1
THE INFORMATION CONTAINED
IN THIS DOCUMENT IS CONFIDENTIAL
YOUR CUSTOMER SERVICE AND SALES REPRESENTATIVES
AT BOWNE OF NEW YORK ARE:
8 A.M. - 4 P.M.
TEAM LEADER
Mike Yelenovic (212) 229-7278
REPRESENTATIVES
Joe Guglielmo (212) 229-7273
Gina Brown (212) 229-7272
Joanne Dunkelman (212) 229-7279
Sheila Gladhill (212) 229-7278
4 P.M. - 12 A.M.
TEAM LEADER
Sharon Gosman (212) 229-7272
REPRESENTATIVES
Paul Lemma (212) 229-7278
Jackie Politowski (212) 229-7273
Terry Fisher (212) 229-7358
Tony Hagar (212) 229-7272
12 A.M. - 8 A.M.
TEAM LEADER
Susan Yulan (212) 229-7279
REPRESENTATIVES
Tony Barrett (212) 229-7278
Scott D'Amico (212) 229-7272
Mike Miller (212) 229-7273
Tom Caruso (212) 229-7279
FACSIMILE (212) 229-3400
SALES: GATES HELMS (212) 229-7315
WE WANT TO PROVIDE YOU WITH THE BEST SERVICE POSSIBLE. PLEASE HELP US IN OUR
EFFORT BY NOTING THE FOLLOWING POINTS:
- - Write legibly.
- - Mark-up your comments on the most recent version of the document.
- - Avoid use of soft lead pencils, felt tipped pens, fine point pens
(especially blue) or highlighters.
- - Indicate minor changes with an "X" in the margin.
- - Avoid use of scotch tape, "post-its" and staples whenever possible.
- - Specify blacklining requirements.
- - Allow 1/8 inch from the edge of the page whenever making changes.
(LOGO)
Bowne of New York, 345 Hudson Street, New York, New York 10014
2
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 sec.240.14a-11(c) or sec.240.14a-12
STERLING BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
STERLING BANCORP
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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3
(LOGO) STERLING BANCORP
540 MADISON AVENUE / NEW YORK, N.Y. 10022
LOUIS J. CAPPELLI
CHAIRMAN
& CHIEF EXECUTIVE
OFFICER
March 16, 1995
Dear Shareholder:
Sterling's Annual Meeting of Shareholders will be held on Thursday, April 20,
1995, at 10:00 a.m. in the Company's Board Room at 540 Madison Avenue (3rd
Floor), New York, N.Y. You are invited to attend.
1994 was highlighted by significant accomplishments at Sterling Bancorp,
evidence that our corporate strategy is being successfully implemented. Since
1992, Sterling's earnings have grown a healthy 55%, a trend reflective of your
new management team's ability to swiftly capitalize on the enormous potential of
the marketplace we serve. The Annual Meeting will provide an opportunity to
review with you Sterling's achievements and give you a chance to meet your
directors.
It is important that your shares be represented at the Annual Meeting whether or
not you are personally able to attend. Proxy material for the meeting
accompanies this letter and I urge you to sign and date the enclosed proxy card
and return it in the enclosed envelope as soon as possible.
Thank you very much for your continued interest and support.
Sincerely,
/S/ LOUIS CAPPELLI
4
(LOGO)
STERLING BANCORP
540 MADISON AVENUE, NEW YORK, NY 10022-3299
NOTICE OF ANNUAL MEETING
APRIL 20, 1995
The Annual Meeting of Shareholders of Sterling Bancorp will be held on
Thursday, April 20, 1995 at 10:00 o'clock A.M. New York City time at the offices
of the Company, 540 Madison Avenue, New York, New York 10022-3299 (at 55th
Street) to consider and act upon the following matters:
1. Election of 10 directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected.
2. Approval of Stock Incentive Plan Amendment, as described in the
accompanying Proxy Statement.
3. Such other matters, including one shareholder proposal, as may
properly come before the meeting or any adjournment thereof.
The close of business on March 3, 1995 has been fixed as the record date
for the meeting. Only shareholders of record at that time are entitled to notice
of and vote at the Annual Meeting.
IMPORTANT
WE URGE THAT YOU SIGN, DATE AND SEND IN THE ENCLOSED PROXY AT YOUR EARLIEST
CONVENIENCE, WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING. SENDING IN
YOUR PROXY WILL NOT PREVENT YOU FROM VOTING YOUR SHARES PERSONALLY AT THE
MEETING, SINCE YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
JERROLD GILBERT
Secretary
March 16, 1995
5
STERLING BANCORP
540 Madison Avenue
New York, N.Y. 10022-3299
------------------
PROXY STATEMENT
------------------
MARCH 16, 1995
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Sterling Bancorp ("Company") with respect
to the Annual Meeting of Shareholders of the Company to be held on April 20,
1995. Any proxy given by a shareholder may be revoked at any time before it is
voted by giving appropriate notice to the Secretary of the Company or by
delivering a later dated proxy or by a vote by the shareholder in person at the
Annual Meeting. Proxies in the accompanying form which are properly executed by
shareholders and duly returned to the Company and not revoked will be voted for
all nominees listed under "Election of Directors" and on other matters in
accordance with the Board of Directors' recommendations, unless the shareholder
directs otherwise. This proxy statement and the accompanying form of proxy are
being mailed to shareholders on or about March 17, 1995.
The outstanding shares of the Company at the close of business on March 3,
1995 entitled to
vote at the Annual Meeting consisted of 6,346,662 Common Shares, $1 par value
("Common Shares"), and 251,288 Preferred Shares, $5 par value ("Preferred
Shares") of which 1,288 are Series B and 250,000 are Series D. All outstanding
Common Shares and Preferred Shares vote together and not as separate classes.
The Common Shares and the Preferred Shares are entitled to one vote for
each share on all matters to be considered at the meeting and the holders of a
majority of such shares, present in person or represented by proxy, constitute a
quorum for the transaction of business at the Annual Meeting of Shareholders.
Only shareholders of record at the close of business on March 3, 1995 are
entitled to vote at the Annual Meeting.
Assuming the presence of a quorum, directors are elected by a plurality of
the votes cast and approval of the shareholder proposal requires the affirmative
vote of a majority of the votes cast; approval of the Stock Incentive Plan
Amendment requires the affirmative vote of a majority of the voting shares
outstanding. Accordingly, abstentions and broker non-votes (arising from the
absence of discretionary authority on the part of a broker-dealer to vote shares
held in street name for a customer) will have the effect of a vote cast against
the Stock Incentive Plan Amendment but no effect on the other matters.
ELECTION OF DIRECTORS
Ten directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting of Shareholders to be held on April 20, 1995, to
serve until the next Annual Meeting and until their respective successors have
been elected. It is intended that, unless authority to vote for any nominee or
all nominees is withheld, the accompanying proxy will be voted in favor of the
election as directors of the nominees named below. All nominees are members of
the present Board of Directors, having been elected at the 1994 Annual
6
Meeting of Shareholders. There is no family relationship between any of the
nominees or executive officers. In the event that any of the nominees shall not
be a candidate, the persons designated as proxies are authorized to substitute
one or more nominees, although there is no reason to anticipate that this will
occur.
The information set forth in the following table has been furnished by the
nominees:
YEAR
NAME, PRINCIPAL OCCUPATION FOR LAST FIVE YEARS, ELECTED A
BUSINESS EXPERIENCE, DIRECTORSHIPS AND DIRECTORSHIP OF THE DIRECTOR
COMPANY AND OF STERLING NATIONAL BANK & TRUST COMPANY OF NEW YORK OF THE
("BANK"), A SUBSIDIARY OF THE COMPANY, AND OTHER INFORMATION AGE COMPANY
- ------------------------------------------------------------------ ---- -----------
Joseph M. Adamko* 62 1992
Former Managing Dir., Manufacturers Hanover Trust Co.; Vice
Chairman of the Company and of the Bank; Director of the Bank
Lillian Berkman* 72 1989
President and Chief Executive Officer, General Alarm
Corporation; Director of the Bank
Louis J. Cappelli * 64 1971
Chairman of the Board and Chief Executive Officer of the
Company; Chairman of the Board and Director of the Bank
Walter Feldesman* 77 1975
Counsel, Baer Marks & Upham; Director of the Bank
Allan F. Hershfield 63 1994
President, Fashion Institute of Technology; Director of the Bank
Henry J. Humphreys 66 1994
Executive Director, American Association of the Sovereign
Military Order of Malta; Director of the Bank
John C. Millman* 52 1988
President of the Company; President, Chief Executive Officer and
Director of the Bank
Maxwell M. Rabb 84 1989
Counsel, Kramer, Levin, Naftalis, Kamin & Frankel; former United
States Ambassador to Italy; Director of the Bank
Eugene T. Rossides 67 1989
Senior Counsel, Rogers & Wells; former Assistant Secretary,
United States Treasury Department; Director of the Bank
William C. Warren* 86 1988
Dean Emeritus, Columbia University School of Law; Of Counsel,
Roberts & Holland; Director of the Bank
- ---------------
* Member of Executive Committee.
2
7
The following nominees hold directorships in public companies: Mr. Warren,
CSS Industries, Inc. and Barnwell Industries, Inc.; Mr. Adamko, Tommy Hilfiger
Corporation; and Mr. Rabb, Defense Software & Systems, Inc. and MicroHealth
Systems, Inc.
Reference is made to "Security Ownership of Directors and Executive
Officers and Certain Beneficial Owners" on page 10 for information as to the
nominees' holdings of the Company's equity securities.
EXECUTIVE COMPENSATION AND RELATED MATTERS
The following table sets forth information concerning the compensation for
the Company's last three completed fiscal years with respect to its chief
executive officer and the four other most highly compensated executive officers
who served as such at December 31, 1994.
3
8
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
------------------------
ANNUAL SECURITIES
COMPENSATION RESTRICTED UNDERLYING ALL OTHER
-------------------- STOCK OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARD(S)($) SARS(#) SATION($)(1)
- ------------------------------------- ---- --------- -------- ----------- ---------- ------------
Louis J. Cappelli
Chairman of the Board and 1994 251,000 85,000 20,032
Chief Executive Officer, 1993 239,279 55,000 35,000 18,634
Sterling Bancorp 1992 193,894 7,897
Chairman of the Board,
Sterling National Bank
John C. Millman
President, 1994 189,500 65,000 2,785
Sterling Bancorp 1993 180,288 43,000 25,000 2,937
President and Chief Executive 1992 140,384 288
Officer,
Sterling National Bank
Jerrold Gilbert
Executive Vice President, 1994 117,500 10,000 2,704
General Counsel and Secretary, 1993 112,500 4,000 5,000 2,161
Sterling Bancorp 1992 102,019 3,600(2) 450
Executive Vice President,
General Counsel and Secretary,
Sterling National Bank
Leonard Rudolph
Vice President, 1994 120,000 12,000 2,379
Sterling Bancorp 1993 112,500 14,350 5,000 2,037
Senior Vice President, 1992 104,519 174
Sterling National Bank
John A. Aloisio
Vice President, 1994 122,500 9,000 2,482
Sterling Bancorp 1993 117,500 7,000 5,000 2,117
Senior Vice President, 1992 114,663 288
Sterling National Bank
- ---------------
(1) Represents for each executive the term life insurance premiums paid by
the Company on his behalf plus his allocable share of the Company's Employee
Stock Ownership Plan compensation expense.
(2) Represents 600 Common Shares which vested in 1992.
4
9
Mr. Cappelli, who had theretofore been Senior Executive Vice President,
became the Company's President and Chief Operating Officer in February, 1992,
and became its Chairman and Chief Executive Officer in June, 1992. Mr. Millman
was elected President of the Company in April, 1993, having previously been
Executive Vice President.
The Company has agreements with Messrs. Cappelli and Millman which
currently provide for terms extending until December 31, 1999 and December 31,
1997, respectively, and contain change of control provisions entitling the
executive to monthly severance payments equal to one-twelfth of base salary for
a period of 36 months if the executive is terminated other than for cause or has
good reason to terminate his employment, all as defined in the agreements. The
executive also has twelve months after a change of control to terminate his
employment for any reason and receive the severance benefits. These agreements
were entered into upon the recommendation of the Board's Compensation Committee
in 1993.
Retirement Plans. In November 1984, (1) the Sterling Bancorp/Sterling
National Bank and Trust Company of New York Employees' Retirement Plan ("New
Plan"), a defined benefit plan which covers all of their respective eligible
employees, was adopted and (2) the separate defined benefit plans ("Old Plans")
previously maintained by Sterling National Bank and Standard Financial
Corporation (since merged into the Company) were terminated, vesting the
benefits of the participants in the Old Plans for all years of credited service.
The New Plan gives credit for credited service under the Old Plans but provides,
in substance, for a participant's vested benefits under the Old Plans to be
offset against the benefits to be provided the participant under the New Plan.
Accordingly, the retirement benefits to be provided a continuing employee can be
determined simply by reference to the provisions of the New Plan.
An employee becomes eligible for participation in the New Plan upon the
attainment of age 21 and the completion of one year of service. All
contributions required of the New Plan are made by the employers and no employee
contributions are required or permitted.
5
10
The following table sets forth the estimated annual retirement benefits, on
a life annuity and guaranteed 10 year certain basis, payable to persons in
specified remuneration and years of service classifications, not subject to any
offset amount.
PENSION PLAN TABLE
HIGHEST
CONSECUTIVE
FIVE YEAR
AVERAGE ESTIMATED ANNUAL RETIREMENT BENEFIT* AT AGE 65 FOR
COMPENSATION REPRESENTATIVE YEARS OF CREDITED SERVICE
IN LAST --------------------------------------------------------------------------------------------------------------
10 YEARS 10 15 20 25 30 35 40 45 50
- ------------- ------- ------- -------- -------- -------- -------- -------- -------- --------
$100,000....... $14,760 $22,140 $ 29,520 $ 36,900 $ 44,280 $ 51,660 $ 59,040 $ 66,420 $ 73,800
150,000....... 22,260 33,390 44,520 55,650 66,780 77,910 89,040 100,170 111,300
200,000....... 29,760 44,640 59,520 74,400 89,280 104,160 119,040 133,920 148,800
250,000....... 37,260 55,890 74,520 93,150 111,780 130,410 149,040 167,670 186,300
300,000....... 44,760 67,140 89,520 111,900 134,280 156,660 179,040 201,420 223,800
350,000....... 52,260 78,390 104,520 130,650 156,780 182,910 209,040 235,170 261,300
400,000....... 59,750 89,640 119,520 149,400 179,280 209,160 239,040 268,920 298,800
- ---------------
* Figures in the table do not give effect to provisions of the Tax Equity
and Fiscal Responsibility Act of 1982 which impose limitations on maximum
retirement benefits payable after December 31, 1982 or of provisions of the
Revenue Reconciliation Act of 1993, which impose further limitations as to
benefits payable after December 31, 1993 but reflect the provisions of the
Company's supplemental pension benefit plan ("Supplemental Plan"), originally
adopted in 1984 and amended in 1994, providing for supplemental payments to
retirees of the Company in amounts equal to the difference between the
retirement benefits such retirees actually receive and the amount which would
have been received if Internal Revenue Code limitations were not in effect.
Annual benefits are calculated on the highest consecutive five-year average
compensation during the ten years preceding retirement as provided in the New
Plan.
The pensions computed under the New Plan are equal to the sum of:
(1) 1% of the average compensation up to $4,800, multiplied by the
number of years of credited service, plus
(2) 1 1/2% of the average compensation in excess of $4,800, multiplied
by the number of years of credited service.
Average compensation under the New Plan includes salary compensation but
not other types of compensation; bonus compensation for designated senior
management executives, including the Chairman and President, is included under
the Supplemental Plan as currently in effect.
6
11
The current number of years of service credited to Messrs. Cappelli,
Millman, Gilbert, Aloisio and Rudolph are 43, 18, 20, 4 and 4, respectively.
OTHER PLANS
The following table sets forth information as to incentive stock options
held at the end of the Company's last fiscal year by each of the executive
officers named in the summary compensation table; no other options or stock
appreciation rights ("SARs") were held by them, nor were any options or SARs
granted to or exercised by them during the year.
NUMBER OF
SHARES
UNDERLYING
UNEXERCISED VALUE OF
OPTIONS/SARS UNEXERCISED
HELD AT IN-THE-MONEY
FISCAL OPTIONS/SARS AT
NAME YEAR END FISCAL YEAR END
---- ------------ ---------------
Louis J. Cappelli............................................ 35,000 *
John C. Millman.............................................. 25,000
Jerrold Gilbert.............................................. 5,000
Leonard Rudolph.............................................. 5,000
John A. Aloisio.............................................. 5,000
- ---------------
* All options are at prices exceeding year end fair market value.
Following a study commenced in 1992, the Board determined that in lieu of
further contributions to the profit sharing plans which the Company and Sterling
National Bank have had for many years, the Company should utilize an Employee
Stock Ownership Plan; under that Plan, all employees of the Company and its
subsidiaries who have attained age 21 and completed one year of service of at
least 1,000 hours are eligible participants.
7
12
PERFORMANCE GRAPH
The following graph sets forth a comparison of the percentage change in the
cumulative total shareholder return on the Company's Common Shares compared to
the cumulative total return on the Standard & Poor's 500 Index (the "S&P 500
Index") and peer group of selected banking companies (the "Peer Group"). The
stock price performance shown on the graph below is not necessarily indicative
of future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG STERLING BANCORP, THE S&P 500 INDEX AND A PEER GROUP**
MEASUREMENT PERIOD STERLING
(FISCAL YEAR COVERED) BANCORP PEER GROUP S&P 500
1989 100 100 100
1990 97 61 97
1991 85 68 126
1992 127 91 136
1993 115 123 150
1994 100 130 152
- ---------------
* $100 invested on 12/31/89 in Stock or Index.
Includes investment of dividends.
Fiscal years ending December 31.
** The peer banking companies were selected utilizing the same criteria as in
the Company's prior proxy statements -- that is banking companies which were,
like the Company, publicly traded, located in the New York - New Jersey -
Connecticut, tri-state area with assets in the same size range at the outset.
They comprise: B.M.J. Financial Corp., DS Bancor, Inc., Evergreen Bancorp,
Inc., Merchants New York Bancorp, Newmil Bancorp, North Fork Bancorporation,
Inc., Trustco Bank Corp., United National Bancorp., Webster Financial Corp.
8
13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
A law firm to which Mr. Feldesman, a director and nominee for reelection as
a director, was Of Counsel during 1994, received fees from Sterling National
Bank for professional services rendered.
TRANSACTIONS WITH THE COMPANY AND OTHER MATTERS
From time to time, officers and directors of the Company and their family
members or associates have purchased or may purchase short-term notes of the
Company and certificates of deposit from Sterling National Bank on the same
terms available to other persons. Sterling National Bank also makes loans from
time to time to related interests of directors. Such loans were made in the
ordinary course of business, on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than the normal risk of
collectability or present other unfavorable features.
MEETINGS AND ATTENDANCE OF DIRECTORS; COMMITTEES; FEES
During the year ended December 31, 1994, the Board of Directors of the
Company held five regularly scheduled meetings. In addition, various committees
of the Board met at regular meetings. The Company has standing audit and
compensation committees and does not have a nominating committee.
The members of the audit committee ("Audit Committee") are Messrs.
Feldesman (chairman), Adamko, Humphreys and Rossides. The Committee held two
meetings during the Company's last fiscal year. Among the functions of the Audit
Committee are to review the scope of the audit by the Company's independent
accountants, to consider issues which may arise in the course of the audit,
monitor the adequacy of the Company's internal accounting controls, discuss the
services, fees and charges of the independent accountants, report to the Board
in respect of these matters, and recommend the firm to be retained as
independent accountants for the Company.
At its December, 1992 meeting, the Board appointed a Compensation Committee
consisting of four non-management directors: Mrs. Berkman, Mr. Feldesman, Mr.
Rabb and Mr. Warren; they remain the Committee's members. As it was requested to
do, the Committee made recommendations (which the Board approved and adopted),
first, as to the corporate policies to be adopted regarding the extent to which
executive officer compensation should be performance related and the performance
measures which should be considered and, second, as to the compensation and
other key terms of employment agreements with Mr. Cappelli and Mr. Millman. The
Committee (whose report is Exhibit A to this proxy statement) maintains ongoing
responsibility for these matters. The Committee held three meetings during the
Company's last fiscal year.
Directors who are not salaried officers receive fees for attendance at
Board and committee meetings. Each eligible director receives $700 for attending
each Board meeting, $400 for attending each committee meeting and a $500
supplemental payment in December of each year. Expenses of directors incurred in
traveling to Board and committee meetings are reimbursed by the Company. The
Chairman of the Audit Committee receives an annual stipend of $3,000 for service
in such capacity in lieu of Audit Committee
9
14
meeting fees. Mr. Adamko, Vice Chairman of the Company and the Bank, receives a
monthly fee of $3,750 but does not recieve attendance fees.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL
OWNERS
The following table sets forth, as of March 3, 1995, holdings of the
Company's Common Shares and Preferred Shares by each director and each of the
executive officers named in the Summary Compensation Table on page 4 and by all
directors and executive officers as a group. The Common Shares are traded on The
New York Stock Exchange and the closing price on March 10, 1995 was $7 per
share.
% OF OUTSTANDING
COMMON % OF OUTSTANDING SERIES D SERIES D
NAME SHARES(1)(2) COMMON SHARES PREFERRED SHARES(1) PREFERRED SHARES
- -------------------------------- ---------------- ---------------- ------------------- ----------------
Joseph M. Adamko................ 500 +
Lillian Berkman................. 7,800 .12
Louis J. Cappelli............... 111,883 1.76 6,646 2.66
Walter Feldesman................ 3,000 +
John C. Millman................. 32,330 .51 5,736 2.29
Maxwell M. Rabb................. 200 +
Eugene T. Rossides.............. 2,314 +
William C. Warren............... 8,886 .14
Allan F. Hershfield............. 300 +
Henry J. Humphreys.............. 200 +
Albert Sarnoff.................. 500 +
Jerrold Gilbert................. 30,273 .48 4,420 1.77
Leonard Rudolph................. 8,257 .13 4,535 1.81
John A. Aloisio................. 7,213 .11 4,484 1.79
All directors and executive
officers as a Group (16 in
Group)........................ 222,073 3.45 32,223 12.89
- ---------------
+ Less than .1 of 1%
(1) Each nominee and officer has sole voting and investment power with
respect to the securities indicated above to be owned by him, except that in the
case of Messrs. Cappelli, Millman, Gilbert, Rudolph and Aloisio, and all
directors and executive officers as a group, shares shown as owned include
41,397, 3,711, 15,409, 2, 2 and 61,824 Common Shares, respectively, held in
profit sharing plans as to which they have power to direct the vote, and the
Preferred Shares, set forth above, held by the Company's Employee Stock
Ownership Trust upon which they are currently entitled to direct the vote and
12,500, 12,500, 5,000, 5,000, 5,000 and 40,000 Common Shares, respectively,
covered by outstanding incentive stock options exercisable within 60 days, and
except that as to persons named in note (2) below and all directors and officers
as a group, shares shown as owned include shares issuable on conversion of
Debentures held by them. In addition, the shares shown as owned by Mr. Cappelli
include 298 Common Shares owned by his wife, beneficial ownership of which he
disclaims.
10
15
(2) Mrs. Berkman and Messrs. Cappelli and Warren own $10,000, $50,000
(0.3%) and $15,000 (0.1%) principal amounts, respectively, of the Company's
Floating Interest Rate Convertible Subordinated Debentures, 4th Series, due 1998
("4th Series Debentures"), which are convertible into Common Shares at a price
of $12.50 per share. Messrs. Rossides, Warren and Rudolph own $1,000, $6,000 and
$7,000 principal amounts, respectively, of the Company's Floating Interest Rate
Convertible Subordinated Debentures, Series V, due 2001, which are convertible
into Common Shares at a price of $8.75 per share; these Debentures were acquired
in August 1994 in exchange for like principal amounts of the Company's Floating
Interest Rate Convertible Subordinated Debentures, Third Series, due 1996,
pursuant to the exchange offer made by the Company to all the holders of such
Third Series Debentures; such exchanges were reported by Messrs. Rossides,
Warren and Rudolph and by Charles Agemian (a former director who exchanged
$10,000 principal amount) by Forms 5 filed in February 1995 rather than Forms 4
in September 1994. The Company's Floating Interest Rate Convertible Subordinated
Debentures, due 1992 and its Floating Interest Rate Convertible Subordinated
Debentures, Second Series, due 1994 were all prepaid and are no longer
outstanding. Unless otherwise indicated, all holdings are less than .1 of 1% of
the class.
The following table sets forth, as of March 1, 1995, the number of Common
Shares owned beneficially by the Estate of Theodore H. Silbert and, based upon
the information provided by it to the Company as of December 31, 1994, by
Dimensional Fund Advisors, Inc.
NUMBER AND
NATURE OF APPROXIMATE
COMMON SHARES PERCENTAGE
BENEFICIALLY OF
NAME AND ADDRESS OWNED CLASS
- ------------------------------------------------------------- ------------- -----------
Dimensional Fund Advisors Inc. ("Dimensional")............... 469,100(1) 7.39%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Estate of Theodore H. Silbert................................ 333,198(2) 5.25%
c/o Trust Department
Sterling National Bank & Trust Company of New York
355 Lexington Avenue
New York, New York 10017 - 6664
- ---------------
(1) Dimensional has advised the Company that it is a registered investment
advisor and is deemed to have beneficial ownership of 469,100 Common Shares as
of December 31, 1994, all of which Shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company, the
DFA Investment Trust Company, a registered open-end investment company, or in
series of the DFA Investment Trust Company, a Delaware business trust, or the
DFA Group Trust and the DFA Participating Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional serves as investment
manager. Dimensional has advised the Company that all such Shares are owned by
advisory clients of Dimensional, no one of which, to the knowledge of
Dimensional, owns more than 5% of the class.
(2) Lawrence Newman (whose business address is 875 Third Avenue, New York,
NY 10022) is, together with the Bank, co-executor of the Estate of Theodore H.
Silbert.
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16
Sterling Bancorp and Subsidiaries Employee Stock Ownership Trust (whose
address is 355 Lexington Ave., New York, NY 10017, Attn: Trust Dept.),
established pursuant to the Sterling Bancorp and Subsidiaries Employee Stock
Ownership Plan ("ESOP"), owns all 250,000 outstanding shares of Series D
Preferred Stock, each share of which is convertible into one Common Share. Until
these shares are allocated, voting rights are passed through to participants in
the ESOP based on relative compensation in the most recent calendar year. After
any shares have been allocated, participants vote shares allocated to their
respective ESOP accounts, and receive passed through voting rights with respect
to unallocated shares based on relative ESOP account balances. Any Shares with
respect to which voting instructions are not received are to be voted by the
ESOP Committee.
Except as set forth above, the Company does not know of any person that
owns more than 5% of any class of the Company's voting securities.
The Company believes that all required filings have been made under Section
16(a) of the Securities Exchange Act of 1934 by the Company's directors,
executive officers, and persons who are the beneficial owners of more than 10%
of the Company's Common Shares, except as set forth in note 2 on page 11 with
respect to filings in connection with the exchange of the Third Series
Debentures described therein and except that Messrs. Cappelli, Millman, Gilbert,
Rudolph and Aloisio and John W. Tietjen, Senior Vice President and Treasurer of
the Company, failed to reflect Incentive Stock Options granted them in 1993 in
Section 16(a) filings until corrective filings were made by each of them in
March 1995. In making this statement, the Company has relied on copies of the
reporting forms received by it or on the written representations from certain
reporting persons that no Forms 5 were required to be filed under the applicable
rules of the Securities and Exchange Commission.
APPROVAL OF STOCK INCENTIVE PLAN AMENDMENT
In April 1992, shareholders approved adoption of the Company's Stock
Incentive Plan. While the grant of awards in the form of incentive stock
options, non-qualified stock options, stock appreciation rights, restricted
stock or a combination of these was authorized (information as to the 'types of
awards' and the Federal income tax consequences of each type is set forth under
appropriate captions on pages 13 through 16 below), all of the 100,000 shares
covered were awarded in the form of incentive stock options.
The Board of Directors has approved and recommends to the shareholders an
amendment to this Plan which would increase the aggregate number of shares
subject to it by 300,000 and provide for the automatic grant of options to
directors who are not also employees or officers of the Company or a subsidiary
("Non-Employee Directors"). The text of the amendment is attached as Exhibit B
to this Proxy Statement.
The amendment is intended (i) to strengthen the Company's ability to
attract and retain directors and employees of high competence and (ii) to
increase the identity of interest of such directors and employees with those of
the Company's shareholders. No grants will be made under the Plan as amended
("Amended Plan") unless the shareholders approve the amendment at the 1995
Annual Meeting.
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17
NON-EMPLOYEE DIRECTOR GRANTS
Under the Amended Plan, each Non-Employee Director will automatically be
granted a Non-Qualified Stock Option ("NQSO") on the last day the Company's
Common Shares are traded in April. Such NQSO is to be for 2,000 shares, is to
become exercisable in four equal installments -- commencing on the first
anniversary of the date of grant -- and to expire on the fifth anniversary of
such date, and is to provide for a purchase price equal to 100% of the fair
market value of the Common Shares on the date of grant. Each Non-Employee
Director is to be granted such an option in each April commencing in 1995 and
terminating in 1999 or such earlier time as his services as a director
terminate; upon such termination all options then exercisable may be exercised
during a period of three months, except that if termination is by reason of
death, the legal representative of the deceased Non-Employee Director has six
months to exercise all options regardless of whether the decedent could have
then exercised them.
ADMINISTRATION
Authority to administer the Plan is delegated by the Board to a Committee
which is to consist of at least three directors, none of whom is to be eligible
to participate in awards (other than automatic awards to Non-Employee
Directors). In addition to Non-Employee Directors, all officers and key
employees of the Company and its subsidiaries who are in positions which enable
them to make significant contributions to long-term performance and
profitability of the Company are eligible to receive awards. As of March 1, 1995
approximately 75 employees of the Company and its subsidiaries were eligible to
participate in the Plan.
TYPE OF AWARDS
Awards granted pursuant to the Plan may take the form of Incentive Stock
Options ("ISOs"), within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), Non-Qualified Stock Options ("NQSOs"), Stock
Appreciation Rights ("SARs"), Restricted Stock or a combination of these forms
of awards.
Incentive Stock Options. The exercise price of an ISO may not be less than
100% of the fair market value of the Company's Shares on the date of grant. If
the aggregate market value (determined on the date of grant) of all shares
subject to ISOs that first become exercisable by an individual optionee in a
single calendar year exceeds $100,000, the excess is to be treated as NQSOs. A
Participant may exercise an ISO during the option period at such time, and in
such amounts (subject to a 100 share minimum), as he desires and may pay the
exercise price in cash or in such other consideration as the Committee may
determine. All ISOs granted under the Plan are exercisable for a ten year
period, on a cumulative basis at a rate of twenty-five (25%) each year,
beginning one year after the date of grant, unless the Committee determines
otherwise. In the event of termination of an optionee's employment, any
unexercised portion of the ISO will terminate. If such termination of employment
is by reason of death or disability, the ISO may be exercised for a period of 12
months after such termination, unless the expiration date of the ISO occurs
sooner. Additional restrictions apply to ISOs granted to a 10 percent
stockholder (as defined in Section 424 of the Code).
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18
Non-Qualified Stock Options. All Non-Qualified Stock Options granted under
the Plan may be for such (i) number of shares, (ii) exercise price and (iii)
term as the Committee, in its sole discretion, may determine. The unexercised
portion of an NQSO terminates upon termination of the optionee's employment,
unless the Committee in its sole discretion determines otherwise. In the event
of termination by reason of retirement at or after age 65, disability, or death,
the unexercised portion of any NQSO shall expire three months after retirement
or disability or one year after death, unless the expiration date of the NQSO
occurs sooner. All NQSOs granted under the Incentive Plan are exercisable
beginning six months after the date of grant unless the Committee determines
otherwise.
Stock Appreciation Rights. Pursuant to the terms of the Plan SARs are
granted only (i) in conjunction with the granting of options, (ii) in an amount
not in excess of the number of Shares granted in the related option and (iii) on
terms providing that the exercise of an option for a given number of shares
terminates the related SAR for that number of shares (so that the total number
of shares for which an option and the related SAR may be exercised cannot exceed
the number of shares granted in the option.) SARs provide the participant with
an amount equal to the difference between the fair market value of the Shares on
the date the SAR is exercised and the exercise price of the option; such amount
is to be paid, in the discretion of the Committee, either in cash or in shares
(valued at their fair market value on the date of exercise) or a combination
thereof. Each SAR is subject to the same conditions on termination of employment
as the related option.
Restricted Stock. A recipient of Restricted Stock may be entitled to
receive Shares of the Company at no out-of-pocket cost or to purchase Shares of
the Company at a price determined by the Committee which is expected to be below
the fair market value of the Shares. The time period of the restrictions and
rate of lapse of such restrictions will be determined by the Committee in its
sole discretion.
Shares. The number of shares available is subject to adjustment in order
to prevent dilution. To the extent that options expire or are cancelled without
having been exercised or Restricted Stock is forfeited, the shares involved
shall become available for future grants or awards.
Amendment. The Plan may be amended, terminated or modified by the Board at
any time, except that the Board may not, without approval by a vote of the
shareholders of the Company (subject, however, to changes resulting from stock
dividends, stock splits or similar changes in the Company's capitalization), (i)
increase the maximum number of shares for which options and awards may be
granted under the Plan, (ii) reduce the exercise price at which options may be
granted, (iii) extend the period during which options may be granted or
exercised beyond the times originally prescribed, (iv) change the persons
eligible to participate in the Plan, or (v) increase the number of options or
awards that may be granted to a participant or materially increase the benefits
accruing to participants under the Plan. No such termination, modification or
amendment may affect the rights of a participant under an outstanding option or
the grantee of an award.
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19
FEDERAL INCOME TAX CONSEQUENCES
Except as described below with respect to Restricted Stock, no taxable
income will be recognized by the participant, and no deduction will be allowed
to the Company, upon the grant of any option, SAR or shares of Restricted Stock
under the Plan.
Non-Qualified Stock Options. In general, upon exercise of an NQSO, an
optionee will recognize income in the year in which the option is exercised in
an amount equal to the difference between the fair market value of the Shares on
the date of exercise and the exercise price; the amount so recognized as income
will be deductible by the Company (if the Company provides for appropriate
withholding of applicable taxes).
Upon any subsequent sale of the shares, the optionee's basis in the shares
for determining gain or loss will be the sum of the exercise price and any
income recognized upon exercise. If the shares purchased as a result of the
exercise of such option constitute a capital asset in the hands of the optionee,
any gain or loss recognized to the optionee upon the sale or other disposition
of any of these shares will be a capital gain or loss, either long-term or
short-term, depending upon the holding period of the shares.
Incentive Stock Options. No taxable income will be recognized by the
optionee upon the exercise of an ISO, but the difference between the fair market
value of the shares on the date of exercise and the exercise price is an item of
tax preference, subject to the possible application of the alternative minimum
tax. If the shares purchased on the exercise of an ISO are held for a period of
at least two years from the date of the grant of the option and one year from
the date the option is exercised, any gain recognized on a subsequent sale of
such Shares will constitute long-term gain rather than ordinary income, and the
Company will not be entitled to any deduction with respect to the option.
However, if the optionee disposes of such shares within one year from the
date of exercise or two years from the date of the grant of the option, the
excess of the lesser of the fair market value of the shares at the time of
exercise and the amount realized by the optionee on such disposition over the
exercise price will be taxed as ordinary income, and the Company will be
entitled to a corresponding deduction. Any further gain or any loss recognized
on such a disposition generally will be a capital gain or loss, either long-term
or short-term, depending on the holding period of the shares.
Stock Appreciation Rights. Upon exercise of an SAR the amount of cash
received (or the value of any shares received) must be treated as compensation
income by the employee. Under such circumstances, the Company will be entitled
to a corresponding tax deduction in the same amount which the employee is
required to treat as compensation income (subject to appropriate withholding of
taxes if the SAR is settled with shares).
Restricted Stock. The award of Restricted Stock to an employee is not
taxable to the employee at the time of grant. Generally, the employee will
recognize ordinary income when the restrictions against transfer of the stock
lapse in an amount equal to the value of the stock at that time. Alternatively,
the employee can elect under Section 83(b) of the Code (a "Section 83(b)
Election") to include the value of the Stock at the time of the grant, less any
amount paid for it, in his income for the year in which he received the
Restricted Stock.
15
20
The employee must file this election with the Internal Revenue Service within 30
days after the Restricted Stock is transferred to him. If the employee makes
this election, subsequent changes in the value of the stock will not result in
ordinary income or loss to him. However, if the stock is later forfeited, the
employee will not be entitled to any deduction with respect to the amount he
earlier included as ordinary income. The Company will be entitled to an income
tax deduction in the year in which the employee recognized ordinary income with
respect to the Restricted Stock in an amount equal to the income recognized by
the employee.
If no Section 83(b) Election is made, (i) no income will be recognized by
the employee (and the Company will not be entitled to a deduction) with respect
to the Restricted Stock until the date the restrictions lapse, (ii) any
dividends paid on the Restricted Stock until the restrictions lapse will be
taxed to the employee as compensation income (and the Company will be entitled
to a deduction) and (iii) the employee will recognize ordinary income at the
time the restrictions lapse in an amount equal to the fair market value of the
Restricted Stock at that time, less the amount paid, if any, and the Company
will be entitled to a corresponding deduction.
An employee who is subject to the "Short-swing" profit provisions of
Section 16(b) of the Securities Exchange Act of 1934, however, will not
recognize ordinary income at the time of the lapse of restrictions (nor will the
Company then be entitled to a deduction) if the shares received are subject to
the restrictions imposed by Section 16(b) (unless he makes a timely Section
83(b) Election to report income at such time); rather that officer or director
will recognize income (and the Company will be entitled to a deduction) at the
time the Section 16(b) restrictions lapse. The amount of ordinary income
recognized at that time (and the Company's deduction) will be equal to the fair
market value of the shares on the date that the restrictions lapse, less the
amount paid, if any, for the stock.
REQUIRED VOTE FOR APPROVAL
Approval of the Amendment requires the vote of the holders of a majority of
the outstanding voting shares.
The Board of Directors recommends a vote FOR the approval of the Amendment,
and it is intended that proxies not marked to the contrary will be so voted.
SHAREHOLDER PROPOSAL
Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, has
informed the Company he is the beneficial owner of 500 Common Shares and
requested the inclusion of the following resolution and supporting statement,
which he has advised that he intends to present for a shareholder vote at the
1995 Annual Meeting:
"RESOLVED, that the shareholders recommend that the board of directors
adopt a policy against entering into future agreements with officers and
directors of this corporation which provide compensation contingent on a
change of control of the corporation, unless such compensation agreements
are
16
21
submitted to a vote of the shareholders and approved by a majority of
shares present and voting on the issue."
PROPOSER'S SUPPORTING STATEMENT
"Lucrative severance contracts awarded to senior corporate executives
which provide compensation contingent on a change of control, usually
through a merger or acquisition of the corporation, are known as "golden
parachutes". These contracts are awarded without shareholder approval.
"The practice of providing these large cash awards to a small group of
senior corporate managers without shareholder approval has been a subject
of public outcry. In 1988, the U.S. Senate in emphasizing the potential
conflict of interest between management and shareholders created by these
agreements voted ninety-eight to one to require shareholder approval of
golden parachutes which exceed three times annual compensation.
"Although final action was not taken, it is clear to me that the
overwhelming vote in favor of the measure reflects public sentiment against
golden parachutes. A shareholder vote would allow the corporation's owners
to decide for themselves whether golden parachutes are in their best
interests.
"As a founding member of the Investors Rights Association of America
it is clear to me that requiring a shareholder vote is necessary to address
the conflicts of interest between management and shareholders that arise in
the awarding of golden parachutes.
"I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION."
Adoption of this proposal requires the affirmative vote of a majority of
the votes cast thereon at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS.
It is widely accepted that appropriate financial protection against loss of
employment and benefits following a change of control can help attract and
retain high quality management. Far from creating a conflict of interest between
management and shareholders, such arrangements tend to align shareholder and
management interests in connection with changes of control which might be in the
interests of shareholders. Indeed, in 1993, 79% of the largest 1,000 public
companies had one or more change of control protections in management agreements
or compensation plans. 56% of those companies had top executive change of
control severance agreements, an increase from 35% in 1987. (Source: Executive
Compensation Research Studies).
Mr. Steiner's arguments for a prior shareholder approval requirement are
based primarily on a 1988 U.S. Senate vote, which did not become law, favoring
shareholder approval of severance packages "which exceed three times annual
compensation." Mr. Steiner's resolution, however, would not limit his proposed
shareholder approval requirement to contracts of that magnitude. That resolution
would require shareholder approval of all arrangements providing any
compensation contingent on a change in control.
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22
Your company follows the now generally accepted practice of avoiding
management conflicts of interest on such matters by referring them to its
Compensation Committee, which consists only of non-management directors and is
thereby well positioned to make judgments concerning the appropriate balancing
of conflicting corporate needs. Moreover, the Committee can act expeditiously
and with little cost, while shareholder approval can only be sought at great
expense other than at each year's annual meeting. A shareholder approval
requirement could therefore seriously impede hiring efforts in some
circumstances.
GENERAL
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG Peat Marwick LLP, which firm audited the financial
statements for the Company's fiscal year ending December 31, 1994 and has been
the auditor for the Company and its predecessors since 1958, are expected to be
present at the Annual Meeting of Shareholders. They will have the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
SHAREHOLDERS' PROPOSALS FOR 1996 ANNUAL MEETING
Any shareholder who may desire to submit a proposal for inclusion in the
proxy and proxy statement for the 1996 Annual Meeting of Shareholders scheduled
to be held on April 18, 1996, must present such proposal in writing to the
Company at 540 Madison Avenue, New York, New York 10022-3299, Attention: Jerrold
Gilbert, Secretary, not later than the close of business on November 7, 1995.
OTHER
Management knows of no other business to be presented to the Annual Meeting
of Shareholders, but if any other matters are properly presented to the meeting
or any adjournments thereof, the persons named in the proxies will vote upon
them in accordance with their best judgment.
The cost of the solicitation of proxies in the enclosed form will be borne
by the Company. In addition to solicitation by mail, directors, officers and
employees of the Company may solicit proxies by personal interview, telephone or
telegram. The Company reimburses brokerage houses, custodians, nominees and
fiduciaries for their expenses in forwarding proxies and proxy material to their
principals. The Company has retained Morrow & Co., Inc. to assist in the
solicitation of proxies, which firm will, by agreement, receive compensation of
$3,000, plus expenses, for these services.
The Annual Report to Shareholders (which is not a part of the proxy
soliciting material) for the fiscal year ended December 31, 1994 accompanies
this Notice and Proxy Statement.
THE COMPANY FILES WITH THE SECURITIES AND EXCHANGE COMMISSION AN ANNUAL
REPORT ON FORM 10-K. A COPY OF THE REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31,
1994, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, WILL BE
FURNISHED, WITHOUT CHARGE, TO ANY SHAREHOLDER SENDING A WRITTEN REQUEST THEREFOR
TO JOHN W. TIETJEN, CHIEF FINANCIAL OFFICER, STERLING BANCORP, 540 MADISON
AVENUE, NEW YORK, NY 10022-3299.
STERLING BANCORP
Dated: March 16, 1995
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EXHIBIT A
COMPENSATION COMMITTEE REPORT
In December 1992 the Board of Directors established our committee as a
Standing Committee of Independent Non-Management Directors and requested us to
recommend to the Board (a) the future compensation and other key terms of
employment agreements with the chief executive officers of the Company and of
Sterling National Bank, Louis J. Cappelli and John C. Millman, and (b) the
extent to which future compensation of key executives should be linked to
performance and the performance measures which should be considered.
As we have previously reported, the Committee, with the assistance of the
firm of Towers Perrin, recommended (and the Board thereafter approved)
employment agreements with Messrs. Cappelli and Millman providing for base
salaries and bonuses under which Messrs. Cappelli and Millman would achieve
total cash compensation comparable with that of peer executives only if the
Committee recommended performance targets were met and not otherwise.
We also recommended (and the Board approved) that:
"Company policy should be to make a meaningful part of the
compensation of executive officers be based on performance. While the
relative importance of performance measures may vary from year to year in
line with corporate business plans and the Committee's judgment, the
measures would include, amongst other criteria, earnings, return on assets,
return on equity, asset quality, loan and deposit growth."
In accordance with the above, 1994 targets were set for consolidated
earnings, return on assets, return on equity, core loans, and deposits and
customer repurchase agreements. Each performance target was set at a level
representing meaningful growth over the appropriate base period. As a result of
1994 performance, bonuses of $85,000 and $65,000 respectively, were earned by
Messrs. Cappelli and Millman.
Given the performance achievements through 1994, as measured by the targets
set, we deemed it appropriate that the terms of the employment agreements with
Messrs. Cappelli and Millman should be extended through December 31, 1999 and
December 31, 1997, respectively.
Dated: February 9, 1995
Walter Feldesman Lillian Berkman, Chair
Maxwell M. Rabb William C. Warren, Vice Chair
A-1
24
EXHIBIT B
STOCK INCENTIVE PLAN AMENDMENT
A. INTRODUCTION -- Sterling Bancorp (the "Company") desires to amend the
Stock Incentive Plan adopted by its Board on February 20, 1992 and approved by
its shareholders on April 16, 1992 (which upon the effectiveness of this
amendment will be known as the "Sterling Bancorp Stock Incentive Plan") (the
"Plan") to increase the maximum aggregate number of shares subject to the Plan
by 300,000 and to provide for the automatic grant of options to members of its
Board who are not also employees or officers of the Company or a subsidiary
("Non-Employee Directors"). The amendment recognizes the essential role of Non-
Employee Directors and provides incentives to such directors as well as (as
heretofore) to officers and other key employees whose performance will
contribute to the long term success of the Company and its subsidiaries. The
Plan as amended will (i) strengthen the Company's ability to attract and retain
directors and employees of high competence and (ii) increase the identity of
interest of such directors and employees with those of the Company's
shareholders. Capitalized terms not otherwise defined in this amendment have the
meanings given them in the Plan as originally adopted.
B. EFFECTIVENESS -- This amendment shall become effective if it shall be
approved by the vote of a majority of the outstanding voting shares entitled to
notice of and to vote at the 1995 annual meeting of shareholders. In the event
of any conflict between the provisions of this amendment and of the plan as
originally adopted, the provisions of this amendment shall control.
C.AUTOMATIC GRANT OF OPTIONS TO NON-EMPLOYEE DIRECTORS --
(i) OPTION GRANT DATES. Non-qualified stock options to purchase 2,000
shares (such number to be subject to adjustment in the same manner as provided
for outstanding options in Section 12 of the Plan as originally adopted) shall
be granted automatically to each Non-Employee Director on the last day that the
Company's Shares are traded on the New York Stock Exchange or other national
securities exchange upon which the Shares are traded or if the Shares are not
then listed on a national securities exchange and are traded over-the-counter on
the date of the last trade as reported by NASDAQ or if not reported by NASDAQ
the last trade which was reported, in each April through 1999.
(ii) PURCHASE PRICE. The purchase prices of Shares upon exercise of an
option shall be 100% of the fair market value of the Shares on the date of grant
of an option; which shall be: (i) if the Shares are then listed on a national
securities exchange, the closing price of the Shares on such date; provided,
however, if on such date the Shares were traded on more than one national
securities exchange, then the closing price on the exchange on which the
greatest volume of Shares were traded on such day; (ii) if the Shares are not
then listed on a national securities exchange and are traded over-the-counter,
the last sale price of the Shares on such date as reported by NASDAQ or, if not
reported by NASDAQ, the average of the closing bid and asked prices for the
Shares on such date; and (iii) if the Shares are neither then listed on a
national securities exchange nor traded in the over-the-counter market, such
value as the Committee shall in good faith determine. If the Shares are then
listed on a national securities exchange or are traded over-the-counter but are
not traded on the date of
B-1
25
grant, then the purchase price of such shares shall be the closing price on the
last day prior thereto on which such Shares were traded.
(iii) EXERCISABILITY AND TERM OF OPTIONS. Each option granted a
Non-Employee Director under the Plan will become exercisable in four equal
annual installments, commencing on the first anniversary of the date of grant.
Each such option granted under the Plan shall expire five years from the date of
the grant, and shall be subject to earlier termination as hereinafter provided.
(iv) TERMINATION OF SERVICE. In the event of the termination of service on
the Board by the holder of any option, other than by reason of death as set
forth in paragraph (v) hereof or by reason of such holders commencement of
employment with the Company, the then outstanding options of such holder's may
be exercised only to the extent that they were exercisable on the date of such
termination and shall expire three months after such termination, or on their
stated expiration date, whichever occurs first.
(v) DEATH. In the event of the death of the holder of any option, each of
the then outstanding options of such holder will immediately mature in full and
become exercisable by the holder's legal representative at any time within a
period of six months after death, but in no event after the expiration date of
the term of the option.
(vi) PAYMENT. Options may be exercised only upon payment to the Company in
full of the purchase price of the Shares to be delivered. Such payment shall be
made only in cash or check at the time of purchase.
(vii) OPTIONS NON-ASSIGNABLE AND NON-TRANSFERABLE. Each option and all
rights thereunder shall be non-assignable and non-transferable other than by
will or the laws of descent and distribution and shall be exercisable during the
holder's lifetime only by the holder or the holder's guardian or legal
representative.
(viii) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that a Non-Employee Director has a right to continue as a Director for any
period of time, or at any particular rate of compensation.
(ix) NO STOCKHOLDERS' RIGHTS FOR HOLDERS OF OPTIONS. A holder of options
shall have no rights as a shareholder with respect to the Shares covered by
options granted hereunder until the date of the issuance of a stock certificate
therefore, and no adjustment will be made for regular cash dividend
distributions for which the record date is prior to the date such certificate is
issued.
(x) LIMITATION ON AMENDMENT. In order to comply with the executive
provisions of Rule 16b-3 under the Securities Exchange Act of 1934, no amendment
of these provisions which might otherwise be permitted, shall be made within six
months of any other amendment hereto, unless such amendment shall be made to
comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act or the rules thereunder.
D. SHARES SUBJECT TO THE PLAN -- The first sentence of Section 3 of the
Plan as originally adopted is amended to increase the number originally set
forth therein by 300,000.
B-2
26
STERLING BANCORP
540 MADISON AVENUE, NEW YORK, NY 10022-3299
(LOGO)
Division
ZENITH FINANCIAL SERVICES COMPANY
Subsidiaries
STERLING NATIONAL BANK & TRUST COMPANY OF NEW YORK
STANDARD FACTORS CORPORATION/STERLING FACTORS
STERLING INDUSTRIAL LOAN ASSOCIATION
STERLING BANKING CORPORATION
UNIVERSAL FINANCE CORPORATION
27
STERLING BANCORP
540 MADISON AVENUE, NEW YORK, NY 10022-3299
(LOGO)
28
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
(LOGO) STERLING BANCORP
ANNUAL MEETING OF SHAREHOLDERS, APRIL 20, 1995
PROXY
The undersigned appoints Louis J. Cappelli, John C. Millman and Lillian
Berkman, or any one of them, attorneys and proxies with power of substitution,
to vote all of the Common Shares and Preferred Shares of Sterling Bancorp
standing in the name of the undersigned at the Annual Meeting of Shareholders
on April 20, 1995, and all adjournments thereof, hereby revoking any proxy
heretofore given.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
29
/X/ Please mark
your votes
as this
-------------- ----------------
COMMON PREFERRED
PROPOSALS OF THE BOARD OF DIRECTORS
THE DIRECTORS RECOMMEND A VOTE FOR
1. ELECTION OF DIRECTORS
Joseph M. Adamko, Lillian Berkman, Louis J. Cappelli, Walter Feldesman, Allan
F. Hershfield, Henry J. Humphreys, John C. Millman, Maxwell M. Rabb, Eugene T.
Rossides, William C. Warren.
For all Withheld for all
NOMINEES NOMINEES
/ / / /
To withhold authority to vote for any individual nominee(s) write that
nominee's name in the space provided.
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2. Proposal to approve the Stock Incentive Plan Amendment.
FOR AGAINST ABSTAIN
/ / / / / /
STOCKHOLDER PROPOSAL
THE DIRECTORS RECOMMEND
A VOTE AGAINST
3. Shareholder Proposal on change of control provisions.
FOR AGAINST ABSTAIN
/ / / / / /
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4. In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER
IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1,
"FOR" APPROVAL OF THE STOCK INCENTIVE PLAN AMENDMENT AND
"AGAINST" THE SHAREHOLDER PROPOSAL.
Signature(s) Date
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Please mark, date, and sign as your name appears hereon and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should so indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized officer. If shares are
held jointly, each shareholder named should sign.