Important Notice Concerning Limitations on
Trading in Provident New York Bancorp Stock
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To: Executive Officers and Directors of Provident New York Bancorp
From: Provident New York Bancorp
Date: July 27, 2007
1. As you may know, a "blackout period" will be imposed on transactions
involving the Provident New York Bancorp ("Company") Stock Fund (the
"Company Stock Fund") under the Provident Bank 401(k) Plan (the
"401(k) Plan"). This blackout period, described in more detail below,
is necessary in order for participants' accounts in the 401(k) Plan to
be transferred to Principal Financial Group ("Principal") in
connection with the change in retirement plan vendors. Under the
Sarbanes-Oxley Act of 2002, the executive officers and directors of
the Company will generally be prohibited from engaging in transactions
involving the Company's equity securities (including options and other
derivatives based on Company stock) during this blackout period.
2. As a result of the transfer of plan assets to Principal, during the
blackout period participants in the 401(k) Plan will be temporarily
unable to (1) make exchanges into or out of the Company Stock Fund
under the 401(k) Plan, (2) take distributions of money invested in the
Company Stock Fund, and (3) take loans of money invested in the
Company Stock Fund.
3. The blackout period is expected to begin at 4:00 pm, Eastern time, on
Tuesday, August 27, 2007, and end the week of September 9, 2007,
provided, however, that the blackout period may be extended due to
events that are beyond the control of Company. We will notify you of
any changes that affect the dates of the blackout period. In addition,
you can confirm the status of the blackout period by contacting Dan
Rothstein at (845) 369-8253.
4. Generally, during the blackout period, you are prohibited from
directly or indirectly, purchasing, selling or otherwise transferring
any equity security of Company that you acquired in connection with
your service as an executive officer or director. "Equity securities"
are defined broadly to include options and other derivatives. Covered
transactions are not limited to those involving your direct ownership,
but include any transaction in which you have a pecuniary interest.
5. The prohibition covers securities acquired "in connection with service
as a director or executive officer." This includes, among other
things, securities acquired under a compensatory plan or contract
(such as under a stock option, or a restricted stock grant), as a
direct or indirect inducement to employment or joining the Board of
Directors, in transactions between the individual and the company, and
as director qualifying shares. Securities acquired outside of an
individual's service as a director or executive officer (such as
shares acquired when the person was an employee but not yet an
executive officer) are not covered. However, if you hold both covered
shares and non-covered shares, any shares that you sell will be
presumed to come first from the covered shares unless you can identify
the source of the sold shares and show that you use the same
identification for all related purposes (such as tax reporting and
disclosure requirements).
6. The following are examples of transactions that you may not engage in
during the blackout period:
o Exercising stock options granted to you in connection with your
service as a director or executive officer.
o Selling Company stock that you acquired by exercising options.
o Selling Company stock that you originally received as a restricted
stock grant.
7. There are certain exemptions, including:
o Purchases or sales under 10b5-1(c) trading plans (so long as you do
not make or modify your election during the blackout period or at a
time when you are aware of the actual or approximate dates of the
blackout)
o Bona fide gifts, bequests and transfers pursuant to domestic relations
orders
8. If you engage in a transaction that violates these rules, you can be
required to disgorge your profits from the transaction, and you are
subject to civil and criminal penalties.
The rules summarized above are complex, and the criminal and civil
penalties that could be imposed upon executive officers and directors who
violate them could be severe.
We therefore request that you contact Dan Rothstein at (845) 369-8253
before engaging in any transaction involving Company stock or derivatives
based on Company stock during the blackout period, or if you believe that
any such transaction in which you have a pecuniary interest may occur
during the blackout period.