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
JSB Financial, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transactions 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: ...............................................................
JSB Financial, Inc. Logo
303 Merrick Road
Lynbrook, New York 11563-2574
(516) 887-7000
March 30, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of JSB Financial, Inc. (the "Company"), the holding
company for Jamaica Savings Bank FSB, which will be held on May 11, 1999 at
10:00 a.m., at the Long Island Marriott Hotel and Conference Center, 101 James
Doolittle Boulevard, Uniondale, New York 11553. (For directions see inside back
cover.)
The attached Notice of the Annual Meeting and the Proxy Statement
describe the formal business to be transacted at the Annual Meeting. Officers of
JSB Financial, Inc. as well as a representative of KPMG LLP, the Company's
independent auditors, will be present at the Annual Meeting to respond to any
questions that our stockholders may have.
The two matters to be considered at the Annual Meeting are the election
of three nominees for Director and the ratification of auditors. The Board of
Directors of JSB Financial, Inc. has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
our stockholders. For the reasons set forth in the Proxy Statement, the Board
unanimously recommends a vote "FOR" each of the nominees and for the
ratification of auditors.
YOUR VOTE IS IMPORTANT. You are urged to vote by one of the following
methods: (i) signing, dating and promptly returning the enclosed proxy in the
postage-paid envelope provided, or (ii) by using a toll-free telephone number as
described on the enclosed proxy card. If you attend the Annual Meeting, you may
vote in person even if you have already mailed in your proxy card or used the
telephone voting system.
On behalf of the Board of Directors and our employees, I wish to thank
you for your continued support. We appreciate your interest.
Sincerely yours,
PARK T. ADIKES
Chairman of the Board
and Chief Executive Officer
JSB FINANCIAL, INC.
303 Merrick Road
Lynbrook, New York 11563-2574
(516) 887-7000
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 11, 1999
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of JSB Financial, Inc. ("JSB Financial" or the "Company") will
be held at the Long Island Marriott Hotel and Conference Center, 101 James
Doolittle Boulevard, Uniondale, New York 11553, on May 11, 1999, at 10:00 a.m.
The Annual Meeting is for the purpose of considering and voting upon the
following matters:
1. Election of three Directors for terms of three years each;
2. Ratification of the appointment of KPMG LLP as independent
auditors of the Company for the year ending December 31, 1999;
3. Such other matters as may properly come before the Annual
Meeting or any adjournment thereof.
Pursuant to the Bylaws of the Company, the Board of Directors has fixed
March 15, 1999, as the record date for the determination of stockholders
entitled to 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 vote at the Annual Meeting or any
adjournments thereof. A list of stockholders entitled to vote at the Annual
Meeting will be available at Jamaica Savings Bank FSB, 303 Merrick Road,
Lynbrook, New York, for a period of ten days prior to the Annual Meeting and
also will be available for inspection at the Annual Meeting.
By Order of the Board of Directors
JOANNE CORRIGAN
Secretary
Lynbrook, New York
March 30, 1999
JSB FINANCIAL, INC.
303 Merrick Road
Lynbrook, New York 11563-2574
(516) 887-7000
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 11, 1999
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Solicitation and Voting of Proxy
This Proxy Statement ("Proxy Statement") is being furnished to
stockholders of JSB Financial, Inc. ("JSB Financial" or the "Company") in
connection with the solicitation by the Board of Directors of proxies to be used
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at the
Long Island Marriott Hotel and Conference Center, 101 James Doolittle Boulevard,
Uniondale, New York 11553, on May 11, 1999, at 10:00 a.m., and at any
adjournments thereof. The 1998 Annual Report to Stockholders, including the
financial statements for the year ended December 31, 1998, accompanies this
Proxy Statement.
This Proxy Statement and the accompanying proxy card are initially being
mailed to stockholders on or about March 30, 1999.
Regardless of the number of shares of common stock of JSB Financial (the
"Common Stock") owned, it is important that stockholders be represented by proxy
or present in person at the Annual Meeting. Stockholders are requested to vote
by one of the following methods: (i) signing, dating and promptly returning the
enclosed proxy in the postage-paid envelope provided, or (ii) by using a
toll-free telephone number as described on the enclosed proxy card. Stockholders
are urged to indicate their vote in the spaces provided on the proxy card or by
voting by telephone. Proxies solicited by the Board of Directors of JSB
Financial will be voted in accordance with the directions given therein. Where
no instructions are indicated, proxies will be voted "FOR" the election of each
of the nominees for Director named in this Proxy Statement and "FOR" the
ratification of the appointment of KPMG LLP as independent auditors of the
Company for the year ending December 31, 1999.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy or
voting by telephone, however, confers on the designated proxyholders
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 or any adjournments thereof.
Stockholders can vote their shares by calling the toll-free number on
the proxy card or by mailing their signed proxy card. The automated telephone
voting system is designed to authenticate Stockholders by use of a personal
identification number. The procedure allows Stockholders to vote their shares
and to confirm that their instructions have been properly recorded.
A proxy may be revoked at any time prior to its exercise by the filing
of written notice of revocation with the Secretary of the Company, by delivering
to the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting, filing a notice of revocation with the Secretary and voting in
person. However, if you are a stockholder whose shares are not registered in
your own name, you will need additional documentation from your recordholder to
vote personally at the Annual Meeting.
The cost of solicitation of proxies will be borne by JSB Financial.
Proxies may be solicited personally or by telephone or telegraph by Directors,
officers and employees of the Company or Jamaica Savings Bank FSB (the "Bank"),
without additional compensation therefor. JSB Financial 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. In addition to the
solicitation of proxies
2
by mail, two companies have been retained to assist the Company in soliciting
proxies for the Annual Meeting: (i) Morrow & Co., Inc., a proxy solicitation
firm, will be paid a fee of $4,500, plus out-of-pocket expenses and (ii)
ChaseMellon Shareholder Services, the Company's transfer agent, will be paid a
fee of $750 for providing the automated telephone voting system, plus out of
pocket expenses.
Voting Securities
The securities which may be voted at the Annual Meeting consist of
shares of the 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. The
close of business on March 15, 1999 has been fixed by the Board of Directors as
the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. The total number of shares of Common Stock outstanding on the Record
Date was 9,288,963 shares.
Record holders of Common Stock who beneficially own in excess of 10% of
the outstanding shares of Common Stock (the "Limit") are not entitled to vote
any shares held in excess of the Limit, as determined in accordance with the
Company's Certificate of Incorporation. The presence, in person or by proxy, of
at least a majority of the total number of shares of Common Stock, entitled to
vote (after subtracting any shares held in excess of the Limit pursuant to the
provisions of Article Fourth of the Company's Certificate of Incorporation) is
necessary to constitute a quorum at the Annual Meeting. In the event there are
not sufficient votes for a quorum at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to Proposal 1, the election of Directors, a stockholder may: (i) vote
"FOR" the election of the nominees proposed by the Board; or (ii) "VOTE
WITHHELD" for one or more of the nominees being proposed. Under Delaware law and
the Company's Bylaws, Directors are elected by a plurality of votes cast,
without regard to either (i) broker non-votes, or (ii) proxies marked "VOTE
WITHHELD".
As to Proposal 2, the ratification of independent auditors and
concerning all other matters that may properly come before the Annual Meeting, a
stockholder may: (i) vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii)
"ABSTAIN" from voting on such item. Under the Company's Bylaws, unless otherwise
required by law, all matters, other than the election of Directors, shall be
determined by a majority of the votes cast, without regard to either (a) broker
non-votes, or (b) proxies marked "ABSTAIN".
Proxies solicited hereby will be returned to the proxy solicitors or the
Company's transfer agent, and will be tabulated by inspectors of election,
designated by the Board of Directors, who will not be employees or Directors of
the Company or any of its affiliates. After the Annual Meeting, the proxies will
be returned to the Company for safekeeping.
3
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the Company's
outstanding shares of Common Stock on March 4, 1999. Persons and groups owning
in excess of 5% of the Company's Common Stock are required to file certain
reports regarding such ownership with the Company and with the Securities and
Exchange Commission ("SEC"), in accordance with the Securities Exchange Act of
1934 (the "Exchange Act"). Other than listed below, the Company is not aware of
any person or group that owned more than 5% of the Company's Common Stock as of
March 4, 1999.
Name and Address Amount and Nature of Percent of
Title of Class of Beneficial Owner Beneficial Ownership Class(1)
- -------------- ------------------- -------------------- --------
Common Stock.......... Jamaica Savings Bank FSB 901,351(2) 9.7%
Employee Stock Ownership
Plan and Trust ("ESOP")
C/O Jamaica Savings Bank FSB
303 Merrick Road
Lynbrook, New York 11563
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<FN>
(1) The total number of shares of Common Stock outstanding on March 4, 1999 was
9,301,435 shares.
(2) An unrelated corporate trustee, Marine Midland Bank, has been appointed for
the ESOP. The ESOP trustee, subject to its fiduciary duty, must vote all
allocated shares held in the ESOP in accordance with the instructions of the
participating employees. As of March 4, 1999, 891,480 shares have been allocated
to participants' accounts. Under the ESOP, unallocated shares held in the
suspense account will be voted in a manner calculated to most accurately reflect
the instructions it has received from participants regarding the allocated
stock, so long as such vote is in accordance with the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
</FN>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The number of Directors of JSB Financial is currently eleven (11). Mr.
Paul R. Screvane will not seek reelection to the Board on the expiration of his
term at the 1999 Annual Meeting, which will reduce the number of Directors of
JSB Financial after the Annual Meeting to ten (10). All members of the Board of
Directors of JSB Financial also serve as Directors of the Bank. Directors are
elected for staggered terms of three years each, with a term of office of only
one class of Directors expiring in each year. Directors serve until their
successors are elected and qualified. No person being nominated as a Director is
being proposed for election pursuant to any agreement or understanding between
any person and JSB Financial, other than as described under "Executive
Compensation - Employment Agreements".
The three nominees proposed for election at the Annual Meeting are
Messrs. Joseph C. Cantwell, James E. Gibbons, Jr. and Edward P. Henson, who have
been nominated for a three year term which will expire at the Annual Meeting of
stockholders in the year 2002. All three of the nominees named are also
presently Directors of the Bank. It is intended that the shares represented by
the enclosed proxy, if executed and returned, or voted through the telephone
voting system, will be voted "FOR" the election of all three nominees, unless
otherwise indicated by a "VOTE WITHHELD". In the event that any such nominee is
unable or declines to serve for any reason, it is intended that proxies will be
voted "FOR" the election of the balance of those nominees named and "FOR" such
other persons as shall be designated by the 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF ALL NOMINEES NAMED IN THE PROXY STATEMENT
4
Information With Respect to Nominees and Continuing Directors
The following table sets forth the names of nominees and continuing
Directors, their ages, a brief description of their recent business experience,
including occupations and employment, certain directorships held by each and the
year in which each became a Director of the Company.
Name and Principal Occupation at Expiration
Present and for the Past Five Years Director of Current Age at
Directorships Since Term 12/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
Nominees:
Joseph C. Cantwell 1996 1999 68
Mr. Cantwell has been a Director of the
Company and the Bank since 1996. He retired as
Vice President of Bankers Trust Company in 1988.
Mr. Cantwell is currently a consultant to a number
of firms in the financial services industry.
James E. Gibbons, Jr.* 1990 1999 81
Mr. Gibbons is a Director of the Company and
has been a Director of the Bank since 1963. He is
President of Sackman-Gibbons Associates, a real
estate consulting firm in East Meadow, New York.
Edward P. Henson 1990 1999 59
Mr. Henson is President and a Director of the
Company and the Bank and has served in both these
capacities since 1990. Mr. Henson served as the
Bank's Executive Vice President from 1987 to 1990.
Continuing Directors:
Park T. Adikes 1990 2001 67
Mr. Adikes is Chairman of the Board and Chief
Executive Officer of the Company and the Bank. He
has been a Director of the Bank since 1964 and
Chairman of the Bank since 1975. Mr. Adikes joined
the Bank in 1954 and became the Chief Executive
Officer of the Bank in 1970.
Richard M. Cummins 1998 2001 61
Mr. Cummins is a Director of the Company
and the Bank. In September 1997, he retired as
a Partner of Coopers & Lybrand LLP, and was
named President of Coopers and Lybrand Financial
Advisors LLC, a position he held until June 30,
1998, when he became a consultant for its successor
firm PricewaterhouseCoopers LLP. Mr. Cummins
serves on the boards of The New York Mets,
Nicklaus Golf Equipment Co. and Thomson
Industries and is Chairman of the U.S. Luge
Foundation. Mr. Cummins is a member of the
Bar in New York and Arizona and a Certified
Public Accountant.
<FN>
* James E. Gibbons, Jr. is the father of Cynthia Gibbons, both of whom are Directors of the Company.
</FN>
5
Name and Principal Occupation at Expiration
Present and for the Past Five Years Director of Current Age at
Directorships Since Term 12/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
Howard J. Dirkes, Jr. 1990 2000 67
Mr. Dirkes is a Director of the Company and has
been a Director of the Bank since 1972. He is the
President of Lo Temp Sales Corporation, an importer
and marketing distributor of commercial refrigeration
equipment, a position he has held since 1956.
Cynthia Gibbons 1997 2000 42
Ms. Gibbons is a Director of the Company and
the Bank. She is a Vice President of Koeppel Tener Real
Estate Services, Inc., a firm specializing in real estate
consulting, appraisal and due diligence services. Prior
to Ms. Gibbon's present position, she was an Appraisal
Associate for Chemical Bank. Ms. Gibbons holds a MBA
degree, a MAI designation from the Appraisal Institute
and a CRE designation from the Counselors of Real Estate.
Alfred F. Kelly 1990 2000 68
Mr. Kelly is a Director of the Company and has
been a Director of the Bank since 1971. He retired as
President of Canada Life Insurance Company of New York
in 1992, where he continues as a director.
Richard W. Meyer 1990 2001 79
Mr. Meyer is a Director of the Company and has
been a Director of the Bank since 1963. He retired in
1984 as a Vice President of Morgan Guaranty Trust
Company of New York.
Arnold B. Pritcher 1990 2001 73
Mr. Pritcher is a Director of the Company and
has been a Director of the Bank since 1971. He is
President of International Gem Corporation, a position
he has held since 1950.
Meetings of the Board and Committees of the Board
The Board of Directors of the Company meets monthly and may have
additional special meetings upon the request of one third of the Directors or
the Chairman. During 1998, the Board of Directors of the Company held sixteen
meetings. The Board of Directors of the Company maintains various committees
either at the Bank or Company level, including, but not limited to, the
Executive Committee, Audit Committee, Nominating Committee and Compensation
Committee, which are discussed below. All nominees and continuing Directors of
the Company attended more than 75% of the aggregate of the total number of Board
meetings during 1998.
Executive Committee - The Executive Committee, comprised of Directors J.
Gibbons, Henson, Kelly, Meyer and Screvane, meets as needed and is authorized to
act for the Board between regular meetings with most powers of the Board. The
Executive Committee did not meet in 1998.
Audit Committee - The Audit Committee, comprised of Directors Kelly
(Chairman), Cantwell, Cummins, Dirkes and C. Gibbons, meets on call and is
responsible for reviewing and reporting to the Board on the Company's financial
condition and reviewing the audit reports from its internal and independent
auditors. The Audit Committee held five meetings during 1998.
Nominating Committee - The Nominating Committee for the 1999 Annual
Meeting, comprised of Directors Adikes, Kelly and Meyer, reviews any nominations
to the Board of Directors made by stockholders of the Company and recommends to
the Board of Directors, nominees for election to the Board. The Company's Bylaws
6
also provide for stockholder nominations of Directors and require such
nominations to be made pursuant to timely written notice to the Secretary of the
Company. Such notice must contain all information relating to the nominee
required to be disclosed by the Company's Bylaws and by SEC disclosure
requirements. See "Additional Information - Notice of Business to be Conducted
at the Annual Meeting". The Nominating Committee met once for the nominations
discussed herein, for this Annual Meeting.
Compensation Committee - The Compensation Committee was comprised of all
nine of the Company's outside Directors for 1998, including, Directors; J.
Gibbons (Chairman), Cantwell, Cummins, Dirkes, C. Gibbons, Kelly, Meyer,
Pritcher and Screvane, who have never been employed by the Company or the Bank.
The Compensation Committee presents to the Board for ratification, the
compensation of the Company's Chief Executive Officer, and approves the
compensation paid to other senior executives. The Compensation Committee met
once in 1998. See "Report of the Compensation Committee on Executive
Compensation".
PROPOSAL 2. RATIFICATION OF INDEPENDENT AUDITORS
The Company's independent auditors for the year ended December 31, 1998,
were KPMG LLP. The Company's Board of Directors has reappointed KPMG LLP to
continue as independent auditors for JSB Financial for the year ending December
31, 1999, and is requesting stockholder ratification for such appointment.
Representatives of KPMG LLP are expected to attend 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 stockholders present at the
Annual Meeting.
Unless otherwise indicated, the shares represented by the enclosed Proxy
will be voted "FOR" ratification of KPMG LLP as the independent auditors of the
Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF KPMG LLP
AS THE INDEPENDENT AUDITORS OF THE COMPANY
7
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 4, 1999, as to
shares of Common Stock beneficially owned by Directors, nominees named under
"Election of Directors" and "Named Executive Officers" (as defined on page 11,
herein) individually and by Executive Officers and Directors as a group.
Ownership information is based upon information furnished by the respective
individuals.
Shares of Common Stock Percent of
Name Beneficially Owned (1) Class (2)
---- ------------------------- ------------
Directors:
Park T. Adikes ........................................ 417,259 (3) 4.4%
Joseph C. Cantwell .................................... 17,584 (4) *
Richard M. Cummins .................................... 10,384 (4) *
Howard J. Dirkes, Jr. ................................. 38,958 (4) *
Cynthia Gibbons ....................................... 14,384 (4) *
James E. Gibbons, Jr. ................................. 67,385 (4) *
Edward P. Henson ...................................... 130,482 (3) 1.4
Alfred F. Kelly ....................................... 26,635 (4) *
Richard W. Meyer ...................................... 29,085 (4) *
Arnold B. Pritcher .................................... 47,185 (4) *
Paul R. Screvane ...................................... 20,700 (4) *
Named Executive Officers:
John F. Bennett........................................ 88,938 (3) 1.0
Thomas R. Lehmann...................................... 54,943 (3) *
Lawrence J. Kane....................................... 48,798 (3) *
All Executive Officers and Directors of the
Company as a group (18 persons) ...................... 1,230,865 (5) 12.5
- ------------
<FN>
* Is less than 1.0% of the Company's voting securities, when rounded to the
nearest tenth.
(1) Each person effectively exercises sole (or shared with spouse or other
immediate family member) voting and dispositive power as to shares reported.
Excluded are 193,723 shares held by a trust which was established for the
Benefit Restoration Plan (the "Restore Plan") in connection with the Company's
benefit plans. Shares held in this trust are voted at the direction of the
Employee Benefits Committee of the Bank's Board of Directors. The assets held by
the trust, including the Company's shares, are subject to the claims of the
general creditors of the Company and the Bank. The above table does not include
the 154,000 options granted to Executive Officers and Directors pursuant to the
1996 Stock Option Plan (the "1996 Option Plan"), on January 1, 1999, which
shares are not exercisable until they vest on July 1, 1999, as detailed in Notes
3 and 4, below.
(2) The total number of shares of Common Stock outstanding on March 4, 1999 was
9,301,435. Exercisable options for each individual are included in shares
beneficially owned and are added to common stock outstanding in determining the
percent of class. Shares subject to options that are not exercisable within 60
days are excluded.
(3) Includes 147,500, 48,000, 59,293, 30,000 and 30,000 shares for Messrs.
Adikes, Henson, Bennett, Lehmann and Kane, respectively, which may be acquired
through the exercise of stock options granted and exercisable under the JSB
Financial, Inc. 1990 and 1996 Stock Option Plans. Does not include 20,000,
16,000, 10,000, 12,500 and 12,500 options granted on January 1, 1999, to Messrs.
Adikes, Henson, Bennett, Lehmann and Kane, respectively, which vest on July 1,
1999.
(4) Includes 17,000, 10,000, 18,073, 13,000, 12,000, 18,250, 12,000, 22,000 and
12,000 shares for Directors Cantwell, Cummins, Dirkes, C. Gibbons, J. Gibbons,
Kelly, Meyer, Pritcher and Screvane, respectively, which may be acquired through
the exercise of stock options granted and exercisable under the Company's stock
option plans. Does not include 4,000 options granted on January 1, 1999, which
vest on July 1, 1999.
(5) Includes 539,116 shares subject to exercisable options.
</FN>
8
DIRECTORS' COMPENSATION
Directors' Fees. During 1998, all Directors and the Director Emeritus of
the Bank received a fee of $1,000 for each monthly Board meeting attended and
for the Annual Meeting. All Directors, except those who are officers of the Bank
or the Company and the Director Emeritus, received an annual fee of $30,000,
consisting of: shares of the Company's Common Stock with a fair market value of
$10,000 on January 1, 1998, and the remaining balance of fees paid in cash, in
three installment payments. The Chairman of the Audit Committee received a flat
annual fee of $10,000 while members of that committee received a flat annual fee
of $7,000. In addition to the Chairman of the Bank's Mortgage Committee
receiving an annual fee of $10,000, the Chairman and the Bank's Mortgage
Committee members received a fee of $750 for each meeting attended. All members
of the Bank's Community Reinvestment Act Committee received a fee of $750 for
each meeting attended. The Chairman of the Bank's Employee Benefits Committee
received an annual fee of $2,500 while members received an annual fee of $1,500.
The Chairman of the Compensation Committee received a flat annual fee of $2,500
while members of the Compensation Committee received a flat annual fee of
$1,500.
Outside Directors' Consultation and Retirement Plan. Under the 1990
Jamaica Savings Bank FSB Outside Directors' Consultation and Retirement Plan
(the "Consultation Plan"), any Director who has served as an outside Director of
the Company or the Bank for 15 years is a participant in the Consultation Plan.
A consulting Director shall be paid his/her annual benefit under the
Consultation Plan in equal monthly installments for the lesser of (a) the number
of months which such participant has agreed to act as a consulting Director or
(b) one-half of the number of months such participant has served as an outside
Director for the Bank up to a maximum of 120 months. The annual benefit shall be
an amount equal to the Director's retainer fee and the fees payable for
attendance at 12 regular Directors' meetings determined as of the participant's
termination date.
The 1990 Stock Option Plan for Outside Directors. Under the JSB
Financial, Inc. 1990 Stock Option Plan for Outside Directors (the "1990
Directors' Option Plan"), certain outside Directors were granted, effective June
27, 1990, non-statutory stock options to purchase 25,000 shares of Common Stock.
In addition, the then active Director Emeritus was granted non-statutory stock
options to purchase 10,000 shares of Common Stock. The exercise price per share
of each option granted under the 1990 Directors' Option Plan is $10.00 per
share. The remaining 40,500 unexercised options granted under the 1990
Directors' Option Plan were exercisable at December 31, 1998. There were no
options available for grant under the 1990 Directors' Option Plan during 1998.
The 1996 Option Plan. Under the 1996 Option Plan, on an annual basis,
each member of the Board of Directors, who is neither an officer nor an employee
of the Company or the Bank, is granted nonstatutory common stock options to
purchase 4,000 shares of the common stock, each active Director Emeritus is
granted 2,000 options and individuals who first become directors are granted
between 6,000 and 9,000 options, the amount of which is determined by the
calendar quarter during which the appointment to the Board is made. On January
1, 1998, members of the Board of Directors and the then active Director Emeritus
of the Company were granted options to purchase an aggregate of 36,000 shares
(with dividend equivalent rights ("DERs") discussed below) at an exercise price
of $50.0625, the market closing price of the Company's Common Stock on the
business day prior to grant. These options became exercisable on July 1, 1998.
See Stock Ownership of Management, on page 7, herein. Simultaneously with the
grant of options, "limited rights" with respect to the shares covered by the
options were granted. These limited rights are subject to terms and conditions
and can be exercised only in the event of a change in control, as defined in the
1996 Option Plan, of the Company. Upon the exercise of a limited right, the
holder shall receive from the Company a cash payment equal to the difference
between the exercise price of the option and the fair market value of the
underlying shares of Common Stock. In addition, pursuant to the 1996 Option
Plan, cash payments for the DER are made to option holders upon the exercise of
the option, thereby separating the cost of the DER from the cost of the option.
The option period for each option grant will expire no later than ten years from
the date of the grant.
9
Directors' Stock Program. To further align the outside Directors' interest
with those of the Company's stockholders, on December 9, 1997, the Board of
Directors of the Company authorized the issuance of up to 20,000 shares of the
Company's Common Stock to the Company's non-employee directors, pursuant to the
Jamaica Savings Bank FSB Directors' Stock Program (the "Directors' Stock
Program"). Under the Directors' Stock Program, each December, the Chairman of
the Board will determine and recommend for approval by the Board, the rate of
annual retainer to be paid to each outside Director for the next succeeding
calendar year. Unless the Board shall elect otherwise, one third (1/3) of the
annual rate of outside Director's fees will be paid to each outside Director in
shares of Common Stock effective as of January 1st and the balance of the fees
will be paid in cash, in three installment payments, on April 1st, July 1st and
October 1st in such dollar amounts to be determined and approved by resolution
of the Board. Payment of outside Director's fees in shares of Common Stock will
be accomplished through the Company's issuance of shares of Common Stock having
a fair market value, determined as of December 31st, equal to one third (1/3) of
the rate of the annual retainer payable to each Director. Directors do not have
the option to receive cash rather than stock in payment of the portion of their
fees subject to the Directors' Stock Program. During 1998, the Company issued
1,800 shares pursuant to this program.
EXECUTIVE COMPENSATION
Under rules established by the SEC, the Company is required to provide
certain data and information in regard to the compensation and benefits provided
to the Company's Chief Executive Officer and other Executive Officers. The
disclosure requirements for the Chief Executive Officer and other Executive
Officers include the use of tables and a report explaining the rationale and
considerations that led to fundamental compensation decisions affecting those
individuals. The members of the Compensation Committee of the Board of Directors
of the Company also serve as the Compensation Committee of the Bank. In
fulfillment of this requirement, the Compensation Committee of the Bank (the
"Compensation Committee"), at the direction of the Company's Board of Directors
has prepared the following report for inclusion in this Proxy Statement.
Report of the Compensation Committee on Executive Compensation
All Executive Officers of the Company also serve as Executive Officers
of the Bank. Such Executive Officers receive compensation for their services to
the Bank and do not receive cash compensation from the Company. The Compensation
Committee of the Board of Directors of the Bank is responsible for establishing
the compensation levels and benefits for Executive Officers of the Bank. For
1998, all independent outside Directors were members of the Compensation
Committee. The Compensation Committee is also responsible for establishing the
policies which govern employee annual compensation and stock ownership programs.
The compensation structure is aimed at establishing levels of compensation
designed to reward performance and to retain and provide incentive to the
Company's Executive Officers. The Compensation Committee believes that any
compensation it determines to be appropriate in excess of $1.0 million to
Executive Officers is not expected to result in any significant loss of tax
benefits to the Company.
Each Executive Officer has an employment agreement with the Bank, that
has been guaranteed by the Company. See "Employment Agreements". The
Compensation Committee approves any perquisites to Executive Officers.
Base Salaries and Performance Bonuses. In determining salary levels of
the Executive Officers, the Compensation Committee considers the entire
compensation package, including stock plans. Rather than establishing specific
performance goals, salary levels and performance bonuses are aimed at reflecting
the overall financial performance of the Company and the performance of each
Executive Officer over time, which evaluation is subjective. The Compensation
Committee reviews various published surveys of compensation paid to executives
performing similar duties for financial institutions and their holding
companies, with focus placed on financial institutions in the Bank's market
area. Thus, the peer group utilized for comparison of compensation includes
some, but not all, of the companies included in the peer group for the Stock
Performance Graph. While salary levels are not targeted to correspond to any
high, median or low end of the companies surveyed, these surveys serve as a
guide for the Compensation Committee in determining salary levels. In December
of each year, the Compensation Committee determines salary adjustments, if any,
to take effect on January 1 of the following year for all officers of the Bank.
10
Performance bonuses, if any, are at the discretion of the Compensation
Committee, and thus may vary. The Compensation Committee granted a midyear
performance bonus to all employees, including Executive Officers based on 5.0%
of annual salary. In addition, a year end performance bonus was granted to all
employees, including Executive Officers, except Mr. Adikes and Mr. Henson, based
on 15.0% of annual salary. Mr. Adikes received a year-end performance bonus of
$300,000 or 42.9% of his 1998 salary and Mr.
Henson received a year-end performance bonus of $100,000 or 25.0% of his 1998
salary.
Stock Programs. The Board of Directors of JSB Financial, Inc., the
Compensation Committee and management believe that significant employee stock
ownership is a major incentive in maximizing Company profitability and
therefore, aligns the interests of employees and stockholders. Therefore, the
Company sponsors an ESOP and maintains stockholder approved Option Plans.
Contributions to the ESOP are currently based on approximately 6% of employees'
base salary.
On January 1, 1998, 126,000 options were granted under the 1996 Option
Plan to all Executive Officers as a group. Such options were granted at the
closing market price of the Common Stock, as of December 31, 1997, of $50.0625.
These options became exercisable on July 1, 1998, six months from the date of
grant. Stock options under such plan were allocated by the Employee Benefits
Committee of the Bank, on a discretionary basis, after considering the practices
of other financial institutions, as verified by external surveys, and reviewing
the Executive Officers' level of responsibility and contributions to the Company
and the Bank. See "Option/SAR Grants in 1998". All options granted under the
1996 Option Plan will expire no later than ten years from the date on which the
option was granted. The Compensation Committee considers prior grants when
determining stock compensation.
Compensation. In determining salary level and performance bonuses for
Mr. Adikes, the Compensation Committee reviews indicators of the Company's
financial strength, efficiency, and profitability. The Compensation Committee
exercises its judgment and discretion, rather than attempting to set absolute
targets for any of the ratios reviewed in connection with the above indicators,
in determining salary and/or performance bonus.
Mr. Adikes' 1998 salary of $700,000 continued at the same level since
1994. Total performance bonuses paid to Mr. Adikes during 1998 were $335,000 and
were comprised of a $300,000 special year-end performance bonus and a $35,000
midyear performance bonus. The Compensation Committee determined Mr. Adikes'
performance bonus based on the criteria discussed above which encompassed his
overall performance. The Compensation Committee believes the placement of Mr.
Adikes' salary and performance bonus at the high end of salaries of the
companies surveyed, as supported by evaluation of his services and performance,
is appropriate and in the best interest of our stockholders.
The 1998 Compensation Committee:
James E. Gibbons, Jr. - Chairman
Joseph C. Cantwell
Richard M. Cummins
Howard J. Dirkes, Jr.
Cynthia Gibbons
Alfred F. Kelly
Richard W. Meyer
Arnold B. Pritcher
Paul R. Screvane
11
Summary Compensation Table
The following table sets forth the compensation paid by the Bank for
services rendered during the three years ended December 31, 1998, 1997 and 1996,
respectively, to the Chief Executive Officer and the four other highest paid
Executive Officers who received more than $100,000 in salary and bonus (the
"Named Executive Officers"). JSB Financial has not paid any compensation other
than through the Bank.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Securities
Restricted Underlying All Other
Stock Options/ Compensa-
Name and Principal Position Year Salary Bonus Awards SARs(#)(1) tion(2)
- ----------------------------- ---- ------ ----- ------------ ------------- -----------
Park T. Adikes 1998 $700,000 $335,000 - 20,000 $323,834
Chairman of the Board, Chief 1997 700,000 285,000 - 20,000 320,932
Executive Officer and Director 1996 700,000 285,000 - 20,000 263,932
Edward P. Henson 1998 400,000 120,000 - 16,000 73,498
President and Director 1997 375,000 93,750 - 16,000 72,324
1996 350,000 77,500 - 16,000 61,584
John F. Bennett 1998 125,000 25,000 - 10,000 16,679
Senior Vice President 1997 119,000 23,800 - 10,000 17,476
1996 115,000 23,000 - 10,000 15,102
Thomas R. Lehmann 1998 115,000 23,000 - 10,000 8,407
Executive Vice President 1997 103,000 20,600 - 10,000 8,733
1996 97,000 19,400 - 10,000 7,476
Lawrence J. Kane 1998 110,000 22,000 - 10,000 8,080
Executive Vice President 1997 99,000 19,800 - 10,000 8,216
1996 93,000 18,600 - 10,000 6,994
<FN>
(1) All options presented in the table were exercisable prior to December 31,
1998.
(2) Items included in other compensation for 1998 pertain to the following
items: (i) ESOP; $7,500, $10,929, $8,537, $7,885 and $7,558 for Messrs. Adikes,
Henson, Bennett, Lehmann and Kane, respectively, (ii) the Restore Plan in
connection with the ESOP; $268,069, $46,219 and $6,036 for Messrs. Adikes,
Henson and Bennett, respectively, (iii) the Restore Plan in connection with the
Incentive Savings Plan ("ISP"); $31,157 for Mr. Adikes, (iv) life insurance
premiums; $3,108, $1,350, $2,106, $522 and $522 for Messrs. Adikes, Henson,
Bennett, Lehmann and Kane, respectively, and (v) Director's Fees; $14,000 and
$15,000 to Messrs. Adikes and Henson, respectively.
</FN>
12
Employment Agreements. The Bank and the Company maintain employment
agreements with Messrs. Adikes and Henson and the Bank maintains employment
agreements with Messrs. Bennett, Lehmann and Kane. The original employment
agreements each provided for a three-year term. Commencing on the first
anniversary date and continuing each anniversary date thereafter, the agreements
extend for an additional year so that the remaining terms shall be three years,
provided, however, that the Board of Directors has determined to renew the
agreements. The agreements provide that the base salary of the executive will be
reviewed annually. In addition to the base salary, the agreements provide for,
among other things, disability pay, participation in stock benefit plans and
other fringe benefits applicable to executive personnel. The agreements provide
for termination by the Bank or the Company for cause at any time. In the event
the Bank or the Company chooses to terminate the executive's employment for
reasons other than for cause, or in the event of the executive's resignation
from the Bank and the Company upon (i) failure to reelect the executive to
his/her current office or board membership, (ii) a material change in the
executive's functions, duties or responsibilities, or relocation of his/her
principal place of employment, (iii) liquidation or dissolution of the Bank or
the Company, or (iv) a breach of the agreement by the Bank or the Company, or if
termination, voluntary or involuntary, results from a change in control, as
defined in the employment agreements ("Change in Control"), of the Bank or the
Company, the executive or, in the event of death, his/her beneficiary, would be
entitled to a severance payment equal to the greater of the payments due for the
remaining term of the agreement or three times his/her average annual
compensation over the past three years of employment with the Bank. The
agreements also provide for a lump sum cash payment for the executive's life,
medical, dental and disability coverage for the remaining unexpired term of the
agreements, however, if termination is due to a Change in Control, then the
executive is entitled to a lump sum cash payment for the benefits covering 36
months. Payments to the executive under the Bank's agreements are guaranteed by
the Company.
Payments under the employment agreements, in the event of a Change in
Control, including other payments that might be made as a result of a Change in
Control, may constitute an excess parachute payment under Section 280G of the
Internal Revenue Code (the "Code") of 1986, as amended, resulting in the
imposition of an excise tax on the recipient and denial of a tax deduction for
such excess amounts to the Company and the Bank. If any amounts payable in
connection with a Change in Control are determined to be "excess parachute
payments" under Section 280G of the Code resulting in the imposition of the 20%
excise tax on such payments under Section 4999 of the Code, each officer will
receive from the Company an additional amount, a gross up amount (which amount
is included in the payments under the employment agreements indicated below)
such that the effect of the imposition of that excise tax is effectively
eliminated.
These agreements provide for an annual base salary to be paid in 1999 by
the Bank or the Company in lieu of the Bank of $700,000, $400,000, $130,000,
$125,000 and $120,000 to Messrs. Adikes, Henson, Bennett, Lehmann and Kane,
respectively. Based upon current compensation which includes salary, bonuses and
benefits under employee benefit plans, payments pursuant to these agreements
upon a Change in Control would be approximately $3,197,864, $2,209,785,
$465,673, $423,764 and $407,384 to Messrs. Adikes, Henson, Bennett, Lehmann and
Kane, respectively. Actual required payments in the event of a future Change in
Control, based on calculations under the agreements at the time, could vary
significantly from such amounts. In addition to the above payments, the gross up
for the acceleration of stock options would also be payable; however, such
amounts would be affected by the market value of the Company's Common Stock at
the time such acceleration, if any, may be triggered.
Stock Option Plans. The Company maintains two option plans, the 1990
Option Plan and the 1996 Option Plan. During 1996, the Company's stockholders
approved the 1996 Option Plan. No awards were granted under the 1990 Option Plan
during 1998.
13
OPTION/SAR* GRANTS IN 1998
The following table shows all grants of options under the JSB Financial,
Inc. 1996 Option Plan to the Named Executive Officers during 1998 and contains
certain information about the present value of the option on the date of grant.
Individual Grants
-----------------
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Options/SARs Executive Base price Expiration Present
Name Granted (1) Officers (2) Per Share Date Value (3)
- ---- ------------- ------------------ ------------ ------------- -----------
Park T. Adikes 20,000 15.87% $50.0625 12/31/07 $219,200
Edward P. Henson 16,000 12.70 50.0625 12/31/07 175,360
John F. Bennett 10,000 7.94 50.0625 12/31/07 109,600
Thomas R. Lehmann 10,000 7.94 50.0625 12/31/07 109,600
Lawrence J. Kane 10,000 7.94 50.0625 12/31/07 109,600
- ------------
<FN>
*SAR - Stock appreciation rights.
(1) All options granted on January 1, 1998 were granted at an exercise price of
$50.0625, the market closing price of the Company's Common Stock on the business
day before grant. The option period during which an individual may exercise such
option will generally commence six months after the date of grant and expire no
later than ten years from the date of the grant. Options granted under the 1996
Option Plan provide for limited rights and DERs, as more fully discussed under
Directors' Compensation - The 1996 Option Plan on page 8, herein.
(2) Based upon a total of 126,000 options granted to Executive Officers during
1998. There were no options granted to employees other than Executive Officers
during 1998.
(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 stock option value of $10.96 was determined based on the following
assumptions: volatility rate of 20.75%; risk-free interest rate of 5.74%;
historic annual dividend yield on underlying stock of 3.07%; estimated option
term of 5.7 years.
</FN>
14
The following table shows options exercised by Named Executive Officers
during 1998, including the aggregate value of gains on the date of exercise and
certain information with respect to the number of shares of Common Stock
represented by outstanding options held by such persons as of December 31, 1998.
Also reported are the values 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 of $54.375.
AGGREGATED OPTION/SAR EXERCISES DURING THE YEAR
ENDED DECEMBER 31, 1998 AND YEAR-END OPTION/SAR VALUES
Number of Value of Unexercised In-the-
Shares Underlying Securities Money Options/SARS
Acquired Value Options/SARs at Year-End(#) at Year-End (1)
Name on Exercise(#) Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- ----------- ----------- ------------- ------------- -------------
Park T. Adikes 27,896 $1,202,697 162,500 - $5,417,188 $ -
Edward P. Henson - - 48,000 - 695,000 -
John F. Bennett - - 59,293 - 1,734,252 -
Thomas R. Lehmann - - 30,000 - 434,375 -
Lawrence J. Kane - - 30,000 - 434,375 -
- ------------
<FN>
(1) Options are subject to limited rights pursuant to which the options, to the
extent outstanding for at least six months, may be exercised in the event of a
Change in Control of the Company or the Bank. Upon the exercise of limited
rights, the optionee would receive cash payments equal to the difference between
the exercise price of the related option on the date of the grant and the fair
market value of the underlying shares of Common Stock on the date the limited
rights are exercised.
(2) Market value of underlying securities at exercise, minus the exercise price
of $10.00 per share pursuant to the 1990 Option Plan. No options granted
pursuant to the 1996 Option Plan were exercised.
</FN>
15
Stock Performance Graph
The following graph, which is required by the SEC, compares the
Company's five-year cumulative return to stockholders (stock price appreciation
plus dividends) from December 31, 1993 through December 31, 1998, with the
return for the New York Stock Exchange (the "NYSE") and an index of performance
for peer group companies, as compiled by Media General Financial Services.
Effective August 7, 1997, the Company's Common Stock began trading on the NYSE.
For purposes of the stock performance graph, the Company is presenting the NYSE
Market Index. The performance of the peer group and the NYSE include the impact
of stock price run-ups resulting from acquisition activity. In addition, the
significant volume of initial public stock offerings made by financial
institutions and the price escalations that generally followed, further skew the
return data in favor of the peer group and the broad market indexes presented.
JSB FINANCIAL, INC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
JSB Financial, Inc., The NYSE Market Index and Peer Group Index
Years Ending December 31,
(Performance Graph)
- ---------------------------------------------------------------------------------------------------
1993* 1994 1995 1996 1997 1998
----- ---- ---- ---- ---- ----
JSB Financial Inc. 100.00 105.82 145.77 181.45 246.98 276.49
The NYSE Market
Index 100.00 98.06 127.15 153.16 201.50 239.77
Media General S&L
Peer Group Index (1) 100.00 95.79 151.72 198.00 332.91 291.84
- ---------------------------------------------------------------------------------------------------
<FN>
*Assumes $100.00 invested on December 31, 1993.
NOTE: Prior to listing on the NYSE, the Company's Common Stock was listed on the
Nasdaq Stock Market
(1) The peer group, as compiled by Media General Financial Services, consists of
all thrifts publicly traded on the NYSE, American Stock Exchange and the Nasdaq
Stock Market at December 31, 1998.
</FN>
16
Pension and Pension Restoration Plan. The Bank maintains the Retirement
Plan of Jamaica Savings Bank FSB (the "Retirement Plan"), a defined benefit plan
for eligible employees of the Bank. In addition, the Bank maintains the Restore
Plan, an unfunded non-qualified plan, to compensate participants in any of the
Bank's qualified plans for benefits which would have accrued under such plans
absent the limitations of Sections 415 and 401(a)(17) of the Code. As of
December 31, 1998 all of the Named Executive Officers were eligible to
participate in the Restore Plan, but only Messrs. Adikes and Henson had accrued
supplemental pension benefits thereunder. Estimated annual benefits payable
under the Retirement Plan and the supplemental retirement benefits payable
pursuant to the Restore Plan, are reflected in the following table. The
supplemental retirement benefit payable under the Restore Plan is determined
upon the participant's retirement and will be paid in the manner designated by
the retiree.
The following table sets forth, in straight life annuity amounts, the
estimated annual benefits payable upon retirement at age 65 in calendar year
1998, expressed in the form of a single life annuity, in the final average
salary and creditable service classifications specified.
PENSION AND PENSION RESTORATION PLAN TABLE
------------------------------------------
Years of Service
Remuneration 15 20 25 30 35(1)
- ------------ ----------------------------------------------------------------------------------------
$ 25,000 $ 5,300 $ 7,100 $ 9,500 $ 12,000 $ 14,500
50,000 12,400 16,500 21,300 26,300 30,000
75,000 19,900 26,500 33,800 41,300 45,000
100,000 27,400 36,500 46,300 56,300 60,000
150,000 42,400 56,500 71,300 86,300 90,000
200,000(3) 57,400 76,500 96,300 116,300 120,000
250,000(3) 72,400 96,500 121,300 146,300(2) 150,000(2)
300,000(3) 87,400 116,500 146,300(2) 176,300(2) 180,000(2)
350,000(3) 102,400 136,500(2) 171,300(2) 206,300(2) 210,000(2)
400,000(3) 117,400 156,500(2) 196,300(2) 236,300(2) 240,000(2)
500,000(3) 147,400(2) 196,500(2) 246,300(2) 296,300(2) 300,000(2)
600,000(3) 177,400(2) 236,500(2) 296,300(2) 356,300(2) 360,000(2)
700,000(3) 207,400(2) 276,500(2) 346,300(2) 416,300(2) 420,000(2)
800,000(3) 237,400(2) 316,500(2) 396,300(2) 476,300(2) 480,000(2)
- ------------
<FN>
(1) The maximum benefit under the Retirement Plan's formula is 60% of final
average salary.
(2) These are hypothetical benefits based upon the Retirement Plan's normal
benefit formula. The maximum annual benefit permitted under Section 415 of the
Code for 1998 was $130,000, or, if higher, a participant's current accrued
benefit as of December 31, 1982 (but not more than $136,425). The $130,000
ceiling will be adjusted for increases in the cost of living in $5,000
increments in 1999 and succeeding years. The Bank maintains a non-qualified
Restore Plan for the purpose of providing the benefits that would normally be
paid under the Retirement Plan, but are precluded from being paid due to this
limitation.
(3) The maximum annual salary permitted under the Code for 1998 was $160,000.
Benefits accrued as of December 31, 1993 on the basis of compensation limits
prior to 1994 are preserved. The $160,000 compensation limitation will be
adjusted for increases in the cost of living in $10,000 increments in 1999 and
succeeding years. The Bank maintains a non-qualified Restore Plan for the
purpose of providing the benefits that would normally be paid under the
Retirement Plan, but are precluded from being paid due to this limitation.
</FN>
17
Compensation utilized for the pension formula is the average of the highest
salaried three consecutive years of creditable service. For 1998, the final
average annual salary for the Named Executive Officers was based on the salaries
presented in the "Summary Compensation Table" for 1998, 1997 and 1996. The
resulting average salaries are as follows: Mr. Adikes, $700,000; Mr. Henson,
$375,000; Mr. Bennett, $119,667; Mr. Lehmann, $105,000 and Mr. Kane, $100,667.
Benefit amounts are not subject to any deduction for Social Security benefits or
other offset amounts.
The following table sets forth the years of creditable service as of
December 31, 1998 for each of the individuals named in the compensation table.
Creditable Service
-----------------------
Years Months
----- ------
Park T. Adikes ......................... 44 1
Edward P. Henson ....................... 38 7
John F. Bennett ........................ 38 11
Thomas R. Lehmann ...................... 29 3
Lawrence J. Kane ...................... 26 10
Indebtedness of Management and Transactions With Certain Related Persons
All loans or extensions of credit to Executive Officers and Directors
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 repayment or present other unfavorable features.
ADDITIONAL INFORMATION
Stockholder Proposals for 2000 Annual Meeting
To be considered for inclusion in the Proxy Statement and proxy relating
to the Annual Meeting of Stockholders to be held in 2000, a stockholder proposal
must be received by the Secretary of the Company at the address set forth on the
first page of the Proxy Statement, not later than November 30, 1999. Any such
proposal will be subject to 17 C.F.R. Section 240.14a-8 of the Rules and
Regulations of the SEC.
Notice of Business to be Conducted at the Annual Meeting
The Bylaws of the Company provide an advance notice procedure for
certain business to be brought before an annual meeting. In order for a
stockholder to properly bring business before an annual meeting, the stockholder
must give written notice to the Secretary of the Company not less than ninety
(90) days before the time originally fixed for such meeting; provided, however,
that in the event that less than one hundred (100) days notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be received not later than the close of
business on the tenth day following the day on which such notice of the annual
meeting was mailed or such public disclosure was made. The notice must include
the stockholders' name and address, as it appears on the Company's record of
stockholders, a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, the class and number of shares of the Company's capital stock that are
beneficially owned by such stockholder and any material interest of such
stockholder in the proposed business.
18
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
Whether or not you intend to be present at this Annual Meeting, you are
urged to return your proxy promptly or use the telephone voting system. If you
are present at this Annual Meeting and wish to vote your shares in person, your
proxy may be revoked upon request.
A COPY OF THE FORM 10-K FOR THE PERIOD ENDED DECEMBER 31, 1998, AS FILED
WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD
DATE UPON WRITTEN REQUEST TO THE SECRETARY, JSB FINANCIAL, INC., 303 MERRICK
ROAD, LYNBROOK, NEW YORK 11563.
By Order of the Board of Directors
JOANNE CORRIGAN
Secretary
Lynbrook, New York
March 30, 1999
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR
NOT YOU HAD PLANNED TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE PAID
ENVELOPE OR USE THE TELEPHONE VOTING SYSTEM.
- --------------------------------------------------------------------------------
LONG ISLAND MARRIOTT
HOTEL AND CONFERENCE CENTER
101 JAMES DOOLITTLE BOULEVARD
UNIONDALE, NEW YORK 11553
(516) 794-3800
From Manhattan and Points West:
Midtown Tunnel to Long Island Expressway (Route 495) East to Exit 38
Northern State Parkway to Exit 31A Meadowbrook Parkway South to Exit M4 West,
Hempstead Turnpike (Route 24W) continue 100 yards to Hotel on right.
From Eastern Long Island (North Shore):
Long Island Expressway (Route 495) West to Exit 42 Northern State Parkway
to Exit 31A Meadowbrook Parkway South to Exit M4 West, Hempstead Turnpike (Route
24W) continue 100 yards to Hotel on right.
or alternatively:
Long Island Expressway (Route 495) West to Exit 39 Glen Cove Road South to Old
Country Road. Turn left (East) one mile to Merrick Avenue. Turn right to
Hempstead Turnpike (Route 24). Turn right, Hotel is 200 yards on the right.
From Eastern Long Island (South Shore):
Sunrise Highway to Southern State Parkway to Exit 22N. Meadowbrook Parkway
North to Exit M4 Hempstead Turnpike West (Route 24W). Follow road to Hempstead
Turnpike, Hotel is 100 yards on the right.
From Kennedy Airport:
JFK Expressway East to Belt Parkway East (becomes Southern State Parkway at
Nassau County border) Southern State Parkway East to Exit 22N Meadowbrook
Parkway North to Exit M4 Hempstead Turnpike West (Route 24). Follow road to
Hempstead Turnpike, Hotel is 100 yards on the right.
From Laguardia Airport:
Grand Central Parkway (Eastern L.I.) becomes the Northern State Parkway at
Nassau County border to Exit 31A Meadowbrook Parkway South to Exit M4 West,
Hempstead Turnpike (Route 24W) continue 100 yards to Hotel on right.
From Hempstead Turnpike (West to East):
Just past Hofstra University, make a left onto Earl Ovington Boulevard.
Follow road around the Nassau Coliseum, right onto James Doolittle Boulevard.
Hotel will be on the right.
JSB FINANCIAL, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
-------
ANNUAL MEETING OF STOCKHOLDERS
MAY 11,1999
10:00 A.M.
-------
The undersigned hereby appoints the official proxy committee of the
Board of Directors of JSB Financial, Inc. (the "Company") consisting of Alfred
F. Kelly, Richard W. Meyer and Arnold B. Pritcher, each of them, each with full
power of substitution, to act as attorneys and proxies for the undersigned, and
to vote all shares of Common Stock of the Company which the undersigned is
entitled to vote only at the Annual Meeting of Stockholders (the "Annual
Meeting"), to be held at the Long Island Marriott Hotel and Conference Center,
101 James Doolittle Boulevard, Uniondale, New York 11553, on May 11, 1999 at
10:00 a.m., and at any and all adjournments thereof.
This proxy is continued on the reverse side.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
You can vote in one of two ways:
1. Call toll free 1-800-840-1208 on a Touch Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
or
2. Mark, sign and date your proxy card and return it promptly in the enclosed
postage-paid envelope.
PLEASE VOTE
This proxy is revocable and will be voted as directed, but if no instructions
are specified, this proxy will be voted FOR Proposals 1 and 2. If any other
matters to be voted on are presented at the Annual Meeting, this proxy will be
voted by those named in this proxy in their best judgment. At the present time,
the Board of Directors knows of no other matters to be voted on at the Annual
Meeting.
Please mark your votes as indicated in this example X
---
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 and 2.
VOTE
FOR WITHHELD
Proposal 1. Election as directors of all nominees
listed (except as marked to the contrary below). --- ---
1. Joseph C. Cantwell
2. James E. Gibbons, Jr.
3. Edward P. Henson
Instruction: To withhold your vote for any individual nominee,
write that nominee's name on the line provided below.
- -------------------------------
Proposal 2. Ratification of the appointment of KPMG LLP as independent auditors
of the Company for the year ending December 31, 1999.
FOR AGAINST ABSTAIN
--- --- ---
PLEASE CAST YOUR VOTE BY TELEPHONE AS INSTRUCTED BELOW OR COMPLETE, DATE, SIGN
AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
The undersigned acknowledges receipt from the Company of a Notice of Annual
Meeting and of a Proxy Statement dated March 30, 1999.
WILL ATTEND MEETING ___
Signature(s) __________________________________________ Date _____________
NOTE:
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder may sign but only one signature is
required.
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW
VOTE BY TELEPHONE
QUICK - EASY - TOLL FREE - IMMEDIATE
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
You will be asked to enter a Control Number which is located in the box in the
lower right hand corner of this form.
OPTION #1: To vote as the Board of Directors recommends
on All proposals: Press 1.
When asked, please confirm your vote by Pressing 1.
OPTION #2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9.
To withhold FOR AN INDIVIDUAL nominee, press 0 and listen to the
instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
When asked, please confirm your vote by Pressing 1.
PLEASE DO NOT RETURN THE ABOVE PROXY CARD IF VOTED BY PHONE
Call Toll Free Anytime From a Touch Tone Telephone
1-800-840-1208
There is NO CHARGE to you for this call.
JAMAICA SAVINGS BANK FSB
EMPLOYEE STOCK OWNERSHIP PLAN
VOTE AUTHORIZATION FORM
I, the undersigned, acknowledge that Marine Midland Bank is the Trustee and the
holder of record and custodian of the shares of JSB Financial, Inc. (the
"Company") common stock under the Jamaica Savings Bank FSB Employee Stock
Ownership Plan and Trust (the "ESOP"). I understand that the above number of
shares of Company stock have been allocated to me as of 12/31/98. Further, I
understand that my voting instructions are solicited on behalf of the Company's
Board of Directors for the Annual Meeting of Stockholders on May 11, 1999.
Accordingly, I direct the Trustee to vote my shares as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 and 2.
FOR VOTE WITHHELD
(1) The election as Directors of all nominees listed
(except as marked to the contrary below). --- ---
James E. Gibbons, Jr.
Edward P. Henson
Joseph C. Cantwell INSTRUCTION: To withhold your
vote for any individual nominee,
write that nominee's name(s) on
the line provided below.
-------------------------------
(2) The ratification of KPMG,LLP as independent FOR AGAINST ABSTAIN
auditors of the Company for the fiscal
year ending December 31, 1999. --- ----- -----
The ESOP Trustee is hereby authorized to vote my shares as indicated above. I
understand that if I sign this form without indicating specific instructions, my
shares will be voted as unallocated shares. I understand that my voting
instructions will be confidential.
-------------------------
Signature
- ------ -------------------------
Date Print your name
Please date, sign and submit this form to Marine Midland Bank in the enclosed
postage paid envelope by April 19, 1999.
TO: Participants in the Jamaica Savings Bank FSB Employee Stock Ownership
Plan (the "ESOP")
FROM: John J. Conroy, for the ESOP Plan Administrator
RE: Vote Authorization Form
DATE: March 30, 1999
- - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Jamaica Savings Bank FSB (the "Bank") instituted an Employee Stock Ownership
Plan in connection with its conversion from the mutual to the stock form of
organization and the formation of its holding company, JSB Financial, Inc. (the
"Company").
As you know, shares of Company stock have been allocated to your ESOP account on
an annual basis. You have the right to vote these shares in your account
concerning the matters that come before the Annual Meeting of Stockholders on
May 11, 1999.
Attached you will find a Vote Authorization Form, an Annual Report and a Proxy
Statement in connection with the Annual Meeting. The management of the Bank
requests that you read this material and complete and sign the Vote
Authorization Form. We urge you to forward your response to the Trustee of the
ESOP who will be voting the Shares held by the ESOP. All replies should be
mailed directly to the Trustee, Marine Midland Bank, Trust & Investment
Management Group, 140 Broadway, 11th Floor, New York, N. Y. 10269-0080 by April
19, 1999 using the postage paid envelope provided. Your Vote Authorization Form
will be held confidential.
JJC:seb
JAMAICA SAVINGS BANK FSB
INCENTIVE SAVINGS PLAN
VOTE AUTHORIZATION FORM
I understand that my proportionate interest in the JSB Stock Fund ("Fund D") of
the Jamaica Savings Bank FSB Incentive Savings Plan (the "Plan") is as stated
above. I further understand that I have the right to direct Bankers Trust
Company, the Trustee of the Plan, to vote my proportionate interest in Fund D.
I have been advised that my voting instructions are solicited on behalf of the
Board of Directors of JSB Financial, Inc. (the "Company") for the Annual Meeting
of Stockholders on May 11, 1999.
Accordingly, I direct the Trustee, to vote my proportionate interest in Fund D
as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 and 2.
FOR VOTE WITHHELD
(1) The election as Directors of all nominees listed
(except as marked to the contrary below) --- -----
James E. Gibbons, Jr.
Edward P. Henson
Joseph C. Cantwell INSTRUCTION: To withhold your vote
for any individual nominee, write
that nominee's name(s) on the line
provided below.
-----------------------------------
(2) The ratification of KPMG, LLP as independent FOR AGAINST ABSTAIN
auditors of the Company for the fiscal year
ending December 31, 1999. --- ----- -----
Bankers Trust Company, the Trustee of the Jamaica Savings Bank FSB Incentive
Savings Plan and Trust, is hereby authorized to vote my proportionate interest
in Fund D as indicated above. I understand that my voting instructions will be
confidential.
---------------------------
Signature
- ----- ---------------------------
Date Print your name
Please date, sign and submit this form to Bankers Trust Co. in the enclosed
postage paid envelope by April 19, 1999.
TO: Participants in Fund D (the "JSB Stock Fund") of the Jamaica Savings
Bank Incentive Savings Plan
FROM: John J. Conroy, Administrator of the Plan
RE: Vote Authorization Form
DATE: March 30, 1999
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
As you know, Jamaica Savings Bank FSB (the "Bank") amended the Incentive Savings
Plan (the "Plan") to provide for a means by which participants in the Plan could
invest funds in the common stock of JSB Financial, Inc., the parent holding
company of the Bank. As a participant in the JSB Stock Fund you have the right
to vote your proportionate interest.
As the Administrator of the Plan, it is my responsibility to provide to you a
Vote Authorization Form for use in directing Bankers Trust Co., the Trustee, in
voting your proportionate interest in the JSB Stock Fund in regard to the Annual
Meeting of Stockholders which will be held on May 11, 1999.
The management of Jamaica Savings Bank FSB requests that you read the attached
Annual Report and Proxy Statement with regard to this meeting and sign the
enclosed Vote Authorization Form. This form should be sent to the Trustee,
Bankers Trust Company, Post Office Box 2626 Jersey City N. J. 07303-2626,
Attention: Gina Gehan, 4th Floor, M. S. 3048 JSB in the attached postage paid
envelope by April 19, 1999. Your Vote Authorization Form will be kept
confidential.
JJC:seb