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:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
Statewide Financial Corp.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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(LOGO)
April 21, 1999
Dear Statewide Financial Corp. Shareholder:
You are cordially invited to attend the annual meeting of
shareholders (the "Annual Meeting") of Statewide Financial Corp. (the
"Company"), the holding company for Statewide Savings Bank, S.L.A.
(the "Bank"), to be held on May 11, 1999, at 10:30 a.m., at the Newark
Airport Marriott, Newark International Airport, Newark, New Jersey
07114.
At the Annual Meeting, shareholders will be asked to elect two
members to the Board of Directors.
The Board of Directors of the Company has determined that the
election of the Board's nominees is in the best interests of the
Company and its shareholders and the Board unanimously recommends that
you vote "FOR" each candidate.
YOUR COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE COMMON
STOCK MUST BE REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE
A QUORUM FOR THE CONDUCT OF BUSINESS. WHETHER OR NOT YOU EXPECT TO
ATTEND, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY
IN THE POSTAGE-PAID ENVELOPE PROVIDED, SO THAT YOUR SHARES WILL BE
REPRESENTED.
On behalf of the Board of Directors, officers and all of the
employees of the Company, I thank you for your continued interest and
support.
Sincerely yours,
/s/Victor M. Richel
---------------------
Victor M. Richel
Chairman of the Board, President
and Chief Executive Officer
STATEWIDE FINANCIAL CORP.
70 Sip Avenue
Jersey City, New Jersey 07306
-----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 11, 1999
------------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders
(the "Annual Meeting") of Statewide Financial Corp. (the "Company")
will be held on May 11, 1999, at 10:30 a.m., at the Newark Airport
Marriott, Newark International Airport, Newark, New Jersey 07114.
The purpose of the Annual Meeting is to consider and vote upon
the following matters:
1. Election of two directors, each to a three-year term of
office;
2. Such other matters as may properly come before the Annual
Meeting and at any adjournments thereof, including whether
or not to adjourn the meeting.
The Board of Directors has established March 23, 1999, as the
record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting and at any adjournments
thereof. Only record holders of the common stock of the Company as of
the close of business on that date will be entitled to notice of, and
to vote at, the Annual Meeting or any adjournments thereof.
By Order of the Board of Directors
/s/Victor M. Richel
---------------------
Victor M. Richel
Chairman of the Board, President
and Chief Executive Officer
Jersey City, New Jersey
April 21, 1999
STATEWIDE FINANCIAL CORP.
70 Sip Avenue
Jersey City, New Jersey 07306
-------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1999
-------------------------------
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to shareholders of
Statewide Financial Corp. (the "Company") in connection with the
solicitation by the Board of Directors of proxies to be used at the
annual meeting of shareholders (the "Annual Meeting"), to be held on
May 11, 1999, at 10:30 a.m., at the Newark Airport Marriott, Newark
International Airport, Newark, New Jersey 07114 and at any
adjournments thereof. The 1998 Annual Report to Shareholders,
including consolidated financial statements for the fiscal year ended
December 31, 1998, and a proxy card, accompanies this Proxy Statement,
which is first being mailed to record holders on or about April 21,
1999.
Regardless of the number of shares of common stock owned, it is
important that you vote by completing the enclosed proxy card and
returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their vote in the spaces provided
on the proxy card. PROXIES SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN.
WHERE NO INSTRUCTIONS ARE INDICATED, SIGNED PROXY CARDS WILL BE VOTED
"FOR" THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR NAMED IN THIS
PROXY STATEMENT.
Other than the matters set forth on the attached Notice of Annual
Meeting of Shareholders, the Board of Directors knows of no additional
matters that may be presented for consideration at the Annual Meeting.
Execution of a proxy, however, confers on the designated proxy holders
discretionary authority to vote the shares in accordance with their
best judgment on such other business, if any, that may properly come
before the Annual Meeting and at any adjournments thereof, including
whether or not to adjourn the Annual Meeting.
A proxy may be revoked at any time prior to its exercise by
filing a written notice of revocation with the Corporate Secretary of
the Company, by delivering to the Company a duly executed proxy
bearing a later date, or by attending the Annual Meeting and voting in
person. However, if you are a shareholder whose shares are not
registered in your own name, you will need appropriate documentation
from your record holder to vote personally at the Annual Meeting.
The cost of solicitation of proxies on behalf of the Board of
Directors will be borne by the Company. In addition to the
solicitation of proxies by mail, Chase Mellon Shareholder Services,
LLC will assist the Company in soliciting proxies for the Annual
Meeting and will be paid a fee of $3,500, plus out of pocket expenses.
Proxies may also be solicited personally or by mail or telephone by
directors, officers and other employees of the Company and Statewide
Savings Bank, S.L.A. (the "Bank"), its wholly-owned subsidiary,
without additional compensation therefor. The Company 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 material to and obtain proxies from such
beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
Voting Securities
The securities which may be voted at the Annual Meeting consist
of shares of common stock, no par value, of the Company ("Common
Stock"), with each share entitling its owner to one vote on all
matters to be voted on at the Annual Meeting, except as described
below. There is no cumulative voting for the election of directors.
The close of business on March 23, 1999, has been fixed by the
Board of Directors as the record date (the "Record Date") for the
determination of shareholders of record entitled to notice of and to
vote at the Annual Meeting and at any adjournments thereof. The total
number of shares of Common Stock outstanding on the Record Date was
4,037,847 shares.
In accordance with the provisions of the Company's Certificate of
Incorporation, record holders of Common Stock (other than employee
benefit plans or trusts for the benefit of employees) who beneficially
own in excess of 10% of the outstanding shares of Common Stock (the
"Limit") are not entitled to any vote with respect to the shares held
in excess of the Limit. A person or entity is deemed to beneficially
own shares owned by an affiliate of, as well as by persons acting in
concert with, such person or entity. The Company's Certificate of
Incorporation authorizes the Board of Directors (i) to make all
determinations necessary to implement and apply the Limit, including
determining whether persons or entities are acting in concert, and
(ii) to demand that any person who is reasonably believed to
beneficially own stock in excess of the Limit supply information to
the Company to enable the Board of Directors to implement and apply
the Limit.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to
vote (after giving effect to the Limit described above, if applicable)
is necessary to constitute a quorum at the Annual Meeting. In the
event that there are not sufficient votes for a quorum, or to approve
or ratify any matter being presented at the time of the Annual
Meeting, the Annual Meeting may be adjourned in order to permit the
further solicitation of proxies.
The proxy card being provided by the Board of Directors enables a
shareholder to vote "FOR" the election of the nominees proposed by the
Board of Directors, or to "WITHHOLD AUTHORITY" to vote for one or more
of the nominees being proposed. Under New Jersey law and the
Company's Bylaws, directors are elected by a plurality of votes cast,
without regard to either broker non-votes or proxies as to which
authority to vote for one or more of the nominees being proposed is
withheld.
Interest of Certain Persons in Matters to be Acted Upon
All persons standing for election as director were unanimously
nominated by the Board of Directors. No person being nominated as a
director is being proposed for election pursuant to any agreement or
understanding between any such person and the Company.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to those persons
believed by the Company to be beneficial owners of more than 5% of the
Company's outstanding shares of Common Stock on the Record Date or as
disclosed in certain reports regarding such ownership filed by such
persons with the Company and with the Securities and Exchange
Commission ("SEC"), in accordance with sections 13(d) and 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Other than those persons listed below, the Company is not aware of any
person, as such term is defined in the Exchange Act, that owns more
than 5% of the Company's Common Stock as of February 28, 1999.
Amount and
Nature of
Name and Address of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class
-------------- --------------- --------- -------
Common Stock Thomson, Horstmann & Bryant, Inc.
Park 80 West, Plaza Two 574,900 14.22%
Saddle Brook, NJ 07663
Common Stock Statewide Savings Bank, S.L.A.
Employee Stock Ownership Trust 419,997(1) 10.39%
("ESOP")
70 Sip Avenue
Jersey City, NJ 07306
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(1) The Board of Directors has appointed Messrs. Richel and Lenihan
to serve as the ESOP Administrative Committee. Manchester Trust
Bank, Lakehurst, New Jersey has been appointed as the corporate
trustee for the ESOP ("ESOP Trustee"). The ESOP Trustee must
vote all allocated shares held in the ESOP in accordance with the
instructions of the participants. Under the ESOP, unallocated
shares will be voted by the ESOP Trustee and shares allocated to
participants' accounts who do not provide voting instructions to
the ESOP Trustee will be voted by the ESOP Trustee in the best
interest of the participants and beneficiaries in accordance with
the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
PROPOSALS TO BE VOTED ON AT THE MEETING
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of six
directors and is divided into three classes. Each of the six members
of the Board of Directors of the Company also presently serve as
directors of the Bank. Directors are elected for staggered terms of
three years each, with the term of office of only one of the three
classes of Directors expiring each year. Directors serve until their
successors are elected and qualified.
The two nominees proposed for election at this Annual Meeting are
Victor M. Richel and Walter G. Scott.
In the event that any such nominee is unable to serve or declines
to serve for any reason, it is intended that the proxies will be voted
for the election of such other person as may be designated by the
present Board of Directors. The Board of Directors has no reason to
believe that any of the persons named will be unable or unwilling to
serve. UNLESS AUTHORITY TO VOTE FOR THE NOMINEE IS WITHHELD, IT IS
INTENDED THAT THE SHARES REPRESENTED BY THE ENCLOSED PROXY CARD, IF
EXECUTED AND RETURNED, WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
PROPOSED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION
OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
Information with Respect to the Nominees, Continuing Directors and
Executive Officers
The following table sets forth, as of the Record Date, the names
of the nominees and those directors whose terms continue beyond the
Annual Meeting and their ages, a brief description of their recent
business experience, including present occupations and employment,
certain directorships held by each, the year in which each became a
director of the Company or the Bank, and the year in which their terms
(or in the case of the nominees, their proposed terms) as director of
the Company expire. The table also sets forth the amount of Common
Stock and the percent thereof beneficially owned by each and all
directors and executive officers as a group as of February 28, 1999.
<TABLE>
<CAPTION>
Shares of
Name and Principal Expiration Common Stock Percent
Occupation at Present Director of Term as Beneficially of
and for Past Five Years Age Since(1) Director Owned(2) Class
----------------------- --- ------- -------- ------- -----
<S> <C> <C> <C> <C> <C>
Nominees
Victor M. Richel 60 1974 2002 155,528.939(3) 3.68%
Chairman of the Board,
President and Chief
Executive Officer of the
Company; Chairman and Chief
Executive Officer of the
Bank; formerly a group Vice
President of Elizabethtown
Gas Company, a public
utility
Walter G. Scott 57 1986 2002 57,545.000(4) 1.36%
President of Scott Printing
Corporation, a financial
printing company
Continuing Directors
Maria F. Ramirez 51 1989 2000 40,661.000(4) 0.96%
President of Maria Fiorini
Ramirez, Inc., an inter-
national economic and
investment advisory firm
and Maria Fiorini Ramirez
Securities, Inc., a
securities brokerage firm
Stephen R. Tilton 53 1989 2000 92,565.000(4) 2.19%
Chairman, Tilton Securities
L.L.C. and Director,
Garban P.L.C.; formerly
President of Garban, Ltd.,
a financial services firm
Thomas J. Sharkey, Sr. 65 1997 2001 43,493.000(4)(5) 1.03%
Chairman, Meeker Sharkey
Financial Group
Thomas V. Whelan 55 1995 2001 87,161.000(4) 2.06%
Chairman of the Board and
Chief Executive Officer of
Healthways Communications,
Inc., a medical education
and communications company
Executive Officers of the Company
Name and Position with Company
Michael J. Griffin 49 - - 38,994.114(6) 0.92%
President and Chief
Operating Officer of the
Bank; formerly Executive
Vice President, Summit Bank
Robert H. Hunt, Jr. 51 - - 32,095.055(7) 0.76%
Senior Vice President of
the Bank; formerly Senior
Vice President of Bancorp
New Jersey
Bernard F. Lenihan 52 - - 62,854.762(8) 1.49%
Senior Vice President,
Chief Financial Officer
of the Company and of the
Bank; Treasurer and
Secretary of the Company;
formerly an Executive
Officer with NUI Corp., a
publicly traded utility
Stock Ownership of all - - - 610,897.870(9) 14.47%
Directors and Executive
Officers of the Company
as a Group (9 persons)
</TABLE>
--------------------
(1) Includes years of service as a director of the Bank and its
predecessor institutions.
(2) Beneficially owned shares include shares over which the named
person exercised either sole or shared voting power or sole or
shared investment power. It also includes shares owned (i) by a
spouse, minor children or relatives sharing the same home, (ii)
by entities owned or controlled by the named person, and (iii) by
other persons if the named person has the right to acquire such
shares within sixty (60) days by the exercise of any right or
option. Unless otherwise noted, all shares are owned of record
and beneficially by the named person.
(3) Includes 3,699.186 shares held by the Company's 401(k) Plan for
Mr. Richel's benefit, 4,028.753 shares held by the Bank's ESOP
and allocated for Mr. Richel's benefit, and 560 shares held by
Mr. Richel's spouse in her own name. Also includes 57,900 shares
purchasable upon the exercise of stock options which may be
exercised within sixty (60) days.
(4) Includes 11,580 shares purchasable upon the exercise of stock
options which may be exercised within sixty (60) days.
(5) Includes 22,365 shares held by corporations controlled by Mr.
Sharkey.
(6) Includes 577.260 shares held for Mr. Griffin's benefit by the
Company's 401(k) Plan and 1,224.854 shares allocated for Mr.
Griffin's benefit under the Bank's ESOP. Also includes 14,180
shares purchasable upon the exercise of stock options which may
be exercised within sixty (60) days.
(7) Includes 1,199.872 shares held for Mr. Hunt's benefit by the
Company's 401(k) Plan and 3,989.183 shares allocated for Mr.
Hunt's benefit under the Bank's ESOP. Also includes 13,680
shares purchasable upon the exercise of stock options which may
be exercised within sixty (60) days.
(8) Includes 3,433.005 shares held for Mr. Lenihan's benefit under
the Company's 401(k) Plan, 4,028.757 shares allocated for Mr.
Lenihan's benefit under the Bank's ESOP, 1,280 shares held by Mr.
Lenihan's spouse in her own name, and 2,243 shares held by trusts
for the benefit of Mr. Lenihan's children. Mr. Lenihan is the
Trustee of these trusts. Also includes 14,180 shares purchasable
upon the exercise of stock options which may be exercised within
sixty (60) days.
(9) Includes 157,840 shares purchasable upon the exercise of stock
options which may be exercised within sixty (60) days.
Meetings of the Board of Directors and Committees of the Board of
Directors
The Board of Directors conducts its business through meetings of
the Board of Directors and through activities of its committees.
During 1998, the Board of Directors of the Company held thirteen (13)
meetings. All of the directors of the Company attended at least 75%
of the total number of the Company's Board meetings held and committee
meetings on which such directors served during 1998.
Audit Committee. The Company and the Bank maintain an Audit
Committee. The Audit Committee consists of Messrs. Whelan (Chairman),
Sharkey and Tilton, all of whom are outside directors of the Company
and the Bank. The Audit Committee arranges the annual financial
statement audit through the Company's and the Bank's independent
certified public accountants, reviews and evaluates the
recommendations of the annual audit, receives all reports of
examination of the Bank by the internal audit department, analyzes
such internal audit reports, receives all reports of examination of
the Bank by regulatory agencies, analyzes such regulatory reports, and
reports to the Board of Directors the results of their analysis. The
Audit Committee met four (4) times during 1998.
Compensation/Benefits Committee. The Company and the Bank
maintain a Compensation/Benefits Committee. The Compensation/Benefits
Committee consists of Messrs. Scott (Chairman), Sharkey and Whelan,
and Ms. Ramirez. The Compensation/Benefits Committee meets to
establish compensation for the Chief Executive Officer, approve the
compensation of executive officers and various compensation and
benefits to be paid to employees and to review the incentive
compensation programs when necessary. The Compensation/Benefits
Committee met two (2) times during 1998.
Nominating Committee. The Company maintains a Nominating
Committee. The Nominating Committee consists of Ms. Ramirez
(Chairwoman) and Messrs. Richel, Tilton, Scott, Sharkey and Whelan.
The Nominating Committees selects the Company's nominees to stand for
election to the Board of Directors at the Annual Meeting.
Directors' Compensation
Directors' Fees. Directors who are not also serving as employees
of the Company or the Bank ("Outside Directors") receive an annual
retainer of $10,000 for serving on the Board, and $600 for each Board
meeting attended. Outside Directors also receive an annual retainer
of $2,500 for each Committee on which they serve, and $500 per
Committee meeting attended, except for the Nominating Committee, for
which Directors are not compensated. Mr. Scott also receives an
annual $15,000 retainer for serving as Chairman of the Executive
Committee, and Outside Directors are eligible to obtain health
insurance on the same basis as the Company's employees. Directors who
are also officers of the Company or the Bank do not receive fees or
other compensation for their Board or Committee participation.
Directors' Stock Options. The Company maintains the Statewide
Financial Corp. 1996 Stock Option Plan for Outside Directors (the
"Outside Directors' Plan"). Under the Outside Directors' Plan,
158,700 shares of Common Stock have been reserved for issuance. Non-
employee directors of the Company, the Bank and any other subsidiaries
which the Company may acquire or incorporate are eligible to
participate in the Outside Directors' Plan. Each participant in the
Outside Directors' Plan automatically receives an option to purchase
26,450 shares of Common Stock, to the extent shares are available
under this plan, effective as of the date such participant commences
his service on the Board of Directors. No option may be exercised
more than ten years after the date of its grant. The purchase price
of the shares of Common Stock subject to options under the Outside
Directors' Plan is 100% of the fair market value on the date such
option is granted. All options granted pursuant to the Outside
Directors' Plan are subject to a vesting restriction, with 20% of such
options vesting and becoming exercisable on the first anniversary date
of such grant and each anniversary date thereafter, subject to
acceleration in certain circumstances, including a change in control
of the Company.
Recognition and Retention Plan for Outside Directors. The
Company maintains the Statewide Financial Corp. Recognition and
Retention Plan for Outside Directors (the "Directors' RRP"). Under
the Directors' RRP, grants of up to 63,480 shares of Common Stock may
be made to non-employee directors of the Company, the Bank and any
other subsidiaries which the Company may acquire or incorporate.
Under the Directors' RRP, each such director will receive a grant of
10,580 shares of Common Stock, to the extent shares are available
under this plan, as of the date such participant commences his service
on the Board of Directors. Grants of stock under the Directors' RRP
are subject to a five year vesting schedule, with 20% of a grant
vesting on the first anniversary date of the grant and 20% vesting
each anniversary thereafter, subject to acceleration in certain
circumstances, including a change in control of the Company. Shares
subject to grants under the Directors' RRP may not be transferred
until they have vested. During the vesting period, Directors may vote
such shares and are entitled to receive cash dividends upon such
shares.
Insurance. The Company paid premiums on certain life insurance
policies for its Directors until August 1998, when this benefit
ceased. The value of these premium payments differed by Board member,
and for the period paid in 1998 ranged from approximately $2,000 to
approximately $3,600.
Executive Compensation
The report of the compensation/benefits committee and the
following stock performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this
proxy statement into any filing under the Securities Act of 1933, as
amended or the Exchange Act, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
Compensation Committee Report on Executive Compensation.
General. The Company's executive compensation program is
administered by the Compensation/Benefits Committee of the Board of
Directors. The Compensation/Benefits Committee is comprised of
Messrs. Scott (Chairman), Sharkey and Whelan and Ms. Ramirez. The
Compensation/Benefits Committee is responsible for establishing the
compensation levels and benefits for executive officers of the Company
and the Bank.
Compensation Policies. The Compensation/Benefits Committee has
the following goals for compensation programs impacting the executive
officers of the Company and the Bank:
- to align the interests of executive officers with the long-
term interests of shareholders through awards that can
result in ownership of Common Stock;
- to retain the executive officers who have led the Company to
high performance levels and allow the Company to attract
high quality executive officers in the future by providing
total compensation opportunities which are consistent with
competitive norms of the industry and the Company's level of
performance; and
- to maintain reasonable "fixed" compensation costs by
targeting base salaries at a competitive average.
In addition, in order to align the interests and performance of its
executive officers with the long-term interests of its shareholders,
the Company has adopted plans which reward the executives for
delivering long-term value to the Company and the Bank.
The executive compensation package available to executive
officers has been and will be composed of the following components:
1. base salary;
2. short-term incentive compensation; and
3. long-term incentive compensation, including stock
options and stock awards.
Mr. Richel has an Employment Agreement with the Company and the Bank
which specifies a minimum base salary and requires periodic review of
such salary. In addition, executive officers participate in other
benefit plans available to all employees, including the ESOP and the
401(k) Plan.
Base Salary. The Compensation/Benefits Committee meets during
the last quarter of each year to determine the level of any salary
increase to take effect at the beginning of the year immediately
following. While it uses no specific formula within its decision
making process, the Compensation/Benefits Committee determines the
level of salary increases after reviewing the qualifications and
experience of the executive officers of the Company, the compensation
paid to persons having similar duties and responsibilities at other
institutions, and the size of the Company and the complexity of its
operations.
Short-Term Incentive Compensation. Each year the
Compensation/Benefits Committee establishes the size of the pool of
available bonus money based upon the expected performance of the
Company for that year. The parameters for the award of bonuses are
related to the Company attaining specific levels of performance, and
the individual achieving targeted objectives designed to support and
implement the Company's objectives and strategies.
Although many individual officers achieved their targeted
performance objectives during 1998, in view of the difficult
environment in which the Company and the Bank operated during 1998,
and in light of the Company's 1998 performance, the Committee did not
authorize the payment of any cash bonuses for 1998 to any executive
officer.
Long-Term Incentive Compensation. The Statewide Financial Corp.
1996 Incentive Stock Option Plan (the "Incentive Option Plan") and the
Statewide Financial Corp. Recognition and Retention Plan for Executive
Officers and Employees (the "RRP") are long-term plans designed to
align a significant portion of the executive compensation program with
shareholder interests. The Company and the Bank have adopted the
Incentive Option Plan and the RRP, respectively, under which executive
officers of the Company and the Bank may receive grants and awards.
The Compensation/Benefits Committee believes that stock ownership is a
significant incentive in building shareholders' wealth and aligning
the interests of employees, Outside Directors and shareholders. All
of the Outside Directors and executive officers have received grants
and awards which have vesting schedules of 20% per year beginning on
the first anniversary of the grant or award, subject to acceleration
in certain circumstances. In issuing these grants and awards to
executive officers, the Compensation/Benefits Committee takes into
account the financial performance of the Company, the long term
strategic goals of Statewide to increase shareholder value and the
executive's level of responsibility and contributions to the Company.
A summary of the compensation awarded to Victor M. Richel,
Chairman, President and Chief Executive Officer, and other executive
officers, is set forth in the Summary Compensation Table, and reflects
the facts and considerations as outlined above.
Compensation/Benefits Committee
Walter G. Scott, Thomas J. Sharkey, Sr., Thomas V. Whelan
and Maria F. Ramirez
Stock Performance Graph. The following graph is a comparison of
cumulative total shareholder return on the Company's Common Stock,
based upon the market price of the Common Stock, with the S&P Small
Cap 600 Index and the SNL Index for thrift institutions with assets
between $500 million and $1 billion for the period beginning on
September 29, 1995, the date the Company completed its initial public
offering, through December 31, 1998. The information assumes that
$100 was invested on September 29, 1995. THE GRAPH WAS DERIVED FROM A
LIMITED PERIOD OF TIME AND REFLECTS THE MARKET'S REACTION TO THE
COMPANY'S INITIAL PUBLIC OFFERING, AND, AS A RESULT, MAY NOT BE
INDICATIVE OF POSSIBLE FUTURE PERFORMANCE OF THE COMPANY'S COMMON
STOCK.
<TABLE>
<CAPTION>
Period Ending
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Index 10/2/95 12/31/95 12/31/96 12/31/97 12/31/98
----- ------- -------- -------- ------- --------
Statewide Financial Corp. 100.00 130.60 145.94 249.23 202.34
S&P Small Cap 600 Index 100.00 101.77 123.44 155.00 152.91
SNL Thrifts (500M to $1B)
Index 100.00 104.40 129.45 218.66 200.61
Annual Compensation and all Other Compensation
Summary Compensation Table. The following table shows, for the
years ended December 31, 1998, 1997 and 1996, the cash compensation
paid or accrued for those years, to the chief executive officer and to
each of the Company's four highest paid executive officers earning
over $100,000.
</TABLE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------ -------------------------------------------
Awards Payouts
--------------------- ---------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Bonus Compensation Award(s) Options/ Payouts Compensation
Principal Position Year Salary ($) ($) ($)(1) ($)(2) SARs (#) ($) ($)(3)
------------------ ---- ---------- --- ------ ------ -------- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Victor M. Richel 1998 $295,974 $ 0 $34,810 $ 0 5,970 None $25,305
Chairman of the Board, 1997 285,000 139,650 51,126 0 25,000 None 37,440
President and CEO of 1996 277,574 138,500 17,511 615,227 132,500 None 21,031
the Company and Chairman
and CEO of the Bank
Michael J. Griffin 1998 $172,644 $ 0 $25,749 $ 0 3,000 None $23,272
President and Chief 1997 149,039(4) 45,600 19,242 325,045 39,200 None 0
Operating Officer of
the Bank
Bernard F. Lenihan 1998 $167,452 $ 0 $27,927 $ 0 3,000 None $25,306
Senior Vice President 1997 150,000 44,100 28,512 0 7,500 None 37,440
and Chief Financial 1996 144,602 34,650 19,990 267,630 31,700 None 21,031
Officer of the Company
and of the Bank; and
Treasurer of the Company
Robert H. Hunt, Jr. 1998 $150,577 $ 0 $19,985 $ 0 3,000 None $25,277
Senior Vice President 1997 135,000 33,400 20,588 0 5,000 None 37,440
of the Bank 1996 127,645 30,950 15,732 153,807 31,700 None 20,483
Augustine F. Jehle 1998 $129,808 $ 0 $17,124 $ 0 0 None $25,147
Vice President and 1997 118,000 29,200 22,124 0 5,000 None 33,497
Secretary of the Company 1996 107,725 21,100 17,146 123,045 10,580 None 19,876
and Senior Vice
President of the Bank
</TABLE>
--------------------
(1) Includes the imputed value of personal use of Company
automobiles, life insurance premiums and Company matching
contributions to its 401(k) Plan. Also includes the amount of
cash dividends paid on unvested share awards granted pursuant to
the RRP.
(2) Awards granted pursuant to the RRP are subject to a five year
vesting schedule and are subject to forfeiture during the vesting
period. For Messrs. Richel, Lenihan, Hunt and Jehle, the first
20% of their awards vested on July 15, 1997, the first
anniversary date of the effective date of the award. The value
of the awards made pursuant to the RRP was based upon a market
value of $11.63 on the date of grant. For Mr. Griffin, the first
20% of his award vested on January 8, 1998, and the value of his
award is based on a market value of $14.125 on the date of grant.
At December 31, 1998, Messrs. Richel, Griffin, Lenihan, Hunt and
Jehle held an aggregate of 52,900, 23,012, 23,012, 13,225 and
10,580 shares of Common Stock, respectively, the number of shares
originally granted, which had a market value of $1,005,100,
$437,228, $437,228, $251,275 and $201,020, respectively based
upon a market value of $19.00 for the Common Stock on December
31, 1998. Pursuant to the RRP, recipients of restricted stock
awards are entitled to receive dividends on the awards. All
awards vest immediately upon termination of employment due to
death, disability or upon a change in control of the Company.
(3) Includes shares of Common Stock granted pursuant to the ESOP.
For 1998, Messrs. Richel, Griffin, Lenihan, Hunt and Jehle were
allocated 1,331.9, 1,224.9, 1,331.9, 1,330.4 and 1,323.5, shares
of Common Stock, respectively. Dollar amounts reflect market
value ($19.00) as of December 31, 1998.
(4) Mr. Griffin became the President and Chief Operating Officer of
the Bank on January 8, 1997.
Employment Agreements. The Bank and the Company have entered
into an employment agreement (the "Employment Agreement") with Mr.
Richel. The employment agreement is intended to ensure that the Bank
and the Company will be able to maintain a stable and competent
management base. The continued success of the Bank and the Company
depends, to a significant degree, on the skills and competence of Mr.
Richel.
The Employment Agreement provides for a three-year term, and
further provides that it will automatically be renewed on each
anniversary date unless, ninety days prior to such anniversary date,
either party provides written notice of its intention not to renew.
The Employment Agreement provides that Mr. Richel will receive an
annual base salary, and that his base salary will be reviewed annually
by the Board of Directors. For 1998, Mr. Richel's base salary was
$295,974. In addition, the Employment Agreement provides that upon
the attainment by the Bank and the Company of certain performance
criteria, Mr. Richel is to receive a bonus in an amount up to 50% of
his base salary, as determined by the Board of Directors. The
Employment Agreement permits the Bank or the Company to terminate Mr.
Richel's employment for cause at any time. The Employment Agreement
defines cause to mean personal dishonesty, incompetence, wilful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, wilful violation of any
law, rule or regulation (other than traffic violations or similar
offenses), final cease and desist order, or material breach of any
provision of the Employment Agreement. In the event Mr. Richel is
terminated for any reason other than cause, or in the event Mr. Richel
resigns his employment from the Bank and the Company because (i) he is
reassigned to a position of lesser rank or status than Chairman of the
Board and Chief Executive Officer; (ii) his place of employment is
relocated by more than thirty miles from its location as of the date
of the Employment Agreement; (iii) his compensation or other benefits
are reduced; or (iv) the Company provides Mr. Richel with notice that
it will not renew the Employment Agreement, Mr. Richel or, in the
event of death, his beneficiary will be entitled to severance pay in
an amount equal to the remaining salary payments under the Employment
Agreement. Mr. Richel is also entitled to a tax allowance on these
payments. In calculating the remaining term of the Employment
Agreement, the Employment Agreement provides that Mr. Richel's
termination shall be deemed to have occurred on the anniversary date
preceding the notice of termination. Mr. Richel's Employment
Agreement further provides that upon the occurrence of a change in
control, as defined in the Employment Agreement, in the event Mr.
Richel is terminated for reasons other than cause or in the event Mr.
Richel, within eighteen months of the change in control resigns his
employment for the reasons discussed above, he shall be entitled to
receive his then current base salary for the remaining term of the
Employment Agreement. The Employment Agreement also prohibits Mr.
Richel from competing with the Bank for a period of one year following
the termination of his employment.
In the event of a change in control, based upon the 1998 salary,
Mr. Richel would have received approximately $2,325,000 in severance
payments, including all tax allowances, in addition to other cash and
non-cash benefits provided for under the Employment Agreement,
assuming a lump sum payout.
Change in Control Agreements. The Company and the Bank have
entered into Change in Control Agreements ("CIC Agreements") with
Messrs. Griffin, Hunt and Lenihan. The CIC Agreements expire in
January, 2000, unless renewed. These CIC Agreements provide that in
the event voluntary or involuntary termination follows a change in
control of the Bank or the Company the officer, or in the event of
death, his or her beneficiary, will be entitled to receive a severance
payment equal to two times the officer's average annual compensation
for the two years preceding termination. The CIC Agreements define a
change in control generally to mean (i) a plan of reorganization,
merger or sale of substantially all of the assets of the Company in
which the Company is not the resulting entity; (ii) changes to the
Board of Directors of the Company whereby individuals who constitute
the current Board of Directors cease to constitute a majority of the
Board of Directors, subject to certain exceptions; (iii) a change in
control as defined by HOLA and the rules and regulations of the Office
of Thrift Supervision ("OTS") in effect as of the date of the CIC
Agreements; (iv) the acquisition by any person, directly or
indirectly, of securities of the Company representing 25% or more of
the Company's outstanding securities ordinarily having the right to
vote for the election of directors; (v) a proxy statement soliciting
proxies from shareholders of the Company is distributed by someone
other than current management of the Company, seeking shareholder
approval of a plan of reorganization, merger or consolidation of the
Company or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities
subject to the plan or transaction are exchanged or converted into
cash or property or securities not issued by the Company; or (vi) a
tender offer is made for 25% or more of the voting securities of the
Company and shareholders owning beneficially or of record 25% or more
of the outstanding securities of the Company have tendered or offered
to sell their shares pursuant to such tender offer and such tendered
shares have been accepted by the tender offeror. Payments and
benefits under the CIC Agreements together with payments under any
other benefit plans may constitute an excess parachute payment under
Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), resulting in the imposition of an excise tax on the recipient
and denial of the deduction for such excess amounts to the Company and
the Bank.
Supplemental Executive Retirement Plans. The Bank maintains a
non-qualified supplemental executive retirement plan ("SERP") for Mr.
Richel. If Mr. Richel dies while employed by the Bank but before his
normal retirement date, his designated beneficiary will receive
payment in twenty equal annual installments. The SERP is considered
an unfunded plan for tax and ERISA purposes. All obligations arising
under the SERP are payable from the general assets of the Bank,
however, the Bank has purchased a life insurance policy on the life of
Mr. Richel to provide the assets to meet its obligations under the
SERP. Under Mr. Richel's SERP, the benefits to be paid are to be
increased to account for any tax liabilities Mr. Richel may incur
under Section 280G of the Code.
The following table indicates the expected aggregate annual
retirement benefit payable from the SERP to Mr. Richel.
Years of Benefit Service
at Retirement
------------------------------------
High 5-Year
Average
Earnings (1) 25 30 35
------------ --------- -------- --------
$ 60,000 $ 30,000 $ 36,000 $ 42,000
$ 80,000 $ 40,000 $ 48,000 $ 56,000
$100,000 $ 50,000 $ 60,000 $ 70,000
$150,000 $ 75,000 $ 90,000 $105,000
$200,000 $100,000 $120,000 $140,000
$250,000 $125,000 $150,000 $175,000
$300,000 $150,000 $180,000 $210,000
$350,000 $175,000 $210,000 $245,000
$400,000 $200,000 $240,000 $280,000
$450,000 $225,000 $270,000 $315,000
$500,000 $250,000 $300,000 $350,000
--------------------
(1) Mr. Richel has 25 years of credited service under the SERP.
The Bank maintains separate SERP's for Messrs. Griffin, Hunt, and
Lenihan. A participant's benefit under each SERP is a percentage of
the participant's final average compensation. Under these SERP's, the
final average compensation is determined by taking the average of the
participant's highest three years of total compensation out of their
last five years of total compensation. Each SERP is designed so that
each participant will receive an annual benefit equal to 45% of their
final average compensation at age 55. If the participant continues
their employment with the Bank until age 65, such participant's annual
benefit will proportionately increase until it equals 60% of their
final average compensation. In addition, upon the occurrence of a
change in control, as defined in each SERP, a participant's annual
benefit will automatically be increased to 60% of their final average
compensation. Participants may receive a benefit upon retiring at age
55 or thereafter. Payments may either be made for the life of the
Plan participant, and upon the participant's death, for the remaining
life of the participant's spouse or the participant may elect to
receive the lump sum present value of the benefit payable during the
participant's life. If both the participant and their spouse die
prior to receiving 20 annual payments under these SERP's, the lump sum
present value of 20 annual payments less the annual payments already
received will be paid to the participant's or their spouse's estate.
Incentive Stock Option Plan. The Company maintains the Incentive
Option Plan which provides discretionary awards to officers and key
employees as determined by the Stock Option Subcommittee of the
Compensation/Benefits Committee of the Board of Directors, which
members consist of disinterested directors who administer the
Incentive Option Plan. The following table lists all grants of
options under the Incentive Option Plan to the named executive
officers for 1998 and contains certain information about the present
value of those options based upon certain assumptions.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
Number of
Securities % of Total Present
Underlying Option/SARs Exercise Value of
Options/SARs Granted to or Base Option on
Granted Employees in Price Expiration Date of
Name (#)(1) Fiscal Year ($/SH) Date Grant($)
---- ------ ----------- ------ ---- --------
Victor M. Richel 5,970 22.55% $16.13 12/07/08 $18,567(2)
Michael J. Griffin 3,000 11.33% $16.13 12/07/08 $ 9,330(2)
Bernard F. Lenihan 3,000 11.33% $16.13 12/07/08 $ 9,330(2)
Robert H. Hunt, Jr. 3,000 11.33% $16.13 12/07/08 $ 9,330(2)
--------------------
(1) Options granted pursuant to the Incentive Option Plan become
exercisable in five equal annual installments commencing on
December 8, 1999, the first anniversary date of the grant. To
the extent not already exercisable, the options become
exercisable upon death, disability or upon a change in control of
the Company.
(2) The present value has been estimated using the Black-Scholes
option pricing model and the following assumptions: dividend
yield of 3.22%, expected volatility of 23.00% and a risk-free
interest rate of 4.40%.
The following table provides certain information with respect to
the number of shares of Common Stock represented by outstanding
options held by the named executive officers as of December 31, 1998.
Also reported are the value of "in-the-money" options which represent
the positive spread between the exercise price of any such existing
stock options and the year-end price of the Common Stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of Unexercised
Underlying In-the-Money
Shares Unexercised Options/SARs at FY-
Acquired Options/SARs End($) (based on
on Value at FY-End (#) $19.00 per share)
Exercise Realized Exercisable/ (E)Exercisable/
Name (#) ($) Unexercisable (U)Unexercisable(1)
---- --- --- -------------- -------------------
<S> <C> <C> <C> <C>
Victor M. Richel 0 0 57,900/105,320 $360,249/$557,507
Michael J. Griffin 0 0 7,840/ 34,360 $ 29,608/$127,041
Bernard F. Lenihan 0 0 14,180/ 28,020 $ 86,351/$138,136
Robert H. Hunt, Jr. 0 0 13,680/ 26,020 $ 86,351/$138,136
Augustine F. Jehle 0 0 5,232/ 10,348(2) $ 28,820/$ 43,230
------------
(1) Market value of the underlying securities at year end ($19.00)
minus the exercise price per share. Options vest at an annual
rate of 20% of the original amount granted, subject to
acceleration in certain circumstances.
(2) Mr. Jehle retired in February 1999. All options which had not
vested as of such date were forfeited.
Transactions With Certain Related Persons
The Bank has had, and is likely in the future to have, banking
transactions in the ordinary course of its business with the Company's
and the Bank's directors, executive officers and their affiliates
(each a "related party" and collectively, the "related parties").
Past transactions were, and future transactions will be, on the same
terms and conditions as are prevailing at the time such transactions
occur for comparable transactions with unrelated borrowers and are not
believed to involve more than the normal risk of repayment.
INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended
December 31, 1998 were KPMG LLP and the Company's Board of Directors
has appointed KPMG LLP to continue as independent auditors for the
Bank and the Company for the year ending December 31, 1999.
Representatives of KPMG LLP will be present at the Annual
Meeting. They will be given an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate
questions from shareholders present at the Annual Meeting.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's officers
and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the SEC. Officers,
directors and greater than ten percent shareholders are required by
regulation of the SEC to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received
by it, or written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes that,
during the year ended December 31, 1998, all filing requirements
applicable to its officers, directors and greater than ten percent
beneficial owners were met.
ADDITIONAL INFORMATION
Shareholder Proposals
To be considered for inclusion in the Company's proxy statement
and form of proxy relating to the 2000 Annual Meeting of Shareholders,
a shareholder proposal must be received by the Secretary of the
Company at the address set forth on the first page of this Proxy
Statement not later than December 17, 1999.
Advance Notice of Shareholder Nominations to the Board of Directors
The Bylaws of the Company provide an advance notice procedure for
a shareholder to properly submit nominations to the Board of
Directors. The shareholder must give written advance notice to the
Secretary of the Company not less than fifty (50) days nor more than
seventy-five (75) days prior to the date of the shareholder meeting,
irrespective of any deferrals, postponements or adjournments thereof
to a later date; provided, however, that in the event that less than
sixty (60) days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to
be timely must be so received not later than the close of business on
the tenth (10th) day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made,
whichever first occurs. The advance notice to the Secretary of the
Company must include certain information regarding the shareholder and
the nominee or nominees. Nothing in this paragraph shall be deemed to
require the Company to include in its proxy statement or the proxy
relating to a shareholder meeting any shareholder nominations to the
Board of Directors which do not meet all of the requirements set forth
in the Bylaws of the Company or do not meet all of the requirements
established by the SEC for inclusion in effect at the time such
nominations are received.
STATEWIDE FINANCIAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints the Board of Directors or any
survivor thereof to vote all of the shares of Statewide Financial
Corp. ("Statewide") standing in the undersigned's name at the Annual
Meeting of Shareholders of Statewide, to be held at the Newark Airport
Marriott, Newark International Airport, Newark, New Jersey 07114, on
Wednesday, May 11, 1999, at 10:30 A.M., and at any adjournment
thereof. The undersigned hereby revokes any and all proxies
heretofore given with respect to such meeting.
This proxy will be voted as specified below. If no choice is
specified, the proxy will be voted "FOR" Management's Nominees to The
Board of Directors.
The Board of Directors recommends a vote "FOR" approval of
Management's Nominees to The Board of Directors.
1. Election of the following two (2) nominees to each serve for
a three (3) year term of office as directors of Statewide:
Victor M. Richel, Walter G. Scott.
FOR ALL NOMINEES
----
TO WITHHOLD AUTHORITY FOR ANY OF THE ABOVE NAMED NOMINEES,
PRINT THE NOMINEE'S NAME ON THE LINE BELOW:
--------------------------------------
WITHHOLD AUTHORITY FOR ALL NOMINEES
----
2. In their discretion, such other business as may properly
come before the meeting.
Dated: , 1999. ---------------------------------
Signature
---------------------------------
Signature
(Please sign exactly as your name appears. When
signing as an executor, administrator, guardian,
trustee or attorney, please give your title as
such. If signer is a corporation, please sign the
full corporate name and then an authorized officer
should sign his name and print his name and title
below his signature. If the shares are held in
joint name, all joint owners should sign.)
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE
ENCLOSED RETURN ENVELOPE.
</TABLE>
