SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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. )
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[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
THE FIRST OF LONG ISLAND CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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THE FIRST OF LONG ISLAND CORPORATION
10 GLEN HEAD ROAD
GLEN HEAD, NEW YORK 11545
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 17, 2001
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March 6, 2001
To the Stockholders of
The First of Long Island Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of THE FIRST
OF LONG ISLAND CORPORATION will be held at the OLD BROOKVILLE OFFICE, 209 GLEN
HEAD ROAD, GLEN HEAD, NEW YORK, on Tuesday, April 17, 2001, at 3:30 P.M. local
time for the following purposes:
(1) To elect Directors.
(2) To approve an amendment of the Corporation's Stock Option Plan to
allow for the granting of stock options to non-employee directors of
the Corporation and to limit the number of stock options and stock
appreciation rights that can be granted to any one person in any one
fiscal year to 25,000.
(3) To transact any other business as may properly come before the meeting.
Only stockholders of record at the close of business on February 28, 2001
are entitled to notice of and to vote at such meeting or any adjournment
thereof.
By Order of the Board of Directors
Joseph G. Perri
Senior Vice President and Secretary
IMPORTANT -- PLEASE MAIL YOUR PROXY PROMPTLY.
IN ORDER THAT THERE MAY BE PROPER REPRESENTATION AT THE MEETING, YOU ARE URGED
TO SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
THE FIRST OF LONG ISLAND CORPORATION
10 Glen Head Road
Glen Head, New York 11545
(516) 671-4900
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
The accompanying proxy is being solicited by the Board of Directors of The
First of Long Island Corporation (the "Corporation") for use at the Annual
Meeting of Stockholders to be held at 3:30 P.M. local time at the Old Brookville
Office, 209 Glen Head Road, Glen Head, New York, on April 17, 2001. The
approximate date on which proxy statements and forms of proxy are first being
sent or given to stockholders is March 6, 2001.
Proxies in the accompanying form that are properly executed and duly
returned to the Corporation will be voted at the meeting. Each proxy granted may
be revoked at any time prior to its exercise either by written notice filed with
the secretary of the meeting or by oral notice given during the meeting by the
stockholder to the presiding officer of the meeting.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The only class of voting securities of the Corporation is its Common Stock,
$.10 par value ("Common Stock"), each share of which entitles the holder thereof
to one vote except in the election of directors, where votes may be cumulated as
described below. Only stockholders of record at the close of business on
February 28, 2001 are entitled to notice of and to vote at the meeting. For the
election of directors, each share is entitled to as many votes as there are
directors to be elected, and such votes may be cumulated and voted for one
nominee or divided among as many different nominees as is desired. If authority
to vote for any nominee or nominees is withheld on any proxy, the votes will
then be "spread" among the remaining nominees.
As of January 31, 2001, there were issued 2,892,549 shares of the Common
Stock, all of which were outstanding and entitled to vote. To the best knowledge
of the Corporation, the only persons owning beneficially more than five percent
(5%) of the Common Stock of the Corporation as of January 31, 2001 are
identified in the table below.
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class
- ----------- ------------------- ----------------------- --------
Common Sidney Canarick 253,725 shares (1) 8.77%
Stock 25 Glen Street
($.10 par value) Glen Cove, N.Y. 11542
Common Paul T. Canarick 253,725 shares (1) 8.77%
Stock 25 Glen Street
($.10 par value) Glen Cove, N.Y. 11542
Common Zachary Levy 238,618 shares 8.25%
Stock 125 Jerusalem Avenue
($.10 par value) Hicksville, N.Y. 11801
1
(1) Including 236,970 shares in the names of Sidney Canarick and Jean C.
Canarick, his wife, (Mr. Paul T. Canarick's parents) as Trustees under a
Trust Agreement dated May 27, 1992; 10,575 shares in the name of Jean C.
Canarick, Dr. Canarick's wife; and 6,180 shares in the name of Paul T.
Canarick. Pursuant to applicable rules, Sidney Canarick and Paul T.
Canarick are both deemed to be beneficial owners of the foregoing shares.
Furnished below is information with respect to the beneficial ownership of
the Corporation's Common Stock as of January 31, 2001 by all directors and
nominees, by the executive officers of the Corporation named in the "Summary
Compensation Table", and by directors and executive officers of the Corporation
as a group.
Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class
- ---------------- ------------------------ -------------------- ----------
Common Stock Allen E. Busching 500 .02%
($.10 par value) Paul T. Canarick 253,725 (1) 8.77%
Beverly Ann Gehlmeyer 31,269 (2) 1.08%
Howard Thomas Hogan, Jr. 36,829 (3) 1.27%
J. William Johnson 55,103 (4) 1.89%
J. Douglas Maxwell, Jr. 9,575 (5) .33%
John R. Miller III 2,008 .07%
Walter C. Teagle III 15,750 (6) .54%
Mark D. Curtis 3,258 (7) .11%
Arthur J. Lupinacci, Jr. 24,296 (8) .83%
Donald L. Manfredonia 16,401 (9) .56%
Joseph G. Perri 12,375 (10) .43%
Directors and Executive
Officers as a group 474,481 (11) 16.38%
(1) Including 236,970 shares in the names of Sidney Canarick and Jean C.
Canarick (Mr. Paul T. Canarick's parents) as trustees under a Trust
Agreement dated May 27, 1992; and 10,575 shares in the name of Jean C.
Canarick, Mr. Paul T. Canarick's mother.
(2) Including 2,915 shares in the name of Robert Val Gehlmeyer, Mrs.
Gehlmeyer's husband, and 5,283 shares in the name of Gehlmeyer & Gehlmeyer,
P.C. Retirement Trust.
(3) Including 16,515 shares in the name of Mr. Hogan as Trustee for the benefit
of his children, Howard, Kathryn, and Margaret Hogan, and 861 shares in the
name of Mr. Hogan as Trustee for the Hogan Family Trust.
(4) Including 1,224 shares in the name of Gail G. Johnson, Mr. Johnson's wife;
3,079 shares held in Mr. Johnson's individual retirement account; and
20,869 shares which are not presently owned, but which are deemed
beneficially owned under Securities and Exchange Commission Rule
13d-3(d)(1) because they could be acquired by the exercise of stock
options.
(5) Including 5,625 shares held in Mr. Maxwell's retirement account.
(6) Including 225 shares in the name of Janet D. Teagle, Mr. Teagle's wife; and
675 shares each (totaling 2,025 shares) held for the benefit of W. Clark
Teagle IV, Clifton D. Teagle and Janet W. Teagle, Mr. Teagle's children.
(7) Including 300 shares held in Mr. Curtis's individual retirement account;
158 shares in the name of Mr. Curtis as custodian for the benefit of
Heather M. Curtis, Mr. Curtis's daughter; and 2,800 shares which are not
presently owned, but which are deemed beneficially owned under Securities
and Exchange Commission Rule 13d-3(d)(1) because they could be acquired by
the exercise of stock options.
2
(8) Including 20,050 shares which are not presently owned, but which are deemed
beneficially owned under Securities and Exchange Commission Rule
13d-3(d)(1) because they could be acquired by the exercise of stock
options.
(9) Including 12,041 shares which are not presently owned, but which are deemed
beneficially owned under Securities and Exchange Commission Rule
13d-3(d)(1) because they could be acquired by the exercise of stock
options.
(10) Including 500 shares held in Mr. Perri's individual retirement account; and
11,875 shares which are not presently owned, but which are deemed
beneficially owned under Securities and Exchange Commission Rule
13d-3(d)(1) because they could be acquired by the exercise of stock
options.
(11) Including 78,797 shares which are not presently owned, but which are deemed
beneficially owned under Securities and Exchange Commission Rule
13d-3(d)(1) because they could be acquired by the exercise of stock
options.
ELECTION OF DIRECTORS
The Board of Directors of the Corporation presently consists of eight
members classified into two classes, Class I with four members and Class II with
four members, with each director to serve a two-year term. Only one class of
directors is elected at each annual meeting of stockholders. The following table
sets forth the present composition of the Board.
Expiration
Name Class of Term
----------------------- ----- ----------
Allen E. Busching II 2002
Paul T. Canarick II 2002
Beverly Ann Gehlmeyer II 2002
Howard Thomas Hogan, Jr. I 2001
J. William Johnson II 2002
J. Douglas Maxwell, Jr. I 2001
John R. Miller III I 2001
Walter C. Teagle III I 2001
The nominees for election at this meeting will be the Class I directors. It
is intended that shares represented by properly executed proxies will be voted
at the meeting in accordance with the marking indicated thereon and, in the
absence of contrary indication, for the re-election of Messrs. Hogan, Maxwell,
Miller and Teagle, each to hold office until the 2003 Annual Meeting of
Stockholders or until his successor is elected and qualified. If at the time of
the 2001 Annual Meeting any of the nominees named above is not available to
serve as a director (an event which management does not now anticipate), the
proxies will be voted for the election as director of such other person or
persons as the Board of Directors may designate.
The Board of Directors recommends a vote FOR all named nominees.
3
Information about the nominees and directors continuing in office follows.
The year set forth for each director is the year in which the person named
became a director of the Bank. Mrs. Gehlmeyer and Messrs. Hogan, Johnson, and
Miller became directors of the Corporation upon its formation in 1984. Messrs.
Busching, Canarick, Maxwell and Teagle became directors of the Corporation and
the Bank in the years set forth next to their names.
Principal Occupations for Last Director
Name 5 Years and Other Directorships Since
- ------------------- ------------------------------- ---------
Allen E. Busching Principal, 1999
(Age 69) B&B Capital
(Consulting and Private Investment);
(formerly: Managing Director,
Unitech p.l.c., Reading, England;
Chairman of the Board, President, and
Chief Executive Officer, Lambda
Electronics, Inc. (formerly Veco Instruments));
Trustee, North Shore-Long Island Jewish
Health Systems, Inc.
Paul T. Canarick President and Principal, 1992
(Age 44) Paul Todd, Inc.
(Construction Company)
Beverly Ann Gehlmeyer Tax Manager and Principal, 1978
(Age 69) Gehlmeyer & Gehlmeyer, P.C.
(Certified Public Accounting Firm)
Howard Thomas Hogan, Jr. Hogan & Hogan, Lawyer 1978
(Age 56) (Private Practice)
J. William Johnson Chairman of the Board, President, 1979
(Age 60) and Chief Executive Officer,
The First of Long Island Corporation;
Chairman of the Board, President,
and Chief Executive Officer,
The First National Bank of Long Island;
Director, Independent Bankers Association
of New York State
J. Douglas Maxwell, Jr. Chairman, Chief Executive Officer and Director, 1987
(Age 59) NIRx Medical Technologies Corp.
(Medical Technology);
(formerly Chairman of the Board and Chief
Executive Officer, Swissray Empower, Inc.,
a Medical Imaging Distributor);
Director, Slater Development Corp. and
Police Relief Association of Nassau County
4
Principal Occupations for Last Director
Name 5 Years and Other Directorships Since
- ------------------- ------------------------------- ---------
John R. Miller III President and Chief Executive Officer, 1982
(Age 60) Equal Opportunity Publications, Inc.
(Publishing);
Director, The Middleby Corporation and
Middleby Marshall, Inc.
Walter C. Teagle III Executive Vice President and Director, 1996
(Age 51) Lexent, Inc.
(Design, Deployment, and Maintenance
of Networks for Telecommunications
Industry);
(formerly President, Chief Executive Officer,
and Director, Metro Design Systems, Inc.,
an Engineering Design Services Firm);
President, Chief Investment Officer,
and Director, Teagle Management, Inc.
(Private Investment Firm)
COMPENSATION OF DIRECTORS
All of the members of the Board of Directors of the Corporation also serve
on the Board of Directors of the Bank. Directors are paid for their services as
directors of the Bank and of the Corporation. Directors of the Corporation are
paid a quarterly retainer of $1,000. The Board of Directors of the Bank
currently holds 12 regular meetings a year and such special meetings as deemed
advisable to review significant matters. Directors of the Bank are paid $1,000
for each regularly scheduled Board meeting, provided they attend at least ten
meetings. If a director attends less than ten meetings, the director is paid
$1,000 for each meeting attended. In addition, directors of the Corporation and
the Bank are generally paid $500 for each special Board meeting and $100 for
each telephone Board meeting.
The Chairman of the Corporation's Nominating Committee receives an annual
retainer of $700, and other committee members receive annual retainers of $250.
The Chairmen of the Bank's Compensation, Compliance, and Board Trust Committees
are each paid an annual retainer of $1,700, and other members of these
committees are paid annual retainers of $700. The Chairman of the Bank's Loan
Committee receives an annual retainer of $1,700, and other committee members
receive annual retainers of $250. In addition, the Chairman and all other
members of the Bank's Loan Committee receive $250 per meeting. The Bank's
Examining and Trust Audit Committees consist of the same four independent
directors, with the Chairman being paid an annual retainer or $1,700 and other
members paid an annual retainer of $700 for service on both committees. Neither
the Chairman nor the other members of the Pension Plan Committee receive fees
for their services. Mr. Johnson does not receive director fees or committee fees
from the Bank or the Corporation.
In the past, non-employee directors of the Corporation have not been
eligible to receive any stock options under the Corporation's Stock Option and
Appreciation Rights Plan (the "Stock Option Plan"). The Board of Directors of
the Corporation has approved an amendment of the Stock Option Plan to allow for
the granting of stock options to non-employee directors of the Corporation. The
amendment, which is subject to stockholder approval, is discussed in the
proposal by the Board of Directors that follows later in this Proxy Statement.
5
BOARD COMMITTEES AND MEETINGS
The Board of Directors of the Corporation has two committees: the
Compensation and Stock Option Committee and the Nominating Committee.
The Compensation and Stock Option Committee is responsible for determining
an appropriate level of compensation for the Corporation's Chief Executive
Officer and administering the Corporation's Stock Option Plan. Administration of
the Stock Option Plan includes the selection of optionees and the determination
of the timing, duration, amount and type of each award. The Committee consists
of J. Douglas Maxwell, Jr., Beverly Ann Gehlmeyer and John R. Miller III. Under
the proposed amendment to the Stock Option Plan (see discussion of proposal that
follows), members of the Committee as well as all other non-employee directors
of the Corporation would be eligible for stock option grants under the Stock
Option Plan. The Committee met five times during 2000.
The Nominating Committee is responsible for the nomination of individuals
to the Board of Directors of the Corporation and the Bank. The members of the
Nominating Committee are Beverly Ann Gehlmeyer, Walter C. Teagle III, and John
R. Miller III. The Nominating Committee will consider nominees proposed by
stockholders in accordance with the provisions of the Corporation's bylaws
establishing the information and notice requirements for such nominations. The
Committee met once during 2000.
The Board of Directors of the Bank currently has seven committees: an
Examining Committee, a Trust Audit Committee, a Compensation Committee, a
Compliance and Community Reinvestment Act Committee, a Board Trust Committee, a
Loan Committee, and a Pension Plan Committee.
Among other things, the Examining Committee: (1) meets with the
Corporation's independent public accountants and reviews with them the results
of their annual audit of the Corporation's financial statements, including any
recommendations the accountants may have with respect to internal controls or
other business matters; (2) reviews the plan, scope and results of internal
audits performed by both the Bank's in-house audit staff and independent
external firms; (3) reviews the results of examinations performed by regulatory
authorities; and (4) is responsible for insuring that the Bank fulfills the
annual audit and management reporting requirements of Section 112 of the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"). The members of
the Examining Committee are Beverly Ann Gehlmeyer, John R. Miller III, Paul T.
Canarick, and Walter C. Teagle III. During 2000, the Committee held five
meetings.
With respect to audits of the Bank's Trust Department, the Trust Audit
Committee meets with the auditors and reviews with them the nature, extent and
results of their audit effort. The members of the Trust Audit Committee are
Beverly Ann Gehlmeyer, John R. Miller III, Paul T. Canarick, and Walter C.
Teagle III. During 2000, the Committee held three meetings.
The Compensation Committee recommends to the full Board salary policy,
management succession, compensation of officers, incentive compensation, and
employee benefits. The members of the Compensation Committee are J. Douglas
Maxwell, Jr., John R. Miller III and Beverly Ann Gehlmeyer. During 2000, the
Committee held eight meetings.
The Compliance and Community Reinvestment Act Committee is responsible for
reviewing the Bank's performance of its obligations under the various laws and
regulations affecting consumers, including the Federal Community Reinvestment
Act. The members of the Committee are John R. Miller III and Howard
6
Thomas Hogan, Jr. The Committee met four times during 2000, and each meeting was
attended by one or more officers of the Bank whose duties relate to compliance
with such laws and regulations.
The Board Trust Committee is responsible for reviewing the activities of
the Trust and Investment Services Department including the handling of fiduciary
relationships, investment management activities, and compliance. The members of
the Committee are J. Douglas Maxwell, Jr., Allen E. Busching, and J. William
Johnson. During 2000, the Committee held four meetings.
The Loan Committee consists of members who, except for Mr. Johnson, are not
officers of the Bank. Two members of the Loan Committee meet with the officers
of the Bank to review and approve substantial loans and the entire committee
meets on a quarterly basis to review the overall portfolio. The members of the
Loan Committee are Paul T. Canarick, Beverly Ann Gehlmeyer, Howard Thomas Hogan,
Jr., J. Douglas Maxwell, Jr., J. William Johnson, and Allen E. Busching.
Including the meetings to approve large loans, the Committee held thirty
meetings in 2000.
The Pension Plan Committee has the authority to take such action with
respect to the Bank's Pension Plan and Supplemental Executive Retirement Plan as
may be necessary or advisable to be taken between regular meetings of the Bank's
Board of Directors. The members of the Pension Plan Committee are J. Douglas
Maxwell Jr., Beverly Ann Gehlmeyer, and John R. Miller III. Paul T. Canarick is
an alternate member of this Committee with the right to replace any absent
member of the Committee at any meeting thereof. The Committee did not meet in
2000.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation held nine regular meetings and
one special meeting during 2000. When meetings of both the Corporation and the
Bank are considered, each director attended at least 75% of the aggregate number
of Board meetings and committee meetings on which such director served. With
respect to meetings of the Corporation only, each director attended at least 75%
of the aggregate number of Board meetings and committee meetings on which such
director served except for Mr. Teagle.
MANAGEMENT
The following tables contain information about the executive officers of
the Corporation and the Bank.
Executive Officers Term of Officer
of the Corporation Age Present Capacity Office Since
- ------------------ --- ---------------- --------- -------
J. William Johnson 60 Chairman of the Board, 3 yrs. 1984
President, and Chief
Executive Officer
Arthur J. Lupinacci, Jr. 60 Executive Vice President 1.5 yrs. 1985
and Chief Administrative
Officer
Mark D. Curtis 46 Senior Vice President 1 yr. 1997
and Treasurer
Brian J. Keeney 52 Senior Vice President 1 yr. 2000
Richard Kick 43 Senior Vice President 1 yr. 1991
Donald L. Manfredonia 49 Senior Vice President 1 yr. 1987
Joseph G. Perri 49 Senior Vice President 1 yr. 1990
and Secretary
7
Executive Officers Term of Officer
of the Bank Age Present Capacity Office Since
- ------------------ --- ---------------- --------- -------
J. William Johnson 60 Chairman of the Board, 1 yr. 1979
President, and Chief
Executive Officer
Arthur J. Lupinacci, Jr. 60 Executive Vice President 1 yr. 1985
and Chief Administrative
Officer
Donald L. Manfredonia 49 Executive Vice President 1 yr. 1982
Joseph G. Perri 49 Executive Vice President 1 yr. 1990
Mark D. Curtis 46 Senior Vice President, 1 yr. 1997
Chief Financial Officer
and Cashier
Brian J. Keeney 52 Senior Vice President 1 yr. 2000
Richard Kick 43 Senior Vice President 1 yr. 1991
Messrs. Curtis and Keeney have been employed by the Corporation and the
Bank for less than five years. From September 1998 to March 2000, Mr. Keeney was
President and Chief Executive Officer of The Rockefeller Trust Company. From
December 1996 to September 1998, he was Chairman of the Board, President & Chief
Executive Officer of Fidelity Management Trust Company of New York and from
January 1992 to November 1996, he was Senior Vice President and Chief Operating
Officer of U.S. Trust Company of New Jersey. Previously, he held various
positions with U.S. Trust Company of New York, Irving Trust Company, and The
Chase Manhattan Bank, N.A.
During 1996, Mr. Curtis was a consultant in the banking industry. From 1988
through 1995, he was employed by Gateway State Bank, most recently as Executive
Vice President, Chief Financial Officer and Secretary. Previously, he was Senior
Audit Manager at KPMG Peat Marwick, NY.
8
BOARD COMPENSATION COMMITTEE REPORT
The Corporation's executive compensation program is administered by the
Compensation and Stock Option Committee of the Corporation's Board of Directors
and the Compensation Committee of the Bank's Board of Directors (the
"Committees"). Both Committees consist of the same three independent directors,
who are not employed by the Bank or the Corporation.
Compensation for executive officers consists of direct salary, incentive
bonuses paid under the Bank's Incentive Compensation Plan, and stock options and
appreciation rights awarded under the Corporation's Stock Option and
Appreciation Rights Plan. The payment or awarding of compensation is approved by
the Committees. Following approval by the Committees, the full Boards of
Directors of the Corporation and the Bank approve the salary package for all
executive officers and review the proposed payment of incentive compensation and
granting of stock options.
The Committees adhere to the practice that compensation for executive
officers be directly and materially linked to bank performance, individual
performance, and to what is paid to individuals in similar positions within the
industry. As such, (1) salaries are related to the Bank in light of overall Bank
performance; (2) incentive compensation, an objective means of rewarding
individual performance, is paid pursuant to the Incentive Compensation Plan
based on achievement by the individual of objective goals and the Bank's
performance with respect to profitability and financial strength; and (3) base
salary and incentive compensation for executive officers is compared to the
amounts of such compensation paid to individuals with reasonably similar
responsibilities employed by banks that are similar in size and scope to the
Corporation. In addition, from time to time the Corporation retains outside
consultants to determine the appropriateness of executive officer compensation.
Regarding Mr. Johnson's compensation, the Committees have considered, in
addition to the factors described above, the profitability and growth of the
Corporation during Mr. Johnson's tenure as Chief Executive Officer.
J. Douglas Maxwell, Jr.
John R. Miller III
Beverly Ann Gehlmeyer
9
COMPENSATION OF EXECUTIVE OFFICERS
Furnished below is information with respect to the aggregate compensation
paid or accrued during the fiscal year ended December 31, 2000 to the Chief
Executive Officer and to each of the additional four most highly compensated
executive officers of the Bank who received compensation of more than $100,000
for services rendered to the Corporation or the Bank. This information is
provided pursuant to the Securities and Exchange Commission executive
compensation disclosure rules for proxy statements. All of the listed officers
are also officers of the Corporation but received salaries only from the Bank;
no compensation for their employment, other than Stock Options or Stock
Appreciation Rights ("SARs"), was received from the Corporation. A description
of the Incentive Compensation Plan under which the bonuses were paid follows.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
----------------------------- ---------------------------
Awards Payouts
------------------- -------
Other Restricted All Other
Name and Principal Compen- Stock Options/ Compen-
Position Year Salary Bonus sation Award(s) SARs LTIP sation (2)
($) ($) ($) ($) # ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ----------------------- ---- -------- -------- -------- ---------- -------- ----- ----------
J. William Johnson 2000 $340,000 $94,200 See None 3,200 None $39,331
Chairman of the Board, 1999 $325,000 $98,735 Footnote None 1,800 None $38,409
Director, President and 1998 $307,000 $93,760 (1) None 1,800 None $36,914
Chief Executive Officer
Arthur J. Lupinacci, Jr. 2000 $201,000 $48,610 See None 2,000 None $23,252
Executive Vice President 1999 $185,500 $47,715 Footnote None 1,300 None $21,923
and Chief Administrative 1998 $178,500 $45,375 (1) None 1,300 None $21,463
Officer
Donald L. Manfredonia 2000 $162,000 $33,050 See None 1,600 None $16,291
Senior Vice President 1999 $150,000 $40,770 Footnote None 1,000 None $15,459
1998 $135,500 $31,575 (1) None 800 None $13,886
Joseph G. Perri 2000 $151,000 $31,050 See None 1,200 None $15,185
Senior Vice President 1999 $134,000 $36,950 Footnote None 800 None $13,810
and Secretary 1998 $128,000 $28,200 (1) None 800 None $13,117
Mark D. Curtis 2000 $140,000 $27,300 See None 1,200 None $14,078
Senior Vice President 1999 $125,000 $25,350 Footnote None 800 None $12,883
and Treasurer 1998 $114,000 $21,400 (1) None 800 None $11,514
- ----------------------------------------------------------------------------------------------------------
(1) Other annual compensation excludes the value of perquisites and other
personal benefits since the Corporation and the Bank have concluded that
for the named executive officers the aggregate amount of such compensation
does not exceed the lesser of either $50,000 or 10% of the total of annual
salary and bonus reported in columns (c) and (d).
10
(2) All other compensation for 2000 (column (i) of the "Summary Compensation
Table") includes the following amounts either paid for or contributed on
behalf of the named executive officers. The 401(k) and profit sharing
contributions shown in the table include amounts paid under the Bank's
Profit Sharing and Supplemental Executive Retirement ("SERP") Plans.
Life 401(k) Profit
Insurance Matching Sharing
Name Premiums Contributions Contributions Total
- ----------------------- --------- ------------- ------------- -------
J. William Johnson........... $8,731 $6,800 $23,800 $39,331
Arthur J. Lupinacci, Jr. .... $5,162 $4,020 $14,070 $23,252
Donald L. Manfredonia ....... $1,711 $3,240 $11,340 $16,291
Joseph G. Perri ............. $1,595 $3,020 $10,570 $15,185
Mark D. Curtis .............. $1,478 $2,800 $9,800 $14,078
COMPENSATION PURSUANT TO PLANS
Pension Plan
The Bank is a participant in the New York State Bankers Retirement System
Pension Plan ("Plan") and maintains the SERP described below. Set forth in the
table that follows are total estimated annual benefits payable under the Plan
and SERP upon retirement based on various levels of compensation and years of
service.
Years of Creditable Service
Average Annual ---------------------------------------------------------------------------
Compensation 10 15 20 25 30 35
- -------------- -------- -------- -------- -------- -------- --------
$100,000 $ 15,780 $ 23,670 $ 31,560 $ 39,450 $ 47,339 $ 55,229
$125,000 $ 20,155 $ 30,232 $ 40,310 $ 50,387 $ 60,464 $ 70,542
$150,000 $ 24,530 $ 36,795 $ 49,060 $ 61,325 $ 73,589 $ 85,854
$175,000 $ 28,905 $ 43,357 $ 57,810 $ 72,262 $ 86,714 $101,167
$200,000 $ 33,280 $ 49,920 $ 66,560 $ 83,200 $ 99,839 $116,479
$225,000 % 37,655 $ 56,482 $ 75,310 $ 94,137 $112,964 $131,792
$250,000 $ 42,030 $ 63,045 $ 84,060 $105,075 $126,089 $147,104
$300,000 $ 50,780 $ 76,170 $101,560 $126,950 $152,339 $177,729
$400,000 $ 68,280 $102,420 $136,560 $170,700 $204,839 $238,979
$500,000 $ 85,780 $128,670 $171,650 $214,450 $257,339 $300,229
$600,000 $103,280 $154,920 $206,560 $258,200 $309,839 $361,479
The Plan covers employees who are over the age of 21 years and have been
employed for over one year. The normal retirement age is 65 and early retirement
with reduced benefits is available at age 55. However, an unreduced benefit is
available at age 62 or above to a participant with at least 10 years of service
whose employment terminates after age 55 and who begins receiving benefits after
attaining age 62. Upon retirement, each participant is paid a benefit in the
form of a joint and survivor annuity computed by (i) multiplying the
participant's final average compensation (the average of the participant's
Annual Earnings, as defined, during the five highest consecutive years of
employment) by the product of 1.75 percent and the participant's credited years
of service (to a maximum of 35 years), (ii) adding 1.25
11
percent of average compensation times the participant's credited years of
service in excess of 35 years (up to five such years), and (iii) subtracting the
product of .49 percent of the participant's final three year average
compensation (limited to covered compensation) and the participant's credited
years of service (to a maximum of 35 years). The .49 percent represents the
minimum Social Security offset to the pension benefit.
The Bank makes annual payments to a trust fund, computed on an actuarial
basis, to fund these benefits. No contribution is required for the plan year
ended September 30, 2001 because the plan has reached the full funding
limitation. A contribution of $328,554 was required for the plan year ended
September 30, 2000. Employees also make contributions of 2 percent of their
compensation. An employee becomes fully vested after 4 years of participation in
the Plan. No vesting occurs during that 4-year period.
The compensation covered by the Plan includes: (1) salary and bonus as set
forth in the "Summary Compensation Table"; (2) value realized from the exercise
of stock appreciation rights; and (3) generally all other taxable compensation
except that resulting from the Bank's contributions to the SERP or reimbursement
for taxes on SERP earnings and amounts realized after April 15, 1998 from the
exercise of disqualified incentive stock options. Sections 401(a)(17) and 415 of
the Internal Revenue Code of 1986, as amended, limit the annual benefits which
may be paid from a tax-qualified retirement plan. Any benefits which may be
above the limits under these sections would be payable under the SERP.
The credited years of service, for purposes of calculating benefits, for
the executive officers of the Bank named in the Summary Compensation Table and
all executive officers of the Bank as a group are as follows: Mr. Johnson - 20
years; Mr. Lupinacci - 14 years; Mr. Manfredonia - 17 years; Mr. Perri - 9
years; Mr. Curtis - 3 years; and all executive officers as a group - 71 years.
Supplemental Executive Retirement Plan
On August 3, 1995, the Corporation adopted The First National Bank of Long
Island Supplemental Executive Retirement Plan ("SERP"). The SERP provides
benefits that would have been provided under the Pension Plan and Profit Sharing
Plan, in the absence of Internal Revenue Code ("IRC") limitations, to certain
employees whose benefits under those plans are limited by the IRC. The
Compensation Committee of the Board of Directors designates the employees
eligible to participate in the SERP.
Supplemental retirement program and profit sharing plan contributions under
the SERP are made to a "secular trust" for the benefit of the participants.
Amounts contributed to the secular trust are not subject to the claims of
creditors of the Bank. Accordingly, the contributions are taxable to each
participant and deductible by the Bank when made. Trust income is also taxable
to each participant. Taxes are withheld from the contributions to pay each
participant's taxes. In addition, the Bank makes tax payments in an amount
sufficient to cover each participant's taxes on both the trust income and the
tax payment.
The SERP and related secular trust are intended to meet the requirements of
the Employee Retirement Income Security Act (ERISA) as they pertain to vesting,
reporting and disclosure information.
Profit Sharing Plan
The First National Bank of Long Island Profit Sharing Plan (the "Profit
Sharing Plan") covers all employees who have reached age 21 and have one year of
service. The amount contributed for each plan year is within the discretion of
the Bank, subject to the limitations of federal law. For 2000, the Bank chose to
contribute approximately $446,000 which is approximately 3.5% of its pre-tax
profits. This "Employer
12
Contribution", when made, is allocated, along with any forfeitures attributable
to that year, among the participants in proportion to their annual compensation.
The Profit Sharing Plan has a salary reduction provision. Under this
"401(k)" arrangement, participants may elect to make a pre-tax contribution not
exceeding the lesser of $10,500 or 10% of their compensation for the year
("Salary Reduction Contributions"). Salary Reduction Contributions are matched
at the end of the year by the Bank in an amount equal to 50% of the Salary
Reduction Contributions but only to the extent that the Salary Reduction
Contributions do not exceed 4% of compensation ("Matching Contributions").
Therefore, the Matching Contributions for any year cannot exceed 2% of a
participant's compensation. Total Matching Contributions for 2000 were
approximately $113,000.
Salary Reduction Contributions are fully and immediately vested. Employer
Contributions and Matching Contributions vest at the rate of 20% for each year
of participation in the Profit Sharing Plan so that after five years a
participant is fully vested. Also, a participant becomes fully vested in
Employer Contributions and Matching Contributions upon death or disability.
Normal retirement age is 65, although the Profit Sharing Plan also contains
provisions allowing pre-termination withdrawals and loans under certain
circumstances. The amount of retirement benefits will depend upon the
accumulation of contributions and forfeitures and the investment performance of
the Plan. The amount allocated under the Profit Sharing Plan and related SERP to
the account of the Chief Executive Officer for 2000 and to each of the
additional four most highly compensated executive officers of the Bank who
received compensation of more than $100,000 for services to the Corporation or
the Bank in 2000 is set forth in footnote (2) to the "Summary Compensation
Table."
Retirement Plan For Directors
On June 18, 1991, the Board of Directors of the Bank adopted The First
National Bank of Long Island Retirement Plan for Directors (the "Retirement
Plan"). In order to be eligible to receive benefits under the Retirement Plan, a
retired director must have served on the Board of Directors for three (3) years
and, except in the case of retirement due to substantial physical disability,
must have attained the age of sixty (60) years. Pursuant to the terms of the
Retirement Plan, an eligible director receives a credit (the "Credit
Percentage") of ten percent (10%) multiplied by the number of years of service
on the Board, to a maximum of one hundred percent (100%). The annual benefit
(the "Annual Benefit") under the Retirement Plan is equal to the monthly Board
of Directors attendance fee in effect as of the date of the director's
retirement, multiplied by twelve (12) and then multiplied by the Credit
Percentage. The Annual Benefit is payable for a period of seven (7) years from
the date of retirement (the "Payment Period"), in quarterly installments. In the
event of the death of a director or a retired director, the surviving spouse of
such director shall be entitled to receive an annual payment equal to
seventy-five percent (75%) of the Annual Benefit, calculated as set forth above,
and payable over the remainder of the applicable Payment Period.
In February 2001, the Board of Directors of the Corporation approved
amending the Stock Option Plan to allow for the granting of stock options to
non-employee directors. The amendment, which is subject to stockholder approval,
is discussed in the proposal by the Board of Directors that follows later in
this Proxy Statement. Upon approval of the amendment by stockholders, the
Retirement Plan will terminate effective December 31, 2000, the benefits earned
by directors under the Retirement Plan for services rendered through December
31, 2000 will be frozen, and the ability of directors to earn additional
benefits under the Retirement Plan will be discontinued.
13
Incentive Compensation Plan
The executive officers of the Bank are eligible for compensation under the
Bank's Incentive Compensation Plan (the "Plan") described in the Board
Compensation Committee Report herein. Incentive compensation paid to the Chief
Executive Officer for 2000 and to each of the additional four most highly
compensated executive officers of the Bank who received compensation of more
than $100,000 for services to the Corporation or the Bank in 2000 is set forth
in the "Summary Compensation Table."
Stock Option and Appreciation Rights Plan
The Corporation's 1986 Stock Option and Appreciation Rights Plan (the "1986
Plan") expired on January 21, 1996. The 1986 Plan was adopted by the Board of
Directors in January 1986 and approved by the stockholders in April 1986 as a
Stock Option Plan and subsequently was amended to include provisions for the
granting of Stock Appreciation Rights ("SARs"), which amendment was adopted by
the Board of Directors in May 1988 and approved by the stockholders in April
1989.
In January 1996, the Board of Directors unanimously adopted a new plan
entitled The First of Long Island Corporation Stock Option and Appreciation
Rights Plan (the "Stock Option Plan") as a successor to the 1986 Plan. The
Corporation's stockholders approved the 1996 Stock Option Plan in April 1996. In
February 2001, and subject to stockholder approval, the Board of Directors
unanimously approved an amendment of the Stock Option Plan to allow for the
granting of stock options to non-employee directors and limit the number of
stock options and stock appreciation rights that can be granted to any one
person in any one fiscal year to 25,000. Except for this amendment, the terms of
the Stock Option Plan are substantially identical to the terms of the 1986 Plan.
Under the Stock Option Plan, options to purchase up to 360,000 shares of
common stock were made available for grant to key employees and, as amended,
non-employee directors of the Corporation and its subsidiaries through January
15, 2006. Each option granted under the Stock Option Plan is granted at a price
equal to the fair market value of one share of the Corporation's stock on the
date of grant. Options granted on or before December 31, 2000 are exercisable in
whole or in part commencing six months from the date of grant and ending ten
years after the date of grant. The Corporation currently intends that options
granted after December 31, 2000 will be exercisable in whole or in part
commencing three years from the date of grant and ending ten years after the
date of grant. The date on which options first become exercisable is subject to
acceleration in the event of a change in control, retirement, death, disability,
and certain other limited circumstances.
Each option granted to an employee under the Stock Option Plan may be
granted with or without a SAR attached. The Stock Option Plan also provides for
the granting of stand-alone SARs to employees. Under the proposed amendment to
the Stock Option Plan, each option granted to a non-employee director would be
granted without an attached SAR and non-employee directors would not be eligible
for grants of stand-alone SARs. An employee who is granted an option with a SAR
attached may elect to exercise either the option or the SAR, at which point the
related SAR or option shall be deemed to have been cancelled. If a SAR is
exercised, the participant is entitled to a payment equal to the amount by which
the fair market value of the shares of the Common Stock allocable to the SAR on
the exercise date exceeds the fair market value of such shares on the date of
grant. Payment to a holder who exercises a SAR is made in cash. Unexercised
options which expire or terminate are again available for grant, but options
cancelled because an attached SAR was exercised are not again available for
grant.
14
Options may be granted under the Stock Option Plan as incentive stock
options ("ISOs") qualified under Section 422 of the Internal Revenue Code or as
non-qualified stock options ("NQSOs"). Generally, options and SARs have a
maximum duration of 10 years. The total fair market value of stock, determined
as of the date of grant of the option, for which ISOs are first exercisable by a
holder in any year is limited to $100,000. A holder may elect to exercise
options or SARs in any order without regard to the date on which the options or
SARs were granted.
Options and SARs are not transferable, except upon death (i) by will, (ii)
by the laws of descent and distribution, or (iii) by beneficiary designation.
The purchase price for the Common Stock must be paid in full in either common
stock of the Corporation or cash when an option is exercised. Generally, options
and SARs are exercisable only during the holder's continued employment or
service as a director with the Corporation or the Bank. However, in accordance
with the terms of the Stock Option Plan and/or administrative guidelines adopted
by the Compensation and Stock Option Committee, there are additional limited
periods following termination of employment or service as a director during
which options or SARs may be exercised in the event employment or service is
terminated as a result of resignation, death, disability, retirement, or a
change in control of the Corporation.
Subject to the provisions of applicable law and the terms of the Stock
Option Plan, the designation of those officers and non-employee directors who
will be granted options, or those officers who will be granted SARs, as well as
the terms of the options or SARs granted, is solely within the discretion of the
Compensation and Stock Option Committee which administers the Stock Option Plan.
No consideration is received by the Corporation or the Bank for the granting of
options or SARs.
During 2000, ISOs to purchase 23,100 shares were granted under the Stock
Option Plan at a per share, weighted average exercise price of $30.09. The
following table shows, as to the executive officers named in the "Summary
Compensation Table", information for 2000 with respect to the options granted.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
- -----------------------------------------------------------------------------
Percent of Potential Realizable
Total Value at Assumed
Options/ Annual Rates of
SARs Stock Price
Options/ Granted to Appreciation
SARs Employees Exercise or For Option Term
Granted in Fiscal Base Price Expiration -------------------
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
(a) (b) (c) (d) (e) (f) (g)
- ----------------------- ------- --------- ---------- ---------- ------- --------
J. William Johnson .............. 3,200 13.85% $29.97 1/17/10 $60,314 $152,846
Arthur J. Lupinacci, Jr. ........ 2,000 8.66% $29.97 1/17/10 $37,696 $ 95,529
Donald L. Manfredonia ........... 1,600 6.93% $29.97 1/17/10 $30,157 $ 76,423
Joseph G. Perri ................. 1,200 5.19% $29.97 1/17/10 $22,618 $ 57,317
Mark D. Curtis .................. 1,200 5.19% $29.97 1/17/10 $22,618 $ 57,317
15
The following table sets forth the aggregated options/SARs exercised in the
last fiscal year and the aggregated number and value of unexercised options and
SARs at December 31, 2000 for each of the executive officers named in the
"Summary Compensation Table."
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
Number of Value of
Unexercised Unexercised
Options/SARs In-the-Money
Shares Value at Fiscal Year-End Options/SARs
Acquired on Realized (all are exercisable) at Fiscal Year-
Name Exercise (#) ($) (#) End ($)
(a) (b) (c) (d) (e)
- -------------------------------- ------------ -------- -------------------- ---------------
J. William Johnson ............. 6,706 $114,599 20,869 $281,357
Arthur J. Lupinacci, Jr......... 2,700 $ 78,418 20,050 $358,189
Donald L. Manfredonia........... 1,575 $ 40,259 12,041 $201,013
Joseph G. Perri................. 900 $ 25,718 11,875 $210,113
Mark D. Curtis.................. -- -- 2,800 $ 10,236
There were no long-term incentive plan awards granted in the last fiscal
year.
Employment Contracts
Messrs. Johnson and Lupinacci have employment contracts with the
Corporation pursuant to which Mr. Johnson is employed in the position of
President and Chief Executive Officer of the Corporation and Mr. Lupinacci is
employed in the position of Executive Vice President of the Corporation. In
addition, each of these officers is also employed in such other senior executive
positions of the Corporation or the Bank as may be determined by the Board of
Directors of the Corporation or the Bank. Mr. Johnson's contract has a term of
three years effective January 1, 2001 and Mr. Lupinacci's contract has a term of
eighteen months effective July 1, 2000. The term of each of these contracts is
automatically extended at the expiration of each year for an additional period
of one year, thus resulting in a new three-year term for Mr. Johnson and a new
eighteen-month term for Mr. Lupinacci. Mr. Johnson's contract currently provides
for a base annual salary of $357,000 and Mr. Lupinacci's contract provides for a
base annual salary of $215,000 to be paid by the Corporation or the Bank. The
base annual salary for Mr. Johnson includes services as a director of the
Corporation and the Bank.
Under these contracts, Messrs. Johnson and Lupinacci are entitled to
severance compensation. In the event of a termination of employment following a
change of control or generally upon an involuntary termination of employment,
Mr. Johnson is entitled to receive a single sum payment equal to three (3) times
the base annual salary under his contract, together with continued insurance
coverage, and Mr. Lupinacci is entitled to receive a single sum payment equal to
one and one-half (1.5) times the base annual salary under his contract, together
with continued insurance coverage.
Severance Agreements
Messrs. Manfredonia, Perri, and Curtis each have a severance agreement with
the Corporation. Each such agreement has a term of one year effective July 1,
2000. The term of each agreement is automatically
16
renewed for additional one-year terms, unless the Board of Directors of the
Corporation chooses not to renew and notifies the officer at least thirty days
prior to the end of a term. Each officer's agreement entitles him to a
"Termination Payment" and continued health insurance coverage for a period of
twelve months in the event that the officer's employment is terminated within
twenty-four months following a Change of Control Event, as defined, or, under
certain circumstances, following the acquisition of more than 20% of the voting
shares of the Corporation by any entity, person, or group. The Termination
Payment and continued health insurance coverage also apply if the officer
resigns for Good Reason, as defined, within twenty-four months after a Change of
Control Event. The Termination Payment for Messrs. Manfredonia, Perri, and
Curtis is equal to 125%, 100%, and 100%, respectively, of his then current
annual base salary. Alternatively, each officer's agreement entitles him to a
payment in the amount of 66 2/3% of the Termination Payment and continued health
insurance coverage in the event that the officer resigns for any reason during
the period beginning on the thirty-first day after a Change of Control Event and
ending on the sixtieth day after such event.
PERFORMANCE GRAPH
The following graph compares the Corporation's total stockholder return
over a 5-year measurement period with (i) the NASDAQ Market Index, and (ii) the
National Commercial Banks Index*.
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
1/1/96 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
-------- ---------- ---------- ---------- ---------- ----------
The First of Long Island $100.00 $116.20 $212.93 $235.20 $158.31 $211.99
National Commercial Banks $100.00 $140.46 $208.90 $225.56 $191.69 $221.85
NASDAQ Market Index $100.00 $124.27 $152.00 $214.39 $378.12 $237.66
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
THE FIRST OF LONG ISLAND CORPORATION,
NATIONAL COMMERCIAL BANKS INDEX, AND NASDAQ MARKET INDEX
Assumes $100 Invested on January 1, 1996
Assumes Dividend Reinvested
Fiscal Year Ended December 31, 2000
* The National Commercial Banks Index consists of nationally chartered
commercial banks and certain other financial institutions which, on the basis of
Standard Industrial Classification (S.I.C.) codes developed by the U.S. Office
of Management and Budget, have been included in the same industry group as the
Corporation.
17
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In 1992, the Bank, as tenant, entered into a lease with Howard Thomas
Hogan, Jr., a director of the Corporation and the Bank, covering premises in a
building located in Locust Valley, New York, to be used as a branch office. The
lease has a term of ten years and one month and expires on October 30, 2002.
However, the Bank may cancel the lease at any time upon giving Mr. Hogan ninety
days written notice. The lease provides for annual base rentals of $27,385 for
the year ending October 30, 2001 and $28,207 for the year ending October 30,
2002. In addition to the base rent, the Bank is responsible for certain charges
for real estate taxes and common area maintenance. The Corporation believes that
the foregoing is comparable to the rent that would be charged by an unrelated
third party.
The Bank has had, and expects to have in the future, banking transactions
in the ordinary course of its business with directors, officers, principal
stockholders of the Corporation and their associates. Such transactions,
including borrowings and loan commitments, were 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
others, and in the opinion of management do not involve more than a normal risk
of collectibility, nor do they present other unfavorable features.
Certain directors are officers, directors, partners, and/or stockholders of
companies or partnerships which (or associates of which) may have been customers
of the Bank in the ordinary course of business during 2000 and up to the present
time. Additional transactions of this type may occur in the future. All such
transactions were effected on substantially the same terms as comparable
transactions with other persons.
EXAMINING COMMITTEE
Report of Examining Committee
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2000.
We have discussed with the independent auditors the matters required to be
discussed by Statement of Auditing Standards No. 61 "Communication with Audit
Committees", as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have reviewed the written disclosures and letter from the independent
auditors required by Independence Standard No. 1, "Independence Discussions with
Audit Committees", as amended, by the Independence Standard Board, and have
discussed with the auditors the auditors' independence.
Based on the review and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the year ended December 31,
2000.
Beverly Ann Gehlmeyer
Paul T. Canarick
John R. Miller III
Walter C. Teagle III
18
Examining Committee Charter and Independence
The Examining Committee is governed by a written charter adopted by the
Board of Directors of both the Corporation and the Bank (see Appendix A). All of
the members of the Examining Committee are independent directors as defined in
Marketplace Rule 4200(a)(14) of The Nasdaq Stock Market, Inc.
The preceding report and information and the Examining Committee charter
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 (the "1933 Act") or the Securities Act of 1934 (the "1934
Act"), except to the extent the Corporation specifically incorporates this
information by reference, and shall not otherwise be deemed filed under the 1933
Act or the 1934 Act.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements for the year ended December 31, 2000
were examined by Arthur Andersen LLP. It is anticipated that the Board of
Directors will reappoint Arthur Andersen LLP as the Corporation's independent
public accountants for 2001. A representative of Arthur Andersen LLP will be
present at the Annual Meeting of Stockholders and will have the opportunity to
make a statement and respond to appropriate questions from stockholders.
Audit Fees
Arthur Andersen LLP billed the Corporation $82,500 for the following
services performed with respect to the 2000 year: (1) professional services
rendered for the audit of the Corporation's annual financial statements; (2)
reviews of the financial statements included in the Corporation's Forms 10-Q;
(3) a reading of the Corporation's annual report on Form 10-K; (4) rendering an
opinion on management's assertion about the effectiveness of the Bank's internal
control structure over financial reporting; and (5) consultation on matters
related to accounting and financial reporting.
All Other Fees
Other than audit fees, the aggregate fees billed to the Corporation by
Arthur Andersen LLP for the most recent fiscal year were $157,650. These fees,
none of which were financial information systems design and implementation fees,
include the amount paid to Arthur Andersen LLP for a special comprehensive audit
of the Bank's Trust Department. The Examining Committee of the Board of
Directors determined that the services performed by Arthur Andersen LLP other
than audit services are not incompatible with Arthur Andersen LLP maintaining
their independence.
BOARD OF DIRECTORS PROPOSAL TO AUTHORIZE AN AMENDMENT OF THE
CORPORATION'S STOCK OPTION PLAN
(Item 2 on Proxy)
The Corporation's Board of Directors has unanimously approved an amendment
of the Stock Option Plan, subject to stockholder approval, to (1) allow for the
granting of stock options to non-employee directors of the Corporation and (2)
limit the number of stock options and stock appreciation rights that can be
granted to any one person in one fiscal year to 25,000.
Under the first part of the amendment of the Stock Option Plan, options
granted to non-employee directors would not have stock appreciation rights
attached and non-employee directors would not be granted stand-alone stock
appreciation rights. Upon approval of the amendment by stockholders, The First
19
National Bank of Long Island Retirement Plan for Directors (the "Retirement
Plan") will terminate effective December 31, 2000, benefits earned by directors
under the Retirement Plan for services rendered through December 31, 2000 will
be frozen, and the ability of directors to earn additional benefits under the
Retirement Plan will be discontinued. In making its decision to terminate the
Retirement Plan and approve the amendment of the Stock Option Plan, the Board
considered its goal of directly linking the benefits received by directors to
the value created for shareholders in the form of stock price appreciation.
It is currently anticipated that the first time a stock option grant to
non-employee directors will be considered is January 2002 for services rendered
during the 2001 calendar year. It is also anticipated that the Board of
Directors, in determining the number of options to be granted to any director,
will consider, among other things, the compensation earned by the director
during the calendar year, consisting solely of board and committee fees, and the
Corporation's financial performance for the year with respect to its goals.
Under the second part of the amendment of the Stock Option Plan, the
aggregate number of stock options and stand-alone stock appreciation rights that
may be granted to any one person in any one fiscal year is limited to 25,000.
This part of the amendment is designed to ensure that future awards of
stock-based compensation to key executives under the Stock Option Plan meet the
definition of "Performance-Based Compensation" set forth in Section 162(m) of
the Internal Revenue Code and are therefore not subject to the limit on
deductibility specified in that Section.
The proposed amendment of the Stock Option Plan requires an affirmative
vote by the holders of a majority of the shares entitled to vote and represented
at the meeting.
The Board of Directors recommends a vote IN FAVOR OF this proposal.
OTHER MATTERS
The Board of Directors of the Corporation does not know of any matters for
action by stockholders at the annual meeting other than the matters described in
the notice. However, the enclosed Proxy will confer discretionary authority with
respect to matters which are not known to the Board of Directors at the time of
the printing hereof and which may properly come before the meeting. It is the
intention of the persons named in the Proxy to vote such Proxy with respect to
such matters in accordance with their best judgment.
The entire expense of preparing, assembling and mailing the enclosed
material will be borne by the Corporation. In addition to using the mails,
directors, officers and employees of The First National Bank of Long Island (the
"Bank"), a wholly-owned subsidiary of the Corporation, acting on behalf of the
Corporation, and without extra compensation, may solicit proxies in person, by
telephone or by facsimile.
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be submitted at the 2002 Annual
Meeting of Stockholders must be received by the Chairman of the Board or the
President no later than November 6, 2001 in order to be included in the proxy
statement and form of proxy for such meeting. If the Corporation is not notified
of a stockholder proposal by January 20, 2002, then the proxies held by
management of the Corporation may provide the discretion to vote against such
stockholder proposal, even though such proposal is not included in the proxy
statement and form of proxy.
20
ANNUAL REPORTS TO STOCKHOLDERS
Consolidated financial statements for the Corporation and the Bank are
included in the Corporation's 2000 Annual Report to Stockholders, which was
mailed with this Proxy Statement. In addition, copies of the 2000 Annual Report
or the annual report on Form 10-K as filed with the Securities and Exchange
Commission for 2000 will be sent to any stockholder upon written request without
charge. Such request should be directed to Mark D. Curtis, Senior Vice President
and Treasurer, at the Corporation's principal office, 10 Glen Head Road, Glen
Head, New York, 11545. The financial statements contained in the Corporation's
2000 Annual Report are not part of this Proxy Statement.
By Order of the Board of Directors
Joseph G. Perri
March 6, 2001 Senior Vice President and Secretary
21
APPENDIX A
THE FIRST OF LONG ISLAND CORPORATION AND THE FIRST NATIONAL BANK OF
LONG ISLAND EXAMINING COMMITTEE CHARTER
I. PURPOSE
The primary function of the Examining Committee is to assist the Board of
Directors ("Board") in fulfilling its oversight responsibilities by
reviewing: the financial reports and other financial information provided
by the Corporation to any governmental body or the public; the
Corporations' system of internal controls regarding finance, accounting,
legal compliance and ethics that management and the Board have established;
and the Corporation's auditing, accounting and financial reporting
processes generally. Consistent with this function, the Examining Committee
should encourage continuous improvement of, and should foster adherence to,
the bank's policies, procedures and practices at all levels. The Examining
Committee's primary duties and responsibilities are to:
Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system.
Review and appraise the audit efforts of the Corporation's independent
accountants and internal auditing department.
Provide an open avenue of communication among the independent
accountants, financial and senior management, the internal auditing
department and the Board of Directors.
The Examining Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Examining Committee shall be comprised of four directors as determined
by the Board, each of whom shall be independent directors, and free from
any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the
Committee. All members of the Committee shall have a working familiarity
with basic finance and accounting practices, and at least one member of the
Committee shall have accounting or related financial management expertise.
Committee members may enhance their familiarity with finance and accounting
by participating in educational programs conducted by an outside firm.
The members of the Committee shall be elected by the Board at the annual
organization meeting of the Board and shall serve until the next annual
organization meeting or until their successors shall be duly elected and
qualified.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication,
the Committee should meet at least annually with management, the Chief
Auditor and the independent accountants in separate executive sessions to
A-1
discuss any matters that the Committee or each of these groups believe
should be discussed privately. In addition, the Committee or at least its
Chair should meet with the independent accountants and management quarterly
to review the Corporation's financials consistent with IV.4 below.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Examining Committee shall:
Documents/Reports Review
1. Review with the Chief Auditor and the independent accountants the
coordination of audit efforts to assure completeness of coverage,
reduction of redundant efforts and the effective use of audit
resources.
2. Receive prior to each meeting, a summary of findings from completed
internal audits and a progress report on the proposed internal audit
plan, with explanations for any deviations from the original plan.
3. Review and update the committee's charter annually.
4. Review with financial management and the independent accountants the
Form 10-Q prior to its filing or prior to the release of earnings. The
Chair of the Committee may represent the entire Committee for purposes
of this.
5. Review the financial statements contained in the annual report to
shareholders with management and the independent accountants to
determine that the independent accountants are satisfied with the
disclosure and content of the financial statements to be presented to
the shareholders. Any changes in accounting principles should be
reviewed.
Independent Accountants
6. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve
the fees and other compensation to be paid to the independent
accountants. With regard to independence, take action to oversee the
independence of the independent accountants. This would include, among
other things: (1) receiving formal written statements from the
independent accountants on a periodic basis which delineate all
relationships between the independent accountants and the Corporation
consistent with Independence Standards Board Standard 1; and (2)
actively engaging in a dialogue with the independent accountants with
respect to any disclosed relationships or services that may impact
their objectivity and independence.
7. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
8. Provide sufficient opportunity for the internal auditors and
independent accountants to meet with the members of the Examining
Committee without members of management present. Among the
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items to be discussed in these meetings are the independent
accountant's evaluation of the Corporation's financial, accounting and
auditing personnel and the cooperation that the independent
accountants received during the audit.
Financial Reporting Processes
9. In consultation with the independent accountants and the internal
auditors, review the integrity of the Corporation's financial
reporting processes, both internal and external.
10. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied
in its financial reporting.
11. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practice as
suggested by the independent accountants, management or the internal
auditing department.
Process Improvement
12. Establish regular and separate systems of reporting to the Examining
Committee by each of management, the independent accountants and the
internal auditors regarding any significant judgments made in
management's preparation of the financial statements and the view of
each as to appropriateness of such judgments.
13. Following completion of the annual audit, review separately with each
of management, the independent accountants and the internal auditing
department any significant difficulties encountered during the course
of the audit, including any restrictions on the scope of work or
access to required information.
14. Review any significant disagreement among management and the
independent accountants or the internal auditing department in
connection with the preparation of the financial statements.
15. Review with the independent accountants, the internal auditing
department and management the extent to which changes or improvements
in financial or accounting practices, as approved by the Examining
Committee, have been implemented.
Other
16. Conduct or authorize investigations into any matters within the
Examining Committee's scope of responsibilities. The committee shall
be empowered to retain independent counsel, accountants or others to
assist it in the conduct of any investigation.
17. Perform such other functions as assigned by law, the Corporation's
charter or bylaws, or the board of directors.
18. Prepare a letter for inclusion in the annual report that describes the
committee's composition and responsibilities and how they were
discharged.
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REVOCABLE PROXY
THE FIRST OF LONG ISLAND CORPORATION
|X| PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
APRIL 17, 2001
KNOW ALL PERSONS BY THESE PRESENTS that I, the undersigned, being a
stockholder of THE FIRST OF LONG ISLAND CORPORATION, GLEN HEAD, NEW YORK, do
hereby constitute and appoint STEPHEN P. LYON AND JOHN H. TREIBER or either one
of them (with full power to act alone), my true and lawful attorney(s), with
full power of substitution, to attend the Annual Meeting of Stockholders of said
Corporation, to be held at the OLD BROOKVILLE OFFICE, 209 GLEN HEAD ROAD, GLEN
HEAD, NEW YORK, on Tuesday, April 17, 2001, at 3:30 P.M. local time, or any and
all adjournments thereof, and to vote all stock owned by me or standing in my
name, place and stead on the proposals of the Board of Directors specified in
the Notice of Meeting dated March 6, 2001, with all powers I would possess if I
were personally present, hereby ratifying and confirming all that my said Proxy
or Proxies may do, in my name, place and stead, as follows:
For With- For All
hold Except
1. Election of Directors |_| |_| |_|
To elect four (4) Directors,
each for a term of two (2) years
(except as marked to the contrary
below)
HOWARD THOMAS HOGAN, JR. J. DOUGLAS MAXWELL, JR.
JOHN R. MILLER III WALTER C. TEAGLE III
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"For All Except" and write the name(s) of any such nominee(s) in the space
provided below.
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For Against Abstain
2. To amend the Corporation's Stock Option |_| |_| |_|
Plan to allow for the granting of
stock options to non-employee directors
of the Corporation and to limit the
number of stock options and stock
appreciation rights that can be granted
to any one person in any one fiscal year
to 25,000.
3. Other Matters: If any other business is presented at said meeting, this
Proxy shall be voted in accordance with the best judgement of the Proxies.
IF NO DESIGNATIONS ARE MADE IN THE BOXES PROVIDED ABOVE AS TO A PROPOSAL,
THIS PROXY WILL BE VOTED "FOR" SUCH PROPOSAL.
The shares represented by a properly executed Proxy will be voted as
directed.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT MAY BE
REVOKED PRIOR TO ITS EXERCISE.
ALL JOINT OWNERS MUST SIGN INDIVIDUALLY. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR CUSTODIAN, PLEASE GIVE FULL TITLE.
IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN.
Please be sure to sign and date this Proxy in the box below. Date ___________
Stockholder sign above Co-holder (if any) sign above.
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Detach above card, sign, date and mail in postage paid envelope provided.
THE FIRST OF LONG ISLAND CORPORATION
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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