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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:
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(4) Date Filed:
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LOGO STERLING BANCORP
540 MADISON AVENUE / NEW YORK, N.Y. 10022
LOUIS J. CAPPELLI
CHAIRMAN
& CHIEF EXECUTIVE
OFFICER
March 14, 1996
Dear Shareholder:
Sterling's Annual Meeting of Shareholders will be held on Thursday, April 18,
1996, at 10:00 a.m. in the Company's Board Room at 540 Madison Avenue (3rd
Floor), New York, N.Y. and you are invited to attend.
By any measure, 1995 was an impressive year for Sterling Bancorp: net income
increased 41% over 1994 as we continued to build our unique niche market
position into an enviable banking and financial service franchise -- a
springboard for future growth. 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,
Louis Cappelli
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LOGO
STERLING BANCORP
540 MADISON AVENUE, NEW YORK, NY 10022-3299
NOTICE OF ANNUAL MEETING
APRIL 18, 1996
The Annual Meeting of Shareholders of Sterling Bancorp will be held on
Thursday, April 18, 1996 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 as may properly come before the meeting or any
adjournment thereof.
The close of business on March 1, 1996 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 14, 1996
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STERLING BANCORP
540 Madison Avenue
New York, N.Y. 10022-3299
------------------
PROXY STATEMENT
------------------
MARCH 14, 1996
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 18,
1996. 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," for the amendment of the
Company's Stock Incentive Plan, 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 19, 1995.
The outstanding shares of the Company at the close of business on March 1,
1996 entitled to
vote at the Annual Meeting consisted of 6,395,722 Common Shares, $1 par value
("Common Shares"), and 251,288 Preferred Shares, ("Preferred Shares") of which
1,288 are Series B ($5 par value) and 250,000 are Series D ($10 par value). 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 1, 1996 are
entitled to vote at the Annual Meeting.
Assuming the presence of a quorum, directors are elected by a plurality of
the votes cast; approval of the Stock Incentive Plan Amendment requires the
affirmative vote of a majority of the holders of outstanding shares entitled to
vote. 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 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 18, 1996, 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 1995 Annual 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.
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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* 63 1992
Former Managing Dir., Manufacturers Hanover Trust Co.; Vice
Chairman of the Company and of the Bank; Director of the Bank
Lillian Berkman* 73 1989
President and Chief Executive Officer, General Alarm
Corporation; Director of the Bank
Louis J. Cappelli * 65 1971
Chairman of the Board and Chief Executive Officer of the
Company; Chairman of the Board and Director of the Bank
Walter Feldesman* 78 1975
Counsel, Baer Marks & Upham; Director of the Bank
Allan F. Hershfield 64 1994
President, Fashion Institute of Technology; Director of the Bank
Henry J. Humphreys 67 1994
Executive Director, American Association of the Sovereign
Military Order of Malta; Director of the Bank
John C. Millman* 53 1988
President of the Company; President, Chief Executive Officer and
Director of the Bank
Maxwell M. Rabb 85 1989
Counsel, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel;
former United States Ambassador to Italy; Director of the Bank
Eugene T. Rossides 68 1989
Senior Counsel, Rogers & Wells; former Assistant Secretary,
United States Treasury Department; Director of the Bank
William C. Warren* 87 1988
Dean Emeritus, Columbia University School of Law; Of Counsel,
Roberts & Holland; Director of the Bank
- ---------------
* Member of Executive Committee.
The following nominees hold directorships in public companies: Mr. Adamko,
Tommy Hilfiger Corporation; and Mr. Rabb, Defense Software & Systems, Inc. and
M.I.C. Industries, Inc.
Reference is made to "Security Ownership of Directors and Executive
Officers and Certain Beneficial Owners" on page 9 for information as to the
nominees' holdings of the Company's equity securities.
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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, 1995.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL ------------
COMPENSATION SECURITIES ALL OTHER
-------------------- UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) SATION($)(1)
- ----------------------------------------------- ---- --------- -------- ------------ ------------
Louis J. Cappelli 1995 306,324 150,000 26,556
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
Chairman of the Board,
Sterling National Bank
John C. Millman 1995 221,019 100,000 5,331
President, 1994 189,500 65,000 2,785
Sterling Bancorp 1993 180,288 43,000 25,000 2,937
President and Chief Executive Officer,
Sterling National Bank
Jerrold Gilbert 1995 122,500 10,000 2,716
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
Executive Vice President,
General Counsel and Secretary,
Sterling National Bank
Leonard Rudolph 1995 126,000 15,000 2,790
Vice President, 1994 120,000 12,000 2,379
Sterling Bancorp 1993 112,500 14,350 5,000 2,037
Senior Vice President,
Sterling National Bank
John A. Aloisio 1995 127,500 12,000 2,865
Vice President, 1994 122,500 9,000 2,482
Sterling Bancorp 1993 117,500 7,000 5,000 2,117
Senior Vice President,
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 ("ESOP") compensation expense, and as to Messrs. Cappelli
and Millman, $4,255 and $2,278, respectively, accruing to them for 1995 under
the Company's supplemental pension benefit plan (see "Retirement Plans" below)
as compensation for Internal Revenue Code limitations on contributions to the
ESOP for them.
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.
Employment Contracts. The Company has agreements with Messrs. Cappelli and
Millman which currently provide for terms extending until December 31, 2000 and
December 31, 1998, 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
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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.
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
450,000....... 67,260 100,890 134,520 168,150 201,780 235,410 269,040 302,670 336,300
500,000....... 74,760 112,140 149,520 186,900 224,280 261,660 299,040 336,420 373,800
- ---------------
* 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, as amended, ("Supplemental Plan")
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.
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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.
The current number of years of service credited to Messrs. Cappelli,
Millman, Gilbert, Aloisio and Rudolph are 44, 19, 21, 5 and 5 respectively.
OTHER PLANS
The following table sets forth information as to incentive stock options
held at December 31, 1995 by each of the executive officers named in the summary
compensation table; no other options or stock appreciation rights ("SARs") were
held by such officers.
FISCAL YEAR-END OPTION VALUES
NUMBER OF COMMON SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
FISCAL YEAR END AT FISCAL YEAR END
------------------------------- -------------------------------
NAME EXERCISABLE NON-EXERCISABLE EXERCISABLE NON-EXERCISABLE
- --------------------------------------- ----------- --------------- ----------- ---------------
Louis J. Cappelli...................... 25,000 10,000 $ 131,250 $52,500
John C. Millman........................ 25,000 131,250
Jerrold Gilbert........................ 5,000 22,500
Leonard Rudolph........................ 5,000 22,500
John A. Aloisio........................ 5,000 22,500
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.
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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
1990 100 100 100
1991 87 116 130
1992 130 156 140
1993 118 211 155
1994 102 223 157
1995 202 337 215
- ---------------
* $100 invested on 12/31/90 in Stock or Index.
Including reinvestment of dividends.
Fiscal year 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.
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The preceding graph reflects the fact that while the Company's net income
and income per share have increased more than 20% annually since current top
management took office in 1992 (see the table below taken from "Selected
Financial Data" in the Company's 1995 annual report), the price of the Company's
Common Shares did not begin to increase until 1995.
YEARS ENDED DECEMBER 31 1991 1992 1993 1994 1995
- --------------------------------------------- ------- ------ ------ ------ ------
Net income (loss)............................ $(4,692) $2,577 $3,155 $4,006 $5,638
Per average common share..................... (.74) .41 .50 .63 .88
Dividends per common share*.................. .22 .20 .20 .21 .25
- ---------------
* The quarterly dividend was increased to $.06 during the last quarter of 1994
and to $.07 during the last quarter of 1995.
In this context, the graph below, which compares the percentage changes in
total shareholder return on the Company's Common Shares to the S&P 500 Index and
the Peer Group for the one year period ending December 31, 1995 may be of
interest.
COMPARISON OF 12 MONTH 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
1994 100 100 100
1995 198 151 138
- ---------------
* $100 invested on 12/31/94 in Stock or Index. Including reinvestment of
dividends. Fiscal year ending December 31.
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MEETINGS AND ATTENDANCE OF DIRECTORS; COMMITTEES; FEES
During the year ended December 31, 1995, the Board of Directors of the
Company held five regularly scheduled meetings. In addition, various committees
of the Board met at regular meetings. No director attended fewer than 75% of the
meetings he or she was required to attend. The Company has standing audit and
compensation committees and does not have a nominating committee or a committee
performing similar functions.
The members of the audit committee ("Audit Committee") are Messrs.
Feldesman (chair), Adamko, Humphreys and Rossides. The Committee held two
meetings during the year ended December 31, 1995. 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
year ended December 31, 1995.
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 meeting fees. Mr. Adamko, Vice
Chairman of the Company and the Bank, receives a monthly fee of $3,750 but does
not receive attendance fees.
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 the Bank on the same terms available to
other persons. The Bank also makes loans from time to time to related interests
of directors. Such loans are 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 do not
involve more than the normal risk of collectability or present other unfavorable
features. Messrs. Feldesman, Rabb and Warren each are counsel to law firms that
the Company retained during its last fiscal year.
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SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL
OWNERS
The following table sets forth, as of March 13, 1996, 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 3 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 13, 1996 was $12.50 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.................... 1,000 +
Lillian Berkman..................... 8,300 .13
Louis J. Cappelli................... 176,121 2.75 6,867 2.75
Walter Feldesman.................... 3,500 +
John C. Millman..................... 81,241 1.27 5,957 2.38
Maxwell M. Rabb..................... 700 +
Eugene T. Rossides.................. 2,814 +
William C. Warren................... 14,186 .22
Allan F. Hershfield................. 800 +
Henry J. Humphreys.................. 700 +
Jerrold Gilbert..................... 38,290 .60 4,601 1.84
Leonard Rudolph..................... 8,423 .13 4,744 1.90
John A. Aloisio..................... 9,094 .14 4,690 1.88
All directors and executive officers
as a group (15 in group).......... 356,722 5.57 33,555 13.42
- ---------------
+ 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. The
shares shown as owned include as to each director 500 Common Shares and as to
Messrs. Cappelli, Millman, Gilbert, Rudolph, and Aloisio, and all executive
officers as a group, 25,000, 25,000, 5,000, 5,000, 5,000 and 70,000 Common
Shares, respectively, covered by outstanding incentive stock options exercisable
within 60 days, and, as to Messrs. Cappelli, Millman, Gilbert, and all executive
officers as a group include 50,000, 35,000, 5,000 and 92,500 Common Shares,
respectively, granted under the Company's Stock Incentive Plan as to which they
do not have sole investment power, and as to the persons named in note (2) below
and all directors and officers as a group, include shares issuable on conversion
of Debentures held as set forth in note (2). In addition, the shares shown as
owned by Mr. Cappelli include 298 Common Shares owned by his wife, the shares
shown as owned by Mr. Millman include 20 shares owned by his wife as custodian,
and the shares shown as owned by Mr. Gilbert include 100 shares owned as
custodian, beneficial ownership of which each of them disclaims.
(2) Mrs. Berkman and Messrs. Cappelli and Warren own $10,000 (less than .1
of 1%), $50,000 (0.3%) and $50,000 (0.3%) 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. Warren and Rudolph own $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.
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The following table sets forth the number of Common Shares owned
beneficially by Dimensional Fund Advisors, Inc. based upon information provided
by it to the Company as of December 31, 1995.
NUMBER AND
NATURE OF
COMMON SHARES APPROXIMATE
BENEFICIALLY PERCENTAGE OF
NAME AND ADDRESS OWNED CLASS
- ----------------------------------------------------------------- ------------- -------------
Dimensional Fund Advisors Inc. ("Dimensional")................... 477,300(1) 7.52%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
- ---------------
(1) Dimensional has advised the Company that it is a registered investment
advisor and is deemed to have beneficial ownership of 477,300 Common Shares as
of December 31, 1995, 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.
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 and
executive officers. 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, which authorized 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. Information as to the types of
awards and the Federal income tax consequences of each type is set forth under
appropriate captions on pages 11 through 13 below. All of the 100,000 shares
covered by the Plan were awarded in the form of incentive stock options.
In April 1995, shareholders approved an amendment to the Plan which
increased the aggregate number of shares subject to the Plan by 300,000 and
provided for the automatic grant of options to directors who are not also
employees or officers of the Company or a subsidiary ("Non-Employee Directors").
Since then, awards covering an aggregate of 236,000 shares were made. After
giving effect to such grants, only 64,000 shares remained available under the
Plan.
The Compensation Committee has advised the Board of Directors of its belief
that there should be greater utilization of stock-based compensation and has
recommended that the number of shares available under the Plan be increased by
300,000 shares (see "Compensation Committee Report" attached as
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Exhibit A to this Proxy Statement). The Board of Directors has approved and
recommends to the shareholders an amendment to the Plan which would increase the
aggregate number of shares subject to it by 300,000. The text of the amendment
is attached as Exhibit B to this Proxy Statement. No grants will be made under
the Plan pursuant to the proposed amendment unless the shareholders approve the
amendment at the 1996 Annual Meeting.
Approval of the amendment requires the affirmative vote of a majority of
the holders of outstanding shares entitled to vote.
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.
ADMINISTRATION
Authority to administer the Plan was delegated by the Board to a Committee
which consists 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. Approximately 75 employees of the
Company and its subsidiaries are 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).
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.
11
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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.
NON-EMPLOYEE DIRECTOR GRANTS
Under the Plan, as amended, 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.
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.
FEDERAL INCOME TAX CONSEQUENCES
In general, 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.
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.
12
16
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.
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. 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.
On April 28, 1995, pursuant to the terms of the Plan, NQSO's to purchase
2,000 Common Shares were granted to each of the Company's eight Non-Employee
Directors at a price of $7.25 per share, the closing price of the Common Shares
on such date. Effective January 3, 1996, ISO's covering 34,000 Common Shares
were granted to executive officers (7,000 to Mr. Gilbert; 15,000 to Mr. Rudolph;
and 12,000 to Mr. Aloisio), ISO's covering 75,500 Common Shares were granted to
other employees, restricted stock awards covering 92,500 Common Shares were made
to executive officers (including 50,000 to Mr. Cappelli, 35,000 to Mr. Millman,
and 5,000 to Mr. Gilbert), and restricted stock awards covering 18,000 Common
Shares were made to other employees. Generally, the ISO's become exercisable on
the first anniversary of the effective date, and the restrictions on the
restricted stock lapse, as to 25% of the shares, on each of the next four
anniversaries of the effective date. The exercise price of each ISO is $12.50,
the closing price of the Common Shares on January 3, 1996.
REQUIRED VOTE FOR APPROVAL
Approval of the Amendment requires the vote of a majority of the holders of
the outstanding shares entitled to vote.
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.
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, 1995 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
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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 1997 ANNUAL MEETING
Any shareholder who may desire to submit a proposal for inclusion in the
proxy and proxy statement for the 1997 Annual Meeting of Shareholders scheduled
to be held on April 17, 1997, 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, 1996.
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
$3,500, 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, 1995 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,
1995, 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 14, 1995
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EXHIBIT A
COMPENSATION COMMITTEE REPORT
The policy of the Company -- adopted by the Board of Directors in 1993 on
the recommendation of our Committee is:
"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, loan and deposit growth."
In accordance with the above, 1995 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.
1995 performance exceeded bonus targets and given the level of performance
achieved, we deemed it appropriate that the bonus amounts for Messrs. Cappelli
and Millman be augmented to be $150,000 and $100,000 respectively, and for the
terms of their employment agreements to be extended through December 31, 2000
and December 31, 1998, respectively.
In light of the advances made by the Company, since we recommended that
performance-based compensation be emphasized, we advised the Board of our belief
that there should be greater utilization of stock-based compensation and in that
connection recommended to the Board an increase of 300,000 in the shares
available under the Company's Stock Incentive Plan, which increase the Board is
recommending to the shareholders for approval at the upcoming annual meeting.
Dated: February 8, 1996
Walter Feldesman Lillian Berkman, Chair
Maxwell M. Rabb William C. Warren, Vice Chair
A-1
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EXHIBIT B
STERLING BANCORP STOCK INCENTIVE PLAN AMENDMENT
A. INTRODUCTION -- Sterling Bancorp (the "Company") desires to amend the
Stock Incentive Plan originally adopted by its Board on February 20, 1992 and
approved by its shareholders on April 16, 1992 as amended by its Board on
February 4, 1995, which amendment was approved by its shareholders on April 20,
1995 (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.
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 1996 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. SHARES SUBJECT TO THE PLAN -- The first sentence of Section 3 of the
Plan, as amended, is amended to further increase the number set forth therein by
300,000.
B-1
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STERLING BANCORP
540 MADISON AVENUE, NEW YORK, NY 10022-3299
LOGO
Subsidiaries and Division
STERLING NATIONAL BANK & TRUST COMPANY OF NEW YORK
STANDARD FACTORS CORPORATION/STERLING FACTORS
STERLING INDUSTRIAL LOAN ASSOCIATION
STERLING BANKING CORPORATION
UNIVERSAL FINANCE CORPORATION
ZENITH FINANCIAL SERVICES COMPANY (DIVISION)
21
STERLING BANCORP
540 MADISON AVENUE, NEW YORK, NY 10022-3299
LOGO
22
PROXY THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
(LOGO) STERLING BANCORP
ANNUAL MEETING OF SHAREHOLDERS, APRIL 18, 1996
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 18, 1996, 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
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23
Please mark /X/
your votes
as this
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
/ / / / / /
3. 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 AND
"FOR" APPROVAL OF THE STOCK INCENTIVE PLAN AMENDMENT.
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.
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