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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ______)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-12
Clifton Savings Bancorp, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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pursuant to Exchange Act Rule 0-11(set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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CLIFTON SAVINGS BANCORP, INC.
1433 VAN HOUTEN AVENUE
CLIFTON, NEW JERSEY 07015
(973) 473-2200
June 10, 2005
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
of Clifton Savings Bancorp, Inc. We will hold the meeting at the Valley Regency
located at 1129 Valley Road, Clifton, New Jersey on July 14, 2005 at 9:00 a.m.,
local time.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Company.
Directors and officers of the Company, as well as a representative of Beard
Miller Company LLP, the Company's independent auditors, will be present to
respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number of
shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed WHITE proxy card. If you attend the meeting, you
may vote in person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ John A. Celentano, Jr.
John A. Celentano, Jr.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
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YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT NO MATTER HOW
MANY OR HOW FEW SHARES YOU OWN. In order to vote on the three proposals being
presented at the Annual Meeting, please do the following:
If your shares are registered in your name, please sign, date and mail
the enclosed WHITE proxy card to Regan & Associates, Inc. in the postage
paid envelope provided today.
If your shares are held in "street name," you will receive
an instruction form from your broker, bank or other nominee
that you must follow in order to have your shares voted.
Please sign, date and mail the enclosed WHITE instruction
form in your postage-paid envelope provided. To ensure that
your shares are voted, you also should contact and give
instructions to the person responsible for your account.
If you have any questions or need further assistance in
voting your shares, please contact our proxy solicitor:
Regan & Associates, Inc.
505 Eighth Avenue
Floor 12A
New York, New York 10018
Call toll free - (800) 737-3426.
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CLIFTON SAVINGS BANCORP, INC.
1433 VAN HOUTEN AVENUE
CLIFTON, NEW JERSEY 07015
(973) 473-2200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
On July 14, 2005, Clifton Savings Bancorp, Inc. (the "Company") will
hold its annual meeting of stockholders at the Valley Regency located at 1129
Valley Road, Clifton, New Jersey. The meeting will begin at 9:00 a.m., local
time. At the meeting, stockholders will consider and act on the following:
1. The election of two directors to serve for a term of three
years;
2. The approval of the Clifton Savings Bancorp, Inc. 2005 Equity
Incentive Plan;
3. The ratification of the appointment of Beard Miller Company
LLP as independent auditors for the Company for the fiscal
year ending March 31, 2006; and
4. Such other business that may properly come before the meeting.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
The Board of Directors set June 3, 2005 as the record date for the
meeting. This means that owners of the Company's common stock at the close of
business on that date are entitled to receive notice of the meeting and to vote
at the meeting and any adjournments or postponements of the meeting.
Please complete and sign the enclosed WHITE proxy card, which is
solicited by the Board of Directors, and mail it promptly in the enclosed
envelope. The proxy will not be used if you attend the meeting and vote in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Walter Celuch
Walter Celuch
PRESIDENT AND CORPORATE SECRETARY
Clifton, New Jersey
June 10, 2005
NOTE: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE VOTE BY
MARKING, SIGNING, DATING AND PROMPTLY RETURNING THE ENCLOSED WHITE PROXY CARD IN
THE ENCLOSED ENVELOPE.
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CLIFTON SAVINGS BANCORP, INC.
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PROXY STATEMENT
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This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Clifton Savings Bancorp, Inc. ("Clifton
Savings Bancorp" or the "Company") to be used at the annual meeting of
stockholders of the Company. Clifton Savings Bancorp is the holding company for
Clifton Savings Bank, S.L.A. ("Clifton Savings" or the "Bank") and the
majority-owned subsidiary of Clifton MHC. The annual meeting will be held at the
Valley Regency located at 1129 Valley Road, Clifton, New Jersey on July 14, 2005
at 9:00 a.m., local time. This proxy statement and the enclosed WHITE proxy card
are being first mailed on or about June 10, 2005 to stockholders of record.
GENERAL INFORMATION ABOUT VOTING
WHO CAN VOTE AT THE MEETING
You are entitled to vote your Clifton Savings Bancorp common stock only
if the records of the Company show that you held your shares as of the close of
business on June 3, 2005. As of the close of business on June 3, 2005, a total
of 30,438,290 shares of Clifton Savings Bancorp common stock were outstanding,
including 16,791,758 shares of common stock held by Clifton MHC. Each share of
common stock has one vote. The Company's Charter provides that, until March 3,
2009, record holders of the Company's common stock, other than Clifton MHC, who
beneficially own, either directly or indirectly, in excess of 10% of the
Company's outstanding shares are not entitled to any vote in respect of the
shares held in excess of the 10% limit.
VOTE BY CLIFTON MHC
Clifton MHC, the mutual holding company for Clifton Savings Bancorp,
owns 55.2% of the outstanding shares of common stock of Clifton Savings Bancorp
as of June 3, 2005. All shares of common stock owned by Clifton MHC will be
voted in accordance with the instructions of the Board of Directors of Clifton
MHC, the members of which are identical to the members of the Board of Directors
of Clifton Savings Bancorp. Clifton MHC is expected to vote such shares "FOR"
each nominee for election as a director and "FOR" each other proposal.
ATTENDING THE MEETING
If you are a beneficial owner of Clifton Savings Bancorp common stock
held by a broker, bank or other nominee (I.E., in "street name"), you will need
proof of ownership to be admitted to the meeting. A recent brokerage statement
or letter from a bank or broker are examples of proof of ownership. If you want
to vote your shares of Clifton Savings Bancorp common stock held in street name
in person at the meeting, you must obtain a written proxy in your name from the
broker, bank or other nominee who is the record holder of your shares.
QUORUM AND VOTE REQUIRED
The annual meeting will be held only if there is a quorum. A quorum
exists if a majority of the outstanding shares of common stock entitled to vote
is represented at the meeting. If you return valid proxy instructions or attend
the meeting in person, your shares will be counted for purposes of determining
whether there is a quorum, even if you abstain from voting. Broker non-votes
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also will be counted for purposes of determining the existence of a quorum. A
broker non-vote occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to that item and has not
received voting instructions from the beneficial owner.
The Company's Board of Directors consists of seven members. At this
year's annual meeting, stockholders will elect two directors to serve a term of
three years. In voting on the election of directors, you may vote in favor of
all nominees, withhold votes as to all nominees, or withhold votes as to
specific nominees. There is no cumulative voting for the election of directors.
Directors must be elected by a plurality of the votes cast at the annual
meeting. "Plurality" means that the nominees receiving the largest number of
votes cast will be elected as directors up to the maximum number of directors to
be elected at the annual meeting. At the annual meeting, the maximum number of
directors to be elected is two. Votes that are withheld and broker non-votes
will have no effect on the outcome of the election.
In voting on the approval of the Clifton Savings Bancorp, Inc. 2005
Equity Incentive Plan (the "2005 Plan"), you may vote in favor of the proposal,
against the proposal or abstain from voting. To be approved, this matter
requires the affirmative vote of a majority of the votes eligible to be cast at
the annual meeting, including the shares held by Clifton MHC ("Vote Standard
A"), AND by the affirmative vote of a majority of the votes cast at the annual
meeting, excluding the shares held by Clifton MHC ("Vote Standard B"). For Vote
Standard A, abstentions and broker non-votes will have the same effect as a
negative vote. For Vote Standard B, abstentions and broker non-votes will have
no effect on the voting.
In voting on the ratification of the appointment of Beard Miller
Company LLP as independent auditors, you may vote in favor of the proposal, vote
against the proposal or abstain from voting. This proposal will be decided by
the affirmative vote of a majority of the shares represented at the annual
meeting and entitled to vote. On this matter abstentions will have the same
effect as a negative vote and broker non-votes will have no effect on the
voting.
Because Clifton MHC owns more than 50% of Clifton Savings Bancorp's
outstanding shares, the votes it casts will ensure the presence of a quorum and
control the outcome of the vote on Proposal 1 (Election of Directors) and
Proposal 3 (Ratification of Appointment of Independent Auditors). See "VOTE BY
CLIFTON MHC" above.
VOTING BY PROXY
The Board of Directors of Clifton Savings Bancorp is sending you this
proxy statement for the purpose of requesting that you allow your shares of
Clifton Savings Bancorp common stock to be represented at the annual meeting by
the persons named in the enclosed WHITE proxy card. All shares of Clifton
Savings Bancorp common stock represented at the annual meeting by properly
executed and dated WHITE proxy cards will be voted according to the instructions
indicated on the proxy card. If you sign, date and return a WHITE proxy card
without giving voting instructions, your shares will be voted as recommended by
the Company's Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE:
o "FOR" BOTH OF THE NOMINEES FOR DIRECTOR;
o "FOR" APPROVAL OF THE CLIFTON SAVINGS BANCORP, INC. 2005
EQUITY INCENTIVE PLAN; AND
o "FOR" RATIFICATION OF BEARD MILLER COMPANY LLP AS INDEPENDENT
AUDITORS.
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If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the WHITE proxy card will
use their own best judgment to determine how to vote your shares. The Company
does not know of any other matters to be presented at the annual meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Corporate Secretary of
the Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy, or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.
If your Clifton Savings Bancorp common stock is held in "street name,"
you will receive instructions from your broker, bank or other nominee that you
must follow in order to have your shares voted. Your broker, bank or other
nominee may allow you to deliver your voting instructions via the telephone or
the Internet. Please see the instruction form provided by your broker, bank or
other nominee that accompanies this proxy statement.
IF YOU HAVE ANY QUESTIONS ABOUT VOTING, PLEASE CONTACT OUR PROXY
SOLICITOR, REGAN & ASSOCIATES, INC., AT (800) 737-3426.
PARTICIPANTS IN THE BANK'S ESOP OR 401(K) SAVINGS PLAN
If you participate in the Clifton Savings Bank, S.L.A. Employee Stock
Ownership Plan (the "ESOP") or if you hold shares through the Clifton Savings
Bank, S.L.A. 401(k) Savings Plan (the "401(k) Plan"), you will receive a voting
instruction form for each plan that reflects all shares you may direct the
trustees to vote on your behalf under the plans. Under the terms of the ESOP,
the ESOP trustee votes all shares held by the ESOP, but each ESOP participant
may direct the trustee how to vote the shares of common stock allocated to his
or her account. The ESOP trustee, subject to the exercise of its fiduciary
duties, will vote all unallocated shares of Company common stock held by the
ESOP and allocated shares for which no voting instructions are received in the
same proportion as shares for which it has received timely voting instructions.
Under the terms of the 401(k) Plan, a participant is entitled to direct the
trustee as to the shares in the Clifton Savings Bancorp, Inc. Stock Fund
credited to his or her account. The trustee, subject to its fiduciary duties,
will vote all shares for which no directions are given or for which instructions
were not timely received in the same proportion as shares for which the trustee
received voting instructions. The deadline for returning your voting
instructions to each plan's trustee is July 7, 2005.
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CORPORATE GOVERNANCE
GENERAL
Clifton Savings Bancorp periodically reviews its corporate governance
policies and procedures to ensure that Clifton Savings Bancorp meets the highest
standards of ethical conduct, reports results with accuracy and transparency and
maintains full compliance with the laws, rules and regulations that govern
Clifton Savings Bancorp's operations. As part of this periodic corporate
governance review, the Board of Directors reviews and adopts best corporate
governance policies and practices for Clifton Savings Bancorp.
CORPORATE GOVERNANCE POLICIES AND PROCEDURES
Clifton Savings Bancorp has adopted a corporate governance policy to
govern certain activities, including:
(1) the duties and responsibilities of each director;
(2) the composition, responsibilities and operation of the Board of
Directors;
(3) the establishment and operation of board committees;
(4) succession planning;
(5) appointing an independent lead director and convening executive
sessions of independent directors;
(6) the Board of Directors' interaction with management and third
parties; and
(7) the evaluation of the performance of the Board of Directors and
of the chief executive officer.
CODE OF ETHICS AND BUSINESS CONDUCT
Clifton Savings Bancorp has adopted a Code of Ethics and Business
Conduct that is designed to ensure that the Company's directors, executive
officers and employees meet the highest standards of ethical conduct. The Code
of Ethics and Business Conduct requires that the Company's directors, executive
officers and employees avoid conflicts of interest, comply with all laws and
other legal requirements, conduct business in an honest and ethical manner and
otherwise act with integrity and in the Company's best interest. Under the terms
of the Code of Ethics and Business Conduct, directors, executive officers and
employees are required to report any conduct that they believe in good faith to
be an actual or apparent violation of the Code.
As a mechanism to encourage compliance with the Code of Ethics and
Business Conduct, the Company has established procedures to receive, retain and
treat complaints received regarding accounting, internal accounting controls or
auditing matters. These procedures ensure that individuals may submit concerns
regarding questionable accounting or auditing matters in a confidential and
anonymous manner. The Code of Ethics and Business Conduct also prohibits the
Company from retaliating against any director, executive officer or employee who
reports actual or apparent violations of the Code.
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MEETINGS OF THE BOARD OF DIRECTORS
The Company and the Bank conduct business through meetings and
activities of their Boards of Directors and their committees. During the year
ended March 31, 2005, the Boards of Directors of the Company and the Bank held
29 and 12 meetings, respectively. No director attended fewer than 75% of the
total meetings of the Company's and the Bank's respective Board of Directors and
the committees on which such director served.
COMMITTEES OF THE BOARD OF DIRECTORS OF CLIFTON SAVINGS BANCORP
AUDIT/COMPLIANCE COMMITTEE. The Board of Directors has a
separately-designated standing Audit/Compliance Committee established in
accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended. The Audit/Compliance Committee, consisting of Messrs. Miller, Peto,
Sisco and Stokes meets periodically with the independent auditors, management
and the internal auditors to review accounting, auditing, internal control
structure and financial reporting matters. This committee met 5 times during the
year ended March 31, 2005. Each member of the Audit/Compliance Committee is
independent in accordance with the listing standards of the Nasdaq Stock Market
("Nasdaq"). The Board of Directors has determined that Mr. Sisco is an audit
committee financial expert under the rules of the Securities and Exchange
Commission. The Audit/Compliance Committee acts under a written charter adopted
by the Board of Directors, a copy of which was included as an appendix to the
Company's proxy statement for the 2004 annual meeting of stockholders. The
report of the audit committee required by the rules of the Securities and
Exchange Commission is included in this proxy statement. See "PROPOSAL
3-RATIFICATION OF INDEPENDENT AUDITORS-REPORT OF AUDIT/COMPLIANCE COMMITTEE."
COMPENSATION COMMITTEE. The Compensation Committee, consisting of
Messrs. Miller, Peto, Sisco and Stokes, is responsible for all matters regarding
the Company's and the Bank's employee compensation and benefit programs. The
Company's Compensation Committee met once in fiscal 2005. Each member of the
Compensation Committee is independent in accordance with the listing standards
of Nasdaq. The report of the compensation committee required by the rules of the
Securities and Exchange Commission is included in this proxy statement.
See "COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION."
NOMINATING/CORPORATE GOVERNANCE COMMITTEE. The Nominating/Corporate
Governance Committee, consisting of Messrs. Miller, Peto, Sisco and Stokes,
takes a leadership role in shaping governance policies and practices including
recommending to the Board of Directors the corporate governance policies and
guidelines applicable to Clifton Savings Bancorp and monitoring compliance with
these policies and guidelines. In addition, the Nominating/Corporate Governance
Committee is responsible for identifying individuals qualified to become Board
members and recommending to the Board the director nominees for election at the
next annual meeting of stockholders. It leads the Board in its annual review of
the Board's performance and recommends director candidates for each committee
for appointment by the Board. This committee met once to recommend nominees for
election as directors at this annual meeting. Each member of the
Nominating/Corporate Governance Committee is independent in accordance with the
listing standards of Nasdaq. The Nominating/Corporate Governance Committee acts
under a written charter adopted by the Board of Directors, a copy of which was
included as an appendix to the Company's proxy statement for the 2004 annual
meeting of stockholders. The procedures of the Nominating/Corporate Governance
Committee required to be disclosed by the rules of the Securities and Exchange
Commission are included in this proxy statement. See "NOMINATING/CORPORATE
GOVERNANCE COMMITTEE PROCEDURES."
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ATTENDANCE AT THE ANNUAL MEETING
The Board of Directors encourages directors to attend the annual
meeting of stockholders. All directors attended the Company's 2004 annual
meeting of stockholders.
DIRECTORS' COMPENSATION
FEES. Each non-employee director of Clifton Savings receives a monthly
fee of $3,208. Each non-employee director of Clifton Savings Bancorp receives a
quarterly retainer of $1,500. Each member of the Clifton Savings Bancorp
Audit/Compliance Committee receives a quarterly retainer of $1,250 plus $250 for
each meeting attended.
AGREEMENT WITH FRANK J. HAHOFER. Pursuant to a Retainer Agreement for
Real Estate Inspection and Consulting Services between Mr. Hahofer and Clifton
Savings, Mr. Hahofer receives $1,368 per month for his consulting services to
Clifton Savings.
DIRECTORS' RETIREMENT PLAN. Clifton Savings maintains the Clifton
Savings Bank, S.L.A. Directors' Retirement Plan to provide directors with
supplemental retirement income. All current directors participate in the plan
and future directors may become participants upon designation as such by the
Board of Directors. The plan provides benefits upon a director's retirement,
death or disability, and upon a change in control of Clifton Savings or Clifton
Savings Bancorp.
Upon their retirement following the completion of three years of
service and the attainment of age 68, participants receive an annual retirement
benefit, payable for life, equal to a percentage of the sum of the annual fees
and retainer paid (or, for employee directors, that would have been paid) during
the twelve-month period ending on the date preceding retirement. For an employee
serving as Chairman of the Board of Directors, the annual retirement benefit
equals a percentage of an amount that equals 137.5% of the annual fees and
retainer that would have been paid if the Chairman was a non-employee. The
percentage paid as an annual benefit is determined by multiplying the
participant's years of service (up to a maximum of 10) by 10 percent.
A participant who completes a minimum of three years of service,
regardless of age, may receive death and disability benefits under the plan. If
the participant dies prior to the start of the normal retirement benefit, the
participant's surviving spouse or other designated beneficiary receives an
annual death benefit, payable over a ten-year period, equal to the sum of the
annual fees and retainer paid (or, for employee directors, that would have been
paid or, for an employee director serving as Chairman, 137.5% of the amount that
would have been paid) to the director during the twelve-month period ending on
the last day of the month preceding the date of death. If a participant dies
while receiving the annual retirement benefit under the plan, the beneficiary
continues to receive the same annual benefit for ten years, minus the number of
years the participant already received the annual retirement benefit. The
disability benefit under the plan equals the sum of the annual fees and retainer
paid (or, for employee directors, that would have been paid or, for an employee
director serving as Chairman, 137.5% of the amount that would have been paid)
during the twelve-month period ending on the last day of the month immediately
preceding the participant's termination of service due to disability. If a
participant dies while receiving the annual disability benefit, the beneficiary
continues to receive the annual disability benefit for a period of 10 years,
less the number of years the participant previously received disability
benefits.
Upon the completion of one year of service, regardless of age,
participants receive a benefit upon a change in control of Clifton Savings or
Clifton Savings Bancorp. The annual change in control benefit, payable for the
life of the participant, equals the sum of the annual fees and retainer paid
(or, for employee directors, that would have been paid or, for an employee
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director serving as Chairman, 137.5% of the amount that would have been paid) to
the participant during the twelve-month period preceding the date of a
termination of service due to a change in control. If a participant dies while
receiving the annual change in control benefit, the designated beneficiary
continues to receive the annual change in control benefit for a period of
fifteen years, minus the number of years the participant had already received
benefits under the plan. Based on current director compensation and membership,
the minimum annual change in control benefits payable to all directors
(including the Chairman) under the Directors' Retirement Plan would total
approximately $352,000 per year. This expense would represent approximately 6.7%
of Clifton Savings' reported net income of $5.3 million for the year ended March
31, 2005.
The plan provides for the payment of retirement, death, disability or
change in control benefits in equal monthly installments, commencing on the
first business day of the month after the participant becomes entitled to a
benefit, or, if a director so elects, in an actuarial equivalent lump sum.
STOCK OWNERSHIP
The following table provides information as of June 3, 2005 about the
persons known to Clifton Savings Bancorp to be the beneficial owners of more
than 5% of the Company's outstanding common stock. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investing power.
PERCENT
NUMBER OF OF COMMON STOCK
NAME AND ADDRESS SHARES OWNED OUTSTANDING
- ----------------------- ------------------- -----------------------
Clifton MHC 16,791,758(1) 55.2%(2)
1433 Van Houten Avenue
Clifton, New Jersey 07015
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(1) Acquired in the Bank's mutual holding company reorganization, which was
completed on March 3, 2004. The members of the Board of Directors of
Clifton Savings Bancorp and Clifton Savings also constitute the Board of
Directors of Clifton MHC.
(2) Based on 30,438,290 shares of the Company's common stock outstanding and
entitled to vote as of June 3, 2005.
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The following table provides information as of June 3, 2005 about the
shares of Clifton Savings Bancorp common stock that may be considered to be
beneficially owned by each director, each nominee for director, named executive
officer listed in the table under "EXECUTIVE COMPENSATION - SUMMARY COMPENSATION
TABLE" and all directors and executive officers of the Company as a group. A
person may be considered to beneficially own any shares of common stock over
which he or she has, directly or indirectly, sole or shared voting or investment
power. Unless otherwise indicated, each of the named individuals has sole voting
power and sole investment power with respect to the number of shares shown.
PERCENT OF
NUMBER OF SHARES COMMON STOCK
NAME OWNED OUTSTANDING(1)
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John A. Celentano, Jr. 109,225(2) *
Walter Celuch 30,077(3) *
Bart D'Ambra 7,608(4) *
Frank J. Hahofer 41,200(5) *
Stephen A. Hoogerhyde 5,417(6) *
Thomas A. Miller 10,000 *
John H. Peto 17,500 *
Christine R. Piano, C.P.A. 7,983(7) *
Raymond L. Sisco 53,962 *
Joseph C. Smith 50,000 *
John Stokes 10,000 *
ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (11 PERSONS) 321,012 1.1%
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* Does not exceed 1.0% of the Company's voting securities.
(1) Percentages with respect to each person or group of persons have been
calculated on the basis of 30,438,290 shares of the Company's common
stock, the number of shares of Company common stock outstanding and
entitled to vote as of June 3, 2005.
(2) Includes 50,000 shares held by Mr. Celentano's spouse. Also includes
4,695 shares allocated to Mr. Celentano's account under the employee
stock ownership plan as to which he has voting but not dispositive power
and 4,178 shares held in trust for Mr. Celentano under the Bank's
supplemental executive retirement plan as to which he has shared voting
power.
(3) Includes 5,000 shares held jointly by Mr. Celuch's spouse and daughters.
Also includes 4,672 shares allocated to Mr. Celuch's account under the
employee stock ownership plan as to which he has voting but not
dispositive power and 297 shares held in trust for Mr. Celuch under the
Bank's supplemental executive retirement plan as to which he has shared
voting power.
(4) Includes 2,608 shares allocated to Mr. D'Ambra's account under the
employee stock ownership plan as to which he has voting but not
dispositive power.
(5) Includes 1,800 shares held jointly by Mr. Hahofer's spouse and grandson.
(6) Includes 2,917 shares allocated to Mr. Hoogerhyde's account under the
employee stock ownership plan as to which he has voting but not
dispositive power.
(7) Includes 2,593 shares allocated to Ms. Piano's account under the employee
stock ownership plan as to which she has voting but not dispositive
power.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The two nominees for election as director were unanimously nominated by
the Nominating/Corporate Governance Committee of the Board of Directors. None of
the nominees were nominated according to any agreement or understanding between
any of them and the Company.
The 2005 Plan is being presented to stockholders for approval. See
"PROPOSAL 2 -- APPROVAL OF THE CLIFTON SAVINGS BANCORP, INC. 2005 EQUITY
INCENTIVE PLAN" for more information. Directors, officers and employees of the
Company and Clifton Savings may be granted stock awards and options under the
2005 Plan.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Company's Board of Directors consists of seven members, all of whom
are independent under the listing standards of Nasdaq, except for Mr. Celentano,
Chairman of the Board and Chief Executive Officer of Clifton Savings Bancorp and
Chairman of the Board of Clifton Savings, Mr. Hahofer who is a consultant to
Clifton Savings and Mr. Smith whose construction company provides construction
services for Clifton Savings. The Board is divided into three classes with
three-year staggered terms, with approximately one-third of the directors
elected each year. The Board of Directors' nominees for election this year, to
serve for a three-year term or until their respective successors have been
elected and qualified, are Messrs. Celentano and Miller, each of whom is
currently a director of Clifton Savings Bancorp and Clifton Savings.
Unless you indicate on the WHITE proxy card that your shares should not
be voted for certain nominees, the Board of Directors intends that the proxies
solicited by it will be voted for the election of all of the Board's nominees.
If any nominee is unable to serve, the persons named in the WHITE proxy card
would vote your shares to approve the election of any substitute proposed by the
Board of Directors. At this time, the Board of Directors knows of no reason why
any nominee might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MESSRS. CELENTANO
AND MILLER.
Information regarding the Board of Directors' nominees and the
directors continuing in office is provided below. Unless otherwise stated, each
individual has held his current occupation for the last five years. The age
indicated for each individual is as of March 31, 2005. The indicated period of
service as a director includes the period of service as a director of Clifton
Savings.
BOARD NOMINEES FOR ELECTION OF DIRECTORS
JOHN A. CELENTANO, JR. has served as the Chairman of the Board and
Chief Executive Officer of Clifton Savings Bancorp since March 2004 and as
Chairman of the Board of Clifton Savings, as an employee, since 2003. Prior to
April 2003, Mr. Celentano was also a partner at the law firm of Celentano,
Stadtmauer & Walentowicz, L.L.P. Mr. Celentano and Mr. Smith are first cousins.
Age 70. Director since 1962.
THOMAS A. MILLER is the owner of The T.A. Miller & Co., Inc., a full
service marketing research organization servicing the pharmaceutical industry
located in Clifton, New Jersey. Age 67. Director since 1990.
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DIRECTORS CONTINUING IN OFFICE
THE FOLLOWING DIRECTORS HAVE TERMS ENDING IN 2006:
JOHN H. PETO is a real estate investor and previously was the owner of
The Peto Agency, a real estate and insurance broker located in Clifton, New
Jersey. Age 59. Director since 1995.
RAYMOND L. SISCO is the President of Cin Ray Farms, Inc., a real estate
management company, located in Ramsey, New Jersey and the Vice Chairman of the
Board of Directors of Clifton Savings Bancorp and Clifton Savings. Age 73.
Director since 1995.
JOSEPH C. SMITH is the President of Smith-Sondy Asphalt Construction
Co., a paving construction company located in Wallington, New Jersey. Mr. Smith
and Mr. Celentano are first cousins. Age 52. Director since 1994.
THE FOLLOWING DIRECTORS HAVE TERMS ENDING IN 2007:
FRANK J. HAHOFER is a private investor and previously was a textile
engraver. Age 91. Director since 1942.
JOHN STOKES has been a General Partner at O.I.R. Realty Co., a real
estate investment company since 1980. From 1978 to 1992, Mr. Stokes was a
General Partner at Brigadier Realty, a real estate investment company. Age 75.
Director since 2001.
PROPOSAL 2 -- APPROVAL OF THE CLIFTON SAVINGS BANCORP, INC.
2005 EQUITY INCENTIVE PLAN
The Board of Directors of the Company is presenting for stockholder
approval the Clifton Savings Bancorp, Inc. 2005 Equity Incentive Plan, in the
form attached to this proxy statement as APPENDIX A. The purposes of the plan
are to attract and retain qualified personnel in key positions, provide
officers, employees and non-employee directors of Clifton Savings Bancorp and
Clifton Savings with a proprietary interest in the Company as an incentive to
contribute to the success of Clifton Savings Bancorp, promote the attention of
management to other stockholder concerns, and reward employees for outstanding
performance. The principal terms of the 2005 Plan are summarized below. The
following summary is qualified in its entirety by the complete text of the plan,
as set forth in APPENDIX A.
PROPOSED ACTION REGARDING THE 2005 EQUITY INCENTIVE PLAN
At the annual meeting, stockholders will be asked to approve the
Clifton Savings Bancorp, Inc. 2005 Equity Incentive Plan (the "2005 Plan"). The
Board of Directors adopted the 2005 Plan, subject to stockholder approval, on
May 18, 2005.
Clifton Savings Bancorp believes that stock-based incentive awards will
further focus employees and directors on the dual objectives of creating
stockholder value and promoting the Company's success, and that the 2005 Plan
will help to attract, retain and motivate valued employees and directors. The
Board of Directors also believes that the 2005 Plan will promote the interests
of Clifton Savings Bancorp and its stockholders and that it will give the
Company flexibility to provide incentives based on the attainment of corporate
objectives and increases in stockholder value.
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SUMMARY DESCRIPTION OF THE 2005 PLAN
ADMINISTRATION. The Compensation Committee of the Board of Directors
will administer the 2005 Plan. The Board of Directors or the Compensation
Committee may also delegate some or all of its authority with respect to the
2005 Plan to certain officers of Clifton Savings Bancorp to provide them with
limited authority to grant awards to employees, provided that no officer may
designate himself or herself as an award recipient. (Generally, the appropriate
acting body, be it the Board of Directors, the Compensation Committee or a
designated officer, is referred to in this proposal as the "Committee.")
Subject to certain regulatory requirements imposed by regulations
promulgated by the Office of Thrift Supervision with respect to plan
administration, the Committee has broad authority under the 2005 Plan with
respect to awards granted thereunder, including, without limitation, the
authority to:
o select the individuals to receive awards under the 2005 Plan;
o determine the type, number, vesting requirements and other
features and conditions of individual awards, including
whether performance goals will be attached to awards; and
o interpret the 2005 Plan and award agreements issued with respect
to individual awards (see below).
Each award granted under the 2005 Plan will be evidenced by a written
award agreement that sets forth the terms and conditions of each award and may
include additional provisions and restrictions as determined by the Committee.
In the event performance goals are attached to awards, those goals would be
identified in the award agreement.
ELIGIBILITY. Persons eligible to receive awards under the 2005 Plan
include directors, officers and employees of Clifton Savings Bancorp and its
affiliates. All of the Company's directors, officers and employees (including
all of the named executive officers of Clifton Savings Bancorp) are presently
considered eligible for awards under the 2005 Plan.
AUTHORIZED SHARES; LIMITS ON AWARDS. The maximum number of shares of
Clifton Savings Bancorp common stock that may be delivered pursuant to awards
under the 2005 Plan is 2,094,390 shares. The following additional share limits
are also contained in the 2005 Plan:
o Of the 2,094,390 shares, the Company may grant a maximum of
1,495,993 shares as stock options.
o Of the 2,094,390 shares, the Company may grant a maximum of
598,397 shares as restricted stock awards.
Shares that are subject to or underlying awards that expire for any
reason or are cancelled, terminated or forfeited, fail to vest, or for any other
reason are not paid or delivered under the 2005 Plan will again become available
for subsequent awards under the 2005 Plan.
TYPES OF AWARDS. The 2005 Plan authorizes grants of stock options and
restricted stock awards. The 2005 Plan retains flexibility to offer competitive
incentives and to tailor benefits to specific needs and circumstances.
A stock option gives the recipient the right to purchase shares of
Clifton Savings Bancorp common stock at a future date at a specified price per
share (the "exercise price"). The per share exercise price of a stock option may
not be less than the fair market value of a share of Clifton Savings Bancorp
common stock on the date of grant. Stock options have a maximum term of ten
years from the date of grant. Incentive stock options granted under the 2005
Plan must comply with additional restrictions under Section 422 of the Code as
set forth in the 2005 Plan. (See --"FEDERAL INCOME TAX TREATMENT OF AWARDS UNDER
THE 2005 PLAN," below).
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A restricted stock award is a grant of a certain number of shares of
common stock subject to the lapse of certain restrictions (such as continued
service) determined by the Committee. Participants may receive dividends and
other distributions declared and paid on the shares and may also vote any
unvested shares subject to their restricted stock awards.
VESTING OF AWARDS. Awards under the 2005 Plan generally would vest at
the rate of 20 percent per year over a period of five years beginning one year
from the date of grant. The Company may, however, consider vesting on a
different schedule if the Committee determines that it would be in the best
interests of the Company and its stockholders to do so and with the
non-objection of the OTS. Among the things the Committee may consider would be
the potential for expense savings associated with the vesting of a portion of
the stock option awards in 2005. In no event would the Company adopt a vesting
schedule that provides for vesting at a rate greater than in five installments.
The first installment, however, may vest as early as the date of the grant.
PAYMENTS AND DEFERRALS. Clifton Savings Bancorp may make payment for
awards in the form of cash, common stock or combinations of cash and stock, as
determined by the Committee. The Committee may provide for the deferred payment
of awards and may determine other terms applicable to deferrals, including the
payment or crediting of interest or other earnings on deferred amounts, or the
payment or crediting of dividend equivalents where the deferred amounts are
denominated in shares.
EFFECT OF TERMINATION OF SERVICE ON AWARDS. Generally, the Committee
will establish, in the applicable award agreement, the effect of a termination
of employment or service on outstanding awards under the 2005 Plan. The
Committee may make appropriate distinctions based upon the cause of termination
and the type of award.
ACCELERATION OF AWARDS. Under circumstances that constitute a change in
control of Clifton Savings Bancorp (as described in the 2005 Plan), outstanding
awards under the 2005 Plan will accelerate and become fully vested, unless
otherwise determined by the Committee.
TRANSFER RESTRICTIONS. Subject to certain exceptions contained in
Section 6 of the 2005 Plan, recipients may not transfer awards under the 2005
Plan other than by will or the laws of descent and distribution. Generally, only
the recipient may exercise or purchase shares subject to an award during the
recipient's lifetime, and the Company will pay any amounts payable or issue
shares pursuant to an award only to the recipient or the recipient's beneficiary
or legal representative.
ADJUSTMENTS. As is customary in equity incentive plans of this nature,
each share limit and the number and kind of shares available under the 2005 Plan
and any outstanding awards as well as the exercise or purchase prices of awards
and any performance standards applicable to the awards, are subject to
proportional adjustment in the event of certain reorganizations, mergers,
combinations, recapitalizations, stock splits, stock dividends or similar events
that change the number or kind of shares outstanding, as well as in the case of
extraordinary dividends or distributions of property to the stockholders.
AMENDMENT OR TERMINATION OF THE 2005 PLAN. The Board of Directors of
Clifton Savings Bancorp may generally amend or terminate the 2005 Plan at any
time and in any manner, except that the Board of Directors may not amend the
2005 Plan or awards to reprice stock options. Stockholder approval of an
amendment will be required only to the extent then required by applicable law or
the listing standards of any national securities exchange or national securities
market where Clifton Savings Bancorp common stock is traded or as required under
Section 162 of the Code to preserve the intended tax consequences of the 2005
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Plan. For example, the Company must obtain stockholder approval for any
amendment that proposes to increase the maximum number of shares that may be
delivered with respect to awards granted under the 2005 Plan. Adjustments as a
result of stock splits or similar events, however, do not require stockholder
approval. Unless terminated earlier by the Board of Directors, the authority to
grant new awards under the 2005 Plan will terminate on July 13, 2015.
Outstanding awards, as well as the Committee's authority with respect to such
awards, will generally continue following the expiration or termination of the
2005 Plan. Generally, the Company must obtain an award recipient's consent for
any plan amendment that materially and adversely affects the recipient.
FEDERAL INCOME TAX TREATMENT OF AWARDS UNDER THE 2005 PLAN
The following discussion of the general tax principles applicable to
the 2005 Plan summarizes the federal income tax consequences of the 2005 Plan
under current federal law, which is subject to change at any time. This summary
is not intended to be exhaustive and, among other considerations, does not
describe state or local tax consequences. The Company does not intend to expense
any stock options that it may grant prior to the approval of final accounting
standards requiring expensing of options.
NONSTATUTORY STOCK OPTIONS. The optionee generally recognizes taxable
income in an amount equal to the difference between the option exercise price
and the fair market value of the shares at the time of exercise. The Company
will receive a tax deduction equal to the ordinary income recognized by the
optionee. Employees exercising non-statutory stock options are also subject to
federal, state, and local (if any) tax withholding on the option income. Outside
directors are not subject to tax withholding.
INCENTIVE STOCK OPTIONS. The optionee generally does not recognize
income upon exercise of an incentive stock option. If the optionee does not
dispose of the common stock acquired upon exercise for the required holding
periods of two years from the date of grant and one year from the date of
exercise, income from a subsequent sale of the shares is treated as a capital
gain for tax purposes. However, if the optionee disposes of the shares prior to
the expiration of the required holding periods, the optionee has made a
disqualifying disposition of the stock. Upon a disqualifying disposition, the
optionee will recognize taxable income equal to the difference between the
option exercise price and the fair market value of the Company common stock on
the date of exercise, and the Company will receive a tax deduction equal to the
ordinary income recognized by the optionee. Currently, the Internal Revenue
Service does not require tax withholding on disqualifying dispositions.
RESTRICTED STOCK. Generally, the recipient of a restricted stock award
recognizes ordinary income, and Clifton Savings Bancorp is entitled to a
corresponding deduction, equal to the fair market value of the stock upon the
lapse of any transfer or forfeiture restrictions placed on the shares (i.e.,
upon vesting of the shares). A restricted stock award recipient who makes an
election under Section 83(b) of the Internal Revenue Code, however, recognizes
ordinary income equal to the fair market value of the stock at the time of
grant, rather than at the time restrictions lapse, and the Company is entitled
to a corresponding deduction at that time. If the recipient makes a Section
83(b) election, there are no further federal income tax consequences to either
the recipient or the Company at the time any applicable transfer or forfeiture
restrictions lapse.
Assuming 598,397 shares of restricted stock awards are granted at a
time when the stock price equals $10.50 per share (the closing price on June 1,
2005) and with vesting based on continued service for five years (vesting 20%
for each year of service), the estimated annual expense of the restricted stock
awards would be approximately $1.3 million. The actual expense, among other
things, would vary based on the number of shares actually granted, the actual
vesting period and the stock price at the date of grant.
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STOCKHOLDER APPROVAL AND EFFECTIVE DATE OF THE 2005 PLAN
The 2005 Plan will become effective upon approval of the majority of
the votes cast, excluding those shares beneficially owned by Clifton MHC.
SPECIFIC BENEFITS UNDER THE 2005 PLAN
Clifton Savings Bancorp has not approved any awards under the 2005 Plan
that are conditioned upon stockholder approval of the 2005 Plan and is not
currently considering any specific awards or grants under the 2005 Plan.
Prior to making any awards under the 2005 Plan, the Committee will
consider all information it determines to be necessary in order to make
appropriate grants, including surveys detailing grants made by similarly
situated companies. The Committee reviews comparative salaries paid by other
financial institutions when establishing salaries and benefits for given
positions and intends to consider similar data when making awards. Under the
terms of the 2005 Plan, the Committee may consider, among other things,
individual or Company performance in making grants or as a condition of vesting
for any grant. The 2005 Plan provides the Committee with flexibility to grant
awards in a manner that it believes will be in the best interest of the Company.
The ten-year term of the 2005 Plan, coupled with the flexibility to structure
awards for different individuals over that time, enables the Committee to make
grants over a period of time and subject to such terms and conditions as it
deems appropriate in light of economic conditions, corporate changes, management
restructuring, and other factors.
EQUITY COMPENSATION PLAN INFORMATION AS OF MARCH 31, 2005
The Company does not maintain any equity compensation plans under which
its common stock may be issued upon exercise of options, warrants and rights as
of March 31, 2005.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
CLIFTON SAVINGS BANCORP, INC. 2005
EQUITY INCENTIVE PLAN.
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PROPOSAL 3 -- RATIFICATION OF INDEPENDENT AUDITORS
For the fiscal years ended March 31, 2004 and 2003, the Company's
consolidated financial statements were audited by Radics & Co., LLC ("Radics").
On April 1, 2005, Radics merged with Beard Miller Company LLP ("Beard Miller")
to become the Pine Brook, New Jersey office of Beard Miller. As a result of the
merger, on April 1, 2005, Radics resigned as independent auditors of the
Company. On April 1, 2005, the Company engaged Beard Miller as its successor
independent audit firm. The Company's engagement of Beard Miller was approved by
the Company's Audit Committee. For the fiscal year ended March 31, 2005, the
Company's consolidated financial statements were audited by Beard Miller.
The reports of Radics on the consolidated financial statements of the
Company as of and for the fiscal years ended March 31, 2004 and 2003, did not
contain an adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope, or accounting principles.
During the Company's fiscal years ended March 31, 2004 and 2003, and in
connection with the audit of the Company's consolidated financial statements for
such periods, and for the period from April 1, 2004 to April 1, 2005, there were
no disagreements between the Company and Radics on any matter of accounting
principles or practices, consolidated financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Radics, would have caused Radics to make reference to the
subject matter of the disagreements in connection with its audit reports on the
Company's consolidated financial statements.
The Audit/Compliance Committee of the Board of Directors has appointed
Beard Miller Company LLP to be the Company's independent auditors for the 2006
fiscal year, subject to ratification by stockholders. A representative of Beard
Miller Company LLP is expected to be present at the annual meeting to respond to
appropriate questions from stockholders and will have the opportunity to make a
statement should he or she desire to do so.
If the ratification of the appointment of the independent auditors is
not approved by a majority of the shares represented at the annual meeting and
entitled to vote, the Audit/Compliance Committee will consider other independent
auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
AUDIT FEES
The following table sets forth the fees billed to the Company for the
fiscal years ending March 31, 2005 and 2004 by our independent auditors:
2005 2004
---- ----
Audit fees(1)................................................. $106,500 $57,200
Audit related fees(2)......................................... 5,000 5,000
Tax fees(3)................................................... 11,500 8,500
All other fees(4)............................................. - 82,000
-----------------
(1) Includes professional services rendered for the audit of the
Company's annual consolidated financial statements and review
of consolidated financial statements included in Forms 10-Q,
attestation of management's assessment of internal controls
and the audit of internal controls as required by the
Sarbanes-Oxley Act of 2002 and services normally provided in
connection with statutory and regulatory filings (i.e.,
attest services required by FDICIA), including out-of-pocket
expenses.
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(2) Assurance and related services reasonably related to the
performance of the audit include the reading of the Company's
Form 10-K and Proxy Statement.
(3) Tax fees include the following: preparation of state and
federal tax returns and assistance with calculating estimated
tax payments.
(4) Other fees consist of fees for assistance with the Company's
initial public stock offering.
POLICY ON AUDIT/COMPLIANCE COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE
NON-AUDIT SERVICES OF INDEPENDENT AUDITOR
The Audit/Compliance Committee is responsible for appointing, setting
compensation, and overseeing the work of the independent auditor. In accordance
with its charter, the Audit/Compliance Committee approves, in advance, all audit
and permissible non-audit services to be performed by the independent auditor.
Such approval process ensures that the external auditor does not provide any
non-audit services to the Company that are prohibited by law or regulation.
In addition, the Audit/Compliance Committee has established a policy
regarding pre-approval of all audit and permissible non-audit services provided
by the independent auditor. Requests for services by the independent auditor for
compliance with the auditor services policy must be specific as to the
particular services to be provided.
The request may be made with respect to either specific services or a
type of service for predictable or recurring services.
During the year ended March 31, 2005, all services were approved, in
advance, by the Audit/Compliance Committee in compliance with these procedures.
REPORT OF THE AUDIT/COMPLIANCE COMMITTEE
The Company's management is responsible for the Company's internal
controls and financial reporting process. The independent auditors are
responsible for performing an independent audit of the Company's consolidated
financial statements and issuing an opinion on the conformity of those financial
statements with generally accepted accounting principles. The Audit/Compliance
Committee oversees the Company's internal controls and financial reporting
process on behalf of the Board of Directors.
In this context, the Audit/Compliance Committee has met and held
discussions with management, the internal auditors and the independent auditors.
Management represented to the Audit/Compliance Committee that the Company's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the Audit/Compliance Committee has reviewed
and discussed the consolidated financial statements with management and the
independent auditors. The Audit/Compliance Committee discussed with the
independent auditors matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication With Audit/Compliance Committees), including the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of the disclosures in
the financial statements.
In addition, the Audit/Compliance Committee has received the written
disclosures and the letter from the independent auditors required by the
Independence Standards Board Standard No. 1 (Independence Discussions With
Audit/Compliance Committees) and has discussed with the independent auditors the
auditors' independence from the Company and its management. In concluding that
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the auditors are independent, the Audit/Compliance Committee considered, among
other factors, whether the non-audit services provided by the auditors were
compatible with its independence.
The Audit/Compliance Committee discussed with the Company's independent
auditors the overall scope and plans for their audit. The Audit/Compliance
Committee meets with the independent auditors, with and without management and
the internal auditors present, to discuss the results of their examination,
their evaluation of the Company's internal controls, and the overall quality of
the Company's financial reporting.
In performing all of these functions, the Audit/Compliance Committee
acts only in an oversight capacity. In its oversight role, the Audit/Compliance
Committee relies on the work and assurances of the Company's management, which
has the primary responsibility for financial statements and reports, and of the
independent auditors who, in their report, express an opinion on the conformity
of the Company's financial statements to generally accepted accounting
principles. The Audit/Compliance Committee's oversight does not provide it with
an independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or policies, or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit/Compliance
Committee's considerations and discussions with management and the independent
auditors do not assure that the Company's financial statements are presented in
accordance with generally accepted accounting principles, that the audit of the
Company's consolidated financial statements has been carried out in accordance
with the standards of the Public Company Accounting Oversight Board (United
States) or that the Company's independent auditors are in fact "independent."
In reliance on the reviews and discussions referred to above, the
Audit/Compliance Committee recommended to the Board of Directors, and the board
has approved, that the audited consolidated financial statements be included in
the Company's Annual Report on Form 10-K for the year ended March 31, 2005 for
filing with the Securities and Exchange Commission. The Audit/Compliance
Committee and the Board of Directors also have approved, subject to stockholder
ratification, the selection of the Company's independent auditors.
AUDIT/COMPLIANCE COMMITTEE THE BOARD OF DIRECTORS OF
CLIFTON SAVINGS BANCORP, INC.
RAYMOND L. SISCO, CHAIRMAN
THOMAS A. MILLER
JOHN H. PETO
JOHN STOKES
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information is provided for John A. Celentano, Jr., the
Chairman of the Board and Chief Executive Officer, Walter Celuch, the President
and Corporate Secretary, Stephen A. Hoogerhyde, the Executive Vice President and
Chief Lending Officer of the Bank, Christine R. Piano, CPA, Chief Financial
Officer and Treasurer and Bart D'Ambra, the Executive Vice President and Chief
Operating Officer of the Bank. No other executive officer of Clifton Savings
Bancorp or the Bank received a salary and bonus of $100,000 or more during the
year ended March 31, 2005.
ANNUAL COMPENSATION(1)
---------------------------------------
ALL OTHER
NAME AND POSITION YEAR SALARY(2) BONUS COMPENSATION(3)
- ---------------------- ---------- -------------- ------------ ----------------
John A. Celentano, Jr. 2005 $358,937 $10,423 $115,128
CHAIRMAN OF THE BOARD AND 2004 356,438 - -
CHIEF EXECUTIVE OFFICER 2003 46,097 - -
Walter Celuch 2005 $191,500 $ 5,400 $ 67,543
PRESIDENT 2004 182,629 6,860 3,492
AND SECRETARY 2003 166,850 7,213 3,523
Stephen Hoogerhyde 2005 $112,500 $ 3,300 $ 38,056
EXECUTIVE VICE PRESIDENT AND CHIEF 2004 105,341 4,152 2,464
LENDING OFFICER OF THE BANK 2003 98,695 4,365 2,319
Christine R. Piano, CPA 2005 $106,000 $ 2,940 $ 33,959
CHIEF FINANCIAL OFFICER AND TREASURER 2004 94,317 13,724 2,431
2003 88,088 3,915 2,070
Bart D'Ambra 2005 $100,500 $ 2,940 $ 34,016
EXECUTIVE VICE PRESIDENT AND CHIEF 2004 94,317 3,724 2,205
OPERATING OFFICER OF THE BANK 2003 88,088 3,915 2,080
- -------------------
(1) Does not include the aggregate amount of perquisites or other personal
benefits, which was less than $50,000 or 10% of the total annual salary and
bonus reported.
(2) Includes Board of Directors and Committee fees for Mr. Celentano in 2003.
(3) For 2005, includes matching contributions the Bank's 401(k) Plan of $7,308,
$6,150, $2,605, $2,451 and $2,327 for Mr. Celentano, Mr. Celuch, Mr.
Hoogerhyde, Ms. Piano and Mr. D'Ambra, respectively. For 2005, also
includes the value of stock allocations under the employee stock ownership
plan of $57,056, $56,776, $35,451, $31,508 and $31,689 for Mr. Celentano,
Mr. Celuch, Mr. Hoogerhyde, Ms. Piano and Mr. D'Ambra, respectively. For
2005, also includes the value of stock allocations under the supplemental
executive retirement plan of $50,764 and $3,617 for Mr. Celentano and Mr.
Celuch, respectively.
EMPLOYMENT AGREEMENTS
Clifton Savings Bancorp and Clifton Savings have entered into
employment agreements with Messrs. Celentano and Celuch. The employment
agreements are designed to encourage the continued services of Messrs. Celentano
and Celuch, as the continued success of Clifton Savings Bancorp and Clifton
Savings will depend to a significant degree on their skills and competence.
Each employment agreement provides for a three-year term. The term of
the employment agreement with Clifton Savings Bancorp extends on a daily basis
until the Board of Directors or the executive provides written notice of
non-renewal, and the term of the employment agreement with Clifton Savings is
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subject to annual renewal by the Board of Directors. The Board of Directors
reviews the executives' base salaries annually and determines the rate of any
salary increase for the following year. In addition to base salary, the
employment agreements provide for, among other things, the executives'
participation in stock-based benefit plans and the provision of certain fringe
benefits applicable to executive personnel. The employment agreements also
provide for termination of the executives by Clifton Savings Bancorp or Clifton
Savings for just cause, as defined in the respective employment agreements, at
any time. Upon a termination for just cause, Clifton Savings Bancorp and Clifton
Savings will make no further payments under the employment agreements. However,
if Clifton Savings Bancorp or Clifton Savings terminates Messrs. Celentano or
Celuch for reasons other than just cause, or if they resign under specified
circumstances that constitute constructive termination, the executives, or if
they should die, their beneficiaries, will receive their base salaries and
contributions to any employee benefit plans that would have been paid or
contributed on their behalf for the remaining terms of their employment
agreements. Clifton Savings Bancorp and Clifton Savings will also continue the
executives' health and welfare benefits for the remaining terms of their
agreements. Upon a termination of employment for reasons other than cause or a
change in control, the agreements will require Messrs. Celentano and Celuch to
adhere to a one-year non-competition provision.
If Messrs. Celentano or Celuch are involuntarily terminated in
connection with a change in control, or if they voluntarily terminate employment
following a change in control under certain circumstances specified in the
employment agreements, they or their beneficiaries will receive a severance
payment equal to three times their average annual compensation over the five
preceding tax years (or if they are employed less than five years, their years
of employment). Clifton Savings Bancorp and Clifton Savings will also continue
the executives' health and welfare benefit coverage for thirty-six months
following their termination.
Under applicable law, the Internal Revenue Service may impose an excise
tax on change in control-related "parachute" payments that equal or exceed three
times each executive's average annual compensation over the five years preceding
the change in control. This excise tax would equal 20% of the amount by which
the total parachute payments exceed the executive's average annual compensation
over the preceding five tax years. Therefore, in order to prevent the imposition
of the excise tax, each employment agreement will limit payments to the
executive upon a change in control to an amount that is one dollar less than
three times the executive's average annual compensation over the five preceding
tax years.
Clifton Savings Bancorp and Clifton Savings are jointly responsible for
payments made to Messrs. Celentano and Celuch under the employment agreements,
although Clifton Savings Bancorp guarantees any payments not made by Clifton
Savings. Clifton Savings Bancorp or Clifton Savings will also pay or reimburse
all reasonable costs and legal fees incurred by Messrs. Celentano or Celuch in
relation to any dispute or question of interpretation involving their employment
agreements, if they succeed on the merits in a legal judgment, arbitration or
settlement proceeding. The employment agreements provide further that Clifton
Savings Bancorp or Clifton Savings will indemnify the executives to the fullest
extent legally permissible for all expenses and liabilities they incur in
connection with any legal proceedings related to their roles as officers or
directors.
CHANGE IN CONTROL AGREEMENTS. Clifton Savings has entered into change
in control agreements with Messrs. D'Ambra and Hoogerhyde and Ms. Piano. Each
change in control agreement has a two-year term, subject to renewal on an annual
basis. If, following a change in control of Clifton Savings Bancorp or Clifton
Savings, an officer is terminated without cause, or the officer voluntarily
resigns upon the occurrence of circumstances equivalent to constructive
termination, as specified in the agreements, the officers will receive severance
payments under the agreements equal to two times each officer's average annual
compensation for the five most recent taxable years. Clifton Savings will also
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continue the officers' health and welfare benefit coverage for twenty-four
months following their termination of employment.
BENEFIT PLANS
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. Clifton Savings has implemented
a supplemental executive retirement plan to provide for supplemental retirement
benefits with respect to its employee stock ownership plan and the 401(k)
savings plan. The plan provides participating executives with benefits otherwise
limited by certain provisions of the Internal Revenue Code or the terms of the
employee stock ownership plan loan. Specifically, the plan provides benefits to
eligible officers (those designated by the Board of Directors of Clifton
Savings) that cannot be provided under the 401(k) plan or the employee stock
ownership plan as a result of limitations imposed by the Internal Revenue Code,
but that would have been provided under the plans, but for these Internal
Revenue Code limitations. In addition to providing benefits that would otherwise
be lost as a result of the Internal Revenue Code limitations on tax-qualified
plans, the plan also provides supplemental benefits upon a change of control
prior to the scheduled repayment of the employee stock ownership plan loan.
Generally, upon a change in control, the supplemental executive retirement plan
will provide participants with a benefit equal to what they would have received
under the employee stock ownership plan, had they remained employed throughout
the term of the loan, less the benefits actually provided under the plan on the
participant's behalf prior to the change in control. A participant's benefits
generally become payable upon a change in control of Clifton Savings and Clifton
Savings Bancorp. Messrs. Celentano and Celuch currently participate in the
supplemental executive retirement plan.
RETIREMENT AGREEMENT. Clifton Savings entered into a retirement
agreement with Kenneth Van Saders, a former executive officer, effective as of
July 24, 1996, which continues in effect. Under the retirement agreement, Mr.
Van Saders was receiving an annual payment of $35,000 per year, payable on a
monthly basis. Due to the death of Mr. Van Saders in February 2005, his
surviving spouse has begun and will continue to receive payments through
December 31, 2008. In addition, Clifton Savings will continue to provide health
insurance coverage for his surviving spouse for life. Currently, the health
insurance coverage provided by Clifton Savings supplements the primary coverage
provided through the Medicare program.
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COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The following is a joint report of the Compensation Committees of the
Boards of Directors of Clifton Savings and Clifton Savings Bancorp (the
"Compensation Committee") regarding executive compensation. The Compensation
Committee determines compensation on a calendar year basis.
COMPENSATION POLICIES
The Compensation Committee bases its executive compensation policy on
the same principles that guide Clifton Savings in establishing all of its
compensation programs. Clifton Savings designs programs to attract, retain and
motivate highly talented individuals at all levels of the organization. Clifton
Savings emphasizes using a competitive base salary and program of retirement
benefits as a means of attracting and retaining employees, rather than
performance-based cash compensation. Clifton Savings maintains a modest bonus
program that provides all employees with a bonus equal to 3% to 4% of annual
salary depending on the performance of Clifton Savings.
The Clifton Savings Bancorp Compensation Committee has adopted a
Compensation Committee Charter. This charter sets forth in writing the policies
of the Compensation Committee such as oversight of executive and staff
compensation programs, benefit programs and incentive compensation plans.
COMPONENTS OF EXECUTIVE COMPENSATION
BASE SALARY. Salary levels for all employees, including executive
officers, are set so as to reflect the duties and levels of responsibilities
inherent in the position and to reflect competitive conditions in the banking
business in Clifton Savings' market area. Comparative salaries paid by other
financial institutions are considered in establishing the salary for a given
position. The Compensation Committee has utilized bank compensation surveys
compiled by the America's Community Bankers and the New Jersey Savings League as
well as other surveys prepared by trade groups and independent benefits
consultants. Base salaries for all employees, including the executive officers,
are reviewed annually by the Compensation Committee, which takes into account
the competitive level of pay as reflected in the surveys consulted and
quantitative recommendations made by management. In setting base salaries, the
Compensation Committee also considers a number of factors relating to the
particular executive, including individual performance, job responsibilities,
level of experience, ability and knowledge of the position. These factors are
considered subjectively in the aggregate and none of the factors are accorded a
specific weight.
BONUS AND PARTICIPATION IN EMPLOYEE BENEFIT PLANS. Compensation for
executive officers is also composed of bonus and participation in various
employee benefit plans, such as the 401(k) plan and employee stock ownership
plan. Executive officers may also participate in the supplemental executive
retirement plan sponsored by Clifton Savings upon designation by the Board of
Directors. The benefits provided under the 401(k) plan, employee stock ownership
plan and supplemental executive retirement plan are determined based on the
executive's compensation.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee fixed the 2005 calendar year base salary for
Mr. Celentano and determined to pay Mr. Celentano a discretionary cash bonus in
a manner consistent with the base salary and bonus guidelines applied for
executive officers of Clifton Savings Bancorp and Clifton Savings as described
above. Specifically, the Board of Directors considered Clifton Savings Bancorp's
financial performance, stockholder return, peer group financial performance and
compensation survey data (survey compiled by the New Jersey Savings League and
Keefe Bruyette & Woods, Inc.). In addition, the Board of Directors considered
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Mr. Celentano's leadership of and contribution to the success of Clifton Savings
and his over 40 years of dedicated service to the Board of Directors. The
Compensation Committee did not assign weights or rankings to any single
performance factor but instead made subjective determinations based on a
consideration of all the factors in the Clifton Savings Bancorp's business
performance. In recognition of these considerations, the Compensation Committee
increased Mr. Celentano's base salary for the 2005 calendar year to $357,438
from $347,438 for 2004 and determined to pay Mr. Celentano a discretionary cash
bonus of $10,423.
Mr. Celentano also participates in Clifton Savings Bancorp's employee
benefit plans, including the employee stock ownership plan, the 401(k) plan and
the supplemental executive retirement plan. In addition, Clifton Savings Bancorp
supplies Mr. Celentano with an annual $9,000 automobile allowance. This
allowance is added to Mr. Celentano's income for tax purposes.
THE COMPENSATION COMMITTEE OF
CLIFTON SAVINGS BANCORP, INC. AND CLIFTON SAVINGS BANK, S.L.A.
THOMAS A. MILLER
JOHN H. PETO
RAYMOND L. SISCO
JOHN STOKES
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company or the Bank serves or has served as
a member of the compensation committee of another entity, one of whose executive
officers serves on the Compensation Committee of the Company or the Bank. No
executive officer of the Company or the Bank serves or has served as a director
of another entity, one of whose executive officers serves on the Compensation
Committee of the Company or the Bank.
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STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
on the Company's common stock with the cumulative total return on the Nasdaq
Stock Market Index (U.S. Companies), the SNL All Thrifts Index and the SNL MHC
Thrift Index. Total return assumes the reinvestment of all dividends. The graph
assumes $100 was invested at the close of business on March 4, 2004, the initial
day of trading of the Company's common stock.
[GRAPH APPEARS HERE]
SUMMARY
PERIOD ENDING
-----------------------------------------------------------------
INDEX 03/04/04 03/31/04 06/30/04 09/30/04 12/31/04 03/31/05
- -------------------------------------------------------------------------------------------------------------
Clifton Savings Bancorp, Inc. $100.00 $109.80 $96.64 $95.66 $ 99.94 $ 92.54
NASDAQ Composite 100.00 97.07 99.79 92.56 106.33 97.87
SNL Thrift Index 100.00 99.02 90.39 94.65 102.33 97.34
SNL MHC Thrift Index 100.00 98.81 88.18 95.48 103.63 100.94
NOTES:
- -----
A. THE LINES REPRESENT MONTHLY 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 MONTHLY INTERVAL, BASED ON THE FISCAL YEAR-END, IS NOT A
TRADING DAY, THE PRECEDING TRADING DAY IS USED.
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OTHER INFORMATION RELATING TO
DIRECTORS AND EXECUTIVE OFFICERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
Based solely on the Company's review of copies of the reports it has
received and written representations provided to it from the individuals
required to file the reports, the Company believes that each of its executive
officers and directors has complied with applicable reporting requirements for
transactions in Clifton Savings Bancorp common stock during the year ended March
31, 2005, except for Mr. Hahofer who filed two late Forms 4 relating to 10
transactions.
TRANSACTIONS WITH MANAGEMENT
LOANS AND EXTENSIONS OF CREDIT. The Sarbanes-Oxley Act generally
prohibits loans by Clifton Savings to its executive officers and directors.
However, the Sarbanes-Oxley Act contains a specific exemption from such
prohibition for loans by Clifton Savings to its executive officers and directors
in compliance with federal banking regulations. Federal regulations require that
all loans or extensions of credit to executive officers and directors of insured
institutions must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons and must not involve more than the normal risk
of repayment or present other unfavorable features. Clifton Savings is therefore
prohibited from making any new loans or extensions of credit to executive
officers and directors at different rates or terms than those offered to the
general public, except for loans made pursuant to programs generally available
to all employees. Notwithstanding this rule, federal regulations permit Clifton
Savings to make loans to executive officers and directors at reduced interest
rates if the loan is made under a benefit program generally available to all
other employees and does not give preference to any executive officer or
director over any other employee.
In addition, loans made to a director or executive officer in an amount
that, when aggregated with the amount of all other loans to the person and his
or her related interests, are in excess of the greater of $25,000 or 5% of
Clifton Savings' capital and surplus, up to a maximum of $500,000, must be
approved in advance by a majority of the disinterested members of the Board of
Directors.
OTHER TRANSACTIONS. Mr. Smith's paving construction company
occasionally provides construction services for Clifton Savings. In fiscal 2005,
Clifton Savings paid a total of $242,000 to Mr. Smith's paving construction
company. This amount did not represent more than 5% of the gross revenues that
Mr. Smith's paving construction company earned during fiscal 2005.
In fiscal 2005, Clifton MHC, the mutual holding company and majority
stockholder of the Company, and the Company entered into a Loan Agreement
pursuant to which the Company agreed to lend Clifton MHC up to $250,000.
Pursuant to the terms of the Loan Agreement, funds advanced to Clifton MHC bear
no interest. At March 31, 2005, the Company had advanced $250,000 to Clifton
MHC.
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F. Dennis Hahofer, son of Frank J. Hahofer, director of the Company,
served as Senior Vice President of the Bank through his retirement on March 31,
2005. During the years ended March 31, 2005, 2004 and 2003, F. Dennis Hahofer
was paid an aggregate salary, bonus and matching contributions under the Bank's
401(k) plan of $98,073, $95,123 and $96,169, respectively.
NOMINATING/CORPORATE GOVERNANCE COMMITTEE PROCEDURES
GENERAL
It is the policy of the Nominating/Corporate Governance Committee of
the Board of Directors of the Company to consider director candidates
recommended by stockholders who appear to be qualified to serve on the Company's
Board of Directors. The Nominating/Corporate Governance Committee may choose not
to consider an unsolicited recommendation if no vacancy exists on the Board of
Directors and the Nominating/Corporate Governance Committee does not perceive a
need to increase the size of the Board of Directors. In order to avoid the
unnecessary use of the Nominating/Corporate Governance Committee's resources,
the Nominating/Corporate Governance Committee will consider only those director
candidates recommended in accordance with the procedures set forth below.
PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS
To submit a recommendation of a director candidate to the
Nominating/Corporate Governance Committee, a stockholder should submit the
following information in writing, addressed to the Chairman of the
Nominating/Corporate Governance Committee, care of the Corporate Secretary, at
the main office of the Company:
1. The name of the person recommended as a director candidate;
2. All information relating to such person that is required to be
disclosed in solicitations of proxies for election of
directors pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended;
3. The written consent of the person being recommended as a
director candidate to being named in the proxy statement as a
nominee and to serving as a director if elected;
4. As to the stockholder making the recommendation, the name and
address, as they appear on the Company's books, of such
stockholder; provided, however, that if the stockholder is not
a registered holder of the Company's common stock, the
stockholder should submit his or her name and address along
with a current written statement from the record holder of the
shares that reflects ownership of the Company's common stock;
and
5. A statement disclosing whether such stockholder is acting with
or on behalf of any other person and, if applicable, the
identity of such person.
In order for a director candidate to be considered for nomination at
the Company's annual meeting of stockholders, the recommendation must be
received by the Nominating/Corporate Governance Committee at least 120 calendar
days prior to the date the Company's proxy statement was released to
stockholders in connection with the previous year's annual meeting, advanced by
one year.
MINIMUM QUALIFICATIONS
The Nominating/Corporate Governance Committee has adopted a set of
criteria that it considers when it selects individuals to be nominated for
election to the Board of Directors. First a candidate must meet the eligibility
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requirements set forth in the Company's bylaws, which include a requirement that
the candidate not have been subject to certain criminal or regulatory actions. A
candidate also must meet any qualification requirements set forth in any Board
or committee governing documents.
The Nominating/Corporate Governance Committee will consider the
following criteria in selecting nominees: financial, regulatory and business
experience; familiarity with and participation in the local community;
integrity, honesty and reputation; dedication to the Company and its
stockholders; independence; and any other factors the Nominating/Corporate
Governance Committee deems relevant, including age, diversity, size of the Board
of Directors and regulatory disclosure obligations.
In addition, prior to nominating an existing director for re-election
to the Board of Directors, the Nominating/Corporate Governance Committee will
consider and review an existing director's Board and committee attendance and
performance; length of Board service; experience, skills and contributions that
the existing director brings to the Board; and independence.
PROCESS FOR IDENTIFYING AND EVALUATING NOMINEES
The Nominating/Corporate Governance Committee process that it follows
when it identifies and evaluates individuals to be nominated for election to the
Board of Directors is as follows:
IDENTIFICATION. For purposes of identifying nominees for the Board of
Directors, the Nominating/Corporate Governance Committee relies on personal
contacts of the committee and other members of the Board of Directors as well as
its knowledge of members of the Bank's local communities. The
Nominating/Corporate Governance Committee will also consider director candidates
recommended by stockholders in accordance with the policy and procedures set
forth above. The Nominating/Corporate Governance Committee has not previously
used an independent search firm in identifying nominees.
EVALUATION. In evaluating potential nominees, the Nominating/Corporate
Governance Committee determines whether the candidate is eligible and qualified
for service on the Board of Directors by evaluating the candidate under the
selection criteria set forth above. In addition, the Nominating/Corporate
Governance Committee will conduct a check of the individual's background and may
interview the candidate.
SUBMISSION OF BUSINESS PROPOSALS AND
STOCKHOLDER NOMINATIONS
The Company must receive proposals that stockholders seek to include in
the proxy statement for the Company's next annual meeting no later than February
10, 2006. If next year's annual meeting is held on a date more than 30 calendar
days from July 14, 2006, a stockholder proposal must be received by a reasonable
time before the Company begins to print and mail its proxy solicitation for such
annual meeting. Any stockholder proposals will be subject to the requirements of
the proxy rules adopted by the Securities and Exchange Commission.
The Company's Bylaws provide that in order for a stockholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a stockholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 30 days prior to the
date of the annual meeting; provided that if less than 40 days' notice or prior
public disclosure of the date of the annual meeting is given to stockholders,
such notice must be received not later than the close of the 10th day following
the day on which notice of the date of the annual meeting was mailed to
stockholders or prior public disclosure of the meeting date was made. A copy of
the Bylaws may be obtained from the Company.
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STOCKHOLDER COMMUNICATIONS
The Company encourages stockholder communications to the Board of
Directors and/or individual directors. Communications regarding financial or
accounting policies may be made to the Chairman of the Audit/Compliance
Committee, Raymond L. Sisco, at (973) 473-2200. Other communications to the
Board of Directors may be made to the Chairman of the Nominating/Corporate
Governance Committee, John H. Peto, at (973) 473-2200. Communications to
individual directors may be made to such director at (973) 473-2200.
MISCELLANEOUS
The Company will pay the cost of this proxy solicitation. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Clifton Savings Bancorp common stock. In addition to
soliciting proxies by mail, directors, officers and regular employees of the
Company may solicit proxies personally or by telephone without receiving
additional compensation. Regan & Associates, Inc., a proxy solicitation firm,
will be paid a fee of $15,000, plus of out-of-pocket expenses, to assist the
Company in soliciting proxies.
The Company's Annual Report to Stockholders has been mailed to persons
who were stockholders as of the close of business on June 3, 2005. Any
stockholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Corporate Secretary of the Company. The Annual Report is not
to be treated as part of the proxy solicitation material or as having been
incorporated in this proxy statement by reference.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, WITHOUT EXHIBITS,
FOR THE YEAR ENDED MARCH 31, 2005, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO PERSONS WHO WERE STOCKHOLDERS AS
OF THE CLOSE OF BUSINESS ON JUNE 3, 2005 UPON WRITTEN REQUEST TO BART D'AMBRA,
CLIFTON SAVINGS BANCORP, INC., 1433 VAN HOUTEN AVENUE, CLIFTON, NEW JERSEY
07015.
If you and others who share your address own shares in street name,
your broker or other holder of record may be sending only one annual report and
proxy statement to your address. This practice, known as "householding," is
designed to reduce our printing and postage costs. However, if a stockholder
residing at such an address wishes to receive a separate annual report or proxy
statement in the future, he or she should contact the broker or other holder of
record. If you own your shares in street name and are receiving multiple copies
of our annual report and proxy statement, you can request householding by
contacting your broker or other holder of record.
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Whether or not you plan to attend the annual meeting, please vote by
marking, signing, dating and promptly returning the enclosed WHITE proxy card in
the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Walter Celuch
Walter Celuch
PRESIDENT AND CORPORATE SECRETARY
Clifton, New Jersey
June 10, 2005
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APPENDIX A
CLIFTON SAVINGS BANCORP, INC.
2005 EQUITY INCENTIVE PLAN
1. PURPOSE OF PLAN.
The purposes of this 2005 Equity Incentive Plan are to provide incentives and
rewards to those employees and directors largely responsible for the success and
growth of Clifton Savings Bancorp, Inc. and its Affiliates, and to assist all
these entities in attracting and retaining directors, executives and other key
employees with experience and ability.
2. DEFINITIONS.
"Affiliate" means any "parent corporation" or "subsidiary corporation" of the
Company, as such terms are defined in Sections 424(e) and 424(f) of the Code.
"Award" means one or more of the following: Restricted Stock Awards and Stock
Options, as set forth in Section 6 of the Plan.
"Board of Directors" means the board of directors of the Company.
"Change in Control" means any one of the following events occurs:
(a) Merger: The Company merges into or consolidates with another
corporation, or merges another corporation into the Company,
and as a result, less than a majority of the combined voting
power of the resulting corporation immediately after the
merger or consolidation is held by persons who were
stockholders of the Company immediately before the merger or
consolidation.
(b) Acquisition of Significant Share Ownership: The Company files,
or is required to file, a report on Schedule 13D or another
form or schedule (other than Schedule 13G) required under
Sections 13(d) or 14(d) of the Securities Exchange Act of
1934, if the schedule discloses that the filing person or
persons acting in concert has or have become the beneficial
owner of 25% or more of a class of the Company's voting
securities, but this clause (b) shall not apply to beneficial
ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or
indirectly beneficially owns 50% or more of its outstanding
voting securities.
(c) Change in Board Composition: During any period of two
consecutive years, individuals who constitute the Company's
Board of Directors at the beginning of the two-year period
cease for any reason to constitute at least a majority of the
Company's Board of Directors; provided, however, that for
purposes of this clause (c), each director who is first
elected by the board (or first nominated by the board for
election by the stockholders) by a vote of at least two-thirds
(2/3) of the directors who were directors at the beginning of
the two-year period shall be deemed to have also been a
director at the beginning of such period; or
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(d) Sale of Assets: The Company sells to a third party all or
substantially all of its assets.
Notwithstanding anything in this Plan to the contrary, in no event
shall the conversion of the Bank from the mutual to the stock form of ownership
(including, without limitation, the formation of a stock holding company)
constitute a "Change in Control" for purposes of this Plan.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee designated, pursuant to Section 3 of the Plan,
to administer the Plan.
"Common Stock" means the common stock of the Company, par value $0.01 per share.
"Company" means Clifton Savings Bancorp, Inc. and any entity which succeeds to
the business of Clifton Savings Bancorp, Inc.
"Disability" means a physical or mental condition, determined by the Committee
after review of those medical reports deemed satisfactory for such purpose,
which renders the Participant totally and permanently incapable of engaging in
any substantial gainful employment based on the Participant's education,
training and experience.
"Employee" means any person employed by the Company or an Affiliate. Directors
who are also employed by the Company or an Affiliate shall be considered
Employees under the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means the price at which an individual may purchase a share of
Common Stock pursuant to an Option.
"Fair Market Value" means the closing sales price reported on the Nasdaq
National Market (as published by The Wall Street Journal, if published) on such
date or, if the Common Stock was not traded on such date, on the immediately
preceding day on which the Common Stock was traded thereon or the last previous
date on which a sale is reported. The Committee also may adopt a different
methodology for determining Fair Market Value with respect to one or more Awards
if a different methodology is necessary or advisable to secure any intended
favorable tax, legal or other treatment for the particular Award(s).
"Incentive Stock Option" means a Stock Option granted under the Plan, that is
intended to meet the requirements of Section 422 of the Code.
"Non-Statutory Stock Option" means a Stock Option granted to an individual under
the Plan that is not intended to be and is not identified as an Incentive Stock
Option, or an Option granted under the Plan that is intended to be and is
identified as an Incentive Stock Option, but that does not meet the requirements
of Section 422 of the Code.
"Option" or "Stock Option" means an Incentive Stock Option or a Non-Statutory
Stock Option, as applicable.
"Outside Director" means a member of the Board(s) of Directors of the Company or
an Affiliate who is not also an Employee.
"Participant" means an Employee who is granted an Award pursuant to the terms of
the Plan.
"Plan" means this Clifton Savings Bancorp, Inc. 2005 Equity Incentive Plan.
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"Restricted Stock Award" means an Award of shares of restricted stock granted to
an individual pursuant to Section 6(b) of the Plan.
"Retirement" means retirement from employment with the Company or an Affiliate
on or after the Employee's attainment of age 65. "Retirement" with respect to an
Outside Director means termination of service on the board(s) of directors of
the Company or any Affiliate in accordance with applicable Company policy
following the provision of written notice to such board(s) of directors of the
Outside Director's intention to retire.
3. ADMINISTRATION.
(a) The Committee shall administer the Plan. The Committee shall
consist of two or more disinterested directors of the Company, who shall be
appointed by the Board of Directors. A member of the Board of Directors shall be
deemed to be disinterested only if he or she satisfies: (i) such requirements as
the Securities and Exchange Commission may establish for non-employee directors
administering plans intended to qualify for exemption under Rule 16b-3 (or its
successor) of the Exchange Act and (ii) such requirements as the Internal
Revenue Service may establish for outside directors acting under plans intended
to qualify for exemption under Section 162(m)(4)(C) of the Code. The Board of
Directors or the Committee may also delegate, to the extent permitted by
applicable law, to one or more officers of the Company, its powers under this
Plan to (a) designate the officers and employees of the Company who will receive
Awards and (b) determine the number of Awards to be received by them, pursuant
to a resolution that specifies the total number of rights or options that may be
granted under the delegation, provided that no officer may be delegated the
power to designate himself or herself as a recipient of such options or rights.
(b) Subject to paragraph (a) of this Section 3, the Committee shall:
(i) select the individuals who are to receive grants of Awards under
the Plan;
(ii) determine the type, number, vesting requirements and other
features and conditions of Awards made under the Plan;
(iii) interpret the Plan and Award Agreements (as defined below); and
(iv) make all other decisions related to the operation of the Plan.
(c) Each Award granted under the Plan shall be evidenced by a written
agreement (i.e., an "Award Agreement"). Each Award Agreement shall constitute a
binding contract between the Company or an Affiliate and the Participant, and
every Participant, upon acceptance of an Award Agreement, shall be bound by the
terms and restrictions of the Plan and the Award Agreement. The terms of each
Award Agreement shall be set in accordance with the Plan, but each Award
Agreement may also include any additional provisions and restrictions determined
by the Committee. In particular, and at a minimum, the Committee shall set forth
in each Award Agreement:
(i) the type of Award granted;
(ii) the Exercise Price for any Option;
(iii) the number of shares or rights subject to the Award;
(iv) the expiration date of the Award;
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(v) the manner, time and rate (cumulative or otherwise) of exercise
or vesting of the Award; and
(vi) the restrictions, if any, placed on the Award, or upon shares
which may be issued upon the exercise or vesting of the Award.
The Chairman of the Committee and such other directors and employees as
shall be designated by the Committee are hereby authorized to execute Award
Agreements on behalf of the Company or an Affiliate and to cause them to be
delivered to the recipients of Awards granted under the Plan.
4. ELIGIBILITY.
Subject to the terms of the Plan, Employees and Outside Directors, as the
Committee shall determine from time to time, shall be eligible to participate in
the Plan.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS.
5.1 Shares Available. Subject to the provisions of Section 7, the capital stock
that may be delivered under this Plan shall be shares of the Company's
authorized but unissued Common Stock and any shares of its Common Stock held as
treasury shares.
5.2 Share Limits. The maximum number of shares of Common Stock that may be
delivered pursuant to Awards granted under this Plan (the "Share Limit") equals
2,094,390 shares. The following limits also apply with respect to Awards granted
under this Plan:
(a) The maximum number of shares of Common Stock that may be delivered
pursuant to Stock Options granted under this Plan is 1,495,993 shares.
(b) The maximum number of shares of Common Stock that may be delivered
pursuant to Restricted Stock Awards granted under this Plan is 598,397 shares.
5.3 Awards Settled in Cash, Reissue of Awards and Shares. To the extent that an
Award is settled in cash or a form other than shares of Common Stock, the shares
that would have been delivered had there been no such cash or other settlement
shall not be counted against the shares available for issuance under this Plan.
Shares that are subject to or underlie Awards which expire or for any reason are
cancelled or terminated, are forfeited, fail to vest, or for any other reason
are not paid or delivered under this Plan shall again be available for
subsequent Awards under this Plan.
5.4 Reservation of Shares; No Fractional Shares; Minimum Issue. The Company
shall at all times reserve a number of shares of Common Stock sufficient to
cover the Company's obligations and contingent obligations to deliver shares
with respect to Awards then outstanding under this Plan. No fractional shares
shall be delivered under this Plan. The Committee may pay cash in lieu of any
fractional shares in settlements of Awards under this Plan. No fewer than 100
shares may be purchased on exercise of any Award unless the total number
purchased or exercised is the total number at the time available for purchase or
exercise under the Award.
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6. AWARDS.
6.1 The Committee shall determine the type or types of Award(s) to be made to
each selected eligible individual. Awards may be granted singly, in combination
or in tandem. Awards also may be made in combination or in tandem with, in
replacement of, as alternatives to, or as the payment form for grants or rights
under any other employee or compensation plan of the Company. The types of
Awards that may be granted under this Plan are:
(a) STOCK OPTIONS.
The Committee may, subject to the limitations of this Plan and the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant Stock Options to Employees and Outside Directors, subject to
terms and conditions as it may determine, to the extent that such terms and
conditions are consistent with the following provisions:
(i) EXERCISE PRICE. The Exercise Price shall not be less than one
hundred percent (100%) of the Fair Market Value of the Common Stock on
the date of grant.
(ii) TERMS OF OPTIONS. In no event may an individual exercise an
Option, in whole or in part, more than ten (10) years from the date of
grant.
(iii) NON-TRANSFERABILITY. Unless otherwise determined by the
Committee, an individual may not transfer, assign, hypothecate, or
dispose of an Option in any manner, other than by will or the laws of
intestate succession. The Committee may, however, in its sole
discretion, permit the transfer or assignment of a Non Statutory Stock
Option, if it determines that the transfer or assignment is for valid
estate planning purposes and is permitted under the Code and Rule 16b-3
of the Exchange Act. For purposes of this Section 6.1(a), a transfer
for valid estate planning purposes includes, but is not limited to,
transfers:
(1) to a revocable INTER VIVOS trust, as to which an individual is
both settlor and trustee;
(2) for no consideration to: (a) any member of the individual's
Immediate Family; (b) a trust solely for the benefit of
members of the individual's Immediate Family; (c) any
partnership whose only partners are members of the
individual's Immediate Family; or (d) any limited liability
corporation or other corporate entity whose only members or
equity owners are members of the individual's Immediate
Family.
For purposes of this Section, "Immediate Family" includes, but
is not necessarily limited to, a Participant's parents,
grandparents, spouse, children, grandchildren, siblings
(including half brothers and sisters), and individuals who are
family members by adoption. Nothing contained in this Section
shall be construed to require the Committee to give its
approval to any transfer or assignment of any Non-Statutory
Stock Option or portion thereof, and approval to transfer or
assign any Non-Statutory Stock Option or portion thereof does
not mean that such approval will be given with respect to any
other Non-Statutory Stock Option or portion thereof. The
transferee or assignee of any Non-Statutory Stock Option shall
be subject to all of the terms and conditions applicable to
such Non-Statutory Stock Option immediately prior to the
transfer or assignment and shall be subject to any other
conditions prescribed by the Committee with respect to such
Non-Statutory Stock Option.
(iv) SPECIAL RULES FOR INCENTIVE STOCK OPTIONS. Notwithstanding the
foregoing provisions, the following rules shall further apply
to grants of Incentive Stock Options:
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(1) If an Employee owns or is treated as owning, for purposes of
Section 422 of the Code, Common Stock representing more than
ten percent (10%) of the total combined voting securities of
the Company at the time the Committee grants the Incentive
Stock Option (a "10% Owner"), the Exercise Price shall not be
less than one hundred and ten percent (110%) of the Fair
Market Value of the Common Stock on the date of grant.
(2) An Incentive Stock Option granted to a 10% Owner shall not be
exercisable more than five (5) years from the date of grant.
(3) To the extent the aggregate Fair Market Value of shares of
Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Employee during any
calendar year, under the Plan or any other stock option plan
of the Company, exceeds $100,000, or such higher value as may
be permitted under Section 422 of the Code, Incentive Stock
Options in excess of the $100,000 limit shall be treated as
Non-Statutory Stock Options. Fair Market Value shall be
determined as of the date of grant for each Incentive Stock
Option.
(4) Each Award Agreement for an Incentive Stock Option shall
require the individual to notify the Committee within ten (10)
days of any disposition of shares of Common Stock under the
circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions).
(b) RESTRICTED STOCK AWARDS.
The Committee may make grants of Restricted Stock Awards, which shall
consist of the grant of some number of shares of Common Stock to an individual
upon such terms and conditions as it may determine, to the extent such terms and
conditions are consistent with the following provisions:
(i) GRANTS OF STOCK. Restricted Stock Awards may only be granted in
whole shares of Common Stock.
(ii) NON-TRANSFERABILITY. Except to the extent permitted by the Code,
the rules promulgated under Section 16(b) of the Exchange Act or any
successor statutes or rules:
(1) The recipient of a Restricted Stock Award grant shall not sell,
transfer, assign, pledge, or otherwise encumber shares subject
to the grant until full vesting of such shares has occurred. For
purposes of this section, the separation of beneficial ownership
and legal title through the use of any "swap" transaction is
deemed to be a prohibited encumbrance.
(2) Unless otherwise determined by the Committee, and except in the
event of the Participant's death or pursuant to a qualified
domestic relations order, a Restricted Stock Award grant is not
transferable and may be earned only by the individual to whom it
is granted during his or her lifetime. Upon the death of a
Participant, a Restricted Stock Award is transferable by will or
the laws of descent and distribution. The designation of a
beneficiary shall not constitute a transfer.
(3) If the recipient of a Restricted Stock Award is subject to the
provisions of Section 16 of the Exchange Act, shares of Common
Stock subject to the grant may not, without the written consent
of the Committee (which consent may be given in the Award
Agreement), be sold or otherwise disposed of within six (6)
months following the date of grant.
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(iii) ISSUANCE OF CERTIFICATES. Unless otherwise held in trust and
registered in the name of the Plan trustee (if appointed by the
Company), reasonably promptly after the date of grant of shares of
Common Stock pursuant to a Restricted Stock Award, the Company shall
cause to be issued a stock certificate evidencing such shares,
registered in the name of the Participant to whom the Restricted Stock
Award was granted; provided, however, that the Company may not cause a
stock certificate to be issued unless it has received a stock power
duly endorsed in blank with respect to such shares. Each stock
certificate shall bear the following legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF
STOCK REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS,
TERMS AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND
RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE CLIFTON
SAVINGS BANCORP, INC. 2005 EQUITY INCENTIVE PLAN AND THE
RELATED AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED
OWNER OF SUCH SHARES AND CLIFTON SAVINGS BANCORP, INC. OR ITS
AFFILIATES. A COPY OF THE PLAN AND AWARD AGREEMENT IS ON FILE
IN THE OFFICE OF THE CORPORATE SECRETARY OF CLIFTON SAVINGS
BANCORP, INC.
This legend shall not be removed until the individual becomes vested in
such shares pursuant to the terms of the Plan and Award Agreement. Each
certificate issued pursuant to this Section 6.1(b) shall be held by the
Company or its Affiliates, unless the Committee determines otherwise.
(iv) TREATMENT OF DIVIDENDS. Participants are entitled to all dividends
and other distributions declared and paid on all shares of Common Stock
subject to a Restricted Stock Award, from and after the date such
shares are awarded or from and after such later date as may be
specified by the Committee in the Award Agreement, and the Participant
shall not be required to return any such dividends or other
distributions to the Company in the event of forfeiture of the
Restricted Stock Award. In the event the Committee establishes a trust
for the Plan, the Committee may elect to distribute dividends and other
distributions at the time the Restricted Stock Award vests or pay the
dividends (or other distributions) directly to the Participants.
(v) VOTING OF RESTRICTED STOCK AWARDS. Participants who are granted
Restricted Stock Awards may vote or direct the Plan trustee to vote, as
applicable, all unvested shares of Common Stock subject to their
Restricted Stock Awards.
6.2 Payments and Deferrals. Payment for Awards may be made in the form of
cash, Common Stock, or combinations thereof as the Committee shall determine,
and with such restrictions as it may impose. The Committee may also require or
permit Participants to elect to defer the issuance of shares or the settlement
of Awards in cash under such rules and procedures as it may establish under this
Plan. The Committee may also provide that deferred settlements include the
payment or crediting of interest or other earnings on the deferral amounts, or
the payment or crediting of dividend equivalents where the deferred amounts are
denominated in shares.
6.3 Consideration for Awards. The Exercise Price for any Award granted
under this Plan or the Common Stock to be delivered pursuant to an Award, as
applicable, may be paid by means of any lawful consideration as determined by
the Committee, including, without limitation, one or a combination of the
following methods:
(a) cash, check payable to the order of the Company, or electronic
funds transfer;
(b) the delivery of previously owned shares of Common Stock;
(c) reduction in the number of shares otherwise deliverable pursuant
to the Award; or
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(d) subject to such procedures as the Committee may adopt, pursuant
to a "cashless exercise" with a third party who provides financing for the
purposes of (or who otherwise facilitates) the purchase or exercise of Awards.
In no event shall any shares newly-issued by the Company be issued for less than
the minimum lawful consideration for such shares or for consideration other than
consideration permitted by applicable state law. In the event that the Committee
allows a Participant to exercise an Award by delivering shares of Common Stock
previously owned by such Participant and unless otherwise expressly provided by
the Committee, any shares delivered which were initially acquired by the
Participant from the Company (upon exercise of a stock option or otherwise) must
have been owned by the Participant at least six months as of the date of
delivery. Shares of Common Stock used to satisfy the Exercise Price of an Option
shall be valued at their Fair Market Value on the date of exercise. The Company
will not be obligated to deliver any shares unless and until it receives full
payment of the Exercise Price and any related withholding obligations under
Section 9.5, or until any other conditions applicable to exercise or purchase
have been satisfied. Unless expressly provided otherwise in the applicable Award
Agreement, the Committee may at any time eliminate or limit a Participant's
ability to pay the purchase or Exercise Price of any Award or shares by any
method other than cash payment to the Company.
7. EFFECT OF TERMINATION OF SERVICE ON AWARDS.
7.1 General. The Committee shall establish the effect of a termination of
employment or service on the continuation of rights and benefits available under
an Award or this Plan and, in so doing, may make distinctions based upon, INTER
ALIA, the cause of termination and type of Award.
7.2 Events Not Deemed Terminations of Employment or Service. Unless Company
policy or the Committee provides otherwise, the employment relationship shall
not be considered terminated in the case of (a) sick leave, (b) military leave,
or (c) any other leave of absence authorized by the Company or the Committee;
provided that, unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more than 90
days. In the case of any Employee on an approved leave of absence, continued
vesting of the Award while on leave may be suspended until the Employee returns
to service, unless the Committee otherwise provides or applicable law otherwise
requires. In no event shall an Award be exercised after the expiration of the
term set forth in the Award Agreement.
7.3 Effect of Change of Affiliate Status. For purposes of this Plan and any
Award, if an entity ceases to be an Affiliate of the Company, a termination of
employment or service shall be deemed to have occurred with respect to each
individual who does not continue as an Employee or Outside Director with another
entity within the Company after giving effect to the Affiliate's change in
status.
8. ADJUSTMENTS; ACCELERATION UPON A CHANGE IN CONTROL.
8.1 Adjustments. Upon, or in contemplation of, any reclassification,
recapitalization, stock split (including a stock split in the form of a stock
dividend) or reverse stock split ("stock split"); any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution with respect to the Common Stock (whether in
the form of securities or property); any exchange of Common Stock or other
securities of the Company, or any similar, unusual or extraordinary corporate
transaction affecting the Common Stock; or a sale of all or substantially all
the business or assets of the Company in its entirety; then the Committee shall,
in such manner, to such extent (if any) and at such times as it deems
appropriate and equitable under the circumstances:
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(a) proportionately adjust any or all of: (1) the number and type of
shares of Common Stock (or other securities) that thereafter may be made the
subject of Awards (including the specific Share Limits, maximums and numbers of
shares set forth elsewhere in this Plan); (2) the number, amount and type of
shares of Common Stock (or other securities or property) subject to any or all
outstanding Awards; (3) the grant, purchase, or Exercise Price of any or all
outstanding Awards; (4) the securities, cash or other property deliverable upon
exercise or payment of any outstanding Awards; or (5) the performance standards
applicable to any outstanding Awards; or
(b) make provision for a cash payment or for the assumption,
substitution or exchange of any or all outstanding Awards, based upon the
distribution or consideration payable to holders of the Common Stock.
8.2 The Committee may adopt such valuation methodologies for outstanding
Awards as it deems reasonable in the event of a cash or property settlement and,
in the case of Options, may base such settlement solely upon the excess, if any,
of the per share amount payable upon or in respect of such event over the
Exercise Price or base price of the Award. With respect to any Award of an
Incentive Stock Option, the Committee may make an adjustment that causes the
Option to cease to qualify as an Incentive Stock Option without the consent of
the affected Participant.
8.3 Upon any of the events set forth in Section 8.1, the Committee may take
such action prior to such event to the extent that the Committee deems the
action necessary to permit the Participant to realize the benefits intended to
be conveyed with respect to the Awards in the same manner as is or will be
available to stockholders of the Company generally. In the case of any stock
split or reverse stock split, if no action is taken by the Committee, the
proportionate adjustments contemplated by Section 8.1(a) above shall
nevertheless be made.
8.4 Automatic Acceleration of Awards. Unless otherwise determined by the
Committee, upon a Change in Control of the Company, each Option then outstanding
shall become fully vested and remain exercisable for its remaining term and all
Restricted Stock Awards then outstanding shall fully vest free of restrictions.
9. MISCELLANEOUS PROVISIONS.
9.1 Compliance with Laws. This Plan, the granting and vesting of Awards under
this Plan, the offer, issuance and delivery of shares of Common Stock, the
acceptance of promissory notes and/or the payment of money under this Plan or
under Awards are subject to compliance with all applicable federal and state
laws, rules and regulations (including, but not limited to, state and federal
securities laws) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. The person acquiring any
securities under this Plan will, if requested by the Company, provide such
assurances and representations to the Company as may be deemed necessary or
desirable to assure compliance with all applicable legal and accounting
requirements.
9.2 Claims. No person shall have any claim or rights to an Award (or
additional Awards, as the case may be) under this Plan, subject to any express
contractual rights to the contrary (set forth in a document other than this
Plan).
9.3 No Employment/Service Contract. Nothing contained in this Plan (or in any
other documents under this Plan or in any Award Agreement) shall confer upon any
Participant any right to continue in the employ or other service of the Company,
constitute any contract or agreement of employment or other service or affect an
Employee's status as an employee-at-will, nor interfere in any way with the
right of the Company to change a Participant's compensation or other benefits,
or terminate his or her employment or other service, with or without cause.
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Nothing in this Section 9.3, however, is intended to adversely affect any
express independent right of such Participant under a separate employment or
service contract other than an Award Agreement.
9.4 Plan Not Funded. Awards payable under this Plan shall be payable in
shares of Common Stock or from the general assets of the Company. No
Participant, beneficiary or other person shall have any right, title or interest
in any fund or in any specific asset (including shares of Common Stock, except
as expressly provided otherwise) of the Company by reason of any Award
hereunder. Neither the provisions of this Plan (or of any related documents),
nor the creation or adoption of this Plan, nor any action taken pursuant to the
provisions of this Plan shall create, or be construed to create, a trust of any
kind or a fiduciary relationship between the Company and any Participant,
beneficiary or other person. To the extent that a Participant, beneficiary or
other person acquires a right to receive payment pursuant to any Award
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Company.
9.5 Tax Withholding. Upon any exercise, vesting, or payment of any Award, or
upon the disposition of shares of Common Stock acquired pursuant to the exercise
of an Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall have the right, at
its option, to:
(a) require the Participant (or the Participant's personal
representative or beneficiary, as the case may be) to pay or provide for payment
of at least the minimum amount of any taxes which the Company may be required to
withhold with respect to such Award or payment; or
(b) deduct from any amount otherwise payable in cash to the Participant
(or the Participant's personal representative or beneficiary, as the case may
be) the minimum amount of any taxes which the Company may be required to
withhold with respect to such cash payment.
In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Committee may, in its
sole discretion (subject to Section 9.1) grant (either at the time of the Award
or thereafter) to the Participant the right to elect, pursuant to such rules and
subject to such conditions as the Committee may establish, to have the Company
reduce the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares, valued in a consistent manner at their Fair Market
Value or at the sales price, in accordance with authorized procedures for
cashless exercises, necessary to satisfy the minimum applicable withholding
obligation on exercise, vesting or payment. In no event shall the shares
withheld exceed the minimum whole number of shares required for tax withholding
under applicable law. The Company may, with the Committee's approval, accept one
or more promissory notes from any Participant in connection with taxes required
to be withheld upon the exercise, vesting or payment of any Award under this
Plan; provided, however, that any such note shall be subject to terms and
conditions established by the Committee and the requirements of applicable law.
9.6 Effective Date, Termination and Suspension, Amendments.
(a) This Plan is effective upon receipt of stockholder approval. Unless
earlier terminated by the Board, this Plan shall terminate at the close of
business on the day before the tenth anniversary of the day approved by
stockholders of the Company. After the termination of this Plan either upon such
stated expiration date or its earlier termination by the Board, no additional
Awards may be granted under this Plan, but previously granted Awards (and the
authority of the Committee with respect thereto, including the authority to
amend such Awards) shall remain outstanding in accordance with their applicable
terms and conditions and the terms and conditions of this Plan.
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(b) Board Authorization. Subject to applicable laws and regulations,
the Board of Directors may, at any time, terminate or, from time to time, amend,
modify or suspend this Plan, in whole or in part; provided, however, that no
amendment may have the effect of repricing Options. No Awards may be granted
during any period that the Board of Directors suspends this Plan.
(c) Stockholder Approval. To the extent then required by applicable
law or any applicable listing agency or required under Sections 162, 422 or 424
of the Code to preserve the intended tax consequences of this Plan, or deemed
necessary or advisable by the Board, any amendment to this Plan shall be subject
to stockholder approval.
(d) Limitations on Amendments to Plan and Awards. No amendment,
suspension or termination of this Plan or change affecting any outstanding Award
shall, without the written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Company under any Award granted under this Plan prior to
the effective date of such change. Changes, settlements and other actions
contemplated by Section 8 shall not be deemed to constitute changes or
amendments for purposes of this Section 9.6.
9.7 Governing Law; Compliance with Regulations; Construction; Severability.
(a) This Plan, the Awards, all documents evidencing Awards and all
other related documents shall be governed by, and construed in accordance with,
the laws of the United States.
(b) This Plan will comply with the requirements set forth in
12 C.F.R. Sec. 575.8 and 12 C.F.R. Sec. 563b.500. Notwithstanding any other
provision in this Plan, no shares of Common Stock shall be issued with respect
to any Award to the extent that such issuance would cause Clifton MHC to fail to
qualify as a mutual holding company under applicable federal regulations.
(c) Severability. If a court of competent jurisdiction holds any
provision invalid and unenforceable, the remaining provisions of this Plan shall
continue in effect.
(d) Plan Construction; Rule 16b-3. It is the intent of the Company
that the Awards and transactions permitted by Awards be interpreted in a manner
that, in the case of Participants who are or may be subject to Section 16 of the
Exchange Act, qualify, to the maximum extent compatible with the express terms
of the Award, for exemption from matching liability under Rule 16b-3 promulgated
under the Exchange Act. Notwithstanding the foregoing, the Company shall have no
liability to any Participant for Section 16 consequences of Awards or events
affecting Awards if an Award or event does not so qualify.
9.8 Captions. Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of this Plan or any provision thereof.
9.9 Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed
to limit the authority of the Board of Directors or the Committee to grant
Awards or authorize any other compensation, with or without reference to the
Common Stock, under any other plan or authority.
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REVOCABLE PROXY
CLIFTON SAVINGS BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
JULY 14, 2005
9:00 A.M. EASTERN TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John H. Peto, Raymond L. Sisco and John
Stokes, each with full power of substitution, to act as proxy for the
undersigned, and to vote all shares of common stock of the Company which the
undersigned is entitled to vote only at the Annual Meeting of Stockholders, to
be held on July 14, 2005, at 9:00 a.m. local time, at the Valley Regency located
at 1129 Valley Road, Clifton, New Jersey, with all of the powers the undersigned
would possess if personally present at such meeting, as indicated to the right:
1. The election as directors of all nominees listed (except as marked
to the contrary below).
FOR WITHHOLD FOR ALL EXCEPT
/_/ /_/ /_/
John A. Celentano, Jr. and Thomas A. Miller
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL
EXCEPT" AND WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
- --------------------------------------------------------------------------------
2. The approval of the Clifton Savings Bancorp, Inc. 2005 Equity
Incentive Plan.
FOR AGAINST ABSTAIN
/_/ /_/ /_/
3. The ratification of the appointment of Beard Miller Company LLP as
independent auditors of Clifton Savings Bancorp, Inc. for the year
ending March 31, 2006.
FOR AGAINST ABSTAIN
/_/ /_/ /_/
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE LISTED
PROPOSALS.
45
THIS PROXY, PROPERLY SIGNED AND DATED, IS REVOCABLE AND WILL BE VOTED
AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED
"FOR" THE PROPOSALS LISTED. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING THIS PROXY WILL BE VOTED BY THE PROXIES IN THEIR BEST JUDGMENT. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED
AT THE ANNUAL MEETING. THIS PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON THE
BOARD OF DIRECTORS TO VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS
DIRECTOR WHERE THE NOMINEES ARE UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE
AND MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
Please be sure to sign and date this Proxy in the box below.
- --------------------------------------------------------------------------------
Date ______________________ __________________________________________
Stockholder sign above
__________________________________________
Co-holder (if any) sign above
- --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
CLIFTON SAVINGS BANCORP, INC.
- --------------------------------------------------------------------------------
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders and of a
Proxy Statement dated June 10, 2005 and of the Annual Report to Stockholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
_________________________________________
_________________________________________
_________________________________________
46
[Please Print on Clifton Savings Bancorp, Inc. Letterhead]
Dear ESOP Participant:
On behalf of the Board of Directors, I am forwarding to you the
attached YELLOW vote authorization form for the purpose of conveying your voting
instructions to First Bankers Trust Services, Inc., our ESOP Trustee, on the
proposals presented at the Annual Meeting of Stockholders of Clifton Savings
Bancorp, Inc. (the "Company") on July 14, 2005. Also enclosed is a Notice and
Proxy Statement for the Company's Annual Meeting of Stockholders and a Clifton
Savings Bancorp, Inc. Annual Report to Stockholders.
As a participant in the Clifton Savings Bank, S.L.A. Employee Stock
Ownership Plan (the "ESOP"), you are entitled to instruct the ESOP Trustee how
to vote the shares of Company common stock allocated to your ESOP account as of
June 3, 2005, the record date for the Annual Meeting.
The Trustee will vote all allocated shares of Company common stock as
directed by participants. The Trustee will vote unallocated shares of Common
Stock held in the ESOP Trust and the shares for which timely instructions are
not received in a manner calculated to most accurately reflect the instructions
the ESOP Trustee receives from participants, subject to its fiduciary duties.
To direct the ESOP Trustee how to vote the shares of common stock
allocated to your ESOP account, please complete and sign the enclosed YELLOW
vote authorization form and return it in the enclosed, postage-paid envelope no
later than JULY 7, 2005. Your vote will not be revealed, directly or indirectly,
to any employee or director of the Company or Clifton Savings Bank, S.L.A.
Sincerely,
/s/ Walter Celuch
Walter Celuch
President and Corporate Secretary
47
VOTE AUTHORIZATION FORM
-----------------------
I understand that First Bankers Trust Services, Inc. (the "ESOP
Trustee"), is the holder of record and custodian of all shares of Clifton
Savings Bancorp, Inc. (the "Company") common stock under the Clifton Savings
Bank, S.L.A. Employee Stock Ownership Plan. I understand that my voting
instructions are solicited on behalf of the Company's Board of Directors for the
Annual Meeting of Stockholders to be held on July 14, 2005.
You are to vote my shares as follows:
1. The election as directors of all nominees listed (except as marked
to the contrary below).
John A. Celentano, Jr. and Thomas A. Miller
FOR VOTE WITHHELD FOR ALL EXCEPT
/_/ /_/ /_/
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
- --------------------------------------------------------------------------------
2. The approval of the Clifton Savings Bancorp, Inc. 2005 Equity
Incentive Plan.
FOR VOTE WITHHELD FOR ALL EXCEPT
/_/ /_/ /_/
3. The ratification of the appointment of Beard Miller Company LLP as
independent auditors of Clifton Savings Bancorp, Inc. for the year
ending March 31, 2006.
FOR VOTE WITHHELD FOR ALL EXCEPT
/_/ /_/ /_/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
The ESOP Trustee is hereby authorized to vote all shares of Company
common stock allocated to me in its trust capacity as indicated above.
- --------------------------------- --------------------------------
Date Signature
PLEASE DATE, SIGN AND RETURN THIS FORM IN THE ENCLOSED POSTAGE-PAID ENVELOPE NO
LATER THAN JULY 7, 2005.
48
[Please Print on Clifton Savings Bancorp, Inc. Letterhead]
Dear 401(k) Plan Participant:
On behalf of the Board of Directors, I am forwarding to you the
attached BLUE vote authorization form for the purpose of conveying your voting
instructions to RS Group Trust Company, the Trustee for the Clifton Savings
Bancorp, Inc. Stock Fund (the "Employer Stock Fund") in the Clifton Savings
Bank, S.L.A. 401(k) Savings Plan (the "401(k) Plan"), on the proposals presented
at the Annual Meeting of Stockholders of Clifton Savings Bancorp, Inc. (the
"Company") on July 14, 2005. Also enclosed is a Notice and Proxy Statement for
the Company's Annual Meeting of Stockholders and a Clifton Savings Bancorp, Inc.
Annual Report to Stockholders.
As a participant in the Employer Stock Fund, you are entitled to direct
the Employer Stock Fund Trustee how to vote the shares of Company common stock
credited to your account as of June 3, 2005, the record date for the Annual
Meeting. To direct the Trustee how to vote the shares credited to your account,
please complete and sign the enclosed BLUE vote authorization form and return it
in the enclosed, postage-paid envelope no later than JULY 7, 2005. Your vote
will not be revealed, directly or indirectly, to any employee or director of the
Company or Clifton Savings Bank, S.L.A.
Sincerely,
/s/ Walter Celuch
Walter Celuch
President and Corporate Secretary
49
VOTE AUTHORIZATION FORM
-----------------------
I understand that RSGroup Trust Company (the "Trustee") is the holder
of record and custodian of all shares of Clifton Savings Bancorp, Inc. (the
"Company") common stock credited to me under the Clifton Savings Bank, S.L.A.
401(k) Savings Plan. I understand that my voting instructions are solicited on
behalf of the Company's Board of Directors for the Annual Meeting of
Stockholders to be held on July 14, 2005.
You are to vote my shares as follows:
1. The election as directors of all nominees listed (except as marked
to the contrary below).
John A. Celentano, Jr. and Thomas A. Miller
FOR VOTE WITHHELD FOR ALL EXCEPT
/_/ /_/ /_/
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
- --------------------------------------------------------------------------------
2. The approval of the Clifton Savings Bancorp, Inc. 2005 Equity
Incentive Plan.
FOR VOTE WITHHELD FOR ALL EXCEPT
/_/ /_/ /_/
3. The ratification of the appointment of Beard Miller Company LLP as
independent auditors of Clifton Savings Bancorp, Inc. for the year
ending March 31, 2006.
FOR VOTE WITHHELD FOR ALL EXCEPT
/_/ /_/ /_/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
The Trustee is hereby authorized to vote all shares of Company common
stock credited to me in its trust capacity as indicated above.
- ------------------------------- -------------------------------
Date Signature
PLEASE DATE, SIGN AND RETURN THIS FORM IN THE ENCLOSED POSTAGE-PAID ENVELOPE NO
LATER THAN JULY 7, 2005