against the benefits to be provided
the participant under the New Plan. Accordingly, the retirement benefits to be
provided a continuing employee can be determined simply by reference to the
provisions of the New Plan.
An employee becomes eligible for participation in the New Plan upon the
attainment of age 21 and the completion of one year of service. All
contributions required of the New Plan are made by the employers and no employee
contributions are required or permitted.
The Internal Revenue Code imposes limitations on the retirement benefits
payable to more highly compensated employees. The Company has a Supplemental
Executive Retirement Plan for designated employees ("Supplemental Plan"), which
provides for supplemental payments to such retirees of the Company in amounts
equal to the difference between retirement benefits such retirees actually
receive under the Company's plans and the amount which would have been received
were such Internal Revenue Code limitations not in effect.
The following table sets forth the estimated annual retirement benefits
under the above plans, on a life annuity and guaranteed 10 year certain basis,
payable to persons in specified remuneration and years of service
classifications, not subject to any offset amount.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
HIGHEST
CONSECUTIVE
FIVE YEAR
AVERAGE ESTIMATED ANNUAL RETIREMENT BENEFIT AT AGE 65 FOR
COMPENSATION REPRESENTATIVE YEARS OF CREDITED SERVICE
IN LAST -------------------------------------------------------------------------------------------------------
10 YEARS 10 15 20 25 30 35 40 45 50
- ------------- -- -- -- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$100,000............ $14,760 $ 22,140 $ 29,520 $ 36,900 $ 44,280 $ 51,660 $ 59,040 $ 66,420 $ 73,800
200,000............ 29,760 44,640 59,520 74,400 89,280 104,160 119,040 133,920 148,800
300,000............ 44,760 67,140 89,520 111,900 134,280 156,660 179,040 201,420 223,800
400,000............ 59,760 89,640 119,520 149,400 179,280 209,160 239,040 268,920 298,800
500,000............ 74,760 112,140 149,520 186,900 224,280 261,660 299,040 336,420 373,800
600,000............ 89,760 134,640 179,520 224,400 269,280 314,160 359,040 403,920 448,800
700,000............ 104,760 157,140 209,520 261,900 314,280 366,660 419,040 471,420 523,800
800,000............ 119,760 179,640 239,520 299,400 359,280 419,160 479,040 538,920 598,800
</TABLE>
4
<PAGE> 8
Annual benefits are calculated on the highest consecutive five-year average
compensation during the ten years preceding retirement as provided in the New
Plan.
The pensions computed under the New Plan are equal to the sum of:
(1) 1% of the average compensation up to $4,800, multiplied by the
number of years of credited service, plus
(2) 1 1/2% of the average compensation in excess of $4,800, multiplied
by the number of years of credited service.
Average compensation under the New Plan includes salary compensation but
not other types of compensation; bonus compensation for designated senior
management executives, presently the Chairman and President, is included under
the Supplemental Plan as currently in effect.
The current number of years of service credited to Messrs. Cappelli,
Millman, Gilbert, Aloisio and Tietjen are 47, 22, 24, 8 and 9 respectively.
OTHER PLANS
The following tables set forth information as to options granted to each of
the executive officers named in the summary compensation table in the last
fiscal year and as to incentive stock options held at December 31, 1998 by such
executive officers. No other options or stock appreciation rights ("SARs") were
held by such officers at such date. The options granted to Mr. Cappelli and Mr.
Millman in 1998 are nonqualified stock options. The remainder of the options are
intended to be incentive stock options.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS GRANT DATE
UNDERLYING GRANTED TO EXERCISE OR PRESENT
THE OPTION EMPLOYEES BASE PRICE EXPIRATION VALUE
NAME GRANTED(1) IN 1998 ($/SH)(2) DATE ($)(3)
---- ---------- ------------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Louis J. Cappelli....................... 100,000 38.76 24.75 2/10/08 909,000
John C. Millman......................... 50,000 19.38 24.75 2/10/08 454,500
Jerrold Gilbert......................... 15,000 5.81 24.75 2/10/08 136,350
John A. Aloisio......................... 15,000 5.81 24.75 2/10/08 136,350
John W. Tietjen......................... 15,000 5.81 24.75 2/10/08 136,350
</TABLE>
- ---------------
(1) Options granted will vest in accordance with the following schedule: 100,000
options in 1999 for Mr. Cappelli; 50,000 options in 1999 for Mr. Millman;
2,726 options in 2000 and 4,040 options in each of 2001, 2002 and 2003 and
154 options in 2004 for Mr. Gilbert and Mr. Aloisio; and 565 options in
1999, 4,040 options in each of 2000, 2001 and 2002, and 2,315 options in
2003 for Mr. Tietjen (all subject to acceleration under certain
circumstances, including a change in control).
(2) The exercise price of all options is equal to the fair market value of a
share of Common Stock on the date of grant.
(3) In accordance with SEC rules, the Black-Scholes option pricing model was
chosen to estimate the grant date present value of the options set forth in
this table. The Company's use of this model should not be construed as an
endorsement of its accuracy at valuing options. All stock option valuation
models, including the Black-Scholes model, require a prediction about the
future movement of the stock price. The following assumptions were made for
purposes of calculating the grant date present value: an expected option
term of 8 years; expected volatility of .274; dividend yield of 1.49%; and
risk free rate of return of 5.52%. The real value of the options in this
table depends upon the actual changes in the market price of Common Shares
during the applicable period.
5
<PAGE> 9
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF COMMON SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS HELD AT AT FISCAL YEAR END
FISCAL YEAR END -----------------------------
SHARES ACQUIRED VALUE ----------------------------- VESTED NON-VESTED
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE NON-EXERCISABLE EXERCISABLE NON-EXERCISABLE
---- --------------- ----------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Cappelli........... -- -- 43,336 166,664 $513,555 $345,819
John C. Millman............. -- -- 31,451 83,549 369,402 174,035
Jerrold Gilbert............. -- -- 18,451 23,549 154,214 44,347
John A. Aloisio............. -- -- 23,451 23,549 195,152 44,347
John W. Tietjen............. 5,000 59,688 15,951 20,549 111,245 28,785
</TABLE>
PERFORMANCE GRAPH
The following graph sets forth a comparison of the percentage change in the
cumulative total shareholder return on the Company's Common Shares compared to
the cumulative total return on the Standard & Poor's 500 Index (the "S&P 500
Index"), and the Keefe, Bruyette & Woods 50 Index ("KBW 50 Index"). The stock
price performance shown on the graph below is not necessarily indicative of
future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG STERLING BANCORP, THE S&P 500 INDEX AND THE KBW 50 INDEX
GRAPH
<TABLE>
<CAPTION>
STERLING BANCORP S&P 500 KBW 50
---------------- ------- ------
<S> <C> <C> <C>
Dec 93 100.00 100.00 100.00
Dec 94 86.00 101.00 95.00
Dec 95 171.00 139.00 152.00
Dec 96 207.00 171.00 215.00
Dec 97 343.00 229.00 314.00
Dec 98 332.00 294.00 340.00
</TABLE>
- ---------------
* $100 invested on 12/31/93 in Stock or Index.
Including reinvestment of dividends.
Fiscal year ending December 31.
6
<PAGE> 10
MEETINGS AND ATTENDANCE OF DIRECTORS; COMMITTEES; FEES
During the year ended December 31, 1998, the Board of Directors of the
Company held five regularly scheduled meetings. In addition, various committees
of the Board met at regular meetings. No director attended fewer than 75% of the
meetings he or she was required to attend. The Company has standing audit and
compensation committees and does not have a nominating committee or a committee
performing similar functions.
The members of the audit committee ("Audit Committee") are Messrs.
Feldesman (chair), Adamko, Humphreys and Rossides. The Committee held four
meetings during the year ended December 31, 1998. Among the functions of the
Audit Committee are to review the scope of the audit by the Company's
independent accountants, to consider issues which may arise in the course of the
audit, monitor the adequacy of the Company's internal accounting controls,
discuss the services, fees and charges of the independent accountants, report to
the Board in respect of these matters, and recommend the firm to be retained as
independent accountants for the Company.
The members of the compensation committee ("Compensation Committee") are
Mrs. Berkman (chair), Mr. Feldesman and Mr. Warren. None of the members of the
Compensation Committee has ever been an officer or employee of the Company or
any of the Company's subsidiaries. Among the functions of the Compensation
Committee are making recommendations to the Board concerning the bases for
executive officer compensation, including the relationship between compensation
and performance and the measures of performance to be considered, and concerning
the compensation and other key terms of employment agreements with Mr. Cappelli
and Mr. Millman. (See "Compensation Committee Report" attached as Exhibit A to
this Proxy Statement.) The Compensation Committee held two meetings during the
year ended December 31, 1998.
Directors who are not salaried officers receive fees for attendance at
Board and committee meetings. Each eligible director receives $1,000 for
attending each Board meeting, $600 for attending each committee meeting, a $500
supplemental payment in December of each year and an annual Non-Qualified Stock
Option for 4,000 Common Shares. (See "Non-Employee Director Grants" below.)
Expenses of directors incurred in traveling to Board and committee meetings are
reimbursed by the Company. The Chair of the Audit Committee receives an annual
stipend of $5,000 for service in such capacity in lieu of Audit Committee
meeting fees. Mr. Adamko, Vice Chairman of the Company and the Bank, receives a
monthly fee of $3,750 but does not receive attendance fees.
TRANSACTIONS WITH THE COMPANY AND OTHER MATTERS
From time to time, officers and directors of the Company and their family
members or associates have purchased or may purchase short-term notes of the
Company and certificates of deposit from the Bank on the same terms available to
other persons. The Bank also makes loans from time to time to related interests
of directors. Such loans are made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons and do not
involve more than the normal risk of collectability or present other unfavorable
features. Messrs. Feldesman, Rossides and Warren each are counsel to law firms
that the Company retained during its last fiscal year.
7
<PAGE> 11
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL
OWNERS; SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The following table sets forth, as of February 10, 1999, holdings of the
Company's Common Shares and Preferred Shares by each present director and
nominee for director and each of the executive officers named in the Summary
Compensation Table on page 3 and by all directors and executive officers as a
group. The Common Shares are traded on The New York Stock Exchange and the
closing price on March 1, 1999 was $20 11/16 per share.
<TABLE>
<CAPTION>
% OF OUTSTANDING
COMMON % OF OUTSTANDING SERIES D SERIES D
NAME SHARES(1) COMMON SHARES PREFERRED SHARES(1) PREFERRED SHARES
---- ------------ ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Robert Abrams....................... 100 +
Joseph M. Adamko.................... 5,500 +
Lillian Berkman..................... 28,600 .34
Louis J. Cappelli................... 305,707 3.74 3,390 1.39
Walter Feldesman.................... 8,000 +
John C. Millman..................... 148,309 1.81 3,309 1.36
Maxwell M. Rabb..................... 5,700 +
Eugene T. Rossides.................. 7,399 +
William C. Warren................... 26,818 .33
Allan F. Hershfield................. 5,335 +
Henry J. Humphreys.................. 5,200 +
Jerrold Gilbert..................... 62,231 .76 3,120 1.28
John A. Aloisio..................... 34,716 .42 3,158 1.29
John W. Tietjen..................... 30,163 .37 3,047 1.25
All directors and executive officers
as a group (14 in group).......... 673,778 8.23 16,024 6.57
</TABLE>
- ---------------
+ Less than .1 of 1%
(1) Each nominee and officer has sole voting and investment power with
respect to the securities indicated above to be owned by him, except that in the
case of Messrs. Cappelli, Millman, Gilbert, Aloisio and Tietjen, and all
directors, nominees and executive officers as a group, shares shown as owned
include 45,542, 4,072, 16,951, 2, 77 and 66,644 Common Shares, respectively,
held in profit sharing plans as to which they have power to direct the vote, and
the Preferred Shares, set forth above, held by the Company's Employee Stock
Ownership Trust upon which they are currently entitled to direct the vote. The
shares shown as owned include as to Mr. Warren, Mrs. Berkman and Mr. Rabb, 2,000
Common Shares; as to Messrs. Hershfield and Rossides, 3,500 Common Shares; as to
Mr. Adamko, 4,500 Common Shares; as to Messrs. Feldesman and Humphreys, 5,000
Common Shares; as to Messrs. Cappelli, Millman, Tietjen, Aloisio and Gilbert,
and all executive officers as a group, 151,669, 87,902, 22,065, 29,902, 24,902,
and 316,440 Common Shares, respectively, covered by outstanding stock options
exercisable within 60 days, and as to Messrs. Cappelli, Millman, Gilbert and
Tietjen, and all executive officers as a group, include 12,500, 8,750, 1,250,
625 and 23,125 Common Shares, respectively, granted under the Company's Stock
Incentive Plan as to which they do not have sole investment power. In addition,
the shares shown as owned by Mr. Cappelli include 298 Common Shares owned by his
wife, the shares shown as owned by Mr. Millman include 500 shares owned by his
wife and 123 shares owned by his wife as custodian, and the shares owned by Mr.
Aloisio include 500 shares owned by his son and 80 shares owned by his wife,
beneficial ownership of which each of them disclaims.
8
<PAGE> 12
The following table sets forth the number of Common Shares owned
beneficially by Dimensional Fund Advisors, Inc. based upon information provided
by it to the Company as of March 9, 1999.
<TABLE>
<CAPTION>
NUMBER AND
NATURE OF
COMMON SHARES APPROXIMATE
BENEFICIALLY PERCENTAGE OF
NAME AND ADDRESS OWNED CLASS
---------------- ------------- -------------
<S> <C> <C>
Dimensional Fund Advisors Inc. ("Dimensional").............. 534,795(1) 6.53
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
- ---------------
(1) Dimensional has advised the Company that it is an investment advisor
registered under Section 203 of the Investment Advisor Act of 1940, furnishes
investment advice to four investment companies registered under the Investment
Company Act of 1940, and serves as investment manager to certain other
investment vehicles, including commingled group trusts. (These investment
companies and investment vehicles are the "Portfolios"). In its role as
investment advisor and investment manager, Dimensional states that it possesses
both voting and investment power over the Common Shares set forth in the above
table that are owned by the Portfolios and that all such are owned by the
Portfolios, and Dimensional disclaims beneficial ownership of such securities.
Further, Dimensional has advised the Company that no one of these advisory
clients, to the knowledge of Dimensional, owns more than 5% of the class.
Sterling Bancorp and Subsidiaries Employee Stock Ownership Trust (whose
address is 430 Park Ave., New York, NY 10022, Attn: Trust Dept.), established
pursuant to the Sterling Bancorp and Subsidiaries Employee Stock Ownership Plan
("ESOP"), owns all 243,929 outstanding shares of Series D Preferred Stock, each
share of which is convertible into one Common Share. The Series D Preferred
Stock carries one vote per share, and votes along with the Common Shares as a
single class. Participants vote shares allocated to their respective ESOP
accounts, and receive passed through voting rights with respect to unallocated
shares based on relative ESOP account balances. Any Shares with respect to which
voting instructions are not received are to be voted by the ESOP Committee.
Except as set forth above, the Company does not know of any person that
owns more than 5% of any class of the Company's voting securities.
The Company believes that all required filings have been made under Section
16(a) of the Securities Exchange Act of 1934 by the Company's directors and
executive officers. In making this statement, the Company has relied on copies
of the reporting forms received by it or on the written representations from
certain reporting persons that no Forms 5 were required to be filed under the
applicable rules of the Securities and Exchange Commission.
APPROVAL OF STOCK INCENTIVE PLAN AMENDMENT
In April 1992, shareholders approved adoption of the Company's Stock
Incentive Plan, which authorized the grant of awards in the form of incentive
stock options, non-qualified stock options, stock appreciation rights,
restricted stock or a combination of these. There are currently 1,450,000 shares
covered by the Plan. Awards covering an aggregate of 1,102,750 shares have been
made. After giving effect to such awards, only 347,250 shares remain available
under the Plan.
The Compensation Committee and the Company's Stock Plans Committee have
advised the Board of Directors that in view of the Compensation Committee's
policy for greater utilization of stock-based compensation, they recommended
that the number of shares available under the Plan be increased by 400,000
shares (see "Compensation Committee Report" attached as Exhibit A to this Proxy
Statement). The Board of Directors has approved and recommends to the
shareholders an amendment to the Plan which would increase the aggregate number
of shares subject to it by 400,000. The text of the amendment is attached as
Exhibit B to this Proxy Statement. No grants will be made under the Plan
pursuant to the proposed amendment unless the shareholders approve the amendment
at the 1999 Annual Meeting.
Approval of the amendment requires the affirmative vote of a majority of
the votes cast on the proposal, provided that the total votes so cast represent
over 50% of the votes entitled to be cast at the meeting.
9
<PAGE> 13
The Board of Directors recommends a vote FOR the approval of the amendment,
and it is intended that proxies not marked to the contrary will be so voted.
ADMINISTRATION
Authority to administer the Plan was delegated by the Board to a Stock
Plans Committee which consists of at least three directors, none of whom is to
be eligible to participate in awards (other than automatic awards to
Non-Employee Directors). In addition to Non-Employee Directors, all officers and
key employees of the Company and its subsidiaries who are in positions which
enable them to make significant contributions to long-term performance and
profitability of the Company are eligible to receive awards. Approximately 130
employees of the Company and its subsidiaries are eligible to participate in the
Plan.
TYPE OF AWARDS
Awards granted pursuant to the Plan may take the form of Incentive Stock
Options ("ISOs"), within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), Non-Qualified Stock Options ("NQSOs"), Stock
Appreciation Rights ("SARs"), Restricted Stock or a combination of these forms
of awards.
Incentive Stock Options. The exercise price of an ISO may not be less than
100% of the fair market value of the Company's Shares on the date of grant. If
the aggregate market value (determined on the date of grant) of all shares
subject to ISOs that first become exercisable by an individual optionee in a
single calendar year exceeds $100,000, the excess is to be treated as NQSOs. An
optionee may exercise an ISO during the option period at such time, and in such
amounts (subject to a 100 share minimum), as he desires and may pay the exercise
price in cash or in such other consideration as the Committee may determine. All
ISOs granted under the Plan are exercisable for a ten year period, on a
cumulative basis at a rate of twenty-five (25%) each year, beginning one year
after the date of grant, unless the Committee determines otherwise; provided
that, unless the Committee determines otherwise in an optionee's written award
agreement, all ISOs granted to an optionee will become exercisable upon the
termination of the optionee's employment by the Company without "cause," or upon
a "change in control" of the Company (as each such term is defined in the Plan).
In the event of termination of an optionee's employment, other than by the
Company for cause, or in the event of death or disability, any unexercised
portion of the ISO which is exercisable at the time of termination will
terminate three months following such termination unless the expiration date of
the ISO occurs sooner. If such termination of employment is by reason of death
or disability, the portion of the ISO which is exercisable at the time of
termination may be exercised for a period of 12 months after such termination,
unless the expiration date of the ISO occurs sooner. In the event the Company
terminates an optionee's employment for cause, any unexercised portion of the
ISO will terminate immediately upon termination of employment. Additional
restrictions apply to ISOs granted to a 10 percent stockholder (as defined in
Section 422 of the Code).
Non-Qualified Stock Options. All Non-Qualified Stock Options granted under
the Plan may be for such (i) number of shares, (ii) exercise price and (iii)
term as the Committee, in its sole discretion, may determine. All NQSOs granted
under the Plan are exercisable beginning six months after the date of grant
unless the Committee determines otherwise; provided that, unless the Committee
determines otherwise in an optionee's written award agreement, all NQSOs granted
to an optionee will become exercisable upon the termination of the optionee's
employment by the Company without cause, or upon a change in control of the
Company. The terms of the Plan regarding exercisability of NQSOs following
termination of employment are identical to those applicable to ISOs.
Stock Appreciation Rights. Pursuant to the terms of the Plan SARs are
granted only (i) in conjunction with the granting of options, (ii) in an amount
not in excess of the number of Shares granted in the related option and (iii) on
terms providing that the exercise of an option for a given number of shares
terminates the related SAR for that number of shares (so that the total number
of shares for which an option and the related SAR may be exercised cannot exceed
the number of shares granted in the option). SARs provide the participant with
an amount equal to the difference between the fair market value of the Shares on
the date the SAR is exercised and the exercise price of the option; such amount
is to be paid, in the discretion of the Committee, either in cash or in shares
(valued at their fair market value on the date of exercise) or a
10
<PAGE> 14
combination thereof. Each SAR is subject to the same conditions on termination
of employment as the related option.
Restricted Stock. A recipient of Restricted Stock may be entitled to
receive Shares of the Company at no out-of-pocket cost or to purchase Shares of
the Company at a price determined by the Committee which is expected to be below
the fair market value of the Shares. The time period of the restrictions and
rate of lapse of such restrictions will be determined by the Committee in its
sole discretion; provided that, unless the Committee determines otherwise in a
grantee's written award agreement, all such restrictions shall lapse upon the
termination of the grantee's employment by the Company without cause, or upon a
change in control of the Company.
Shares. The number of shares available is subject to adjustment in order
to prevent dilution. To the extent that options expire or are cancelled without
having been exercised or Restricted Stock is forfeited, the shares involved
shall become available for future grants or awards.
NON-EMPLOYEE DIRECTOR GRANTS
Under the Plan each Non-Employee Director will automatically be granted an
NQSO on the last day the Company's Common Shares are traded in April and an
additional NQSO on the last day the Company's Common Shares are traded in June.
The April NQSO is to be for 2,000 shares, is exercisable in four equal
installments -- commencing on the first anniversary of the date of grant -- and
to expire on the fifth anniversary of such date, and is to provide for a
purchase price equal to 100% of the fair market value of the Common Shares on
the date of grant; provided that an NQSO shall be immediately exercisable in the
event of a change in control of the Company. Each Non-Employee Director is
granted such an option in each April commencing in 1995 and terminating in 1999
or such earlier time as his services as a director terminate; The June NQSO
provides for grants to each Non-Employee Director of 2,000 shares in each of
1998 and 1999 and 4,000 shares in each of 2000, 2001 and 2002 upon substantially
the same terms and conditions as the April grants. Upon termination of the
services of a director, all options then exercisable may be exercised during a
period of three months, except that if termination is by reason of death, the
legal representative of the deceased Non-Employee Director has six months to
exercise all options regardless of whether the decedent could have then
exercised them.
AMENDMENT
The Plan may be amended, terminated or modified by the Board at any time,
except that the Board may not, without approval by a vote of the shareholders of
the Company (subject, however, to changes resulting from stock dividends, stock
splits or similar changes in the Company's capitalization), increase the maximum
number of shares for which options and awards may be granted under the Plan or
change the persons eligible to participate in the Plan. No such termination,
modification or amendment may affect the rights of a participant under an
outstanding option or the grantee of an award.
MARKET VALUE OF STOCK
On March 3, 1999, the market value of one of the Company's Common Shares
was $20 15/16.
FEDERAL INCOME TAX CONSEQUENCES
In general, except as described below with respect to Restricted Stock, no
taxable income will be recognized by the participant, and no deduction will be
allowed to the Company, upon the grant of any option, SAR or shares of
Restricted Stock under the Plan.
Non-Qualified Stock Options. In general, upon exercise of an NQSO, an
optionee will recognize ordinary income in the year in which the option is
exercised in an amount equal to the difference between the fair market value of
the Shares on the date of exercise and the exercise price; the amount so
recognized as income will be deductible by the Company.
Upon any subsequent sale of the shares, the optionee's basis in the shares
for determining gain or loss will be the sum of the exercise price and any
income recognized upon exercise. Any gain or loss recognized to the optionee
upon the sale or other disposition of any of these shares will be a capital gain
or loss, either long-term or short-term, depending upon the holding period of
the shares.
11
<PAGE> 15
Incentive Stock Options. No taxable income will be recognized by the
optionee upon the exercise of an ISO, but the difference between the fair market
value of the shares on the date of exercise and the exercise price is an item of
tax preference, subject to the possible application of the alternative minimum
tax. If the shares purchased on the exercise of an ISO are held for a period of
at least two years from the date of the grant of the option and one year from
the date the option is exercised, any gain recognized on a subsequent sale of
such Shares will constitute long-term capital gain rather than ordinary income,
and the Company will not be entitled to any deduction with respect to the
option.
However, if the optionee disposes of such shares within one year from the
date of exercise or two years from the date of the grant of the option, the
excess of the lesser of the fair market value of the shares at the time of
exercise and the amount realized by the optionee on such disposition over the
exercise price will be taxed as ordinary income, and the Company will be
entitled to a corresponding deduction. Any further gain or any loss recognized
on such a disposition generally will be a capital gain or loss, either long-term
or short-term, depending on the holding period of the shares.
Stock Appreciation Rights. Upon exercise of an SAR the amount of cash
received (or the value of any shares received) must be treated as ordinary
income by the employee. Under such circumstances, the Company will be entitled
to a corresponding tax deduction in the same amount which the employee is
required to treat as income.
Restricted Stock. The award of Restricted Stock to an employee does not
result in taxable income to the employee at the time of grant. Generally, the
employee will recognize ordinary income when the restrictions against transfer
of the stock lapse in an amount equal to the value of the stock at that time.
Alternatively, the employee can elect under Section 83(b) of the Code (a
"Section 83(b) Election") to include the value of the Restricted Stock at the
time of the grant, less any amount paid for it, in his income for the year in
which he received the Restricted Stock. The employee must file this election
with the Internal Revenue Service within 30 days after the Restricted Stock is
transferred to him. If the employee makes this election, subsequent changes in
the value of the stock will not result in ordinary income or loss to him.
However, if the stock is later forfeited, the employee will not be entitled to
any deduction with respect to the amount he earlier included as ordinary income.
The Company will be entitled to an income tax deduction in the year in which the
employee recognized ordinary income with respect to the Restricted Stock in an
amount equal to the income recognized by the employee.
If no Section 83(b) Election is made, (i) no income will be recognized by
the employee (and the Company will not be entitled to a deduction) with respect
to the Restricted Stock until the date the restrictions lapse, (ii) any
dividends paid on the Restricted Stock until the restrictions lapse will be
taxed to the employee as compensation income (and the Company will be entitled
to a deduction) and (iii) the employee will recognize ordinary income at the
time the restrictions lapse in an amount equal to the fair market value of the
Restricted Stock at that time, less the amount paid, if any, and the Company
will be entitled to a corresponding deduction. Upon a subsequent disposition of
the Restricted Stock by the employee, any gain or loss realized above or below
the value previously taken into income by the employee will be long-term or
short-term capital gain or loss, depending on the holding period of the Shares
following the date the restrictions lapse or the Section 83(b) Election was
made, as applicable.
On April 30, 1998, pursuant to the terms of the Plan, NQSOs to purchase
2,000 Common Shares were granted to each of the Company's eight Non-Employee
Directors at a price of $28 per share, the closing price of the Common Shares on
such date, and on June 30, 1998, pursuant to the terms of the Plan, NQSOs to
purchase an additional 2,000 Common Shares were granted to each of the Company's
eight Non-Employee Directors at a price of $26 per share, the closing price of
the Common Shares on such date. Effective February 12, 1999, options covering
294,000 Common Shares were granted to executive officers (including 100,000 to
Mr. Cappelli; 50,000 to Mr. Millman; 15,000 to Mr. Gilbert; 20,000 to Mr.
Aloisio; and 20,000 to Mr. Tietjen) and options covering 89,000 Common Shares
were granted to other employees. The exercise price of each such option is
$20 13/16, the closing price of the Common Shares on February 12, 1999.
REQUIRED VOTE FOR APPROVAL
Approval of the Amendment requires the affirmative vote of a majority of
the votes cast on the proposal, provided that the total votes so cast represent
over 50% of the votes entitled to be cast at the meeting.
The Board of Directors recommends a vote FOR the approval of the Amendment,
and it is intended that proxies not marked to the contrary will be so voted.
12
<PAGE> 16
GENERAL
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG, LLP, which firm audited the financial statements
for the Company's fiscal year ending December 31, 1998 and which has been the
auditor for the Company and its predecessors since 1958, are expected to be
present at the Annual Meeting of Shareholders. They will have the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
CHANGE OF CONTROL ARRANGEMENTS
The Company has agreements with certain executive officers of the Company
and its subsidiaries (other than the Chairman and the President) providing for
guaranteed severance payments equal to two times the annual compensation of the
officer with respect to the designated executive officers and continuation of
health and similar benefits for the applicable period if the officer is
terminated within two years after a change of control. These agreements also
provide for cash payments in amounts necessary to insure that the foregoing
payments are not subject to reduction due to the imposition of excise taxes
payable under I.R.S. Code Section 4999 or any similar tax.
2000 ANNUAL MEETING
Any shareholder who may desire to submit under the Securities and
Commission's shareholder proposal rule (Rule 14a-8) a proposal for inclusion in
the Company's proxy and proxy statement for the 2000 Annual Meeting of
Shareholders currently scheduled to be held on April 20, 2000, must present such
proposal in writing to the Company at 430 Park Avenue, New York, New York
10022-3505, Attention: Jerrold Gilbert, Secretary, not later than the close of
business on November 11, 1999. Under the Company's Bylaws, any shareholder who
desires to submit a proposal outside of the process provided by the Securities
and Exchange Commission's shareholder proposal rule (Rule 14a-8) or desires to
nominate a director at the 2000 Annual Meeting of Shareholders must provide
timely notice thereof in the manner and form required by the Company's Bylaws by
February 20, 2000, (but not before January 21, 2000). If the date of the 2000
Annual Meeting should change, such deadline would also change.
OTHER
Management knows of no other business to be presented to the Annual Meeting
of Shareholders, but if any other matters are properly presented to the meeting
or any adjournments thereof, the persons named in the proxies will vote upon
them in accordance with their best judgment.
The cost of the solicitation of proxies in the enclosed form will be borne
by the Company. In addition to solicitation by mail, directors, officers and
employees of the Company may solicit proxies by personal interview, telephone or
telegram. The Company reimburses brokerage houses, custodians, nominees and
fiduciaries for their expenses in forwarding proxies and proxy material to their
principals. The Company has retained Morrow & Co., Inc. to assist in the
solicitation of proxies, which firm will, by agreement, receive compensation of
$3,500, plus expenses, for these services.
The Annual Report to Shareholders (which is not a part of the proxy
soliciting material) for the fiscal year ended December 31, 1998 accompanies
this Notice and Proxy Statement.
THE COMPANY FILES WITH THE SECURITIES AND EXCHANGE COMMISSION AN ANNUAL
REPORT ON FORM 10-K. A COPY OF THE REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31,
1998, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, WILL BE
FURNISHED, WITHOUT CHARGE, TO ANY SHAREHOLDER SENDING A WRITTEN REQUEST THEREFOR
TO JOHN W. TIETJEN, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER,
STERLING BANCORP, 430 PARK AVENUE, NEW YORK, NY 10022-3505.
STERLING BANCORP
Dated: March 10, 1999
13
<PAGE> 17
EXHIBIT A
COMPENSATION COMMITTEE REPORT
The policy of the Company - adopted by the Board of Directors in 1993 on
the recommendation of our Committee is:
"Company policy should be to make a meaningful part of the
compensation of executive officers be based on performance. While the
relative importance of performance measures may vary from year to year in
line with corporate business plans and the Committee's judgment, the
measures would include, amongst other criteria, earnings, return on assets,
return on equity, loan and deposit growth."
With respect to the Company's Chairman and President, their employment
agreements, as mandated by our Committee, provide for annual performance bonuses
to be based on performance elements set by the Committee together with its
evaluation of relevant qualitative factors. Such factors include growth of
consolidated earnings, improvement of return on assets and return on equity, and
growth of loans, and deposits and customer repurchase agreements. Performance
was to represent meaningful growth over the appropriate base period. Given the
Company's 1998 performance, cash bonus amounts of $385,000 and $190,000,
respectively, were determined for Messrs. Cappelli and Millman.
We further believe that the advances made by the Company since we
recommended that performance-based compensation be emphasized and that there
should be greater utilization of stock-based compensation demonstrate the
soundness of this compensation philosophy and in this connection we recommended
to the Board an increase of 400,000 in the shares available under the Company's
Stock Incentive Plan, which increase the Board is recommending to the
shareholders for approval at the upcoming annual meeting.
After considering the Company's achievements in earnings growth, enhanced
assets and capital, business expansion and heightened recognition in the
financial markets and after evaluating the contributions made by Messrs.
Cappelli and Millman and the responsibilities undertaken by them, our Committee
determined that the annual base salaries under the Company's employment
agreements with them should be increased by $25,000 and $15,000, respectively,
effective January 1, 1999, and the terms of these agreements extended to
December 31, 2003 and December 31, 2001, respectively.
Lillian Berkman, Chair
Walter Feldesman
William C. Warren
Dated: February 19, 1999
A-1
<PAGE> 18
EXHIBIT B
STERLING BANCORP STOCK INCENTIVE PLAN AMENDMENT
A. INTRODUCTION -- Sterling Bancorp (the "Company") desires to amend the
Sterling Bancorp Stock Incentive Plan, as amended to date, (the "Plan") to
increase the maximum aggregate number of shares subject to the Plan by 400,000.
B. EFFECTIVENESS -- This amendment shall become effective if it shall be
approved by the vote of a majority of the outstanding voting shares entitled to
notice of and to vote at the 1999 annual meeting of shareholders. In the event
of any conflict between the provisions of this amendment and of the Plan as
originally adopted, the provisions of this amendment shall control.
C. SHARES SUBJECT TO THE PLAN -- The first sentence of Section 3 of the
Plan, as amended, is amended to further increase the number set forth therein by
400,000.
B-1
<PAGE> 19
STERLING BANCORP
430 PARK AVENUE, NEW YORK, NY 10022-3505
LOGO
Subsidiaries and Division
STERLING NATIONAL BANK
STERLING FACTORS CORPORATION
STERLING NATIONAL MORTGAGE COMPANY, INC. (NEW YORK)
STERLING NATIONAL MORTGAGE CORPORATION (VIRGINIA)
STERLING BANKING CORPORATION
STERLING HOLDING COMPANY OF VIRGINIA, INC.
STERLING REAL ESTATE HOLDING COMPANY INC.
------------------------
STERLING FINANCIAL SERVICES COMPANY (DIVISION)
<PAGE> 20
STERLING BANCORP
430 PARK AVENUE, NEW YORK, NY 10022-3505
LOGO
<PAGE> 21
PROXY
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
STERLING BANCORP
ANNUAL MEETING OF SHAREHOLDERS, APRIL 15, 1999
The undersigned appoints Louis J. Cappelli, John C. Millman and Lillian
Berkman, or any one of them, attorneys and proxies with power of substitution,
to vote all of the Common Shares and Preferred Shares of Sterling Bancorp
standing in the name of the undersigned at the Annual Meeting of Shareholders on
April 15, 1999, and all adjournments thereof, hereby revoking any proxy
heretofore given.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
STERLING BANCORP
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT
COMPANY HIGHLIGHTS
1998 WAS ANOTHER MOMENTOUS YEAR FOR STERLING BANCORP
- - Net income grew 17.5% to a record high of $12.8 million.
- - Capital reached an all time high of $102.2 million.
- - Common Share dividend has been increased to $.48 per annum.
<PAGE> 22
PROXY
Please mark
your votes as [X]
this
PROPOSALS OF THE BOARD OF DIRECTORS
THE DIRECTORS RECOMMEND A VOTE FOR
FOR WITHHELD
ALL NOMINEES FOR ALL NOMINEES
1. ELECTION OF DIRECTORS [ ] [ ]
Robert Abrams, Joseph M. Adamko, Lillian
Berkman, Louis J. Cappelli, Walter
Feldesman, Allan F. Hershfield, Henry J.
Humphreys, John C. Millman, Maxwell M.
Rabb, Eugene T. Rossides, William C.
Warren.
To withhold authority to vote for any
individual nominee(s) write that
nominee's name in the space provided.
THE DIRECTORS RECOMMEND A VOTE FOR FOR AGAINST ABSTAIN
2. Proposal to approve the Stock [ ] [ ] [ ]
Incentive Plan Amendment.
3. In their discretion the Proxies are
authorized to vote upon such other
business as may properly come before the
meeting.
THIS PROXY WILL BE VOTED AS DIRECTED BY
THE SHAREHOLDER IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR ALL NOMINEES"
IN ITEM 1 AND "FOR" APPROVAL OF THE
STOCK INCENTIVE PLAN AMENDMENT.
Signature(s)_____________________________________________Date___________________
Please mark, date, and sign as your name appears hereon and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should so indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized officer. If shares are
held jointly, each shareholder named should sign.
- FOLD AND DETACH HERE -
<PAGE> 23
REMINDER PROXY
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
STERLING BANCORP
ANNUAL MEETING OF SHAREHOLDERS, APRIL 15, 1999
The undersigned appoints Louis J. Cappelli, John C. Millman and Lillian Berkman,
or any one of them, attorneys and proxies with power of substitution, to vote
all of the Common Shares and Preferred Shares of Sterling Bancorp standing in
the name of the undersigned at the Annual Meeting of Shareholders on April 15,
1999, and all adjournments thereof, hereby revoking any proxy heretofore given.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
STERLING BANCORP
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT
COMPANY HIGHLIGHTS
1998 WAS ANOTHER MOMENTOUS YEAR FOR STERLING BANCORP
- - Net income grew 17.5% to a record high of $12.8 million.
- - Capital reached an all time high of $102.2 million.
- - Common Share dividend has been increased to $.48 per annum.
<PAGE> 24
REMINDER PROXY
Please mark
your votes as [X]
this
PROPOSALS OF THE BOARD OF DIRECTORS
THE DIRECTORS RECOMMEND A VOTE FOR
FOR WITHHELD
ALL NOMINEES FOR ALL NOMINEES
1. ELECTION OF DIRECTORS
Robert Abrams, Joseph M. Adamko, Lillian [ ] [ ]
Berkman, Louis J. Cappelli, Walter
Feldesman, Allan F. Hershfield, Henry J.
Humphreys, John C. Millman, Maxwell M.
Rabb, Eugene T. Rossides, William C.
Warren.
To withhold authority to vote for any
individual nominee(s) write that
nominee's name in the space provided.
- --------------------------------------------------------------------------------
THE DIRECTORS RECOMMEND A VOTE FOR FOR AGAINST ABSTAIN
2. Proposal to approve the Stock [ ] [ ] [ ]
Incentive Plan Amendment.
3. In their discretion the Proxies are
authorized to vote upon such other
business as may properly come before the
meeting.
THIS PROXY WILL BE VOTED AS DIRECTED BY
THE SHAREHOLDER IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR ALL NOMINEES"
IN ITEM 1 AND "FOR" APPROVAL OF THE
STOCK INCENTIVE PLAN AMENDMENT.
Signature(s)_____________________________________________Date___________________
Please mark, date, and sign as your name appears hereon and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should so indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized officer. If shares are
held jointly, each shareholder named should sign.
- FOLD AND DETACH HERE -
