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
- - ----
X Definitive Additional Materials
- - ----
- - ---- Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Haven Bancorp, Inc.
(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.
- - ----
- - ---- Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
- - ---- Fee paid previously with preliminary materials.
- - ---- Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(3) Filing Party:
(4) Date Filed:
HAVEN BANCORP, INC.
93-22 Jamaica Avenue
Woodhaven, New York 11421
1-888-237-2265
March 18, 1998
Dear Stockholder:
You are cordially invited to attend the annual meeting of
stockholders (the "Annual Meeting") of Haven Bancorp, Inc. (the
"Company"), the holding company for CFS Bank, formerly Columbia
Federal Savings Bank (the "Bank"), which will be held on April 22,
1998, at 9:00 a.m., at the Holiday Inn Crowne Plaza, 104-04 Ditmars
Blvd., East Elmhurst, New York.
The attached notice of the Annual Meeting and proxy statement
describe the formal business to be transacted at the meeting.
Directors and officers of the Company, as well as a representative
of KPMG Peat Marwick LLP, the Company's independent auditors, will
be present at the meeting to respond to any questions our
stockholders may have.
The Board of Directors of the Company has determined that a
favorable vote on the matters to be considered at the Annual
Meeting is in the best interests of the Company and its
stockholders. For the reasons set forth in the proxy statement, the
Board unanimously recommends a vote "FOR" each matter to be
considered.
Please sign and return the enclosed proxy card promptly. Your
cooperation is appreciated since a majority of the Common Stock
must be represented, either in person or by proxy, to constitute a
quorum for the conduct of business. If you are a stockholder whose
shares are not registered in your own name, you will need
additional documentation from your recordholder to attend and to
vote personally at the Annual Meeting. Examples of such
documentation would include a broker's statement, letter or other
document that will confirm your ownership of shares of the Company.
On behalf of the Board of Directors and all of the employees of the
Company and the Bank, we wish to thank you for your continued
support. We appreciate your interest.
Sincerely yours,
George S. Worgul Philip S. Messina
Chairman of the Board President and Chief
Executive Officer
HAVEN BANCORP, INC.
93-22 Jamaica Avenue
Woodhaven, New York 11421
1-888-237-2265
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 22, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Haven Bancorp, Inc. (the "Company") will be
held on April 22, 1998, at 9:00 a.m., at the Holiday Inn Crowne
Plaza, 104-04 Ditmars Blvd., East Elmhurst, New York.
The Annual Meeting is for the purpose of considering and voting
upon the following matters:
1. The election of three directors for terms of three years each
or until their successors are elected and qualified;
2. The approval of the amendment to the Haven Bancorp, Inc. 1996
Stock Incentive Plan to increase the number of shares available for
issuance thereunder;
3. The approval of the amendment to the Certificate of
Incorporation of the Company to increase the number of shares of
common stock the Company is authorized to issue;
4. The ratification of KPMG Peat Marwick LLP as independent
auditors of the Company for the fiscal year ending December 31,
1998; and
5. Such other matters as may properly come before the Annual
Meeting or any adjournments thereof. The Company is not aware of
any such business.
The Board of Directors has established March 4, 1998 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 recordholders 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. In the event there are
not sufficient votes for a quorum or to approve or ratify any of
the foregoing proposals at the time of the Annual Meeting, the
Annual Meeting may be adjourned in order to permit further
solicitation of proxies by the Company. A list of stockholders
entitled to vote at the Annual Meeting will be available at CFS
Bank, 93-22 Jamaica Avenue, Woodhaven, New York, for a period of
ten days prior to the Annual Meeting and will also be available for
inspection at the Annual Meeting.
By Order of the Board of Directors,
Joseph W. Rennhack
Secretary
Woodhaven, New York
March 18, 1998
HAVEN BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
April 22, 1998
GENERAL
This proxy statement is being furnished to stockholders of Haven
Bancorp, Inc. (the "Company") in connection with the solicitation
by the Board of Directors of the Company (the "Board of Directors")
of proxies to be used at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held on April 22, 1998, at 9:00 a.m., at
the Holiday Inn Crowne Plaza, 104-04 Ditmars Blvd., East Elmhurst,
New York, and at any adjournments thereof. The 1997 Annual Report
to Stockholders, including the consolidated financial statements
for the fiscal year ended December 31, 1997, accompanies this proxy
statement, which is first being mailed to recordholders on or about
March 18, 1998.
Regardless of the number of shares of common stock of the Company
("Common Stock") owned, it is important that recordholders of a
majority of the shares be represented by proxy or be present in
person at the Annual Meeting. Stockholders are requested to vote by
completing the enclosed proxy card and returning it signed and
dated in the enclosed postage-paid envelope. Stockholders are urged
to indicate their vote in the spaces provided on the proxy card.
Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. Where no
instructions are indicated, signed proxies will be voted FOR the
election of each of the nominees for director named in this proxy,
FOR the approval of the amendment to the Haven Bancorp, Inc. 1996
Stock Incentive Plan to increase the number of shares authorized
for issuance thereunder, FOR the approval of the amendment to the
Certificate of Incorporation of the Company to increase the number
of shares of Common Stock the Company is authorized to issue and
FOR the ratification of KPMG Peat Marwick LLP as independent
auditors of the Company for the fiscal year ending December 31,
1998.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a
proxy, 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.
RECORD DATE AND VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of
shares of Common Stock of the Company, with each share entitling
its owner to one vote on all matters to be voted on at the Annual
Meeting except as described below. There is no cumulative voting
for the election of directors.
On October 23, 1997, the Board of Directors of the Company declared
a 2-for-1 stock split (the "Stock Split") effected as a 100% stock
dividend distributed on November 28, 1997 to holders of record as
of October 31, 1997. All stock information in this proxy statement
reflects this Stock Split.
The close of business on March 4, 1998 has been fixed by the Board
of Directors as the record date (the "Record Date") for the
determination of stockholders of record 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 8,835,588 shares.
As provided in the Company's Certificate of Incorporation,
recordholders of Common Stock who beneficially own in excess of 10%
of the outstanding shares of Common Stock (the "Limit") are not
entitled to any vote with respect to the shares held in excess of
the Limit. A person or entity is deemed to beneficially own shares
owned by an affiliate of, as well as persons acting in concert
with, such person or entity. The Company's Certificate of
Incorporation authorizes the Board of Directors (i) to make all
determinations necessary to implement and apply the Limit,
including determining whether persons or entities are acting in
concert and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit supply
information to the Company to enable the Board to implement and
apply the Limit.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to
vote at the meeting (after subtracting any shares in excess of the
Limit pursuant to the Company's Certificate of Incorporation) is
necessary to constitute a quorum at the Annual Meeting.
Abstentions are considered in determining the presence of a quorum.
In the event there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Annual Meeting,
the Annual Meeting may be adjourned in order to permit the further
solicitation of proxies.
VOTE REQUIRED
As to the election of directors, the proxy card being provided by
the Board of Directors enables a stockholder of record to vote
"FOR" the election of the nominees proposed by the Board, or to
"WITHHOLD AUTHORITY" to vote 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 as to which authority to vote
for one or more of the nominees being proposed is withheld.
As to the approval of the amendment to the Haven Bancorp, Inc. 1996
Stock Incentive Plan (the "Stock Incentive Plan"), the proxy card
enables a stockholder, by checking the appropriate box, to: (i)
vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii)
"ABSTAIN" from voting on such item. Under the Company's Certificate
of Incorporation and Bylaws, unless otherwise required by law, the
approval of the amendment to the 1996 Stock Incentive Plan shall be
determined by a majority of the votes cast. Accordingly, shares as
to which the "ABSTAIN" box has been selected on the proxy card will
be counted as votes cast and will have the effect of a vote against
such proposal. Shares underlying broker non-votes will not be
counted as votes cast and will have no effect on the vote for such
proposal.
As to the approval of the amendment to the Certificate of
Incorporation of the Company, the proxy card enables a stockholder,
by checking the appropriate box, to: (i) vote "FOR" the item; (ii)
vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on such
item. Under the Company's Certificate of Incorporation and Bylaws
and as required by Delaware law, the approval of the amendment of
the Certificate of Incorporation of the Company shall be determined
by a majority of the outstanding stock entitled to vote.
Accordingly, shares as to which the "ABSTAIN" box has been selected
on the proxy card will have the effect of a vote against such
proposal. Shares underlying broker non-votes will also be counted
as a vote against such proposal.
As to the ratification of KPMG Peat Marwick LLP as independent
auditors of the Company, the proxy card enables a stockholder, by
checking the appropriate box, to: (i) vote "FOR" the item; (ii)
vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on such
item. Under the Company's Certificate of Incorporation and Bylaws,
unless otherwise required by law, the ratification of independent
auditors of the Company shall be determined by a majority of the
votes cast. Accordingly, shares as to which the "ABSTAIN" box has
been selected on the proxy card will be counted as votes cast and
will have the effect of a vote against such proposal. Shares
underlying broker non-votes will not be counted as votes cast and
will have no effect on the vote for such proposal.
Proxies solicited hereby will be returned to the Company's transfer
agent, and will be tabulated by inspectors of election designated
by the Board of Directors, who will not be employed by, or be a
director of, the Company or any of its affiliates.
REVOCABILITY OF PROXIES
A proxy may be revoked at any time prior to its exercise by filing
a written notice of revocation with the Secretary of the Company,
delivering to the Company a duly executed proxy bearing a later
date or attending the Annual Meeting and voting in person if a
written revocation is filed with the Secretary of the Annual
Meeting prior to the voting of such proxy. A stockholder whose
shares are not registered in his or her own name will need
additional documentation from the recordholder to vote personally
at the Annual Meeting. Examples of such documentation would
include a broker's statement, letter or other document that will
confirm such ownership of shares of Common Stock of the Company.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith
will be borne by the Company. In addition to the solicitation of
proxies by mail, Morrow & Co., Inc., a proxy solicitation firm,
will assist the Company in soliciting proxies for the Annual
Meeting and will be paid a fee estimated to be $5,000 plus
out-of-pocket expenses. Proxies may also be solicited personally or
by telephone or telegraph by directors, officers and regular
employees of the Company and its wholly owned subsidiary, CFS Bank,
formerly Columbia Federal Savings Bank (the "Bank"), without
additional compensation. The Company will also request persons,
firms and corporations holding shares in their names, or in the
name of their nominees, which are beneficially owned by others to
send proxy material to, and obtain proxies from, such beneficial
owners and will reimburse such holders for their reasonable
expenses in doing so.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as to those
persons or groups believed by management to be beneficial owners of
more than 5% of the Company's outstanding shares of Common Stock as
of the Record Date based upon certain reports regarding such
ownership filed with the Company and with the Securities and
Exchange Commission (the "SEC"), in accordance with Sections 13(d)
or 13(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") by such persons or groups. Other than those listed
below, the Company is not aware of any person or group that owns
more than 5% of the Company's Common Stock as of the Record Date.
Name and Address Amount and Nature of Percent of
Title of Class of beneficial Owner Beneficial Ownership Class(1)
- - -------------- ------------------- -------------------- ----------
Common Stock Columbia Federal Savings Bank 650,348(2) 7.4%
Employee Stock Ownership Plan
and Trust (the "ESOP"), 93-22
Jamaica Avenue, Woodhaven, NY
11421
(1) As of the Record Date there were 8,835,588 shares of Common
Stock outstanding.
(2) Shares of Common Stock were acquired by the ESOP in connection
with the conversion of CFS Bank from mutual to stock form (the
"Conversion"). A Committee of the Board of Directors has been
appointed to administer the ESOP (the "ESOP Committee"). An
unrelated third party has been appointed as the corporate trustee
for the ESOP (the "ESOP Trustee"). The ESOP Committee may instruct
the ESOP Trustee regarding investment of funds contributed to the
ESOP. The ESOP Trustee must vote all allocated shares held in the
ESOP in accordance with the instructions of the participating
employees. As of the Record Date, 279,558 shares of Common Stock
in the ESOP have been allocated to participating employees. Under
the ESOP, unallocated shares held in the suspense account will be
voted by the ESOP Trustee in a manner calculated to most accurately
reflect the instructions 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 ("ERISA").
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1.
ELECTION OF DIRECTORS
Pursuant to its Bylaws, the number of directors of the Company is
currently set at nine (9) unless otherwise designated by the Board
of Directors. Each of the nine members of the Board of Directors
of the Company also currently serves as a director of the Bank.
Directors are elected for staggered terms of three years each, with
a term of office of one of the three classes of directors expiring
each year. Directors serve until their successors are elected and
qualified.
The three nominees proposed for election at the Annual Meeting are
Messrs. Sprotte, Fitzpatrick and Jennings. All nominees named are
currently directors of the Company and the Bank. No person being
nominated as a director is being proposed for election pursuant to
any agreement or understanding between any person and the Company.
In the event that any such nominee is unable to serve or declines
to serve for any reason, it is intended that proxies will vote for
the election of the balance of those nominees named and for such
other persons as may be designated by the present Board of
Directors. The Board of Directors has no reason to believe that any
of the persons named will be unable or unwilling to serve. Unless
authority to vote for the directors is withheld, it is intended
that the shares represented by the enclosed proxy card, if executed
and returned, will be voted FOR the election of all nominees
proposed by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL
NOMINEES NAMED IN THIS PROXY STATEMENT.
INFORMATION WITH RESPECT TO THE NOMINEES, CONTINUING DIRECTORS AND
CERTAIN EXECUTIVE OFFICERS
The following table sets forth, as of the Record Date, the names of
the nominees, continuing directors and "named executive officers,"
as defined below, as well as their ages; a brief description of
their recent business experience, including present occupations and
employment; certain directorships held by each; the year in which
each became a director of the Bank and the year in which their term
(or in the case of nominees, their proposed term) as director of
the Company expires. This table also sets forth the amount of
Common Stock and the percent thereof beneficially owned by each
nominee, continuing director and "named executive officer" and all
directors and executive officers as a group as of the Record Date.
All shares of Common Stock reported as beneficially owned have been
adjusted in the following table and in tables throughout this proxy
statement to reflect the Stock Split.
Shares of Ownership
Name and Principal Expiration Common Stock as Percent
Occupation at Present Director of Term as Beneficially of
and for Past Five Years Age Since(1) Director Owned(2) Class(3)
- - ----------------------- --- -------- ---------- ------------ ----------
Nominees
Robert M. Sprotte 61 1974 2001 96,771(6)(7) 1.1%
President of Schmelz Bros., Inc., a
plumbing contractor; President of RDR
Realty Corp., a real estate holding
company; President of Three Rams Realty
Michael J. Fitzpatrick 59 1988 2001 68,771(6)(7) *
CPA, Retired, former Vice President-
National Thrift Director at E.F. Hutton
& Company, Inc., a national securities
firm, Director of Legal Aid Society
of Suffolk County
William J. Jennings II(4) 52 1996 2001 38,267(6)(7) *
Managing Director ! Chief of Staff to
Chairman of Salomon Smith Barney, Inc.,
a brokerage firm
Continuing Directors
George S. Worgul(5) 70 1983 1999 265,756(6)(7)(8) 2.9%
Chairman of the Board and Retired (9)(10)
President of the Company and the Bank
Robert L. Koop 75 1968 1999 78,771(6)(7) *
President of Haven Chevrolet
Michael J. Levine 53 1996 1999 35,267(6)(7) *
President of Norse Realty Group, Inc.
and Affiliates, a real estate owner
and developer, Partner in Levine and
Schmutter Certified Public Accountants
Philip S. Messina 54 1986 2000 260,154(8)(9) 2.9%
President and Chief Executive Officer (10)(11)
of the Company and the Bank; Director
and Chairman of the Board of CFSB
Funding, Inc., Columbia Resources, Inc.,
CFS Investments, Inc. and Columbia
Preferred Capital Corporation, all
subsidiaries of the Bank
Joseph A. Ruggiere 69 1979 2000 154,971(6)(7) 1.7%
President of Ohlert-Ruggiere, Inc., a
financial service company
Msgr. Thomas J. Hartman 51 1997 2000 11,349(6)(7) *
President and Chief Executive Officer
of Radio and Television for the Diocese
of Rockville Centre for Telicare Television
Studios, a cable television station
Named Executive Officers
Joseph W. Rennhack 56 -- -- 149,098(8)(9) 1.7%
Senior Vice President-Secretary of the (10)(11)
Company and the Bank; President and
Director of CFSB Funding, Inc.; Director
of Columbia Resources, Inc.; Administrative
Trustee of Haven Capital Trust I, Secretary
of Columbia Preferred Capital Corporation
Thomas J. Seery 53 -- -- 87,360(8)(9) *
Executive Vice President-Operations of the (10)(11)
Company and Bank; Director of CFS
Investments, Inc.
Catherine Califano 39 -- -- 73,420(8)(9)(11) *
Senior Vice President - Chief Financial
Officer of the Company and the Bank;
Director of Columbia Resources; Director
of CFSB Funding, Inc; former Vice
President-Controller of the Company
and the Bank; former Senior Vice
President-Chief Financial Officer of
Home Savings Bank, Brooklyn, New York;
Administrative Trustee of Haven Capital
Trust I, Vice President and Director of
Columbia Preferred Capital Corporation
Gerard H. McGuirk 55 -- -- 71,218(8)(9) *
Executive Vice President - Chief Lending (10)(11)
Officer of the Company and the Bank;
President and Director of Columbia Resources,
Inc.; former Group Head of Real Estate
Workouts for Fleet Bank, N.Y., President
and Director of Columbia Preferred Capital
Corporation
All directors and executive officers of
the Company as a group (13 persons) -- -- -- 1,393,173 14.4%
(6)(7)(8)(9)
(10)(11)
* Does not exceed 1.0% of the Company's voting securities.
(1) Includes years of service as director of the Company's
predecessor, the Bank.
(2) Each person or relative of such person whose shares are
included herein, exercises sole or shared voting or dispositive
power as to the shares reported.
(3) Percentages with respect to each person or group have been
calculated on the basis of 8,835,588 shares of Common Stock
outstanding as of the Record Date and include the number of shares
of Common Stock which each such person or group of persons has the
right to acquire within 60 days of the Record Date.
(4) Mr. Jennings' wife is the first cousin of Mr. Messina.
(5) Mr. Worgul retired as President of the Company and the Bank on
June 30, 1994.
(6) Includes 4,134, 4,134 and 4,132 shares of restricted stock
awarded to each of Messrs. Levine, Jennings and Msgr. Hartman under
the Columbia Federal Savings Bank Recognition and Retention Plan
for Outside Directors ("DRP"), as to which each individual has sole
voting power but no investment power. Also includes 263 shares of
restricted stock awarded to each of Messrs. Ruggiere, Fitzpatrick,
Sprotte, Worgul, Koop, Levine, Jennings and Msgr. Hartman under the
1996 Stock Incentive Plan, as to which each individual has sole
voting power but no investment power.
(7) Includes 37,194 shares subject to options granted to each of
Messrs. Koop, Sprotte, Ruggiere and Fitzpatrick along with 18,602
shares subject to options granted to each of Messrs. Levine and
Jennings under the Haven Bancorp, Inc. 1993 Stock Option Plan for
Outside Directors ("Directors' Stock Option Plan") which are
currently exercisable. Also includes 8,000 shares subject to
options granted to each of Messrs. Worgul, Koop, Sprotte, Ruggiere
and Fitzpatrick, 2,666 shares subject to options granted to each of
Messrs. Levine and Jennings, also 6,666 shares subject to options
granted to Msgr. Hartman pursuant to the 1996 Stock Incentive Plan,
which may be acquired within 60 days of the Record Date. Does not
include 4,000 shares subject to options granted to each of Messrs.
Worgul, Koop, Sprotte, Ruggiere and Fitzpatrick, 5,334, 5,334 and
13,334 shares subject to options granted to each of Messrs. Levine,
Jennings and Msgr. Hartman under the 1996 Stock Incentive Plan
which are not currently exercisable.
(8) Includes 198,374, 169,364, 109,250, 67,096, 53,534 and 53,534
shares subject to options granted to Messrs. Worgul, Messina,
Rennhack, Seery and McGuirk and to Ms. Califano, respectively,
pursuant to the Haven Bancorp, Inc. 1993 Incentive Stock Option
Plan ("Incentive Option Plan") and the Haven Bancorp, Inc. 1996
Stock Incentive Plan ("1996 Stock Incentive Plan") which may be
acquired within 60 days of the Record Date. Does not include
3,170, 1,170, 1,170, 2,658 and 2,658 shares subject to options
granted to Messrs. Messina, Rennhack, Seery, and McGuirk and Ms.
Califano under the 1993 Incentive Option Plan which are not
currently exercisable. Also not included are 38,000 options
granted to Mr. Messina and 14,000 options granted to each of
Messrs. Rennhack, Seery and McGuirk and Ms. Califano under the 1996
Stock Incentive Plan which are not currently exercisable.
(9) The figures shown include shares held in trust pursuant to the
ESOP that were owned as of December 31, 1997 to individual accounts
as follows: Mr. Worgul, 2,266 shares; Mr. Messina, 8,556 shares;
Mr. Rennhack, 8,224 shares; Mr. Seery, 6,482 shares; Mr. McGuirk,
3,996; shares and Ms. Califano, 5,590 shares. Such persons have
sole voting power but no investment power, except in limited
circumstances, as to such shares. The figures shown do not include
370,790 shares held in trust pursuant to the ESOP that have not
been allocated to any individual's account and as to which the
members of the Company's ESOP Committee (consisting of Messrs.
Ruggiere, Sprotte and Koop) may be deemed to share investment power
and as to which the named executive officers may be deemed to share
voting power, thereby causing each such member or executive officer
to be deemed a beneficial owner of such shares. Each of the
members of the ESOP Committee and the executive officers disclaims
beneficial ownership of such shares.
(10) The figures shown include shares held in the Employer Stock
Fund of the Bank's Employee 401(k) Thrift Incentive Savings Plan
("Employee Thrift Savings Plan") as to which each person identified
has shared voting and investment power as follows: Mr. Worgul,
25,958 shares; Mr. Messina, 27,714 shares; Mr. Rennhack, 8,306
shares; Mr. Seery, 7,268 shares; and Mr. McGuirk, 762 shares. The
figures shown do not include 27,440 shares held in the Employer
Stock Fund of the Employee Thrift Savings Plan as to which the
named executive officers have shared voting power and investment
power. Each of the executive officers disclaims beneficial
ownership of such shares.
(11) Includes 3,202, 4,960, 2,480, 4,000 and 4,000 shares awarded
to Messrs. Messina, Rennhack, Seery and McGuirk and to Ms.
Califano, respectively, under the Columbia Federal Savings Bank
Recognition and Retention Plan for Officers and Employees ("MRP")
as to which each has sole voting power but no investment power.
Also includes 7,998 shares of restricted stock awarded to Mr.
Messina and 4,000 shares of restricted stock awarded to each of
Messrs. Rennhack, Seery and McGuirk and to Ms. Califano,
respectively, under the Haven Bancorp, Inc. 1996 Stock Incentive
Plan ("1996 Stock Incentive Plan").
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Board of Directors conducts its business through meetings of
the Board and through activities of its committees. The Board of
Directors meets monthly and may have additional meetings as needed.
During fiscal 1997, the Board of Directors of the Company held 12
regular board meetings and one special meeting. All of the
directors of the Company attended at least 75% in the aggregate of
the total number of the Company's board meetings held and committee
meetings on which such director served during fiscal 1997. The
Board of Directors of the Company maintains committees, the nature
and composition of which are described below:
The Audit Committee of the Company and the Bank for fiscal 1997
consisted of Messrs. Fitzpatrick, Ruggiere, Levine and Msgr.
Hartman. Msgr. Hartman was appointed to the Committee to fill a
vacancy created by the resignation of Mr. Cashill from the
directorate in February 1997. This Committee met four times in
fiscal 1997 and recommends an independent audit firm to be
submitted for stockholder approval at the Company's Annual Meeting,
approves internal audit schedules and reviews internal audit
reports.
The Company's Nominating Committee for the 1998 Annual Meeting
consists of Messrs. Ruggiere, Koop and Msgr. Hartman. The
Committee considers and recommends the nominees for directors to
stand for election at the Company's Annual Meeting. The Company's
Certificate of Incorporation and Bylaws also provide for
stockholder nominations of directors. These provisions require such
nominations to be made pursuant to timely notice in writing to the
Secretary of the Company. The stockholder's notice of nomination
must contain all information relating to the nominee which is
required to be disclosed by the Company's Bylaws and by the
Exchange Act. The Nominating Committee met once in preparation for
the 1998 Annual Meeting.
The Compensation Committee for the Company and Bank consists of
Messrs. Sprotte, Koop, Worgul and Jennings who are responsible for
the 1998 Compensation Committee Report on Executive Compensation.
The Compensation Committee is responsible for determining executive
compensation. The Compensation Committee met twice in 1997.
DIRECTORS' COMPENSATION
Directors' Fees. In 1997, Directors who were not employees of the
Company or the Bank received a retainer of $18,000 a year, one
third of which was paid in the form of restricted stock granted
pursuant to the 1996 Stock Incentive Plan, and a fee of $1,000 for
each Board meeting attended. The Chairman's annual retainer was
$30,000. One third of these fees were paid by the Company.
Committee members received a fee of $1,500 for each regular and
special meeting attended. The Chairman of each Committee received
an additional retainer of $1,500 per year. Directors are also
eligible for coverage under the Company's health and dental
insurance plans in the same manner as employees.
Directors' Stock Option Plan. Under the Directors' Stock Option
Plan, each outside director who was not an officer of the Company
or the Bank at the time of the Bank's Conversion was granted
options to purchase 37,194 shares of Common Stock at an exercise
price of $5.00 per share on the date of grant, September 23, 1993.
Shares of Common Stock granted and the exercise price under this
and all other stock option plans of the Company reflect the Stock
Split effected on November 28, 1997. To the extent options for
shares are available for grant under the Directors' Stock Option
Plan, each subsequently appointed or elected outside director will
be granted options as of the date on which such director is
qualified and first begins to serve as an outside director.
Pursuant to the Directors' Stock Option Plan, effective October 24,
1996, Messrs. Levine and Jennings were each granted options to
purchase 18,602 shares of common stock at an exercise price of
$13.41 per share, the fair market value on the date of grant. All
options granted under the Directors' Stock Option Plan are
exercisable one year from the date of grant. Upon death, disability
or retirement of the participant or upon a change in control of the
Company or the Bank, all options previously granted would
automatically become exercisable.
Haven Bancorp, Inc. 1996 Stock Incentive Plan. The Company's
stockholders approved the 1996 Stock Incentive Plan at the Annual
Meeting held April 24, 1996. On such date, each eligible outside
director was granted a non-qualified stock option to purchase
12,000 shares of Common Stock at an exercise price of $12.14 per
share. To the extent options for shares are available for grant
under the 1996 Stock Incentive Plan, each subsequently appointed or
elected outside director will be granted options as of the date on
which such outside director is qualified and first begins to serve
as an outside director. Effective October 24, 1996, Messrs. Levine
and Jennings were each granted non-qualified stock options to
purchase 8,000 shares of Common Stock at an exercise price of
$13.41 per share. Effective March 25, 1997, Msgr. Hartman was
granted non-qualified stock options to purchase 20,000 shares of
Common Stock at an exercise price of $17.28, the fair market value
on the date of grant. All options granted under the 1996 Stock
Incentive Plan are exercisable in three equal installments
beginning one year from the date of grant. Upon death, disability
or retirement of the participant or upon a change in control of the
Company or the Bank, all options previously granted would
automatically become exercisable.
Pursuant to the 1996 Stock Incentive Plan, effective as of January
1, 1996 and as of the first business day of each of the first four
calendar years beginning after the January 1, 1996 ("Grant Date"),
each eligible outside director will be granted a number of shares
of restricted stock in lieu of receiving one-third of the annual
retainer that would otherwise be paid in cash to such eligible
outside director for the calendar year in which the Grant Date
occurs. The number of shares of restricted stock to be granted to
an eligible outside director on each Grant Date shall be equal to
the dollar value of one-third of the eligible outside director's
annual retainer for the calendar year in which the Grant Date
occurs, divided by the fair market value of a share on the
effective date of the grant, disregarding any fractional shares
resulting from such calculation. Effective January 1, 1996, each
eligible outside director was granted 494 shares in lieu of cash.
Messrs. Levine and Jennings were subsequently granted 116 shares on
October 24, 1996. Effective January 1, 1997, each eligible outside
director was granted 420 shares, in lieu of cash, representing one-
third of such director's annual retainer for 1997. Msgr. Hartman,
after his election to the Board of Directors, was granted 288
shares in lieu of cash equal to one-third of his portion of the
annual retainer for 1997 pro rated for his commencement of service
on March 25, 1997. In addition, effective January 1, 1998 each
eligible outside director was granted 263 shares, in lieu of cash,
representing one-third of such director's annual retainer for 1998.
Directors' Recognition and Retention Plan. Under the DRP, each of
the six outside directors at the time of the Conversion received
awards of 12,398 shares. On October 24, 1996, Messrs. Levine and
Jennings were each awarded 6,200 shares. On March 25, 1997, Msgr.
Hartman was awarded 4,132 shares. Awards to directors vest in three
equal annual installments commencing on the first anniversary of
the effective date of the award. Awards will be 100% vested upon
termination of employment or service as a director due to death,
disability or retirement of the director or following a change in
the control of the Bank or the Company. In the event that before
reaching normal retirement a director terminates service with the
Bank or the Company, the director's non-vested awards will be
forfeited. When shares become vested and are actually distributed
in accordance with the DRP, the recipients will also receive
amounts equal to any accrued dividends with respect thereto. Prior
to vesting, recipients of awards may direct the voting of the
shares allocated to them. Shares not subject to an award will be
voted by the trustees of the DRP in proportion to the directions
provided with respect to shares subject to an award.
Consultation and Retirement Plan for Non-Employee Directors. Under
the Company's Consultation and Retirement Plan for Non-Employee
Directors (the "Directors Retirement Plan"), a director who is not
an employee or officer of the Company is a participant in the
Directors Retirement Plan. Any participant who has served as a
director for at least 60 months, has attained age 55 and, after
retirement, executes a Consulting Agreement to provide continuing
service to the Bank and Company, will be eligible to receive
benefits under the Directors Retirement Plan. The annual retirement
benefit will be an amount equal to two thirds of the sum, measured
as of the date of retirement, of (i) the amount of retainer fees
paid to directors, (ii) the aggregate of the annual Board of
Directors committee fees paid to the director and (iii) the
aggregate of the twelve regular meeting fees of the Board of
Directors.
EXECUTIVE COMPENSATION
The report of the Compensation Committee and the stock performance
graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), except to the extent that the Company
specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
Compensation Committee Report on Executive Compensation. 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 of the Company. The disclosure
requirements for the chief executive officer and such 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. In fulfillment
of this requirement, the joint Compensation Committee of the
Company and Bank (the "Compensation Committee"), at the direction
of the Board of Directors, has prepared the following report for
inclusion in the proxy statement. The members of the 1997
Compensation Committee were Messrs. Sprotte, Koop, Worgul, and
Jennings.
The Compensation Committee of the Board of Directors of the Bank is
responsible for establishing the compensation levels and benefits
of executive officers of the Bank, who also serve as executive
officers of the Company, and for reviewing recommendations of
management for compensation and benefits for other officers of the
Bank. The Compensation Committee establishes compensation on a
calendar year basis. The Compensation Committee was responsible
for compensation decisions in 1997.
Compensation of the President and Other Executive Officers. The
compensation of the President and other executive officers consists
of salary, bonus, stock options, restricted stock awards, pension
and fringe benefits. During 1992, the Board of Directors on behalf
of the Compensation Committee engaged the services of KPMG Peat
Marwick LLP to review the Bank's compensation practices (the
"Salary Review Program"). The focus of such program was to develop
a salary management program for officer positions and develop a
management incentive program for executive and senior officers.
The Salary Review Program established competitive salary ranges for
executive officers developed by reviewing market data as of July 1,
1992. Subsequent thereto, the ranges were updated annually through
discussions with KPMG Peat Marwick LLP to reflect remuneration data
with respect to thrift institutions of comparable size in the New
York metropolitan area. Base salary levels are generally within a
range consistent with and competitive with that of other
institutions that are similar to the Bank in asset size, function
and geographical markets. The institutions used to compare
salaries are not necessarily the same as those which make up the
peer group used in the Stock Performance Graph. Executive
compensation is based upon consideration of an individual's
performance and contribution to the viability of the Company and
the performance of the Company as a whole. On March 1, 1998, Mr.
Messina's salary as President and Chief Executive Officer was
increased from $475,000 to $600,000 by the Compensation Committee.
The Compensation Committee reasoned that such amount would
remunerate Mr. Messina within the range in the Company's Salary
Review Program, and within the market average base salary range of
area public thrifts with assets greater than $1 billion and less
than $5 billion. The Compensation Committee authorized the payment
of incentive awards to executive management of the Company under a
management incentive program implemented during 1995. The program
provides for use of key financial factors and pre-defined levels of
achievement established by the Compensation Committee as the basis
for determining incentive awards. In setting executive incentives,
for the President and Chief Executive Officer, the Compensation
Committee considered net income, return on assets, return on equity
and asset quality as each factor relates to overall industry
performance. At December 31, 1997, those measures were: Net Income
$11,083,000; Return on Assets 0.62%; Return on Equity 10.41%; Non-
performing Assets to Total Assets 0.66%. For the fiscal year ended
December 31, 1997, the Company experienced strong core earnings.
These are the primary factors, although not the exclusive ones
considered, on which the Compensation Committee bases executive
compensation. The Compensation Committee at its discretion may
consider the weight of each of the identified factors and may
increase or decrease the achievement levels for any one year.
Based upon the growth of the Company due to the supermarket branch
expansion program of the Bank combined with other events, such as
the formation of a Real Estate Investment Trust as a subsidiary of
the Bank, the renovation of the Company's new headquarters and the
change in the Bank's name necessitated by opening supermarket
branches in New Jersey and Connecticut, the Compensation Committee
decided to award incentive compensation payments based on the
overall achievements of the Company during the 1997 year. The
members reasoned that the short term negative impact upon 1997
operation costs attributed to the activities of the Company
described above, is expected to provide long-term accretive
benefits to the Company's stockholders. Therefore, Mr. Messina
was awarded an incentive payment of $125,000 for the 1997 year.
During the second quarter of 1996, the Board of Directors engaged
the services of KPMG Peat Marwick's Performance and Compensation
Management Division to evaluate, update and recommend changes to
the Company's compensation program. The 1996 Executive
Compensation Review Report contained a study of the Company's
compensation practices compared to a peer group of financial
institutions in the New York geographic area that are of similar
size and nature of business. This report focused upon base
salaries, annual incentives, total cash compensation, long term
incentives and total compensation. In addition, the study
addressed the financial performance of the Company compared to its
peers, provided an analysis of stock granted to executives at
Conversion and conveyed KPMG Peat Marwick LLP's prospective
recommendations for cash compensation, annual incentives and long
term grants. This study was used by the Committee during 1997 to
evaluate and establish executive compensation levels.
Stock options and stock awards are compensation plans maintained by
the Company and serve as a long-term incentive by linking executive
compensation with the interests of the Company's stockholders.
Stock based compensation is designed to retain employees and build
loyalty while promoting stockholder value. Stock options and
restricted stock awards were granted to Mr. Messina as well as to
other officers at the time of the Bank's Conversion to a publicly
held company on September 23, 1993. The Compensation Committee
based such grants to executive officers on practices of other
financial institutions as verified by external surveys as well as
the executives' level of responsibilities, seniority and past
contribution to the Bank. The restricted stock awards granted to
Mr. Messina vested over three years at 33 1/3% per year; vesting
commenced on September 23, 1994, one year from the date of grant.
The stock options and restricted stock awards granted to other
executive officers were based on similar data and factors as those
used in determining appropriate levels of stock options and
restricted stock awards to be granted to Mr. Messina. The
restricted stock granted to other executive officers vests over a
five year period at 20% per year. For some officers, vesting
commenced on September 23, 1994 and for other officers vesting
commenced February 23, 1996, in each case, one year from date of
grant.
The Board of Directors, having thoroughly reviewed the
recommendation of KPMG Peat Marwick LLP with respect to
compensation matters, granted stock options and restricted stock
awards to Mr. Messina as well as to other officers at a meeting
held on May 23, 1996. The restricted stock awards and stock
options granted vest over three years at 33 1/3% per year; vesting
commenced on May 23, 1997, one year from date of grant.
The grants and awards for the President and Chief Executive Officer
along with the grants and awards for other executive officers are
reflected in the Summary Compensation Table.
Compensation Committee:
Robert M. Sprotte Robert L. Koop
George S. Worgul William J. Jennings II
Board of Directors:
Michael J. Fitzpatrick Msgr. Thomas J. Hartman George S. Worgul
Robert M. Sprotte Philip S. Messina Robert L. Koop
William J. Jennings II Joseph A. Ruggiere Michael J. Levine
Stock Performance Graph. The following graph shows a comparison of
cumulative total stockholder return on the Company's Common Stock,
based on the market price of the Common Stock assuming reinvestment
of dividends, with the cumulative total return of companies in The
Nasdaq Stock Market and in the SNL Thrift Index for the period
beginning on September 23, 1993, the day the Company's Common Stock
began trading, through December 31, 1997.
Comparison of Cumulative Total Return Among Haven Bancorp, Inc.
Common Stock, Nasdaq U.S. Index and SNL Thrift Index
September 23, 1993 - December 31, 1997
09/23/93 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
Haven Bancorp, Inc. 100.00 128.76 132.50 238.30 294.76 470.88
NASDAQ (US) 100.00 103.81 101.47 143.51 176.50 216.60
Thrifts (All) 100.00 100.90 99.71 155.29 202.33 344.28
Notes:
A. The lines represent index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market
capitalization on the previous trading day.
C. If the interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 09/23/93.
Summary Compensation Table. The following table sets forth the
compensation paid by the Company and/or Bank for services during
the years ended December 31, 1997, 1996 and 1995, to the Chief
Executive Officer and the four other highest paid executive
officers of the Company and/or the Bank who each received total
salary and bonus in excess of $100,000 (the "Named Executive
Officers") in 1997.
Long Term Compensation
Annual Compensation Awards Payouts
---------------------------- ----------------------- -------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Awards Options/SARs Payouts Compensation
Position Year ($) ($(2) ($)(2) ($)(3)(4) (#)(5) ($)(6) ($)(7)
- - ------------------ ---- ------ ----- ------------ ---------- ------------ ------- ------------
Philip S. Messina 1997 450,481 125,000 2,999 -- -- -- 32,317
President and CEO 1996 369,230 131,250 1,800 240,450 30,877 -- 33,296
1995 293,077 75,000 -- -- -- -- 23,335
Joseph W. Rennhack 1997 170,154 40,000 1,500 -- -- -- 32,214
Senior Vice President 1996 161,865 40,000 900 85,875 11,377 -- 35,536
and Secretary 1995 151,962 22,950 -- -- -- -- 22,911
Thomas J. Seery 1997 151,607 40,000 1,500 -- -- -- 29,022
Executive Vice President- 1996 134,654 33,750 900 85,875 11,377 -- 26,397
Operations 1995 116,615 20,060 -- -- -- -- 17,386
Gerard H. McGuirk 1997 164,823 40,000 1,500 -- -- -- 30,901
Executive Vice President- 1996 154,952 38,750 900 85,875 11,377 -- 31,238
Chief Lending Officer 1995 135,337 23,375 -- 118,125 20,000 -- 1,932
Catherine Califano 1997 159,519 40,000 1,500 -- -- -- 31 271
Senior Vice President- 1996 150,721 37,500 900 85,875 11,377 -- 29,342
Chief Financial Officer 1995 132,740 20,625 -- 118,125 20,000 -- 11,036
(1) Bonus shown for the years 1995 through 1997 consists of
payments pursuant to Bank's Executive Incentive Compensation Plan.
(2) For 1995 there were no (a) perquisites over the lesser of
$50,000 or 10% of the individual's total salary and bonus for the
year; (b) payments of above-market preferential earnings on
deferred compensation; (c) the payment reimbursements or (d)
preferential discounts on stock. Amounts listed for 1996 and 1997
are dividends received on restricted stock granted under the 1996
Stock Incentive Plan which are distributed when paid, even if prior
to the vesting of restricted stock.
(3) Pursuant to the MRP, an award of 4,802 shares of restricted
stock was made to Mr. Messina on May 23, 1996, which award vests in
three equal annual installments commencing on May 23, 1997. In
addition, awards of 10,000 shares of restricted stock were made
pursuant to the MRP to each of Mr. McGuirk and Ms. Califano on
February 23, 1995, which awards vest in five equal annual
installments commencing on February 23, 1996. When shares become
vested and are distributed, the recipient also receives an amount
equal to accumulated dividends and earnings thereon (if any). The
dollar amounts in the table for 1996 are based upon the closing
market price of $14.3125 per share of Common Stock on December 31,
1996, as reported on the Nasdaq National Market System and the
dollar amounts in the table for 1995 are based upon the closing
market price of $11.8125 per share of Common Stock on December 29,
1995, as reported on the Nasdaq National Market System.
(4) Pursuant to the 1996 Stock Incentive Plan, Mr. Messina was
granted an award of 11,998 shares of restricted stock and each of
Messrs. Rennhack, Seery, and McGuirk and Ms. Califano were granted
awards of 6,000 shares of restricted stock on May 23, 1996, which
vest in three annual installments commencing May 23, 1997. The
dollar amounts in the table for 1996 are based upon the closing
market price of $14.3125 per share of Common Stock on December 31,
1996, as reported on the Nasdaq National Market System.
(5) Includes options awarded under the Company's Incentive Option
Plan and the 1996 Stock Incentive Plan. For a discussion of the
terms of the grants and vesting of options, see footnote
accompanying Fiscal Year End Option/SAR Values Table.
(6) The Company does not maintain long-term incentive plans, and
therefore, there were no payments under such plans for fiscal 1997,
1996 or 1995.
(7) Amounts represent life insurance premiums paid by the Bank
with respect to Messrs. Messina, Rennhack, Seery and McGuirk and
Ms. Califano. Amounts for 1997 include the dollar value of an
allocation of Common Stock made to the named executive officer's
account under the ESOP during 1997, with respect to the plan year
ending December 31, 1996. Based on the closing market price of the
Common Stock on December 31, 1996 of $14.3125 per share, the market
value of such allocation was $26,067, $25,964, $23,169, $24,651 and
$25,146 with respect to Messrs. Messina, Rennhack, Seery, and
McGuirk and Ms. Califano. The allocations to be made under the ESOP
for the plan year ending December 31, 1997 have not yet been
determined. The Bank made no matching contributions to the
Employee Thrift Savings Plan on behalf of the named executive
officers in 1995. Matching contributions resumed for the Employee
Thrift Savings Plan on July 1, 1996. The matching contributions
for 1996 for Messrs. Messina, Rennhack, Seery, McGuirk and Ms.
Califano were $1,260, $2,386, $1,065, $2,364 and $2,441. The
matching contributions for 1997 for Messrs. Messina, Rennhack,
Seery, McGuirk and Ms. Califano were $4,750, $4,750, $4,475,
$4,750 and $4,750.
Employment Agreement. The Company entered into an employment
agreement with Mr. Messina, effective as of September 21, 1995,
which was amended as of May 28, 1997 ("Company Employment
Agreement"). In addition, the Bank entered into an employment
agreement with Mr. Messina, effective as of May 28, 1997 ("Bank
Employment Agreement"). The Company Employment Agreement and the
Bank Employment Agreement (collectively, the "Employment
Agreements") are intended to clarify the terms of Mr. Messina's
employment and to ensure the Company and the Bank of his continued
availability with a minimum of personal distraction in the event of
a proposed or threatened change in control of the Company or the
Bank. The continued success of the Company and the Bank depends to
a significant degree on Mr. Messina's skills and competence.
The Company Employment Agreement provides for a five-year term, and
beginning on the second anniversary of its effective date,
automatically extends for one day each day, such that the term is
always three years, until either the Board of Directors or Mr.
Messina provides written notice to the other party of an intention
not to extend the term of the employment agreement, at which time
the remaining term of the agreement will be fixed at three years
from the date of written notice. The Bank Employment Agreement
provides for an initial term of three years, beginning on the date
of the agreement. On or about September 23, 1997 and on each
anniversary of such date thereafter, the Bank's Board of Directors
shall review the terms of this agreement and the performance of the
executive and may, in the absence of the executive's objection,
approve an extension of the employment agreement to the third
anniversary of such date. Accordingly, at a meeting held in
September 1997, the Board of Directors extended the employment
agreement to September 23, 2000. The Employment Agreements
provide that Mr. Messina will receive an aggregate base salary from
the Company and the Bank at an initial annual rate of $475,000,
which will be reviewed annually by the Boards of Directors.
In addition to base salary, the Employment Agreements provide for,
among other things, disability pay, participation in stock plans
and other employee benefit plans, fringe benefits applicable to
executive personnel and supplemental retirement benefits to
compensate the executive for the benefits that he cannot receive
under the Company's and the Bank's tax-qualified employee benefit
plans due to the limitations imposed on such plans by the Internal
Revenue Code of 1986 (the "Code"). The Employment Agreements also
provide that the Company and the Bank will indemnify Mr. Messina
during the term of the Employment Agreements and for a period of
six years thereafter against any costs, liabilities, losses and
exposures for acts and omissions in connection with his service as
an officer or director, to the fullest extent allowable under
federal and Delaware law.
The Employment Agreements provide for termination of the executive
by the Company or the Bank for cause at any time. Under the
Company Employment Agreement, in the event the Company chooses to
terminate the executive's employment for reasons other than for
cause or for disability, or in the event of the executive's
resignation from the Company following: (i) a failure to re-elect
or re-appoint the executive to his current offices; (ii) a material
change in the executive's functions, duties or responsibilities;
(iii) a relocation of his principal place of employment; (iv) a
material reduction in his compensation, benefits or perquisites; or
(v) a "Change in Control" as defined in the agreement, the
executive or, in the event of his death, his estate, would be
entitled to a payment equal to the salary payable or due during the
remaining term of the employment agreement, the other cash
compensation and benefits that would have been accrued or received
by the executive if he had remained employed by the Company during
the remaining unexpired term of the employment agreement and
continued life, health, dental, accident and disability insurance
coverage for the remaining unexpired term of the employment
agreement. In the event that the executive's termination occurs
following a Change in Control, the insurance coverage described
above shall be provided for the executive's lifetime and he shall
also be entitled to receive continued fringe benefits and
perquisites for the remaining unexpired term of the employment
agreement and a payment equal to the difference between the value
of his normal and supplemental retirement benefits and an unreduced
early retirement benefit commencing at age 55. Payments made to
Mr. Messina under the Company Employment Agreement upon a change in
control may result in an "excess parachute payment" as defined
under Section 280G of the Code, which may result in the imposition
of an excise tax on Mr. Messina and a denial of a deduction for
such excess amounts for the Company. Under the Company Employment
Agreement, the Company would indemnify Mr. Messina for any such
excise taxes, and any additional income, employment and excise
taxes imposed as a result of such indemnification. The estimated
value of Mr. Messina's Company Employment Agreement in the event of
his termination of employment following a Change in Control is
approximately $4,966,000 based upon certain assumptions regarding
the timing and structure of such a transaction.
Under the Bank Employment Agreement, in the event the Bank chooses
to terminate the executive's employment for reasons other than for
cause or disability, or in the event of the executive's resignation
from the Bank following (i) a failure to re-elect or re-appoint the
executive to his current offices; (ii) a material change in the
executive's functions, duties or responsibilities; (iii) a
relocation of his principal place of employment; (iv) a material
reduction in his compensation, benefits or perquisites; or (v) a
Change in Control followed by the executive's demotion, loss of
title or significant authority or responsibility, relocation or
exclusion from compensation or benefit programs, the executive, or,
in the event of his death, his estate, would be entitled to the
same type of severance payments and benefits provided for under the
Company Employment Agreement, but not in excess of three times his
average annual compensation for the preceding five calendar years.
The Company Employment Agreement provides that the Company
guarantees the payment of any benefits and compensation due to Mr.
Messina under the Bank Employment Agreement and that amounts
payable under the Company Employment Agreement will be reduced to
avoid duplication of amounts payable under the Bank Employment
Agreement.
Change in Control Agreements. For similar reasons as with the
Company and Bank Employment Agreements with Mr. Messina, the Bank
and the Company have entered into change in control agreements with
Messrs. Rennhack, Seery and McGuirk and Ms. Califano. Each change
in control agreement with the Bank provides for a two-year term,
and commencing on the first anniversary of the date of the
agreement and continuing on each anniversary thereafter, the
agreement may be extended by the Board of Directors of the Bank for
an additional year such that the remaining term of the Bank's
change in control agreement shall be two years. Each change in
control agreement with the Company provides for a three-year term
which automatically extends for one day each day, such that the
term will always be three years, until either the Board of
Directors of the Company or the executive provides written notice
of an intention not to extend the term of the agreement. Each
change in control agreement provides that at any time following a
"Change in Control" (as defined in the agreements) of the Company
or the Bank, if the Company or the Bank terminates the employee's
employment for any reason other than cause or, in the case of the
Bank's change in control agreements, if the employee voluntarily
resigns following demotion, loss of title, office or significant
authority, a reduction in compensation, or a relocation of the
employee's principal place of employment and, in the case of the
Company's change in control agreements, if the employee resigns
without regard as to whether a change in status, compensation or
working conditions or location has occurred, then the employee or,
in the event of death, the employee's beneficiary would be entitled
to receive a payment equal to the salary, bonus and benefits, and
perquisites in the case of the Company's agreements, that the
employee would have accrued or received if employment continued for
the remaining unexpired term of the agreement. The change in
control agreements with the Company provide that the Company would
indemnify the executive for any excise taxes imposed on "excess
parachute payments" deemed made to the executive under Section 280G
of the Code and for any additional income, employment and excise
taxes imposed as a result of such indemnification. Payments to be
made under the Company's change in control agreement with an
executive will be offset by any payments to be made under the
Bank's change in control agreement with such executive. Payments
to the executive under the Bank's change in control agreement are
guaranteed by the Company if payments or benefits are not paid by
the Bank. The estimated value of the change in control agreements
in the event of the executives' termination of employment following
a Change in Control is approximately $1,229,000, $1,277,000,
$1,290,000, and $1,268,000 for Messrs. Rennhack, Seery and McGuirk
and Ms. Califano, respectively, based upon certain assumptions
regarding the timing and structure of such a transaction.
Incentive Stock Option Plan and 1996 Stock Incentive Plan. The
Company maintains the Incentive Stock Option Plan and the 1996
Stock Incentive Plan, which provide discretionary awards to
officers and key employees as determined by a committee of
disinterested directors who administer the plans. For a
description of the 1996 Stock Incentive Plan and the proposed
amendment to the 1996 Stock Incentive Plan, see "Proposal 2 -
Approval of the Amendment to the Haven Bancorp, Inc. 1996 Stock
Incentive Plan."
The following table provides certain information with respect to
the number of shares of Common Stock represented by outstanding
options held by the Named Executive Officers as of December 31,
1997. Also reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of any
such existing stock options and the year-end price of the Common
Stock.
FISCAL YEAR END OPTION/SAR VALUES
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Options/SARs Money Options/SARs at Fiscal
at Fiscal Year End (#) Year End ($)(1)
------------------------- ----------------------------
Shares Acquired Value
on Exercise Realized
Name (#) $ Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
Philip S. Messina -- -- 169,364 41,170 2,796,625 385,969
Joseph W. Rennhack -- -- 109,250 15,170 1,850,255 142,219
Thomas J. Seery -- -- 67,096 15,170 1,112,560 142,219
Gerard H. McGuirk -- -- 53,534 16,658 736,425 168,259
Catherine Califano -- -- 53,534 16,658 736,425 168,259
(1) Messrs. Messina, Rennhack, Seery and McGuirk and Ms. Califano
have 148,780, 101,666, 59,512, 7,438 and 7,438 options with an
exercise price of $5.00. In addition Mr. McGuirk and Ms. Califano
have 40,000 options with an exercise price of $8.47. Messrs.
Messina, Rennhack, Seery and McGuirk and Ms. Califano also have
61,754, 22,754, 22,754, 22,754, and 22,754 options with an exercise
price of $13.125. As of December 31, 1997 the closing price of the
common stock was $22.50.
Defined Benefit Plan. The Bank maintains the CFS Bank Retirement
Income Plan, a non-contributory defined benefit pension plan
("Retirement Plan").
Retirement Plan Table. The following table indicates the annual
retirement benefit that would be payable as of December 31, 1997
under the Retirement Plan upon retirement at age 65 to a
participant electing to receive his retirement benefit in the
standard form of benefit (single life annuity), assuming various
specified levels of average annual compensation and various
specified years of credited service.
Average 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
Annual of Credited of Credited of Credited of Credited of Credited of Credited
Compensation Service Service Service Service Service Service(1)
------------ ----------- ----------- ----------- ----------- ----------- -----------
$125,000 24,345 36,518 48,690 60,863 73,036 73,036
150,000 29,595 44,393 59,190 73,988 88,786 88,786
160,000 31,695 47,543 63,390 79,238 95,086 95,086
175,000(2) 34,845 52,268 69,690 87,113 104,536 104,536
200,000(2) 40,095 60,143 80,190 100,238 120,286 120,286
300,000(2) 61,095 91,643 122,190 152,738 183,286(3) 183,286(3)
400,000(2) 82,095 123,143 164,190 205,238(3) 246,286(3) 246,286(3)
500,000(2) 103,095 154,643 206,190(3) 257,738(3) 309,286(3) 309,286(3)
(1) Maximum amount of service credited for purposes of the
Retirement Plan is 30 years.
(2) The annual retirement benefits shown in the table reflect a
deduction for Social Security benefits and are not subject to
further deduction. The compensation covered by the Retirement Plan
is total annual compensation (as reflected in the Summary
Compensation Table) including all compensation reported by the Bank
for federal income tax purposes. The benefits shown corresponding
to these compensation ranges are hypothetical benefits based upon
the Retirement Plan's normal retirement benefit formula. Under
Section 401(a)(17) of the Code, for plan years beginning in 1994
through 1996, a participant's compensation in excess of $150,000
(as adjusted to reflect cost-of-living increases) was disregarded
for purposes of determining average annual earnings. This
limitation was increased to $160,000 for plan years beginning in
1997. The amounts shown in the table include the supplemental
retirement benefits payable to Mr. Messina under his employment
agreement to compensate for the limitation on includible
compensation.
(3) These are hypothetical benefits based upon the Retirement
Plan's normal retirement benefit formula. The maximum annual
benefit permitted under Section 415 of the Code in 1996 is $120,000
and is $125,000 for 1997, or if higher, a member's current accrued
benefit as of December 31, 1982 (but not more than $136,425). The
$125,000 ceiling will be adjusted to reflect cost of living
increases in 1998 and succeeding years in accordance with Section
415 of the Code. The amounts shown in the table reflect the
supplemental retirement benefits payable to Mr. Messina under his
employment agreement to compensate for the limitation on annual
benefits.
The following table sets forth the years of credited service (i.e.,
benefit service) as of June 30, 1996 for each of the Named
Executive Officers.
Credited Service(1)
Years Months
----- ------
Philip S. Messina 32 2
Joseph W. Rennhack 28 5
Thomas J. Seery 21 11
Gerard H. McGuirk 2 11
Catherine Califano 3 1
(1) The Retirement Plan was frozen effective as of June 30, 1996
for a period of three years, at which time the status of the Plan
will be evaluated for reactivation.
Supplemental Executive Retirement Agreement. The Bank has entered
into an agreement to provide supplemental retirement benefits for
Mr. Worgul ("Executive"). The agreement is unfunded. As of
December 31, 1996, the Company has accrued the entire $1.2 million
liability under the unfunded agreement. All obligations arising
under the agreement are payable from the general assets of the
Bank. However, the Bank is responsible for the payment of premiums
on an insurance policy which would reimburse the Bank for the
payments due under the agreement in the event of the Executive's
death. The agreement provides for an annual retirement benefit of
$120,000 for 10 years after retirement upon reaching the normal
retirement age contained in the Retirement Plan. In the event of
a change in ownership of the Bank after retirement but prior to the
payment of the entire benefit or in the event of the Executive's
death after retirement, any unpaid benefit shall be paid in a lump
sum to the Executive or the Executive's estate, respectively.
Transactions With Certain Related Persons. The federal banking
laws require that all loans or extensions of credit to executive
officers and directors must be made on substantially the same
terms, including interest rates and collateral, and follow
substantially the same credit underwriting procedures as those
prevailing at the time for comparable transactions with the other
persons and must not involve more than the normal risk of repayment
or present other unfavorable features. The Bank made a residential
mortgage loan on the home of Gerard H. McGuirk during 1997. The
loan was underwritten on substantially the same terms as those
prevailing at the time for a comparable transaction with employees
of the Bank. The Bank's personnel policy provides for an employee
discount of 1% on primary residential properties, which is
available to all full time employees completing one year of
service. Mr. McGuirk qualified for such employee discount.
Michael J. Levine, a director since 1996, has an equity interest in
a number of companies that had commercial real estate loans
outstanding with the Bank in 1997, which loans were made prior to
the time Mr. Levine became a director. The Board of Directors at
a meeting held December 17, 1997 approved extending the maturity of
one of the existing loans in which Mr. Levine has an equity
interest. The loan was extended for ten years at market interest
rates, with no additional funds advanced. The largest aggregate
outstanding balance of these loans in 1997 was approximately $27.8
million. Three such loans totalling approximately $8.5 million
were paid in full in 1997. At December 31, 1997 the aggregate
balance outstanding for all loans in which Mr. Levine has an equity
interest was approximately $19.2 million. Management expects all
but the recently extended loan to be paid in full by mid-year 1998.
A loan with an outstanding balance of $3 million was satisfied in
February 1998. The loans to such entities 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 other persons and management
believes that such loans do not involve more than the normal risk
of collectibility or present other unfavorable features.
In addition, Mr. Levine and his wife have a 30% interest in a
company, which they acquired in February 1996, that owns a building
formerly occupied as a branch office of the Bank. The Bank closed
the office May 1997, subletting the space. The lease payments on
such property for 1997 was approximately $56,000.
Joseph A. Ruggiere, a director since 1979, is President of Ohlert-
Ruggiere, Inc. During 1997, Ohlert-Ruggiere was paid approximately
$73,000 in agency commissions for the sale of property, casualty
and liability insurance, and for services provided as a travel
agent. The Bank believes that these transactions were on terms
substantially similar to those available from non- affiliated
agents.
William J. Jennings II, a director since 1996, is managing director
of Salomon Smith Barney, Inc., an investment banking firm that
performed services for the Company in 1997 in connection with
normal business transactions.
PROPOSAL 2.
AMENDMENT TO THE HAVEN BANCORP, INC.
1996 STOCK INCENTIVE PLAN
GENERAL INFORMATION IN CONNECTION WITH THE AMENDMENT TO THE 1996
STOCK INCENTIVE PLAN
Effective as of February 18, 1998, the Company has adopted, subject
to the approval by shareholders of the Company, an amendment
("Amendment") to the Haven Bancorp, Inc. 1996 Stock Incentive Plan
("Plan") to increase the number shares of Common Stock of the
Company ("Shares") that are available for issuance pursuant to the
Plan. The Plan was originally adopted by the Company and approved
by shareholders effective as of January 1, 1996. The Plan provides
for the grant of options to purchase Shares ("Options"), stock
appreciation rights ("SARs") and restricted stock awards ("Awards")
to certain officers, employees and outside directors. The
Amendment will not take effect, and no Options, SARs or Awards
grants relating to the additional number of Shares to be available
under the Plan thereunder will be effective, prior to the date of
shareholder approval ("Effective Date") of the Amendment. The Plan
is not subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). The principal provisions of the Plan
and the Amendment are summarized below.
PURPOSE OF THE PLAN
The purpose of the Plan is to advance the interests of the Company
and its shareholders by providing current directors, officers and
employees of the Company and its affiliates with an incentive to
achieve corporate objectives, by attracting and retaining
directors, officers and employees of outstanding competence through
the award of equity interests in the Company, and by providing a
means for the payment of compensation earned under the Columbia
Federal Savings Bank Executive Incentive Compensation Plan in the
form of Options and Awards.
DESCRIPTION OF THE PLAN
Administration. The Compensation Committee of the Board of
Directors (or any successor committee) or such other committee as
the Board may designate ("Committee"), administers the Plan. Such
Committee is comprised of at least two directors of the Company,
and all directors on the Committee are "disinterested directors"
(as that term is defined under Section 16(b) of the Exchange Act
and the rules and regulations promulgated thereunder) who are not
currently and have not at any time during the immediately preceding
one-year period been an employee of the Company, the Bank or any
affiliates. The Committee determines, within the limitations of
the Plan, the officers and employees to whom Options or Awards will
be granted, the number of shares subject to each Option or Award,
the terms of such Options and Awards (including provisions
regarding exercisability and acceleration of exercisability) and
the procedures by which the Options and Awards shall be exercised.
Options and Awards granted to directors under the Plan are by
automatic formula grant, and the Committee has no discretion over
such grants. Subject to certain specific limitations and
restrictions set forth in the Plan, the Committee has full and
final authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations, if any, relating to the Plan and to
make all determinations necessary or advisable for the
administration of the Plan. The costs and expenses of
administering the Plan will be borne by the Company and not charged
to any grant of an Option or Award nor to any participating
director, officer or employee.
Stock Subject to the Plan Under the Amendment. Under the Plan as
originally adopted, the Company reserved 210,000 Shares for current
and future issuance of Options and Awards. Pursuant to the Stock
Split, this number increased to 420,000. Under the Amendment, if
approved, an additional 400,000 Shares will be available for
issuance pursuant to Option and Awards. As of December 31, 1997,
the fair market value of a Share was $22.50 (as reported by the
National Association of Securities Dealers Automated Quotation
System ("NASDAQ")). All Shares available under the Plan may be
authorized and unissued shares or shares previously issued and
reacquired by the Company. Any Shares subject to grants under the
Plan which expire or are terminated, forfeited or cancelled without
having been exercised or vested in full, shall again be available
for purposes of the Plan. The exercise of a SAR shall not be
treated as an exercise of the related Option.
Eligibility. Any employee of the Company and its affiliates who is
selected by the Committee is eligible to participate in the Plan as
an "Eligible Individual." Members of the Board or the board of
directors of the Bank who are not employees or officers of the
Company or Bank are eligible to participate in the Plan as an
"Eligible Director." As of January 1, 1998, the number of Eligible
Individuals and Eligible Directors was 29 and 8, respectively.
Terms and Conditions of Options. The Committee may, in its
discretion, grant Options to Eligible Individuals. The Committee
determines the number of Shares subject to an Option granted to an
Eligible Individual and the Exercise Price and Exercise Period
during which the Option may be exercised at the time of the grant,
and may establish a vesting schedule or other terms and conditions
applicable to the Option, in its discretion. The Exercise Period
will not exceed ten years from the date of the grant. On the
effective date of the adoption of the Plan, each Eligible Director
who was an Eligible Director on such date was granted a NQSO to
purchase 12,000 Shares. Such Options have an Exercise Price equal
to the fair market value of a Share on the date of grant and an
Exercise Period commencing with the earliest of: (a) the first
anniversary of the date the Option was granted, (b) the date of the
Eligible Director's Retirement (as defined in the Plan), and (c)
the date of a Change of Control of the Company (as defined in the
Plan). The Exercise Period applicable to an Eligible Director's
Option will expire on the earliest of (i) the last day of the
one-year period commencing on the date he ceases to be an Eligible
Director, other than due to a termination for cause, (ii) the date
he ceases to be an Eligible Director due to a termination for
cause, and (iii) the last day of the ten-year period commencing on
the date the Option was granted. In the event an Eligible Director
ceases to be an Eligible Director prior to the commencement of the
Exercise Period, his Option will be forfeited.
Unless otherwise designated, Options granted under the Plan are
non-qualified stock options ("NQSOs"). All or part of an Option
granted under the Plan to an Eligible Individual may, at the
election of the Committee, be designated as an incentive stock
option ("ISO"), and the Exercise Price of such Option designated to
be an ISO will not be less than 100% of the Fair Market Value (as
defined in the Plan) of the Shares at grant; provided, however,
that if an ISO is granted to an employee who on the date of grant
is the owner of stock (determined under the ownership attribution
rules of Section 424(d) of the Code) possessing more than 10% of
the total combined voting power of all classes of stock of the
Company or any affiliate, the Exercise Price of the ISO will not be
less than 110% of the Fair Market Value of the Shares on the date
of the grant, and the ISO will not have a term in excess of five
years from the date of the grant. In the event that all or any
portion of an Option designated as an ISO cannot be exercised as an
ISO in accordance with Section 422 of the Code, such Option or
portion thereof shall be treated as a NQSO.
Upon the exercise of an Option, the Exercise Price must be paid in
full. Payment may be made in cash or in such other consideration
as the Committee deems appropriate, including, but not limited to,
Shares already owned by the option holder or Shares to be acquired
by the option holder upon exercise of the Option, provided that the
delivery of Shares concurrently with the exercise of an Option does
not violate Section 16(b) of the Exchange Act, or any rules or
regulations promulgated thereunder.
Terms and Conditions of Stock Appreciation Rights. The Committee
may also grant SARs to Eligible Individuals which may or may not
relate to Options granted to the recipient, at any time, and
generally with such terms and conditions as the Committee may
determine in its discretion. An Eligible Director who has been
granted an Option pursuant to the Plan has also been granted an SAR
relating to all of the Shares subject to the Option, with same
Exercise Price and Exercise Period as the related Option, except as
provided below. In order to avoid adverse accounting treatment,
all SARs granted under the Plan may not become exercisable prior to
a Change of Control. In addition, all such SARs will contain such
conditions upon exercise (including, without limitation, conditions
limiting the time of exercise to be specified periods) as may be
required to satisfy applicable regulatory requirements, including
without limitation, Section 16(b) of the Exchange Act and the rules
and regulations promulgated thereunder. Upon exercise of a SAR,
the Eligible Individual will be entitled to receive an amount equal
to (a) the excess of the Change of Control Consideration (as
defined in the Plan) over the Exercise Price per Share specified in
the SAR, multiplied by (b) the number of Shares with respect to
which the SAR is being exercised. Change of Control Consideration
is defined in the Plan as the greater of (i) the highest price per
Share paid by any person who initiated or sought to effect the
Change in Control during the one-year period ending on the date of
the Change in Control and (ii) the average Fair Market Value of a
Share over the last 10 trading days preceding the date of the
exercise of the SAR.
Dividend Equivalent Rights. The Committee, may, in its discretion,
also grant DERs relating to Options or SARs granted to Eligible
Individuals. Such DERs may provide for the current or deferred
payment of the cash or stock dividends that would have been paid on
Shares subject to an Option or SAR had they been outstanding, or
may provide for other methods of reflecting dividends paid on
outstanding Shares.
Terms and Conditions of Restricted Stock Awards. The Committee
may, in its discretion, grant Awards of restricted stock to
Eligible Individuals. The Committee determines the number of
Shares subject to an Award and the vesting schedule applicable to
an Award granted to an Eligible Individual at the time of grant,
and may establish other terms and conditions applicable to the
Award, in its discretion. On the effective date of the Plan and on
the first business day of each of the next four calendar years to
begin after such date, each Eligible Director is automatically
granted an Award of restricted stock in lieu of one-third of the
annual cash retainer such Eligible Director would otherwise receive
for the calendar year in which the Award is made. The number of
Shares subject to an Award made to an Eligible Director will be
determined by dividing the dollar value of one-third of the
Eligible Director's annual retainer by the Fair Market Value of a
Share on the date of the grant, disregarding any fractional Shares.
Awards granted to Eligible Directors will become vested six months
after the date of grant.
A stock certificate or stock certificates evidencing the Shares
granted pursuant to an Award are registered on Company's books in
the name of the recipient as of the date the Award is granted and
bear a legend restricting the transferability of such certificate
or certificates until vesting and referring to the terms,
conditions and other restrictions, including forfeiture, applicable
to such Shares. The Company retains physical possession or custody
of such certificates until such time as such Shares become vested.
Subsequent to the date Shares subject to an Award have been granted
and prior to the date such Shares have become vested and are
distributed, the Award recipient is entitled to vote the Shares and
to receive cash dividends declared and paid with respect to such
Shares. Any stock dividends declared and paid with respect to such
Shares are evidenced by a stock certificate or certificates
registered in the name of the Award recipient, retained in the
possession or custody of the Company, and made subject to the same
restrictions, terms and conditions as the Shares to which they
pertain. Such stock dividends become vested and are distributed at
the same time as the Shares to which they pertain. As soon as
practicable following the vesting date of Shares subject to an
Award, the Company issues the Award recipient a stock certificate
evidencing his ownership of the Shares.
TERMINATION OR AMENDMENT OF THE PLAN
Unless sooner terminated, the Plan will terminate automatically on
the day preceding the tenth anniversary of the date the Plan was
adopted. The Board may suspend or terminate the Plan in whole or
in part at any time prior to such date by giving written notice of
such suspension or termination to the Committee. In the event of
any suspension or termination of the Plan, all Options, Awards,
SARs and DERs theretofore granted under the Plan that are effective
on the date of such suspension or termination of the Plan will
remain effective under the terms of the agreements granting such
Options, Awards, SARs and DERs.
The Board may amend or revise the Plan in whole or in part at any
time; provided, however, that if the amendment or revision (1)
materially increases the benefits accruing under the Plan, (2)
materially increases the number of Shares which may be issued under
the Plan or (3) materially modifies the requirements as to
eligibility for Options, Awards, SARs or DERs under the Plan, such
amendment or revision will be subject to approval by the
shareholders of the Company. Subject to these above provisions,
the Board will also have broad authority to amend the Plan to take
into account changes in applicable securities and tax laws and
accounting rules, as well as other developments.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary and does not
purport to be a comprehensive description of the federal tax laws,
regulations and policies affecting the Company and recipients of
Options, SARs and Awards that may be granted under the Plan. Any
descriptions of the provisions of any law, regulation or policy
contained herein are qualified in their entirety by reference to
the particular law, regulation or policy. Any change in applicable
law or regulation or in the policies of various taxing authorities
may have a material effect on the discussion contained herein. The
Plan does not constitute a qualified Plan under section 401(a) of
the Code.
With respect to the Options which may be granted under the Plan,
there are no federal income tax consequences for the Company or the
option holder at the date of the grant, provided that the Option is
not considered to have an ascertainable fair market value. Options
granted under the Plan would generally not be considered to have an
ascertainable fair market value. Upon exercise of an NQSO, the
difference between the fair market value of the Shares on the date
of exercise and the option price will be taxable as compensation
income to the option holder under sections 61 and 83 of the Code,
and the Company would be entitled to a deduction for federal income
tax purposes of the same amount. Upon a subsequent sale or
exchange of stock acquired pursuant to the exercise of an Option,
the option holder would have taxable gain or loss, measured by the
difference between the amount realized on the disposition and the
tax basis of such shares. In the event that the Company grants an
ISO, the option holder generally will not recognize taxable income
either at the date of the grant or the date of exercise. At the
date of disposition of the underlying Shares, the such option
holder will recognize income at the capital gain rate on the
difference between the disposition proceeds and the Exercise Price
of the ISO. The Company is not normally entitled to a deduction
with respect to an ISO, unless the option holder makes a
"disqualifying disposition," whereupon the Company would receive a
deduction under section 162 of the Code in the year in which the
disqualifying disposition occurs.
In the case of SARs, upon exercise of a SAR, the SAR holder would
have to include the amount paid to him upon exercise in his gross
income for federal income tax purposes in the year in which payment
is made, and the Company would be entitled to a deduction for
federal income tax purposes of the amount paid.
In the case of Awards, when Shares subject to Awards become vested
in accordance with the Plan, the recipients will recognize income
equal to the fair market value of the Shares at that time, and the
Company will ordinarily receive an expense deduction in the amount
of income recognized by the recipient.
The foregoing statements are intended to summarize the general
principles of current federal income tax law applicable to Options,
SARs and Awards that may be granted under the Plan. State and
local tax consequences may also be significant. Participants are
advised to consult with their tax advisor as to the tax
consequences of the Plan.
NO CURRENT NEW PLAN BENEFITS
The Amendment is intended to increase the number of Shares
available for future grants by the Committee, or pursuant to the
formulas applicable to directors, of Options and Awards pursuant to
the Plan. It is anticipated that such grants will be made to
officers and employees by the Committee, in its discretion or to
directors pursuant to the formulas currently in effect under the
Plan. No such grants have been made to date. Therefore the
benefits or amounts to be received by directors, officers or
employees as a result of the Amendment are not determinable at this
time.
The approval of the amendment to the Haven Bancorp, Inc. 1996 Stock
Incentive Plan shall be determined by a majority of the votes cast.
Accordingly, abstentions will be counted as votes cast and will
have the effect of a vote against such proposal. Shares underlying
broker non-votes will not be counted as votes cast and will have no
effect on the vote for such proposal.
Unless marked to the contrary, the shares represented by the
enclosed Proxy, if executed and returned, will be voted FOR the
amendment to the Haven Bancorp, Inc. 1996 Stock Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE
1996 STOCK INCENTIVE PLAN.
PROPOSAL 3.
AMENDMENT OF THE CERTIFICATE
OF INCORPORATION OF HAVEN BANCORP, INC.
By resolution dated February 18, 1998, the Board of Directors
declared it advisable and in the best interests of the Company to
amend the Company's Certificate of Incorporation to increase the
number of shares of stock that the Company has the authority to
issue to an aggregate of 32,000,000 (thirty-two million) shares, of
which 30,000,000 (thirty million) shares would be Common Stock and
2,000,000 (two million) shares would be Preferred Stock, and
directed that the Certificate of Incorporation be submitted to a
vote of the stockholders at the Annual Meeting. If the proposal is
adopted, Article FOURTH, Section A of the Certificate of
Incorporation will be hereby amended to read as follows:
"FOURTH: A. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is thirty-two
million (32,000,000) consisting of:
1. Two million (2,000,000) shares of Preferred Stock, par value
one cent ($0.01) per share (the "Preferred Stock"); and
2. Thirty million (30,000,000) shares of Common Stock par value
one cent ($0.01) per share (the "Common Stock")."
The Certificate of Incorporation currently authorizes the issuance
of up to 12,500,000 shares, consisting of 10,500,000 shares of
Common Stock and 2,000,000 shares of Preferred Stock. As of
December 31, 1997, the Company had 8,784,000 shares of Common Stock
outstanding due to the Stock Split declared on October 23, 1997 and
distributed on November 28, 1997 to holders of record as of October
31, 1997. No shares of Preferred Stock are outstanding. Because
of the Stock Split, the Company has nearly exhausted its existing
authorized Common Stock.
The Board of Directors believes that it is in the best interest of
the Company and its stockholders to increase the number of
authorized shares of Common Stock in order to have additional
shares available for issuance to meet various business needs as
they may arise and to enhance the Company's flexibility in
connection with possible future actions. These business needs and
actions may include stock dividends, stock splits, employee benefit
programs, corporate business combinations, funding of business
acquisitions, and other corporate purposes. The authorization of
additional shares of Common Stock pursuant to this proposal will
have no dilutive effect upon the proportionate voting power of the
present shareholders of the Company. However, to the extent that
shares are subsequently issued in connection with any corporate
action to persons other than the present shareholders, such
issuance could have a dilutive effect on the earnings per share and
voting powers of present shareholders. The Company would expect
that the dilutive effect on earnings per share would be relatively
short-term in duration. In addition, although the issuance of
shares of Common Stock in certain instances may have the effect of
forestalling a takeover, the Board does not intend or view the
increase in authorized Common Stock as an anti-takeover measure.
The Company is not aware of any proposed or contemplated
transaction of this type, and this amendment to the Certificate of
Incorporation is not being recommended in response to any specific
effort of which the Company is aware to obtain control of the
Company. Although the Board periodically considers transactions
such as those listed above, it currently does not have plans to
issue any significant amount of such Common Stock, except as
reserved for issuance under the Company's stock option plans and
its stockholder rights plan.
The authorized shares of Common Stock and Preferred Stock in excess
of those currently issued will be available for issuance at such
times and for such purposes as the Board of Directors may deem
advisable without further action by the Company's stockholders,
except as may be required by applicable laws or regulations.
Adoption of the amendment to the Certificate of Incorporation
requires the affirmative vote of the holders of at least a majority
of the issued and outstanding shares of Common Stock entitled to
vote. Abstentions from voting on this amendment and broker non-
votes will have the effect as a vote against this proposal.
Unless marked to the contrary, the shares represented by the
enclosed Proxy, if executed and returned, will be voted FOR the
approval of the amendment to the Certificate of Incorporation of
the Company.
In connection with this proposal, the Company recommends that each
stockholder consider the financial statements of the Company as set
forth in the Company's 1997 Annual Report to Stockholders, a copy
of which is being furnished to each stockholder together with this
proxy statement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL 4.
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended
December 31, 1997 were KPMG Peat Marwick LLP. The Company's Board
of Directors has reappointed KPMG Peat Marwick LLP to continue as
independent auditors for the Bank and the Company for the year
ending December 31, 1998, subject to ratification of such
appointment by the stockholders.
A representative of KPMG Peat Marwick LLP will be present at the
Annual Meeting, will be given an opportunity to make a statement if
so desired and will be available to respond to appropriate
questions from stockholders present at the Annual Meeting.
Ratification of KPMG Peat Marwick LLP as independent auditors of
the Company requires the affirmative vote of a majority of the
votes cast. Abstentions will have the effect as a vote against
this proposal while broker non-votes will have no effect on the
vote for this proposal.
Unless marked to the contrary, the shares represented by the
enclosed Proxy, if executed and returned, will be voted FOR
ratification of the appointment of KPMG Peat Marwick LLP as the
independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF
THE COMPANY.
ADDITIONAL INFORMATION
STOCKHOLDER PROPOSALS
To be considered for inclusion in the proxy statement and proxy
relating to the Annual Meeting of Stockholders to be held in 1999,
a stockholder proposal must be received by the Secretary of the
Company at the address set forth on the first page of this Proxy
Statement, not later than November 17, 1998. Any such proposal will
be subject to 17 C.F.R. Section 240.14a-8 of the Rules and Regulations
under the Exchange Act.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for
a stockholder to properly bring business before an Annual Meeting.
The stockholder must give written advance notice to the Secretary
of the Company not less than ninety (90) days before the date
originally fixed for such meeting; provided, however, that in the
event less than one hundred (100) days notice or prior public
disclosure of the date of the Annual 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 date on which the Company's notice to stockholders of
the Annual Meeting date was mailed or such public disclosure was
made. The advance notice by stockholders must include the
stockholder's name and address, as they appear on the Company's
record of stockholders, a brief description of the proposed
business, the reason 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. In
the case of nominations to the Board of Directors, certain
information regarding the nominee must be provided. Nothing in this
paragraph shall be deemed to require the Company to include in its
proxy statement and proxy relating to an Annual Meeting any
stockholder proposal which does not meet all of the requirements
for inclusion established by the SEC in effect at the time such
proposal is received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE ANNUAL 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 the Annual Meeting, you
are urged to return your proxy card promptly. If you are present at
the Annual Meeting and wish to vote your shares in person, your
proxy may be revoked in writing and you may vote your shares at the
Annual Meeting.
A copy of the Form 10-K (without exhibits) for the year ended
December 31, 1997, as filed with the Securities and Exchange
Commission, will be furnished without charge to stockholders of
record upon written request to Haven Bancorp, Inc., Mr. Joseph W.
Rennhack, Senior Vice President and Secretary, 93-22 Jamaica Ave.,
Woodhaven, New York 11421.
By Order of the Board of Directors,
Joseph W. Rennhack
Secretary
Woodhaven, New York
March 18, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE
REQUESTED TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.