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:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (SS) 240.14a-11(c) or (SS) 240.14a-12
Flushing Financial Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[_] Fee paid previously with preliminary materials.
[_] 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:
FLUSHING FINANCIAL CORPORATION
144-51 Northern Boulevard
Flushing, New York 11354-4240
(718) 961-5400
April 8, 2002
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Flushing Financial Corporation. The annual meeting will be held at the
LaGuardia Marriott located at 102-05 Ditmars Boulevard, East Elmhurst, New York
11369, on May 21, 2002 at 2:00 p.m., New York time. The matters to be
considered by stockholders at the annual meeting are described in the
accompanying materials.
It is very important that you be represented at the annual meeting regardless
of the number of shares you own. Whether or not you plan to attend the meeting
in person, we urge you to vote as soon as possible. You may vote by marking,
signing and dating your proxy card and returning it in the envelope provided.
Alternatively, you may vote over the Internet or by telephone. Voting over the
Internet, by telephone or by written proxy will not prevent you from voting in
person, but will ensure that your vote is counted if you are unable to attend.
Please review the instructions on the proxy card regarding each of these voting
options.
Your continued support of and interest in Flushing Financial Corporation are
sincerely appreciated.
Sincerely,
/s/ Gerard P. Tully /s/ Michael J. Hegarty
Gerard P. Tully, Sr. Michael J. Hegarty
Chairman of the Board President and Chief Executive Officer
FLUSHING FINANCIAL CORPORATION
144-51 Northern Boulevard
Flushing, New York 11354-4240
(718) 961-5400
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------------
DATE & TIME: May 21, 2002 at 2:00 p.m. New York time
PLACE: LaGuardia Marriott
102-05 Ditmars Boulevard
East Elmhurst, New York 11369
ITEMS OF BUSINESS: (1) To elect three directors for a three-year term and until their successors are elected
and qualified;
(2) To approve an amendment to the Company's certificate of incorporation to
increase the number of shares of common stock that the Company is authorized
to issue to 40,000,000;
(3) To ratify the appointment by the Board of Directors of PricewaterhouseCoopers
LLP as the Company's independent auditors for the fiscal year ending
December 31, 2002; and
(4) To transact such other business as may properly come before the meeting or any
adjournment thereof.
RECORD DATE: You are entitled to vote at the annual meeting or any adjournment of that meeting only
if you were a stockholder at the close of business on Monday, March 25, 2002.
VOTING BY PROXY: Please submit a proxy as soon as possible so that your shares can be voted at the
meeting in accordance with your instructions. You may submit your proxy (1) over
the Internet, (2) by telephone, or (3) by mail. For specific instructions, please refer to
the information in the proxy statement and the instructions on the proxy card.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Anna M. Piacentini
Anna M. Piacentini
Corporate Secretary
Flushing, New York
April 8, 2002
FLUSHING FINANCIAL CORPORATION
144-51 Northern Boulevard
Flushing, New York 11354-4240
(718) 961-5400
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PROXY STATEMENT
Annual Meeting of Stockholders
To be held on May 21, 2002
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INTRODUCTION
This proxy statement is furnished to holders of common stock, $.01 par value
per share, of Flushing Financial Corporation (the "Company"), which is the sole
stockholder of Flushing Savings Bank, FSB (the "Bank"). Proxies are being
solicited on behalf of the Board of Directors of the Company (the "Board of
Directors") to be used at the annual meeting of stockholders to be held at the
LaGuardia Marriott located at 102-05 Ditmars Boulevard, East Elmhurst, New
York, 11369 at 2:00 p.m., New York time, on May 21, 2002 and at any adjournment
thereof. Only holders of record of the Company's issued and outstanding common
stock as of the close of business on the record date, March 25, 2002, are
entitled to notice of and to vote at the annual meeting and any adjournments
thereof. This proxy statement, the accompanying notice of annual meeting of
stockholders, the form of proxy, and the Company's 2001 Annual Report to
Stockholders, including the consolidated financial statements for the year
ended December 31, 2001, are first being mailed on or about April 8, 2002 to
all persons entitled to vote at the annual meeting.
VOTING AND PROXIES
Voting Rights and Quorum Requirement
Stockholders of record as of the close of business on March 25, 2002, the
record date, are entitled to one vote for each share of common stock then held.
On the record date, there were [ ] shares of common stock outstanding and
entitled to be voted and the Company had no other class of equity securities
outstanding. Holders of a majority of the outstanding shares of common stock
must be present at the annual meeting, either in person or represented by
proxy, to constitute a quorum for the conduct of business. In order to ensure a
quorum, you are requested to vote by proxy even if you plan to attend the
annual meeting in person. You can vote by completing the enclosed proxy card
and returning it signed and dated in the enclosed postage-paid envelope. You
can also vote over the Internet or by telephone, as described below.
Voting Electronically over the Internet or by Telephone
If your shares are registered in your name with our transfer agent, you may
vote either over the Internet or by telephone. Specific instructions for voting
over the Internet or by telephone are set forth on the enclosed proxy card.
These procedures are designed to authenticate each stockholder's identity and
to allow stockholders to vote their shares and confirm that their instructions
have been properly recorded.
If your shares are registered in the name of a bank or brokerage firm, you
may also be able to vote your shares electronically over the Internet or by
telephone. A large number of banks and brokerage firms are participating in
online programs that allow eligible stockholders to vote over the Internet or
by telephone. If your bank or brokerage firm is participating in such a
program, your voting form will provide instructions. If your voting form does
not contain Internet or telephone voting information, please complete and
return the paper proxy card in the self-addressed, postage paid envelope
provided.
1
Effect of Proxy
The proxy solicited by this proxy statement, if properly signed and received
by the Company in time for the annual meeting, or properly transmitted by
telephone or the Internet, and not revoked prior to its use, will be voted in
accordance with the instructions it contains. If no instructions are given, the
proxy will be voted FOR election of the nominees for director described herein,
FOR the approval of the amendment to the Company's certificate of incorporation
to increase the number of shares of common stock authorized for issuance by the
Company and FOR ratification of the selection of PricewaterhouseCoopers LLP as
independent auditors for fiscal year 2002. With respect to the transaction of
such other business as may properly come before the meeting, each proxy
received will be voted in accordance with the best judgment of the persons
appointed as proxies. At this time, the Board of Directors knows of no such
other business.
Revoking a Proxy
If you give a proxy, you may revoke it at any time before it is voted by (1)
filing written notice of revocation with the Corporate Secretary of the Company
(Anna M. Piacentini, Corporate Secretary, Flushing Financial Corporation,
144-51 Northern Boulevard, Flushing, New York 11354-4240); (2) submitting a
duly executed proxy bearing a later date; or (3) appearing at the annual
meeting and giving the Corporate Secretary notice of your intention to vote in
person.
Votes Required for Approval
Directors are elected by a plurality of the votes cast with a quorum
present. Abstentions are considered present for purposes of determining the
presence of a quorum and will not affect the plurality vote required for the
election of directors. The affirmative vote of a majority of the outstanding
shares of common stock of the Company is required for approval of the amendment
to the Company's certificate of incorporation to increase the number of shares
of common stock authorized for issuance. The affirmative vote of a majority of
the total votes present in person or by proxy is required to ratify the
appointment of the independent auditors. Abstentions will have the effect of a
vote against these proposals. Under rules of the New York Stock Exchange, to
which its member firms are subject, these proposals are considered
"discretionary" items upon which brokerage firms holding shares of common stock
in "street name" may vote in their discretion on behalf of their clients if
such clients have not furnished voting instructions.
Cost of Solicitation of Proxies
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by mail, Morrow & Co., Inc., a proxy
soliciting firm, will assist the Company in soliciting proxies for the annual
meeting and will be paid a fee of $4,000, plus reimbursement for out-of-pocket
expenses. Proxies also may be solicited personally or by telephone or telecopy
by directors, officers and employees of the Company or the Bank, without
additional compensation therefor. The Company will also request persons, firms
and corporations holding shares in their names, or in the name of their
nominees, which are beneficially owned by others, to send proxy materials to
and obtain proxies from such beneficial owners, and will reimburse such holders
for reasonable expenses incurred in connection therewith.
2
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Stock Ownership of Certain Beneficial Owners
To the knowledge of the Company, the following persons were the beneficial
owners of more than five percent of the outstanding shares of common stock, as
of December 31, 2001.
Number of Shares
Name and Address of Beneficial Owner Beneficially Owned Percent of Class/(1)/
------------------------------------ ------------------ --------------------
J.P. Morgan Chase & Co./(2)/......... 1,246,237 9.24%
270 Park Avenue
New York, New York 10017
Dimensional Fund Advisors Inc./(3)/.. 967,700 7.17%
1299 Ocean Avenue
11th Floor
Santa Monica, California 90401
Pinnacle Associates, Ltd./(4)/....... 685,000 5.08%
666 Fifth Avenue
14th Floor
New York, New York 10103
Thomson Horstmann & Bryant, Inc./(5)/ 1,195,625 8.86%
Park 80 West
Plaza Two
Saddle Brook, New Jersey 07663
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(1) On December 31, 2001, the total number of shares of common stock
outstanding was 13,487,784.
(2) According to its filing with the SEC on Schedule 13G/A, J.P. Morgan Chase &
Co. has shared voting and dispositive power with respect to these shares of
common stock. J.P. Morgan Chase & Co., through an affiliate, serves as
trustee for the Flushing Financial Corporation Employee Benefit Trust. As
of December 31, 2001, there were 1,246,237 shares of common stock held in
the Flushing Financial Corporation Employee Benefit Trust.
(3) According to its filing with the SEC on Schedule 13G, Dimensional Fund
Advisors Inc. is an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940 and has sole voting and dispositive power
with respect to these shares of common stock.
(4) According to its filing with the SEC on Schedule 13G, Pinnacle Associates,
Ltd. is an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940 and has sole voting power with respect to
these shares.
(5) According to its filing with the SEC on Schedule 13G/A, Thomson Horstmann &
Bryant, Inc. is an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940 and has sole voting power with respect to
691,250 shares of common stock, shared voting power with respect to 27,675
shares of common stock, and sole dispositive power with respect to
1,195,625 shares of common stock.
3
Stock Ownership of Management
The following table sets forth information regarding the beneficial
ownership of the common stock as of January 31, 2002, by each director of the
Company, by each executive officer named in the Summary Compensation Table on
page 14, and by all directors and executive officers as a group.
Shares of
Common Stock
Name Position(s) with the Company Beneficially Owned/(1)(2)/
- ---- ---------------------------- -------------------------
Gerard P. Tully, Sr............................ Chairman of the Board 178,712/(3)/
Michael J. Hegarty............................. President, Chief Executive Officer and 290,205/(4)/
Director
James D. Bennett............................... Director 15,000/(5)/
Louis C. Grassi................................ Director 17,812/(6)/
Robert A. Marani............................... Director 155,212/(7)/
John O. Mead................................... Director 118,087/(8)/
Vincent F. Nicolosi............................ Director 84,547/(9)/
Franklin F. Regan, Jr.......................... Director 88,952/(10)/
John E. Roe, Sr................................ Director 138,312/(11)/
Michael J. Russo............................... Director 179,624/(12)/
John R. Buran.................................. Executive Vice President 39,000/(13)/
and Chief Operating Officer
Monica C. Passick.............................. Senior Vice President, Treasurer 142,274/(14)/
and Chief Financial Officer
Henry A. Braun................................. Senior Vice President 124,045/(15)/
Francis W. Korzekwinski........................ Senior Vice President 118,735/(16)/
All directors and executive officers as a group
(16 persons)................................. 1,920,465/(17)/
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(1) Under the rules of the SEC, beneficial ownership includes any shares over
which an individual has sole or shared power to vote or to dispose, as well
as any shares that the individual has the right to acquire within 60 days.
Unless otherwise indicated, each person has sole voting and dispositive
power as to the shares reported. Officers have the power to direct the
voting and, subject to plan provisions, the disposition of shares held for
their account in the Bank's 401(k) Savings Plan and the Company's
Stock-Based Profit Sharing Plan, and have voting power over, but no
economic interest in, the shares representing their proportionate voting
interest in the Company's Employee Benefit Trust. Officers and directors
have the power to vote, but not the power to dispose of, unvested shares of
restricted stock granted to them under the Company's 1996 Restricted Stock
Incentive Plan. The table also includes shares which the named individual
had a right to acquire upon the exercise of stock options granted under the
Company's 1996 Stock Option Incentive Plan which were exercisable on
January 31, 2002. No additional stock options are scheduled to become
exercisable within 60 days after January 31, 2002.
(2) On January 31, 2002, the total number of shares of common stock outstanding
was 13,493,896 (including shares held by the Employee Benefit Trust). As of
January 31, 2002, other than Messrs. Tully, Hegarty, Marani, Roe and Russo
and Ms. Passick, who beneficially owned 1.32%, 2.15%, 1.15%, 1.02%, 1.33%
and 1.05% of the outstanding shares of common stock, respectively, each
individual beneficially owned less than 1% of the outstanding shares of
common stock, and all directors and executive officers as a group
beneficially owned 14.23% of the outstanding shares of common stock.
(3) Includes 49,500 shares held jointly by Mr. Tully and his spouse, with whom
he shares voting and dispositive power, 35,250 shares held by Mrs. Tully or
an entity owned by Mrs. Tully with respect to which Mr. Tully disclaims
beneficial ownership, 7,000 shares held by Tulger Con Corp. with respect to
which Mr. Tully has sole voting and dispositive power, 1,125 unvested
shares of restricted stock, and 64,687 shares underlying exercisable stock
options.
4
(4) Includes 23,714 shares credited to Mr. Hegarty's account in the 401(k)
Plan, 7,218 shares credited to his account in the Profit Sharing Plan,
39,000 unvested shares of restricted stock, 150,000 shares underlying
exercisable stock options, and 8,773 shares representing his proportionate
voting interest in the Employee Benefit Trust.
(5) Includes 3,375 unvested shares of restricted stock and 6,750 shares
underlying exercisable stock options.
(6) Includes 3,375 unvested shares of restricted stock and 6,750 shares
underlying exercisable stock options.
(7) Includes 89,400 shares held by Mrs. Marani with respect to which Mr. Marani
disclaims beneficial ownership, 1,125 unvested shares of restricted stock,
and 64,687 shares underlying exercisable stock options.
(8) Includes 1,125 unvested shares of restricted stock, and 64,687 shares
underlying exercisable stock options.
(9) Includes 7.065 shares held jointly by Mr. Nicolosi and his spouse, with
whom he shares voting and dispositive power, 1,125 unvested shares of
restricted stock, and 64,687 shares underlying exercisable stock options.
(10) Includes 1,500 shares held by Mrs. Regan with respect to which Mr. Regan
disclaims beneficial ownership, 1,125 unvested shares of restricted stock,
and 64,687 shares underlying exercisable stock options.
(11) Includes 11,650 shares held by Mrs. Roe with respect to which Mr. Roe
disclaims beneficial ownership. Also includes 10,350 shares held by City
Underwriting Agency, Inc. Defined Profit Sharing Plan and Trust, with
respect to which Mr. Roe shares voting and dispositive power, as well as
1,125 unvested shares of restricted stock and 64,687 shares underlying
exercisable stock options.
(12) Includes 113,812 held jointly by Mr. Russo and his spouse with whom he
shares voting and dispositive power, 1,125 unvested shares of restricted
stock and 64,687 shares underlying exercisable stock options.
(13) Includes 3,000 shares held jointly by Mr. Buran and his spouse with whom
he shares voting and dispositive power, 18,000 unvested shares of
restricted stock and 18,000 shares underlying exercisable stock options.
(14) Includes 21,825 shares credited to Ms. Passick's account in the 401(k)
Plan, 8,126 shares credited to her account in the Profit Sharing Plan,
7,500 unvested shares of restricted stock, 77,000 shares underlying
exercisable stock options, and 8,773 shares representing her proportionate
voting interest in the Employee Benefit Trust.
(15) Includes 4,130 shares credited to Mr. Braun's account in the 401(k) Plan,
7,375 shares credited to his account in the Profit Sharing Plan, 7,500
unvested shares of restricted stock, 77,100 shares underlying exercisable
stock options, and 8,773 shares representing his proportionate voting
interest in the Employee Benefit Trust.
(16) Includes 7,086 shares credited to Mr. Korzekwinski's account in the 401(k)
Plan, 6,693 shares credited to his account in the Profit Sharing Plan,
7,500 unvested shares of restricted stock, 72,600 shares underlying
exercisable stock options, and 8,773 shares representing his proportionate
voting interest in the Employee Benefit Trust.
(17) Includes 75,715 shares credited to accounts of executive officers in the
401(k) Plan, 40,935 shares credited to their accounts in the Profit
Sharing Plan, 109,125 unvested shares of restricted stock held by
executive officers and directors, 998,109 shares underlying exercisable
stock options held by executive officers and directors, and 52,638 shares
representing the proportionate voting interest of executive officers in
the Employee Benefit Trust.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of copies of reports furnished to the Company or
written representations that no other reports were required, the Company
believes that during the fiscal year ended December 31, 2001, all filing
requirements under Section 16(a) of the Securities Exchange Act of 1934
applicable to its executive officers and directors were complied with.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of 10 directors
divided into three classes which are as equal in number as possible. The
directors hold office for staggered terms of three years (and until their
successors are elected and qualified). One of the three classes, comprising
approximately one third of the directors, is elected each year to succeed the
directors whose terms are expiring. The directors in Classes B and C are
serving terms expiring at the annual meeting of stockholders in 2003 and 2004,
respectively.
The directors in Class A, whose terms expire at the 2002 annual meeting, are
Michael J. Hegarty, John O. Mead and Michael J. Russo. Each of Messrs. Hegarty,
Mead and Russo has been nominated by the Board of Directors to stand for
re-election for a term expiring at the annual meeting of stockholders to be
held in 2005. Each of these nominees has consented to being named in this proxy
statement as a Board nominee and to serve if elected.
5
Unless otherwise instructed, it is the intention of the proxy holders to
vote the proxies received by them in response to this solicitation FOR the
election of the nominees named above as directors. If any such nominee should
refuse or be unable to serve, the proxies will be voted for such person as
shall be designated by the Board of Directors to replace such nominee. The
Board of Directors has no reason to believe that any of the Board nominees will
refuse or be unable to serve as a director if elected.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ELECTION OF THE
ABOVE NOMINEES AS DIRECTORS.
Information About Directors
The following table sets forth certain information regarding the Board
nominees and members of the Board of Directors of the Company whose terms will
continue after the annual meeting.
Director Term
Name Age/(1)/ Position(s) with the Company Since/(2)/ Expires
- ---- ------- ---------------------------- --------- -------
Gerard P. Tully, Sr... 74 Chairman of the Board 1967 2004
Michael J. Hegarty.... 62 President, Chief Executive 1987 2005/(3)/
Officer and Director
James D. Bennett...... 63 Director 1998 2004
Louis C. Grassi....... 46 Director 1998 2003
Robert A. Marani...... 79 Director 1977 2003
John O. Mead.......... 79 Director 1987 2005/(3)/
Vincent F. Nicolosi... 62 Director 1977 2004
Franklin F. Regan, Jr. 72 Director 1969 2003
John E. Roe, Sr....... 68 Director 1968 2003
Michael J. Russo...... 67 Director 1984 2005/(3)/
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(1) As of December 31, 2001.
(2) With the exception of Messrs. Bennett and Grassi, who commenced service as
directors of the Company on September 29, 1998, all other directors
commenced service as directors of the Company on May 10, 1994, one day
after the date of the Company's incorporation. The dates set forth above
are the dates the individuals commenced service as directors or trustees of
the Bank or its predecessor.
(3) Subject to re-election at the annual meeting.
Set forth below is certain information with respect to the Board nominees
and other directors of the Company. Unless otherwise indicated, the principal
occupation listed below for each person has been his or her principal
occupation for the past five years.
Board Nominees
Michael J. Hegarty has served as President and Chief Executive Officer of
the Company and the Bank since October 1, 1998. He joined the Company as
Executive Vice President and Corporate Secretary and the Bank as Executive Vice
President and Chief Operating Officer in 1995. Prior to that, he was Vice
President, Finance as well as Corporate Secretary and Treasurer and a director
of EDO Corporation, a manufacturer of defense systems and components. Mr.
Hegarty remains a director of EDO Corporation. Mr. Hegarty also serves on the
Board of Directors of the Community Bankers Association of New York State.
John O. Mead served, until his retirement in 1990, as President and Chairman
of the Board of Printfab, Inc., a fabric marketing company located in New York,
New York, and Printed Fabrics Corp., a fabric manufacturing company located in
Carrollton, Georgia.
Michael J. Russo is self-employed as a consulting engineer and serves as
Chairman of the Board of Anthony Russo, Inc., a general contracting firm, and
of Fresh Meadow Mechanical Corp., a mechanical contracting firm, for which he
also serves as Corporate Secretary. Mr. Russo is President and Director of
Operations of Northeastern Aviation Corp., an aircraft charter and management
firm, and is a partner in AMF Associates, a commercial real estate company. Mr.
Russo also serves as chairman of the Board of Trustees of Flushing Hospital
Medical Center.
6
Continuing Directors
Gerard P. Tully, Sr. has served as Chairman of the Board of the Company
since its formation in 1994, and as Chairman of the Board of the Bank since
1980. Mr. Tully served as Chief Executive Officer of the Bank from 1981 through
1989. Mr. Tully is the Chief Executive Officer and a director of Van-Tulco,
Inc. and Tulger Contracting Corp., construction companies, and Bainbridge
Avenue Corp., 1620 Ralph Avenue Corp. and Contractors Associates Inc., each a
real estate holding company.
James D. Bennett is of counsel to the law firm of Farrell, Fritz, P.C. in
Uniondale, New York with a practice in civil law and real estate. He also
serves as Chief Executive Officer of Land Enterprises, Inc., a realty
investment and management firm. Mr. Bennett currently serves as a Commissioner
of the New York State Public Service Commission. Mr. Bennett was formerly a
partner in the law firm of Bennett, Rice &Schure, LLP in Rockville Centre, New
York. In the past, he has served as Trustee of both the Long Island Power
Authority and the New York State Conservation Fund Advisory Council and as
Supervisor and Councilman of the Town of Hempstead.
Louis C. Grassi is Managing Partner of Grassi & Co., CPAs, P.C. located in
Lake Success, New York, with a practice in accounting, tax and management
consulting services. He is a member of the Board of Directors of the New York
State Society of Certified Public Accountants and is Chairman of the Society's
Task Force on Professional Liability Insurance. In addition, he is a licensed
certified fraud examiner, an author and an editor of a national tax and
accounting publication.
Robert A. Marani is a licensed real estate broker who worked through the
offices of Flushing Kent Realty Corp. until his retirement in 1992. He is a
commercial real estate developer currently managing family-owned commercial
real estate properties in New York and New Jersey.
Vincent F. Nicolosi is an attorney in Bayside, New York with a general
practice specializing in civil litigation. Mr. Nicolosi was formerly a partner
in the Bayside law firm of Nicolosi & Sciacca. Since December 1998, Mr.
Nicolosi has served as a Commissioner of the New York State Investigation
Commission. Mr. Nicolosi served as a Queens Assistant District Attorney from
1967 to 1973. From 1973 to 1980, Mr. Nicolosi was a member of the New York
State Assembly and served as Chairman of the Assembly Insurance Committee.
Franklin F. Regan, Jr., is of counsel to the law firm of Cullen and Dykman
in Garden City and Flushing, New York with a practice specializing in real
estate and banking matters, including commercial, residential and multi-family
real estate lending; other commercial lending; bank regulatory matters; and
commercial and residential bankruptcy and foreclosure matters. Prior to July 1,
2001, Mr. Regan maintained a general law practice in Flushing, New York.
John E. Roe, Sr. is Chairman of the Board of City Underwriting Agency, Inc.,
insurance brokers located in Lake Success, New York.
7
Executive Officers Who Are Not Directors
The following persons currently serve as executive officers who are not
directors of the Company.
Name Age/(1)/ Position(s) with the Company
---- ------- ----------------------------
John R. Buran.......... 52 Executive Vice President and Chief
Operating Officer
Monica C. Passick...... 63 Senior Vice President, Treasurer and
Chief Financial Officer
Henry A. Braun......... 56 Senior Vice President
Robert L. Callicutt.... 59 Senior Vice President
Francis W. Korzekwinski 39 Senior Vice President
Anna M. Piacentini..... 55 Senior Vice President and Corporate
Secretary
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(1) As of December 31, 2001.
Set forth below is certain information with respect to the executive
officers who are not directors of the Company.
John R. Buran was named Executive Vice President and Chief Operating Officer
of the Company and the Bank in January, 2001. For the four-year period prior to
joining the Bank, Mr. Buran was Executive Vice President of the New York Metro
Division of Fleet Bank, NA. From 1994 to 1996, Mr. Buran was Senior Vice
President, Division Head, Retail Services of NatWest's Consumer Banking Group.
Prior to 1994, he held several management positions at Citibank/Citicorp, most
recently as Vice President, New York Investment Sales.
Monica C. Passick has been Senior Vice President, Treasurer and Chief
Financial Officer of the Company since its formation in 1994. Ms. Passick
joined the Bank in 1979 as an Assistant Treasurer. She was appointed Controller
of the Bank in 1982 and Vice President in 1983. In 1993, Ms. Passick was
promoted to Senior Vice President/Finance of the Bank. Ms. Passick is a
Certified Public Accountant.
Henry A. Braun has been a Senior Vice President of the Company since 1995.
Mr. Braun joined the Bank in 1994 as Senior Vice President/Bank Operations, a
position he previously held at The Greater New York Savings Bank where he was
employed for five years. Prior to that, Mr. Braun was with The Williamsburgh
Savings Bank for twenty years rising from Assistant Vice President/EDP Auditor
to Vice President/Auditor to Senior Vice President/Operations to Executive Vice
President and Chief Operating Officer.
Robert L. Callicutt was elected a Senior Vice President of the Company in
1999. Mr. Callicutt joined the Bank in 1995 as Vice President of Residential
Mortgage Banking. Prior to joining the Bank, he was Senior Vice President of
Mid-Island Equities Corp., a mortgage banking company, for seven years. Prior
to that, he served as Vice President and Manager of Dean Witter Reynolds, a
stock brokerage firm, in its mortgage whole loan trading department.
Francis W. Korzekwinski was elected a Senior Vice President of the Company
in 1999. Mr. Korzekwinski joined the Bank in 1993 as Assistant Vice President
of Commercial Real Estate and was promoted to Vice President in 1995. He is
also responsible for the New York Federal Division of the Bank. Prior to
joining the Bank, Mr. Korzekwinski was Vice President, Mortgage Officer at
Bankers Federal Savings Bank, FSB for five years. Prior to that, he served as
Vice President of Secondary Marketing for a mortgage banking company.
Anna M. Piacentini has been a Senior Vice President of the Company since
1995. In 1998, Ms. Piacentini was named Corporate Secretary of the Company. Ms.
Piacentini joined the Bank in 1969 and has served in various capacities
including as an Executive Assistant for Branch Operations, Assistant Secretary
for Human Resources and Assistant Vice President of Human Resources. In 1984,
Ms. Piacentini was named Vice President/Human Resources of the Bank and in 1994
was promoted to Senior Vice President/Human Resources of the Bank. Ms.
Piacentini has served as Corporate Secretary of the Bank since 1995.
8
Meetings and Committees of the Board of Directors of the Company and of the Bank
The Board of Directors meets on a monthly basis and may have additional
special meetings upon the request of the Chairman of the Board, the President
or a majority of directors in office at the time. During 2001, the Board of
Directors held 12 regular meetings and one special meeting. No director
attended less than 75% of the meetings of the Board of Directors and its
committees on which he served. The Board of Directors has established the
following committees, among others:
Compensation Committee. The Compensation Committee is composed of Messrs.
Nicolosi (Chairman), Grassi, Mead, Roe and Russo. This committee has primary
responsibility for establishing and administering the compensation and benefit
programs of the Company for its executive officers and other key personnel, and
recommends to the Board of Directors grants to employees under the Company's
stock option and restricted stock plans. This committee meets on an as needed
basis. During 2001, this committee met four times.
Audit Committee. The Audit Committee is composed of Messrs. Grassi
(Chairman), Mead, Roe and Russo. This committee meets at least quarterly to
assist the Board of Directors in meeting its oversight responsibilities. This
committee reviews the results of regulatory examinations, internal audits and
audits by the Company's independent public accountants; the status of actions
taken to correct conditions reported; and any other matters affecting the
internal controls of the Company. This committee also meets with the Company's
outside auditors and implements the audit requirements under applicable federal
regulations. The Charter of the Audit Committee, which elaborates on its
functions and responsibilities, is on file with the SEC. During 2001, this
committee met five times.
Nominating Committee. The Nominating Committee is composed of Messrs. Roe
(Chairman), Marani, Regan, Russo and Tully. This committee has primary
responsibility for identifying and appointing nominees for the Board of
Directors of the Company. This committee held no meetings during 2001.
In addition to the committees described above, the Board of Directors has
established an Executive Committee, an Insurance Committee, an Investment
Committee, and a Planning Committee.
The business of the Bank is conducted at regular and special meetings of the
Bank's Board of Directors (the "Bank Board") and its committees. The Bank Board
and the Board of Directors are identically constituted. During 2001, the Bank
Board held 12 regular meetings and one special meeting.
The Bank Board maintains executive, insurance, investment, nominating,
planning, compensation and audit committees. The membership of these committees
is the same as that of the comparable committees of the Company's Board of
Directors. These committees serve substantially the same functions at the Bank
level as those of the Company. The Bank Board also maintains a loan committee,
a compliance committee, a CRA committee and an ethics committee. No director
attended less than 75% of the meetings of the Bank Board and its committees on
which he served. Directors of the Bank are nominated by the Bank Board
nominating committee and elected by the Company as sole shareholder of the Bank.
Director Compensation
Fee Arrangements. Directors who are not executive officers of the Company
or the Bank ("Outside Directors") currently receive an annual retainer of
$25,000 from the Bank, with no additional retainer from the Company. Outside
Directors also receive meeting fees of $1,200 for each Board or Bank Board
meeting attended and $600 for each committee meeting attended, whether or not
they are members of such committee. However, where the Board of Directors and
the Bank Board meet on the same day, directors receive only a single board
meeting fee for such meetings. Similarly, directors receive only a single
committee meeting fee where identically constituted committees of the Board of
Directors and Bank Board meet on the same day.
Outside Directors also receive a fee from the Bank for conducting on-site
inspections of proposed real estate collateral for certain loans in excess of
$500,000. For each day that a director conducts such inspections, the director
receives a fee of $400 for the first property inspected and $200 for each
additional property inspected on that day.
9
For the year ended December 31, 2001, the aggregate amount of retainer,
meeting and site inspection fees paid by the Bank to Outside Directors was
$532,600, which includes fees paid to Mr. Gleason, who retired in May 2001. In
addition to the retainer and meeting fees, Mr. Tully receives a fee of $155,000
per year for providing additional consulting services to the Bank and the
Company in his capacity as Chairman. For a discussion of fees paid to Mr.
Nicolosi and Mr. Regan for legal services rendered to the Bank in 2001, please
refer to "Compensation Committee Interlocks and Insider Participation" and
"Certain Transactions."
Director Deferred Compensation Plan. The Bank has adopted an Outside
Director Deferred Compensation Plan pursuant to which Outside Directors may
elect to defer all or a portion of their annual retainer, meeting fees, and
inspection fees. Deferred amounts are credited with earnings based on certain
mutual fund investments. The deferred amounts plus earnings thereon will be
paid to the director in cash after the director's termination of service,
either in a lump sum or, if the director so elects, in annual installments over
a period not to exceed five years. The Company has guaranteed the payment of
benefits under the Outside Director Deferred Compensation Plan. A director's
right to receive benefits under the plan is no greater than the right of an
unsecured general creditor of the Bank or the Company. As of December 31, 2001,
there were no participants in this plan.
Director Retirement Plan. The Bank has adopted an Outside Director
Retirement Plan, which provides benefits to each Outside Director who served as
an Outside Director for at least five years and whose years of service as an
Outside Director (including service as a director or trustee of the Bank or its
predecessor) plus age equals or exceeds 55. Benefits are also payable to an
Outside Director whose status as an Outside Director terminates due to death or
disability or who is an Outside Director upon a change of control (as defined
below). However, no benefits will be payable to a director who is removed for
cause. An eligible director will be paid an annual retirement benefit equal to
the last annual retainer paid prior to the director's retirement plus the total
amount of Board and Bank Board meeting fees which were paid to the director for
the 12 months immediately preceding retirement. Such benefit will be paid in
equal monthly installments for the lesser of the number of months such director
served as an Outside Director or 120 months. In the event of a change of
control, benefits under the plan will be paid in a cash lump sum; each director
with at least two years of service as an Outside Director will receive the
equivalent of 120 months of benefits, and each director with less than two
years of service will receive the equivalent of monthly benefits for the number
of months he served as an Outside Director. If the Outside Director dies before
receiving all benefits payable under the plan, the remaining benefits will be
paid to the Outside Director's surviving spouse. The Company has guaranteed the
payment of benefits under the Outside Director Retirement Plan. A director's
right to receive benefits under the plan is no greater than the right of an
unsecured general creditor of the Bank or the Company.
Stock Options and Restricted Stock. Pursuant to the Company's restricted
stock and stock option plans, each person who was an Outside Director on the
effective date of such plans, or who became an Outside Director after such date
and before May 20, 1998, received (after adjustment to reflect the Company's
1998 and 2001 stock splits) a one-time grant of 21,150 shares of restricted
stock and options to purchase 64,687 shares of common stock. Each person who
becomes an Outside Director on or after May 20, 1998 will receive (to the
extent there are shares available), as of the date of his or her first
election, 5,625 shares of restricted stock and options to purchase 11,250
shares of common stock. Each such stock option and restricted stock grant vests
with respect to 20% of the covered shares on each of the first five
anniversaries of the grant date, provided that the Outside Director is then
serving on the Board of Directors of the Company or one of its subsidiaries. In
addition, each Outside Director receives an automatic annual grant of 1,125
shares of restricted stock and options to purchase 9,900 shares of common
stock, with such awards vesting in equal installments over a three-year period.
All options granted to Outside Directors under the Company's stock option plan
have an exercise price equal to the fair market value of the common stock on
the date of grant of the option and are granted with tandem limited stock
appreciation rights. The grants vest in full upon the Outside Director's
termination of service by reason of death, disability or retirement, or in the
event of a change of control of the Company.
Indemnity Agreements. The Company and the Bank have entered into an
Indemnity Agreement with each of the directors and executive officers, which
agreements provide for mandatory indemnification of each director
10
or executive officer to the full extent permitted by law for any claim arising
out of such person's service to the Company or the Bank. The agreements provide
for advancement of expenses and specify procedures for determining entitlement
to indemnification in a particular case.
EXECUTIVE COMPENSATION
Report of the Compensation Committee
Compensation Philosophy. The Company's executive compensation program is
intended to link management's pay with the Company's annual and long-term
performance. The Compensation Committee believes it is important to attract and
retain highly-qualified senior managers by providing compensation opportunities
that are both competitive with the market for executive talent and consistent
with the Company's performance.
The following is a discussion of the Company's executive compensation
program, including a description of the decisions and actions taken by the
Compensation Committee with respect to fiscal 2001 compensation for the Chief
Executive Officer.
Salary and Incentive Bonus. In determining the base salary and annual
incentive bonus of executive officers, the Compensation Committee takes into
consideration a variety of factors, including the executive's level of
responsibility, individual performance, and the financial and operational
performance of the Company and the Bank in relation to their competition in the
industry. Based on an analysis of salary and bonus paid by savings institutions
of comparable size in the Company's geographical area, the Compensation
Committee determined that salary and bonus levels of the Company's executive
officers were at the median. The salary and bonus levels set by the
Compensation Committee for 2001, as in prior years, were intended to maintain
compensation levels at or slightly above the midpoint level of our peer group.
The annual incentive bonus paid to executive officers is determined by the
Compensation Committee in its discretion at the end of the year based on its
assessment of the Company's and the Bank's performance during the year. The
individual contribution of each executive officer to corporate performance is a
significant factor in determining the amount of his or her annual incentive
bonus.
During 2001, Mr. Hegarty's annual rate of base salary was increased from
$420,000 to $440,000 and his bonus was set at $175,000, an increase of $45,000
from 2000. The combined effect of these actions was a $65,000 increase in
current cash compensation. In addition, under Mr. Hegarty's employment
agreement, the Company credits an amount equal to 10% of base salary together
with mutual fund earnings thereon as deferred compensation. The modest increase
in base salary reflects the uncertain economic environment in which the Company
and its peers presently operate, the effect of which has been to slow salary
growth rates in the banking industry generally. However, the Company's solid
financial performance in 2001 despite the difficult economic environment
warranted the greater emphasis on Mr. Hegarty's bonus for 2001. As evidenced by
the Stock Performance Graph on page 12, the cumulative total return on the
Company's common stock increased sharply during 2001 as compared to prior
years, and outperformed both the Nasdaq U.S. market index and the published
index of thrift institutions. In addition, the Company's assets, net income and
earnings per share increased during 2001 as compared to 2000, and management
continued to maintain control over operating costs. The Committee also
considered the stock options granted to Mr. Hegarty in July of 2001 when
determining his overall compensation.
Long-Term Compensation. In 1996, the Company adopted restricted stock and
stock option plans to provide executives and other employees with long-term
incentives which increase their mutuality of interests with the Company's
stockholders. The Compensation Committee has not made routine annual grants to
executive officers under these plans, but instead has considered each year
whether to make such awards consistent with the
11
goal of the plans to compensate, incent and retain talented personnel. The
Committee made large grants under these plans in 1996 and smaller grants in
1999, as well as sporadic individual awards to newly hired or promoted
employees. In 2001, the 1996 awards became fully vested and the prior grants
were determined by the Committee to no longer provide sufficient incentive for
present purposes. Accordingly, the Committee decided to make across the board
grants to executive officers.
Section 162(m). Section 162(m) of the Internal Revenue Code of 1986 limits
the deductibility of compensation paid to the named executive officers in
excess of $1.0 million, excluding from this limit "performance-based"
compensation as defined for purposes of that Section. The Company's restricted
stock and incentive bonus plans are not intended to qualify as
"performance-based" under Section 162(m). The Compensation Committee believes
that the flexibility afforded by the current design of these plans is desirable
and, in light of historical compensation levels for the named executive
officers, sees no need for these plans to conform to the requirements of
Section 162(m). The Company's stock option plan is intended to comply with the
requirements of Section 162(m). It has recently come to the attention of the
Compensation Committee that stock option grants under the plan to date do not
comply with a technical requirement of Section 162(m). The Committee intends to
correct this noncompliance with respect to future grants of stock options. To
date, no named executive officer has had annual compensation in excess of the
Section 162(m) threshold.
Submitted by the Compensation Committee of the Board of Directors,
Vincent F. Nicolosi Louis C. Grassi John O. Mead John E. Roe, Sr. Michael J. Russo
Chairman
Compensation Committee Interlocks and Insider Participation
During 2001, the Compensation Committee consisted of Messrs. Nicolosi
(Chairman), Grassi, Mead, Roe and Russo. None of the current members of the
Compensation Committee are former officers of the Company or the Bank. During
2001, the Bank paid $10,380 in legal fees to Mr. Nicolosi for certain
litigation and contract matters.
Under the Bank's lending policies, residential mortgage loans to immediate
family members of directors are made at market rates of interest and other
normal terms but with reduced origination fees. Seven such loans outstanding to
immediate family members of directors who were members of the Compensation
Committee during 2001 had balances in excess of $60,000 at some time since the
beginning of 2001. The highest aggregate balance of those loans at any time
since January 1, 2001 was $1,479,320 and the aggregate balance of those loans
at January 31, 2002 was $1,455,947. All of such loans were made in the ordinary
course of business and were fully approved in accordance with all of the Bank's
credit underwriting standards. The Bank believes that such loans do not involve
more than the normal risk of collectability or present other unfavorable
features.
12
Stock Performance Graph
The following graph shows a comparison of cumulative total stockholder
return on the common stock since December 31, 1996 with the cumulative total
returns of both a broad equity market index and a published industry index. The
broad equity market index chosen was the Center for Research in Security Prices
("CRSP") Total Return Index for the Nasdaq Stock Market (US) and the published
industry index chosen was the SNL Thrift Index. The graph below reflects
historical performance only, which is not indicative of possible future
performance of the common stock.
Comparison of Cumulative Total Return Among the Common Stock, CRSP Total Return
Index for the Nasdaq Stock Market (US) and SNL Thrift Index/(1) /
[CHART]
Flushing Financial CRSP Total Return Index
Corporation for the NASDAQ Stock Market (US) SNL Thrift Index
- ----------- ----------------- ------------------------------- ----------------
12/31/96 $100.00 $100.00 $100.00
12/31/97 $133.13 $122.48 $170.16
12/31/98 $134.17 $172.68 $149.66
12/31/99 $128.33 $320.89 $122.25
12/31/00 $159.65 $193.01 $195.21
12/31/01 $242.66 $153.15 $208.65
- --------
(1) Assumes $100 invested on December 31, 1996 and all dividends reinvested
through the end of the Company's fiscal year ended December 31, 2001. The
performance graph above is based upon closing prices on the trading day
specified. All share and per share amounts have been adjusted to reflect
the three-for-two split of the Company's common stock paid in the form of a
dividend on each of September 30, 1998 and August 30, 2001.
13
Summary Compensation Table
The following table sets forth the compensation paid by the Company and the
Bank during the years ended December 31, 2001, 2000 and 1999 to the current
Chief Executive Officer and certain other executive officers.
Summary Compensation Table
Long Term Compensation
- - ----------------------
Securities
Annual Compensation Restricted Underlying
---------------------- Stock Options/ All Other
Name and Principal Position(s) Year Salary Bonus Awards /(1)/ SARs(#) Compensation
------------------------------ ---- ------------- -------- ----------- ---------- ------------
Michael J. Hegarty................ 2001 $ 472,929/(2)/ $175,000 $194,640 24,000 $127,664/(3)/
President and Chief 2000 451,003/(2)/ 130,000 -- -- 99,774
Executive Officer of the 1999 409,953/(2)/ 140,000 310,000 40,000 98,155
Company and the Bank
John R. Buran..................... 2001 $ 200,635 $ 75,000 $276,120 112,500 $ 0
Executive Vice President and
Chief Operating Officer of the
Company and the Bank
Monica C. Passick................. 2001 $ 145,020 $ 45,000 $ 48,660 11,250 $ 26,095/(4)/
Senior Vice President, 2000 139,270 38,000 -- -- 23,637
Treasurer, and 1999 137,165 42,000 77,500 10,000 25,439
Chief Financial Officer of the
Company; Senior Vice
President/Finance of the Bank
Francis W. Korzekwinski........... 2001 $ 146,001 $ 45,000 $ 48,660 11,250 $ 26,034/(5)/
Senior Vice President 2000 138,503 38,000 -- -- 23,292
of the Company; 1999 130,096 41,000 77,500 10,000 23,856
Senior Vice President/
Commercial Real Estate
of the Bank
Henry A. Braun.................... 2001 $ 135,200 $ 42,000 $ 48,660 11,250 $ 23,165/(6)/
Senior Vice President 2000 127,700 36,000 -- -- 19,384
of the Company; 1999 122,089 39,000 77,500 10,000 19,943
Senior Vice President/Bank
Operations of the Bank
- --------
(1) Reflects dollar value of restricted stock granted, calculated by
multiplying the number of shares granted by the closing market price of the
common stock on the date of grant. The number of shares of restricted stock
held by each of the named executive officers on December 31, 2001 and the
dollar value of such shares (based on the closing market price of the
common stock on December 31, 2001) are as follows: Mr. Hegarty 12,000
shares, $213,600; Mr. Buran 21,000 shares, $373,800; Ms. Passick 3,000
shares, $53,400; Mr. Korzekwinski 3,000 shares, $53,400; and Mr. Braun
3,000 shares, $53,400. All grants of restricted stock vest 20% per year
beginning one year after the date of grant, subject to immediate vesting in
the event of death, disability, retirement, or a change of control.
Dividends are paid on all shares of restricted stock.
(2) Includes mandatory deferred compensation equal to 10% of salary.
(3) Consists of $5,100 in matching contributions to the 401(k) Plan, $13,232 in
contributions to the Profit Sharing Plan, $50,000 credited toward
Supplemental Retirement Benefits, and $59,332 credited under the Bank's
Supplemental Savings Incentive Plan ("SSIP").
(4) Consists of $3,920 in matching contributions to the 401(k) Plan, $13,232 in
contributions to the Profit Sharing Plan, and $8,943 credited under the
SSIP.
(5) Consists of $3,946 in matching contributions to the 401(k) Plan, $13,232 in
contributions to the Profit Sharing Plan, and $8,856 credited under the
SSIP.
(6) Consists of $3,732 in matching contributions to the 401(k) Plan, $13,232 in
contributions to the Profit Sharing Plan, and $6,201 credited under the
SSIP.
14
Stock Options
The following table contains certain information with respect to stock
options granted in 2001 under the Company's Stock Option Plan to the named
executive officers.
Option/SAR Grants in Last Fiscal Year
Individual Grants
- - ----------------------------------------------------------
Potential Realizable
Value at Assumed Rates
Number of % of Total of Stock Price
Securities Options/SARs Appreciation for Option
Underlying Granted to Exercise or Term (10 Years)/(4)/
- - Grant Options/SARs Employees in Base Price Expiration -----------------------
Name Date Granted/(1)/ Fiscal Year ($/share)/(2)/ Date /(3)/ 5% 10%
- ---- ------- ------------ ------------ ------------- ---------- ------- ---------
Michael J. Hegarty..... 7/17/01 24,000 9.25% 16.33 7/16/11 246,476 624,620
John R. Buran.......... 1/22/01 90,000 34.68% 11.65 1/21/11 659,396 1,671,039
7/17/01 22,500 8.67% 16.33 7/16/11 231,072 585,581
Monica C. Passick...... 7/17/01 11,250 4.34% 16.33 7/16/11 115,536 292,790
Henry A. Braun......... 7/17/01 11,250 4.34% 16.33 7/16/11 115,536 292,790
Francis W. Korzekwinski 7/17/01 11,250 4.34% 16.33 7/16/11 115,536 292,790
- --------
(1) Each stock option was granted with a tandem limited stock appreciation
right that may be exercised only within 90 days after a change of control.
The stock options become exercisable in 20% increments on each of the first
five anniversaries of the date of grant, subject to acceleration in the
event of death, disability, retirement or a change of control.
(2) Pursuant to the Stock Option Plan, the exercise price equals the mean of
the high and low sales price of the Common Stock on the day before the
grant date.
(3) The stock options (and tandem limited stock appreciation rights) are
subject to termination prior to their expiration date in the event of
termination of employment.
(4) The potential realizable value reflected in the table represents the
difference between (i) the price the Common Stock would attain at the end
of the option's 10-year term if the price appreciated from the date of the
stock option grant at a rate of 5% or 10% per year (as the case may be),
and (ii) the option exercise price. The amounts shown in the table are the
result of multiplying the amount described above by the number of options
granted to the respective individual on the applicable grant date.
The following table contains certain information with respect to stock
options previously granted to the named executive officers.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
# of Securities Underlying Value of Unexercised In-the-
Unexercised Options/SARs Money Options/SARs at
Shares Value at FY-End/(1)/ FY-End($)/(2)/
Acquired on Realized -------------------------- ----------------------------
Name Exercise(#)/(1)/ ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- -------- ----------- ------------- ----------- -------------
Michael J. Hegarty..... -- -- 150,000 78,000 1,464,180 468,540
John R. Buran.......... 0 112,500 0 586,575
Monica C. Passick...... -- -- 87,000 20,250 898,125 84,128
Henry A. Braun......... -- -- 77,100 20,250 794,166 84,128
Francis W. Korzekwinski -- -- 72,600 20,250 746,556 84,128
- --------
(1) The number of shares has been adjusted to reflect the three-for-two split
of the Company's common stock paid in the form of a dividend on each of
September 30, 1998 and August 30, 2001.
(2) The value of each unexercised in-the-money stock option (or tandem limited
stock appreciation right) is equal to the difference between $17.80 (the
closing price of the common stock on December 31, 2001) and the exercise
price of the stock option.
15
Employment, Severance and Change of Control Arrangements
Employment Agreements. The Bank and the Company are parties to employment
agreements with Mr. Hegarty, Mr. Buran, Ms. Passick, Mr. Braun and Mr.
Korzekwinski (collectively, the "Employment Agreements"). The Employment
Agreements establish the respective duties and compensation of these
individuals and are intended to ensure that the Bank and the Company will be
able to maintain a stable and competent management team. The continued success
of the Bank and the Company depends to a significant degree on the skills and
competence of these executive officers.
The Employment Agreements are substantially similar. The Employment
Agreement with Mr. Hegarty has an initial three-year term and each of the other
Employment Agreements has an initial two-year term. Prior to the completion of
each year during the term of the agreement, the agreement is subject to renewal
for an additional year. Thus, the unexpired term of the agreement at any time
will generally vary between two and three years, in the case of Mr. Hegarty,
and between one and two years, in the case of the other executives. However,
the term of Mr. Hegarty's agreement reduces to two years in 2003 (at age 64)
and to one year in 2004, and thereafter continues on a one-year basis.
The Employment Agreements provide for a base salary that will be reviewed
annually, customarily in July, with an effective date retroactive to July 1. In
this regard, the base salaries of Mr. Hegarty, Mr. Buran, Ms. Passick, Mr.
Braun and Mr. Korzekwinski in effect as of July 1, 2001 were $440,000,
$215,500, $149,020, $139,200 and $150,000, respectively. In the case of Mr.
Hegarty, an additional amount equal to 10% of base salary is deferred each year
and is credited with earnings based on mutual fund investments. The deferred
amounts plus earnings thereon will be paid to Mr. Hegarty in a cash lump sum
upon termination of employment. In addition to any other pension benefit to
which he may be entitled, the Bank is required to maintain two bookkeeping
accounts for Mr. Hegarty, to provide supplemental retirement benefits. The
first account, consisting of $150,000 plus earnings on such amount based on
mutual fund investments beginning May 27, 2000, will be paid to Mr. Hegarty in
a cash lump sum upon his termination of employment. The Bank is required to
credit to the second bookkeeping account the amount of $50,000 in May of each
year in the period 2001-2011, with such account to be credited with earnings
beginning in 2011. In the event of Mr. Hegarty's death, voluntary resignation
without "good reason" (as defined below), or termination for cause, he is
entitled to receive the amount then credited to such account in a cash lump
sum. In the event of his termination of employment for any other reason (or for
any reason following a change of control), he is entitled to receive $500,000
in a cash lump sum instead of the amount credited to the second account. In
accordance with his employment agreement, Mr. Hegarty's deferred compensation,
supplemental retirement benefits, and benefits under the Bank's Supplemental
Savings Incentive Plan have been funded in a "grantor trust."
The Employment Agreements provide for termination of the executive's
employment by the Bank or the Company with or without cause at any time. The
executive would be entitled to a lump sum severance payment and certain
additional benefits upon the occurrence of certain events: the Company's or the
Bank's termination of the executive's employment for reasons other than for
cause, the executive's resignation during the 60-day period commencing six
months following a change of control (as defined below), or the executive's
resignation from the Bank and the Company following an event which constitutes
"good reason," which is defined as (1) failure to re-elect the executive to his
or her current offices, (2) a material adverse change in the executive's
functions, duties or responsibilities, (3) relocation of the executive's place
of employment outside the Borough of Queens, (4) failure to renew the
Employment Agreement by the Bank or Company, (5) a material breach of the
Employment Agreement by the Bank or the Company, or (6) failure of a successor
company to assume the Employment Agreement. The lump sum severance payment
under Mr. Hegarty's Employment Agreement would be equal to his salary payments,
bonuses (based on the highest bonus received in the last three years preceding
termination) and deferred compensation otherwise payable if Mr. Hegarty's
employment had continued for an additional 36 months if termination occurs
before May 27, 2004 or after a change of control, or 12 months otherwise. The
lump sum severance payment under the other Employment Agreements would be equal
to the salary payments and bonuses (based on the highest bonus received in the
last three years preceding termination)
16
otherwise payable if the executive's employment had continued for an additional
24 months (12 months for Mr. Buran if termination occurs before the second
anniversary of his Employment Agreement, except in the case of a change of
control). In addition, upon a termination of employment following a change of
control, the executive will receive a pro rata portion of his or her bonus
payable for the year of termination (based on the amount of bonus received in
the prior year). Each executive's Employment Agreement with the Company
provides that if the executive receives payments that would be subject to the
excise tax on excess parachute payments imposed by Section 4999 of the Internal
Revenue Code, the executive will be entitled to receive an additional payment,
or "gross-up", in an amount necessary to put the executive in the same
after-tax position as if such excise tax had not been imposed.
Assuming a change of control had occurred on December 31, 2001, Mr. Hegarty,
Mr. Buran, Ms. Passick, Mr. Braun and Mr. Korzekwinski, would have received
cash lump sum severance payments equal to approximately $1,977,000, $581,000,
$388,040, $362,400 and $390,000 based on their salaries and bonuses as of that
date. The preceding amounts do not take into account the gross-up, amounts
related to termination of the Employee Benefit Trust, Mr. Hegarty's
supplemental retirement benefits, or other amounts payable under the Employment
Agreements.
In the event an executive terminates employment due to "disability," which
is defined generally to mean the inability of the executive to perform his or
her duties for 270 consecutive days due to incapacity, each Employment
Agreement provides that the executive would receive 100% of his or her salary
and bonus for the first six months, 75% for the next six months and 60% for the
balance of the term (less any benefits payable to the executive under any
disability insurance coverage maintained by the Company or the Bank). The
Employment Agreement for Mr. Hegarty provides that in the event of termination
of employment due to disability, he would receive the reduced salary described
above, the deferred compensation benefit based on such reduced salary, and the
supplemental retirement benefits described above.
The Employment Agreements provide that in the event the executive's
employment terminates due to death, the executive's beneficiaries (or estate)
would receive a lump sum payment of the executive's earned but unpaid salary,
plus, in the case of Mr. Hegarty, payment of his accrued deferred compensation
benefit and the supplemental retirement benefits described above.
In the event an executive terminates employment for reasons not described
above or the executive's employment is terminated for cause, the executive
would receive only his or her earned but unpaid salary. Mr. Hegarty would also
receive his accrued deferred compensation benefit, and the supplemental
retirement benefits described above.
Change of Control Arrangements. Upon a change of control (as defined
below), in addition to the provisions of the Employment Agreements described
above, (1) all outstanding restricted stock held by then-current employees and
Outside Directors will immediately vest; (2) all outstanding stock options (and
tandem limited stock appreciation rights ("SARs")) held by then-current
employees and Outside Directors will become immediately exercisable; (3) the
exercise of an outstanding SAR within 90 days after the change of control will
entitle the holder to receive a cash payment equal to the excess of (A) the
highest price per share of common stock paid during the 90-day period prior to
the exercise of the SAR or the change of control over (B) the exercise price of
the related stock option; and (4) the Employee Benefit Trust which was
established by the Company to satisfy its obligations under certain employee
benefit plans will terminate and any trust assets remaining after repayment of
the Company's loan to the trust and certain benefit plan contributions will be
distributed to all full-time employees of the Company or one of its
subsidiaries with at least one year of service, in proportion to their
compensation over the current year and the preceding four years.
Definition of Change of Control. A "change of control" is generally
defined, for purposes of the Employment Agreements and benefit plans maintained
by the Company or the Bank, to mean: (1) the acquisition of all or
substantially all of the assets of the Bank or the Company; (2) the occurrence
of any event if,
17
immediately following such event, a majority of the members of the Board of
Directors of the Bank or the Company or of any successor corporation shall
consist of persons other than Current Members (defined as any member of the
Board of Directors as of the completion of the Company's initial public
offering and any successor of a Current Member whose nomination or election has
been approved by a majority of the Current Members then on the Board of
Directors); (3) the acquisition of beneficial ownership of 25% or more of the
total combined voting power of all classes of stock of the Bank or the Company
by any person or group; or (4) approval by the stockholders of the Bank or the
Company of an agreement providing for the merger or consolidation of the Bank
or the Company with another corporation where the stockholders of the Bank or
the Company, immediately prior to the merger or consolidation, would not
beneficially own, directly or indirectly, immediately after the merger or
consolidation, shares entitling such stockholders to 50% or more of the total
combined voting power of all classes of stock of the surviving corporation.
Retirement Plan
The Bank maintains a Retirement Plan which is a tax-qualified defined
benefit plan. Salaried employees who are over age 21 and have been employed by
the Bank for at least one year are eligible to participate in the Retirement
Plan. Participants earn an annual retirement benefit at normal retirement age
(the later of age 65 or the fifth anniversary of participation) equal to the
sum of (1) 2% of "average annual earnings" (the average annual base salary for
the three consecutive years out of the final ten years of service which
produces the highest average) times years of credited service prior to March 1,
1993, up to 30 years, plus (2) 1.6% of "average annual earnings" times years of
credited service after February 28, 1993, plus (3) .45% of "average annual
earnings" in excess of "average social security compensation" (as determined
pursuant to IRS regulations) times years of credited service after February 28,
1993. The total years of credited service taken into account cannot exceed 35
years, and benefits earned in any year cannot be reduced by subsequent changes
to the plan. Annual benefits under the Retirement Plan are limited by federal
tax laws. As a general rule, during 2001 annual benefits were limited to
$140,000. Compensation in excess of $150,000 (subject to cost of living
adjustments which result in a current limit of $170,000) is required to be
disregarded for purposes of benefits earned after 1993. The Retirement Plan is
funded by the Bank on an actuarial basis. Participants earn a vested right to
their accrued retirement benefit upon completion of five years of service with
the Bank or its participating affiliates.
The following table sets forth information with respect to Retirement Plan
benefits payable to the named executive officers.
Retirement Plan Benefits
Current
Years of Estimated Annual Retirement
Name Service/(1)/ Benefit at Age 65/(2)/
---- ----------- ---------------------------
Michael J. Hegarty..... 6 $28,953/(3)/
John R. Buran.......... --/(4)/ 43,573
Monica C. Passick...... 22 64,669
Francis W. Korzekwinski 8 80,696
Henry A. Braun......... 7 37,582
- --------
(1) The number of years of credited service under the Retirement Plan as of
December 31, 2001.
(2) The estimated annual retirement benefit payable as a single life annuity at
age 65 to the named executive officer, based on the assumptions that such
officer retires at age 65 with no increase in compensation or "social
security compensation" from that in effect in 2001.
(3) Does not include supplemental retirement benefits provided under
executive's Employment Agreement.
(4) Mr. Buran's employment commenced in January 2001 and he was not eligible to
participate in the Retirement Plan as of December 31, 2001.
18
Certain Transactions
Under the Bank's lending policies, residential mortgage loans to
non-executive officer employees and immediate family members of employees and
directors are made at market rates of interest and other normal terms, but with
reduced origination fees. Excluding the loans discussed above under
"Compensation Committee Interlocks and Insider Participation," there were four
such loans outstanding to immediate family members of executive officers or
directors with balances in excess of $60,000 at some time since the beginning
of 2001. The highest aggregate balance of these loans at any time since January
1, 2001 was $978,095 and the aggregate balance of these loans at January 31,
2002 was $842,652. All such loans were made in the ordinary course of business
and were fully approved in accordance with all of the Bank's credit
underwriting standards. The Bank believes that such loans do not involve more
than the normal risk of collectability or present other unfavorable features.
Since 1981, Franklin F. Regan, Jr. (or his former law firm) has had a
retainer agreement with the Bank, pursuant to which he is paid an annual
retainer for general legal services to the Bank. In addition, Mr. Regan
represents the Bank in closings of residential and certain commercial real
estate loans, the fees of which are paid by borrowers. In this regard, the
current fee paid by borrowers for closing of a residential loan is $575. Fees
paid for closing mixed use property transactions are fixed at $850. Fees paid
for commercial real estate loan closings currently range from a minimum fee of
$1,000 to a maximum fee of $7,575. Mr. Regan also represents the Bank in
connection with some of its mortgage foreclosure actions. In addition, the Bank
leases office space in its 159-18 Northern Boulevard building at a market
rental rate to Mr. Regan for use in his law practice. On July 1, 2001, Mr.
Regan entered into an agreement with the law firm of Cullen and Dykman and
became of counsel to that firm. Under this agreement, Mr. Regan receives 22.5%
of the fees paid by the Bank and its borrowers to Cullen and Dykman for a
period of ten years, at which time the percentage payable is reduced to 12.5%
for an additional ten-year period. The agreement may be earlier terminated upon
either Mr. Regan's death or the Bank's failure to continue the services
rendered by Cullen and Dykman. Termination generally entitles Mr. Regan or his
heirs to receive a payment equal to, in the case of his death, two times the
amount paid to him in the immediately preceding year (which payment is adjusted
pro rata if cessation of services to the Bank occurs during the two-year period
following his death) and, in the case of cessation of services to the Bank,
$100,000. Cullen and Dykman also agreed to assume Mr. Regan's obligations under
the office lease with the Company. In 2001, the Bank paid to Mr. Regan, either
individually or in his capacity as counsel to Cullen and Dykman, an aggregate
of $67,196 as a retainer for general legal services and for fees in connection
with mortgage foreclosure actions. Borrowers paid an aggregate of $824,886 to
Mr. Regan in these capacities over the same period. In addition, during the
six-month period between July 1, 2001 and December 31, 2001, the Bank paid an
aggregate of $21,401 directly to Cullen and Dykman for general legal services.
Mr. Regan's interest in all of the above payments from the Bank and its
borrowers is an aggregate of $510,516. Mr. Regan is a director of the Company
and the Bank.
PROPOSAL NO. 2
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has determined that it is in the best interests of
the Company and its stockholders to amend the Company's certificate of
incorporation to increase the number of shares of common stock that the Company
is authorized to issue from 20,000,000 to 40,000,000 shares of common stock.
Accordingly, the Board of Directors has unanimously approved a certificate of
amendment to the certificate of incorporation of the Company and hereby
solicits the approval of the Company's stockholders to that proposed
certificate of amendment. If the stockholders approve the proposed certificate
of amendment, the Board of Directors currently intends to file the certificate
of amendment with the Delaware Secretary of State as soon as practicable
following
19
stockholder approval. The proposed certificate of amendment will modify
Paragraph (A) of Article Fourth on the Company's certificate of incorporation
to read as follows:
"FOURTH: (A) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 45,000,000, consisting
of 5,000,000 shares of preferred stock, par value $.01 per share
(hereafter referred to as "Preferred Stock"), and 40,000,000 shares of
common stock, par value $.01 per share (hereinafter referred to as
"Common Stock")."
The affirmative vote of a majority of the outstanding shares of the common
stock of the Company is required for approval of the proposed certificate of
amendment to the Company's certificate of incorporation.
Rationale for the Proposed Amendment
The Company's certificate of incorporation presently authorizes the issuance
of up to 20,000,000 shares of common stock and 5,000,000 shares of preferred
stock. There are no shares of preferred stock issued and outstanding. Of the
20,000,000 shares of common stock authorized, 13,356,496 shares were
outstanding as of the close of business on February 28, 2002. In addition, as
of that date,
. approximately 1,905,246 shares of common stock were reserved for issuance
upon exercise of outstanding options under the Company's stock option plan;
. approximately 557,216 shares of common stock were reserved for future
grants under the Company's stock option plan; and
. approximately 332,487 shares of common stock were reserved for future
grants under the Company's restricted stock plan.
After deducting outstanding and reserved shares from the 20,000,000 shares
of common stock presently authorized, there are approximately 3,848,555
authorized shares that have not been issued and are not otherwise reserved for
a particular purpose. The Board of Directors believes that it is in the
Company's best interests to increase the number of authorized shares of common
stock to the proposed level in order to have a sufficient number of shares of
common stock available for issuance to meet the Company's future business
needs. These business needs may include, without limitation, financings,
establishing strategic relationships with corporate partners, providing equity
incentives to employees, officers or directors, or effecting stock splits or
dividends. The additional shares of common stock authorized may also be used to
acquire or invest in complementary businesses or products or to obtain the
right to use complementary technologies.
The Company's management has no present arrangement, agreement,
understanding or plan for the issuance of the additional shares of common stock
that would be authorized by the proposed certificate of amendment, if approved.
Possible Effects of the Proposed Amendment
If the stockholders approve the proposed certificate of amendment, the Board
of Directors will have the right to authorize the issuance of additional shares
of common stock without further vote of the stockholders of the Company, except
as provided under Delaware corporate law or under the rules of any securities
exchange on which shares of common stock of the Company are then listed.
Current holders of common stock have no preemptive or similar rights, which
means that these holders do not have a prior right to purchase any new issue of
common stock of the Company in order to maintain their proportionate ownership
interest in the Company. The issuance of additional shares of common stock
would decrease the proportionate equity interest of the Company's current
stockholders and, depending upon the price paid for the additional shares,
could result in dilution to the Company's current stockholders.
An increase in the authorized shares of common stock also could have an
anti-takeover effect under some circumstances. For example, authorized but
unissued shares of common stock could be used by the Board of
20
Directors to discourage, delay or make more difficult a change in the control
of the Company by diluting the stock ownership of a person seeking to effect a
change in the composition of the Board of Directors or contemplating a hostile
take-over bid. The current proposal to amend the certificate of incorporation,
however, is not in response to any effort to accumulate the Company's common
stock or to otherwise obtain control of the Company. Instead, this proposal to
increase the number of authorized shares of common stock has been prompted by
business and financial considerations. As of the date of this proxy statement,
management is not aware of any action taken by any person or group to obtain
control of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK TO 40,000,000.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers LLP to perform
the audit of the Company's consolidated financial statements for the year
ending December 31, 2002, subject to ratification by the Company's stockholders
at the annual meeting. PricewaterhouseCoopers LLP served as the independent
auditors of the Company for the year ended December 31, 2001. Representatives
from PricewaterhouseCoopers LLP will be present at the annual meeting and will
be given the opportunity to make a statement if they so desire, and will be
available to respond to appropriate questions from stockholders.
Schedule of Fees to Independent Auditors
The following table sets forth the aggregate fees billed for professional
services to the Company during the fiscal year ended December 31, 2001 by the
Company's independent auditors, PricewaterhouseCoopers LLP. The Audit Committee
has considered whether the provision of non-audit services to the extent
reflected below is compatible with maintaining the independent auditors'
independence from the Company.
Audit service fees.................................................. $175,400
Estimated out-of-pocket expenses.................................... 17,000
Total fees for audit services.................................... $192,400
--------
Financial information systems design and implementation service fees 0
All other fees/(1)/................................................. $ 50,230
- --------
(1) Primarily for tax review and consulting services as well as audit of
employee benefit plans.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2002.
Report of the Audit Committee
The Audit Committee of the Board of Directors is comprised of four
non-employee directors, each of whom is independent within the meaning of the
rules of the NASD. In accordance with its written charter adopted by the Board
of Directors (a copy of which is on file with the SEC), the Audit Committee
assists the Board of Directors in fulfilling its responsibility for oversight
of the Company's accounting, auditing and financial reporting practices.
Management is responsible for the Company's financial reporting process,
including the internal control function, and for preparing the Company's
financial statements in accordance with generally accepted accounting
principles. The Company's independent auditors are responsible for examining
those financial statements and expressing an opinion as to the conformity of
those financial statements with generally accepted accounting principles.
21
In discharging its oversight responsibility, the Audit Committee (1)
reviewed and discussed the audited financial statements of the Company at and
for the fiscal year ended December 31, 2001 with management and the independent
auditors, (2) discussed with the independent auditors the matters required to
be discussed by Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," (3) received the written disclosures and
the letter from the independent auditors required by the Independence Standards
Board's Standard No. 1, "Independence Discussions with Audit Committees," and
(4) discussed with the independent auditors the independent auditors'
independence from the Company.
Based on the reviews and discussions with management and the independent
auditors referred to above, the Audit Committee recommended to the Board of
Directors that the Company's audited financial statements be included in its
Annual Report on Form 10-K for the fiscal year ended December 31, 2001, for
filing with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Board of Directors,
Louis C. Grassi John O. Mead John E. Roe, Sr. Michael J. Russo
Chairman
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING
The last date for timely filing stockholder proposals relating to the annual
meeting under the Company's bylaws is March 23, 2002. As of the date of this
proxy statement, the Board of Directors has not received notice of any
business, and presently knows of no business, that will be presented for
consideration at the annual meeting other than as stated in the notice of
annual meeting of stockholders which is attached to this proxy statement. If,
however, other matters are properly brought before the annual meeting, it is
the intention of the persons named in the accompanying proxy to vote the shares
represented thereby on such matters in accordance with their best judgment.
Whether or not you intend to be present at the annual meeting, you are urged
to return your signed and dated proxy promptly or, alternatively, to indicate
your voting instructions over the Internet or by telephone, if available. If
you are present at the annual meeting and wish to vote your shares in person,
your proxy may be revoked by giving the Corporate Secretary notice of your
intention to vote in person.
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
To Present Proposal at Annual Meeting. The bylaws of the Company provide an
advance notice procedure for a stockholder to properly bring business before an
annual meeting. The stockholder must give written advance notice to the
Corporate Secretary of the Company which must be received not more than ninety
days nor less than sixty days prior to the anniversary of the date of the
immediately preceding annual meeting. In accordance with these provisions, a
stockholder proposal in connection with the 2003 annual meeting of stockholders
must be received by the Corporate Secretary on or before March 22, 2003 in
order to be timely. However, in the event that the date of the forthcoming
annual meeting is more than thirty days after the anniversary date of the prior
year's meeting, such written notice will also be timely if it is received by
the Corporate Secretary by the earlier of (1) the 10th day prior to the
forthcoming meeting date, or (2) the close of business on the 10th day
following the date on which the Company first makes public disclosure of the
meeting date.
The advance notice by stockholders must include the stockholder's name and
address, a representation that the stockholder is a holder of record of the
Company's stock entitled to vote at such meeting (or if the record date for
such meeting is subsequent to the date required for such stockholder notice, a
representation that the
22
stockholder is a holder of record at the time of such notice and intends to be
a holder of record on the date of such meeting) and intends to appear in person
or by proxy at such meeting to propose such business, a brief description of
the proposed business, the reason for conducting such business at the annual
meeting, and any material interest of such stockholder in the proposed
business. In the case of nominations for election to the Board of Directors,
certain information regarding the nominee must also be provided. Nothing in
this paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to an annual meeting any stockholder proposal
which does not meet all of the requirements for inclusion established by the
SEC in effect at the time such proposal is received.
To Include Proposal in the Company's Proxy Statement. In order for a
stockholder proposal to be eligible for inclusion in the proxy materials of the
Company for the 2003 annual meeting of stockholders, it must be received at the
Company's executive offices at 144-51 Northern Boulevard, Flushing, New York
11354-4240 no later than December 9, 2002. Any such proposal shall be subject
to the requirements of the proxy rules adopted under the Securities Exchange
Act of 1934.
MISCELLANEOUS
A copy of the Company's Annual Report on Form 10-K (without exhibits) for
the year ended December 31, 2001, as filed with the SEC, will be furnished
without charge to stockholders of record upon written request to Flushing
Financial Corporation, 144-51 Northern Boulevard, Flushing, New York
11354-4240, Attention: Anna M. Piacentini. Our Internet address is
http://www.flushingsavings.com. The information and other content on our
website is not part of this proxy statement.
The Report of the Audit Committee, the Report of the Compensation Committee
and the Stock Performance Graph which are set forth in this proxy statement
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates the information under such
headings by reference, and shall not otherwise be deemed filed under such Acts.
By Order of the Board of Directors,
/s/ Anna M. Piacentini
Anna M. Piacentini
Corporate Secretary
Flushing, New York
April 8, 2002
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE OR, ALTERNATIVELY, TO INDICATE YOUR VOTING INSTRUCTIONS OVER THE
INTERNET OR BY TELEPHONE, IF AVAILABLE.
23
FLUSHING FINANCIAL CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 2002
The undersigned hereby appoints Anna M. Piacentini and Monica C. Passick, and
either of them, proxies for the undersigned, with full power of substitution and
revocation in each, to vote all shares of Flushing Financial Corporation Common
Stock which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of Flushing Financial Corporation to be held on Tuesday, May 21,
2002 at 2:00 p.m., New York time, at the LaGuardia Marriott located at 102-05
Ditmars Boulevard, East Elmhurst, New York 11369, or at any adjournment thereof.
Please indicate your vote by telephone or over the Internet as described on the
reverse side of this proxy card, or mark, date, sign and return this proxy as
indicated on the reverse side to vote on any item. If you wish to vote by mail
in accordance with the Board of Directors' recommendations, please sign on the
reverse side and return promptly in the enclosed envelope; no boxes need to be
checked.
IF YOUR ADDRESS HAS CHANGED, PLEASE INDICATE NEW ADDRESS BELOW.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------- 1. Election of Directors For
FLUSHING FINANCIAL CORPORATION (01) Michael J. Hegarty For All With- All
- --------------------------------------------------------- (02) John O. Mead Nominees hold Except
(03) Michael J. Russo [ ] [ ] [ ]
The Board of Directors recommends a vote FOR the INSTRUCTION: If you do not wish your shares voted
election of all nominees in Item 1 and FOR approval of "For" particular nominee, mark the "For All Except" box
Items 2 and 3. and write that nominee's name in the space below.
-------------------------------------------------------------------------
2. Approval of the amendment to the For Against Abstain
Company's certificate of incorporation [ ] [ ] [ ]
to increase the number of shares of
common stock authorized for issuance to
40,000,000.
Mark box at right if an address change has been 3. Ratification of the appointment of For Against Abstain
noted on the reverse side of this card. PricewaterhouseCoopers LLP as the [ ] [ ] [ ]
independent auditors of the Company.
CONTROL NUMBER:
RECORD DATE SHARES: In their discretion, the proxies are authorized to vote
upon other business as may properly come before the
meeting or at any adjournment thereof.
The shares represented by this proxy will be voted as
directed by the stockholders. If no direction is given
when the duly executed proxy is returned, such shares
will be voted FOR the election of all nominees in Item 1
and FOR approval of Items 2 and 3.
----------------
Please be sure to sign and date this Date Please mark, date and sign as your name(s)
proxy card. appear(s) 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 the signer is a
partnership, please sign partnership name by
authorized person. If shares are held jointly,
- --------Stockholder sign here-----Co-owner sign here---- each stockholder named should sign.
- ------------------------------------------------------------------------------------------------------------------------------------
DETACH CARD DETACH CARD
- -------------------------- --------------------
Vote by Telephone Vote by Internet
- -------------------------- --------------------
Call Toll-Free on a Touch-Tone Phone
Follow these four easy steps: Follow these four easy steps:
- ----------------------------------------------------------- ---------------------------------------------------------------------
1. Read the accompanying Proxy Statement and Proxy Card. 1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/ffic
There is NO CHARGE for this call. 3. Enter your Control Number located on your Proxy Card.
3. Enter your Control Number located on your Proxy Card. 4. Follow the instructions provided.
4. Follow the recorded instructions.
- ----------------------------------------------------------- ---------------------------------------------------------------------
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/ffic anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet