-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O5kO6KGxatSNw6MqQUENMO8U/6rv/hyM/QGWCI3cs7kVxf2UG+GlRa+dqDtgixQS 0kb3xCLwEt34QRmG4A+hUg== 0000882377-00-000273.txt : 20000417 0000882377-00-000273.hdr.sgml : 20000417 ACCESSION NUMBER: 0000882377-00-000273 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAVEN BANCORP INC CENTRAL INDEX KEY: 0000900741 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 113153802 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-21628 FILM NUMBER: 602357 BUSINESS ADDRESS: STREET 1: 615 MERRICK AVE CITY: WESTBURY STATE: NY ZIP: 11590 BUSINESS PHONE: 5166838385 MAIL ADDRESS: STREET 1: 93 22 JAMAICA AVE CITY: WOODHAVEN STATE: NY ZIP: 11421 DEF 14A 1 HAVEN BANCORP, INC. HAVEN BANCORP, INC. 615 MERRICK AVENUE WESTBURY, NEW YORK 11590 516-683-4100 April 11, 2000 Dear Stockholder: You are cordially invited to attend the annual meeting of stockholders (the "Annual Meeting") of Haven Bancorp, Inc. (the "Company"), the holding company for CFS Bank (the "Bank"), which will be held on May 17, 2000, at 9:00 a.m., at the Huntington Hilton, 598 Broadhollow Road, Melville, New York 11747. The attached notice of the Annual Meeting and proxy statement describe the formal business to be transacted at the meeting. Directors and officers of the Company, as well as a representative of KPMG LLP, the Company's independent auditors, will be present at the meeting to respond to any questions our stockholders may have. At the Annual Meeting, you will be asked to vote for the election of three directors, each for a three-year term, and the ratification of the appointment of KPMG LLP as independent auditors. For the reasons set forth in the proxy statement, the Board of Directors of the Company (the "Board") unanimously recommends a vote "FOR" each of the nominees named in the proxy statement and "FOR" the ratification of the appointment of KPMG LLP as our independent auditors. As discussed in more detail in the attached proxy statement, we are pleased to announce the resolution of the dispute between the PL Capital Group and the Company, which resulted in the appointment of Richard Lashley and Garrett Goodbody to the Boards of Directors of the Company and the Bank. We look forward to working with Messrs. Lashley and Goodbody, both of whom bring to our institution valuable expertise, knowledge and experience in the financial industry. Please sign and return the enclosed BLUE PROXY CARD promptly. Your cooperation is appreciated since a majority of the Common Stock must be represented, either in person or by proxy, to constitute a quorum for the conduct of business. If you are a stockholder whose shares are not registered in your own name, you will need additional documentation from your recordholder to attend and to vote personally at the Annual Meeting. On behalf of the Board and all of the employees of the Company and the Bank, we wish to thank you for your continued support. Sincerely yours, /s/ Philip S. Messina ----------------------------- Philip S. Messina Chairman of the Board and Chief Executive Officer HAVEN BANCORP, INC. 615 MERRICK AVENUE WESTBURY, NEW YORK 11590 516-683-4100 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 2000 NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual Meeting") of Haven Bancorp, Inc. (the "Company") will be held on May 17, 2000, at 9:00 a.m., at the Huntington Hilton, 598 Broadhollow Road, Melville, New York 11747. The Annual Meeting is for the purpose of considering and voting upon the following matters: 1. The election of three directors for terms of three years each or until their successors are elected and qualified; 2. The ratification of the appointment of KPMG LLP as independent auditors of the Company for the fiscal year ending December 31, 2000; and 3. Such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. The Company is not aware of any such business. If any other matters properly come before the Annual Meeting, the named proxies will vote on such matters in such manner as shall be determined by a majority of the Board of Directors. The Board of Directors has established March 29, 2000 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof. Only stockholders of the Company as of the close of business on that date will be entitled to vote at the Annual Meeting or any adjournment or postponement thereof. A list of stockholders entitled to vote at the Annual Meeting will be available at CFS Bank, 615 Merrick Avenue, Westbury, New York, for a period of ten days prior to the Annual Meeting and will also be available for inspection at the Annual Meeting. By Order of the Board of Directors, /s/ Mark A. Ricca ------------------- Mark A. Ricca, Esq. Secretary Westbury, New York April 11, 2000 HAVEN BANCORP, INC. ----------- PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS MAY 17, 2000 ----------- GENERAL This proxy statement is being furnished to stockholders of Haven Bancorp, Inc. (the "Company") in connection with the solicitation by the Board of Directors of the Company (the "Board of Directors") of proxies to be used at the Annual Meeting of Stockholders (the "Annual Meeting") to be held on May 17, 2000, at 9:00 a.m., at the Huntington Hilton, 598 Broadhollow Road, Melville, New York 11747, and at any adjournment or postponement thereof. The 1999 Annual Report to Stockholders, including the consolidated financial statements for the fiscal year ended December 31, 1999, accompanies this proxy statement, which is first being mailed to stockholders on or about April 11, 2000. Regardless of the number of shares of common stock of the Company ("Common Stock") owned, it is important that holders of a majority of the shares of Common Stock be represented by proxy or be present in person at the Annual Meeting. Stockholders are requested to vote by completing the enclosed BLUE PROXY CARD and returning it signed and dated in the enclosed postage-paid envelope. Stockholders are urged to indicate their vote in the spaces provided on the proxy card. PROXIES SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN. WHERE NO INSTRUCTIONS ARE INDICATED, SIGNED PROXIES WILL BE VOTED FOR THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT AND FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000. The Board of Directors knows of no additional matters that will be presented for consideration at the Annual Meeting. If any other matters properly come before the Annual Meeting, the persons named in the accompanying BLUE PROXY CARD will vote the shares represented by all properly executed proxies on such matters in such manner as shall be determined by a majority of the Board of Directors. RECORD DATE AND VOTING SECURITIES The securities which may be voted at the Annual Meeting consist of shares of Common Stock of the Company, with each share entitling its owner to one vote on all matters to be voted on at the Annual Meeting except as described below. There is no cumulative voting for the election of directors. The Board of Directors has fixed the close of business on March 29, 2000 as the record date (the "Record Date") for the determination of stockholders of record entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. The total number of shares of Common Stock outstanding on the Record Date was 9,026,661 shares. 1 As provided in the Company's Certificate of Incorporation, recordholders of Common Stock who beneficially own in excess of 10% of the outstanding shares of Common Stock (the "Limit") are not entitled to any vote with respect to the shares held in excess of the Limit. A person or entity is deemed to beneficially own shares that are owned by an affiliate of, as well as persons acting in concert with, such person or entity. The Company's Certificate of Incorporation authorizes the Board of Directors (i) to make all determinations necessary to implement and apply the Limit, including determining whether persons or entities are acting in concert and (ii) to demand that any person who is reasonably believed to beneficially own stock in excess of the Limit supply information to the Company to enable the Board to implement and apply the Limit. The presence, in person or by proxy, of the holders of at least a majority of the total number of shares of Common Stock entitled to vote at the meeting (after subtracting any shares in excess of the Limit pursuant to the Company's Certificate of Incorporation) is necessary to constitute a quorum at the Annual Meeting. Abstentions are considered in determining the presence of a quorum. If there are not sufficient votes for a quorum or to approve or ratify any proposal at the time of the Annual Meeting, the Annual Meeting may be adjourned or postponed to permit the further solicitation of proxies. VOTE REQUIRED As to the election of directors, the BLUE PROXY CARD being provided by the Board of Directors enables a stockholder of record to vote "FOR" the election of the nominees proposed by the Board, or to "WITHHOLD AUTHORITY" to vote for one or more of the nominees being proposed. Under Delaware law and the Company's Bylaws, directors are elected by a plurality of votes cast, without regard to either (i) broker non-votes or (ii) proxies as to which authority to vote for one or more of the nominees being proposed is withheld. As to the ratification of the appointment of KPMG LLP as independent auditors of the Company, the BLUE PROXY CARD enables a stockholder, by checking the appropriate box, to: (i) vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on such item. Under the Company's Certificate of Incorporation and Bylaws, unless otherwise required by law, the ratification of the appointment of the independent auditors of the Company will require the affirmative vote of a majority of the votes cast. Accordingly, shares as to which the "ABSTAIN" box has been selected on the proxy card will be counted as votes cast and will have the effect of a vote against such proposal. Shares underlying broker non-votes will not be counted as votes cast and will have no effect on the vote for such proposal. Proxies solicited hereby will be tabulated by inspectors of election designated by the Board of Directors, who will not be employed by, or be a director of, the Company or any of its affiliates. REVOCABILITY OF PROXIES A proxy may be revoked at any time prior to its exercise by filing a written notice of revocation with the Secretary of the Company, delivering to the Company a duly executed proxy bearing a later date or attending the Annual Meeting and voting in person if a written revocation is filed with the Secretary of the Annual Meeting prior to the voting of such proxy. If you are a 2 stockholder whose shares are not registered in your own name you may revoke your proxy by contacting your bank or broker for instructions. SOLICITATION OF PROXIES The cost of solicitation of proxies in the form enclosed herewith will be borne by the Company. In addition to the solicitation of proxies by mail, Morrow & Co., Inc. ("Morrow"), a proxy solicitation firm, will assist the Company in soliciting proxies for the Annual Meeting and provide consulting and related services in connection therewith. Morrow will be paid a fee of $3,500, plus out-of-pocket expenses. This amount does not include consulting fees the Company will pay to Morrow for services rendered in connection with the dispute with PL Capital Group, which has been resolved. Proxies may also be solicited personally or by telephone or telegraph by directors, officers and regular employees of the Company and its wholly owned subsidiary, CFS Bank (the "Bank"), without additional compensation. 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 material to, and obtain proxies from, such beneficial owners and will reimburse such holders for their reasonable expenses in doing so. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The following table sets forth certain information as to those persons or groups believed by management to be beneficial owners of more than 5% of the Company's outstanding shares of Common Stock as of April 11, 2000 based upon certain reports regarding such ownership filed with the Company and with the Securities and Exchange Commission (the "SEC"), in accordance with Sections 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") by such persons or groups. Other than those listed below, the Company is not aware of any person or group that owns more than 5% of the Company's Common Stock. 3
AMOUNT AND NATURE OF PERCENT OF TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS (1) - -------------- ------------------------------------ -------------------- --------- Common Stock DePrince, Race & Zollo, Inc. 837,450(2) 9.28% 201 S. Orange Avenue, Suite 850 Orlando, FL 32801 Common Stock David L. Babson and Company Incorporated 800,400(3) 8.87% One Memorial Drive Cambridge, MA 02142 Common Stock Columbia Federal Savings Bank Employee Stock Ownership Plan and Trust (the "ESOP") 631,925(4) 7.00% 615 Merrick Avenue Westbury, NY 11590 Common Stock PL Capital Group (5) c/o Richard J. Lashley 584,072(5) 6.47% 2015 Spring Road, Suite 290 Oak Brook, IL 60523 Common Stock Dimensional Fund Advisors Inc. 541,900(6) 6.00% 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401
- ----------------- (1) As of the Record Date there were 9,026,661 shares of Common Stock outstanding. (2) Based on information in a Schedule 13G, dated February 10, 2000, DePrince, Race & Zollo, Inc., an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, is deemed to be the beneficial owner of these shares of Common Stock. (3) Based on information in a Schedule 13G, dated January 27, 2000, David L. Babson and Company Incorporated, an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, is deemed to be the beneficial owner of these shares of Common Stock. (4) The ESOP, in connection with the conversion of CFS Bank from mutual to stock form (the "Conversion"), acquired shares of Common Stock. A Committee of the Board of Directors has been appointed to administer the ESOP (the "ESOP Committee"). The Chase Manhattan Bank serves as the corporate trustee for the ESOP (the "ESOP Trustee"). The ESOP Committee may instruct the ESOP Trustee regarding the investment of funds contributed to the ESOP. The ESOP Trustee must vote all allocated shares held in the ESOP in accordance with the instructions of the participating employees. Based on information in a Schedule 13G dated February 14, 2000, the ESOP Trust is the beneficial owner of 631,925 shares of Common Stock, of which 387,560 shares have been allocated to participating employees and the balance, 244,365 shares, remain unallocated. Under the ESOP, unallocated shares held in the suspense account will be voted by the ESOP Trustee in a manner calculated to most accurately reflect the instructions received from participants regarding the allocated shares of Common Stock so long as such vote is in accordance with the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). (5) The PL Capital Group consists of PL Capital, LLC, Financial Edge Fund, L.P., Financial Edge/Strategic Fund, L.P., Dr. Irving Smokler, John W. Palmer, Richard J. Lashley, Garrett Goodbody and Beth Lashley (the "PL Capital Group"). Based on information contained in Amendment No. 5 to Schedule 13D, dated April 12, 2000, the above persons beneficially own in the aggregate 584,072 shares of Common Stock. The beneficial ownership of each of the above persons was reported as follows: Financial Edge Fund, L.P., Financial Edge/Strategic Fund, L.P. and PL Capital, LLC claim shared voting and investment power over 549,000 shares; John W. Palmer claims shared voting and investment power over 549,000 shares and sole voting and investment power over 6,000 shares; Richard J. Lashley claims shared voting and investment power over 4 549,000 shares and sole voting and investment power over 8,286 shares; Dr. Irving Smokler claims shared voting and investment power over 95,000 shares; Garrett Goodbody claims sole voting and investment power over 17,786 shares; and Beth Lashley claims shared voting and investment power over 3,000 shares. (6) Based on information in a Schedule 13G, dated February 3, 2000, Dimensional Fund Advisors Inc., an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, is deemed to be the beneficial owner of these shares of Common Stock. PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING PROPOSAL 1 ELECTION OF DIRECTORS GENERAL The number of directors of the Company is currently set at eleven (11) as designated by the Board of Directors pursuant to the Company's Bylaws. Each of the eleven members of the Board of Directors of the Company also currently serves as a director of the Bank. Directors are elected for staggered terms of three years each, with a term of office of one of the three classes of directors expiring each year. Directors serve until their successors are elected and qualified. For the majority of 1999, the Board of Directors consisted of seven members. In December 1999, the Board was increased by two members, and Messrs. McManus and Dahya were appointed to fill the vacancies. Mr. McManus was appointed to the class of Directors whose term expires in 2000, and Mr. Dahya was appointed to the class of Directors whose term expires in 2002. On April 7, 2000, the Board was increased by two additional members, and Messrs. Lashley and Goodbody were appointed to fill the vacancies. Mr. Goodbody was appointed to the class of Directors whose term expires in 2001, and Mr. Lashley was appointed to the class of Directors whose term expires in 2002. The three nominees proposed for election at the Annual Meeting are Messrs. Messina and McManus and Msgr. Hartman. All nominees named are currently directors of the Company and the Bank. No person being nominated as a director is being proposed for election pursuant to any agreement or understanding between that person and the Company. In the event that any such nominee is unable to serve or declines to serve for any reason, it is intended that proxies will be voted for the election of the balance of those nominees named and for such other persons as may be designated by the present Board of Directors. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to serve. UNLESS AUTHORITY TO VOTE FOR THE DIRECTORS IS WITHHELD, IT IS INTENDED THAT THE SHARES REPRESENTED BY THE ENCLOSED BLUE PROXY CARD, IF EXECUTED AND RETURNED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES PROPOSED BY THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED IN THIS PROXY STATEMENT. 5 AGREEMENT WITH THE PL CAPITAL GROUP The Company and the PL Capital Group entered into an agreement, dated April 7, 2000 (the "Agreement"), which provides for a resolution of the dispute between the Company and the PL Capital Group concerning the appointment of Messrs. Richard Lashley ("Lashley") and Garrett Goodbody ("Goodbody") to the Board of Directors of the Company and the PL Capital Group's proxy solicitation in opposition to the Company's nominees for election to the Board of Directors at the Annual Meeting. The Agreement provides, among other things, that (1) each of Messrs. Lashley and Goodbody will be appointed to the Board of Directors of the Company and the Bank (Mr. Lashley to the class of directors that is up for election in 2002 and Mr. Goodbody to the class of directors that is up for election in 2001), and to the Special Committee of the Board of Directors of the Company that is working with Lehman Brothers Inc. to explore strategic alternatives for the Company, and one of Lashley and Goodbody will be appointed to the Loan, Audit, Finance, Compensation and Nomination Committees of the Company and the Bank; (2) Messrs. Lashley and Goodbody will be entitled to the compensation and benefits generally available to the directors of the Company and the Bank; (3) the Board of Directors of the Company shall nominate and support Mr. Goodbody for election to the Board in 2001 and Mr. Lashley for election to the Board in 2002, unless the PL Capital Group or any member thereof shall have submitted to the Company a nomination or a stockholder proposal that is not supported by the Company, or publicly supported such a nomination or proposal; (4) the PL Capital Group will withdraw its preliminary proxy materials filed with the SEC and terminate its proxy solicitation against the Company's nominees for election at the Annual Meeting and will vote all shares of the Company's Common Stock beneficially owned by its members for the Company's nominees for election and for the ratification of the appointment of the Company's independent auditors at the Annual Meeting; (5) the PL Capital Group will not make any statements, public or otherwise, in opposition to, or that would reflect negatively against, the Company, the Bank or any of their directors or officers, or institute litigation against or derivatively on behalf of the Company or the Bank, or any of their respective directors or officers, or provide any funds to, or otherwise support, any third party doing so, until the earlier of the last date for the submission of Board nominations or stockholder proposals for the 2001 Annual Meeting of Stockholders of the Company; and (6) the Company will reimburse the PL Capital Group for all costs and expenses incurred since July 1, 1999 in connection with its proposals for the nomination of Messrs. Lashley and Goodbody to the Board of Directors, or otherwise, up to $150,000. The Agreement will terminate if the Company ceases to exist by reason of merger, sale of assets, liquidation, exchange of shares, or otherwise, or if both Messrs. Lashley and Goodbody cease to be members of the Board of Directors of the Company. INFORMATION WITH RESPECT TO THE NOMINEES, CONTINUING DIRECTORS AND CERTAIN EXECUTIVE OFFICERS The following table sets forth the names of the nominees, continuing directors and the three (3) executive officers (the "Executive Officers") who are not directors, as well as their ages; a brief description of their recent business experience, including present occupations and employment; certain directorships held by each; the year in which each first became a director or officer of the Company and/or the Bank and the year in which their term (or in the case of nominees, their 6 proposed term) as director of the Company expires. This table also sets forth the amount of Common Stock and the percent thereof beneficially owned by each nominee, continuing director and Executive Officer and all directors and Executive Officers as a group as of the Record Date (except as otherwise provided).
EXPIRATION SHARES OF OWNERSHIP NAME AND PRINCIPAL DIRECTOR/ OF TERM AS COMMON STOCK AS PERCENT OCCUPATION AT PRESENT OFFICER DIRECTOR/ BENEFICIALLY OF AND FOR PAST FIVE YEARS AGE SINCE(1) OFFICER OWNED(2) CLASS(3) - --------------------------------------------- ------ ------------- ------------- ------------------- ------------------- Nominees Philip S. Messina 56 1986 2003 319,516(8)(9)(10) 3.46% Chairman of the Board and Chief Executive Officer of the Company and the Bank; Chairman of the Boards of CFSB Funding Corp., Columbia Resources Corp., CFS Investments, Inc. and Columbia Preferred Capital Corp., all subsidiaries of the Bank; Chairman of the Board of CFS Insurance Agency, Inc. and CFS Financial Institute, Inc., both subsidiaries of the Company. Msgr. Thomas J. Hartman 53 1997 2003 26,484(6)(7) * President and Chief Executive Officer of Radio and Television for the Diocese of Rockville Centre for Telicare Television Studios, a cable television station. Michael A. McManus, Jr. 56 1999 2003 11,906(6)(7) * President and Chief Executive Officer of Misonix, Inc., a producer and seller of ultrasonic medical devices and pollution control products; former President and Chief Executive Officer of New York Bancorp, Inc., a thrift holding company, and its subsidiary thrift, Home Federal Savings Bank; formerly President and Chief Executive Officer of Jamcor Pharmaceuticals, Vice President of Pfizer, Inc. and Executive Vice President of McAndrews & Forbes, Inc. and Pantry Pride; served as Assistant to the President of the United States from 1982 to 1985, serving as a member of all senior policy and planning groups during the Reagan Administration; Director of the United States Olympic Committee, Misonix, Inc., Novavax, Inc., National Wireless Corp. and Document Imaging Systems, Inc.
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EXPIRATION SHARES OF OWNERSHIP NAME AND PRINCIPAL DIRECTOR/ OF TERM AS COMMON STOCK AS PERCENT OCCUPATION AT PRESENT OFFICER DIRECTOR/ BENEFICIALLY OF AND FOR PAST FIVE YEARS AGE SINCE(1) OFFICER OWNED(2) CLASS(3) - --------------------------------------------- ------ ------------- ------------- ------------------- ------------------- CONTINUING DIRECTORS Robert M. Sprotte 62 1974 2001 101,572(6)(7)(9) 1.12% President of Schmelz Bros., Inc., a Plumbing contractor; President of RDR Realty Corp., a real estate holding Company; President of Three Rams Realty. Michael J. Fitzpatrick 60 1988 2001 73,572(6)(7) * CPA, Retired, former Vice President- National Thrift Director at E.F. Hutton & Company, Inc.; Director of Legal Aid Society of Suffolk County. William J. Jennings II(4) 54 1996 2001 85,712(7)(8)(11) * President and Chief Operating Officer of the Company and the Bank; President of CFS Financial Institute, Inc., a subsidiary of the Company; former Managing Director - Chief of Staff to Chairman of Salomon Smith Barney, Inc.; Director of CFS Financial Institute, Inc. Garret Goodbody 54 2000 2001 584,072(6)(7)(13) 6.47% Managing Partner of Goodbody Partners LP, a firm engaged in portfolio management and international financial services consulting; formerly held various senior positions in Corporate Lending, Risk Asset Review, Operations and Cash Management Services at Citibank NA; formerly President and CEO of New Milford Savings Bank; formerly Senior Vice President for Corporate Lending at Marine Midland Bank. George S. Worgul(5) 72 1983 2002 229,297(6)(7)(8)(9) 2.48% Former Chairman of the Board of the Company and the Bank. Michael J. Levine 55 1996 2002 45,402(6)(7)(9) * President of Norse Realty Group, Inc. and Affiliates, a real estate owner and developer; Partner in Levine and Schmutter Certified Public Accountants.
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EXPIRATION SHARES OF OWNERSHIP NAME AND PRINCIPAL DIRECTOR/ OF TERM AS COMMON STOCK AS PERCENT OCCUPATION AT PRESENT OFFICER DIRECTOR/ BENEFICIALLY OF AND FOR PAST FIVE YEARS AGE SINCE(1) OFFICER OWNED(2) CLASS(3) - --------------------------------------------- ------ ------------- ------------- ------------------- ------------------- Hanif Dahya 44 1999 2002 5,406(6)(7)(9) * President and Chief Executive Officer of Farah Ashley Capital, an investment firm; former principal of Sandler O'Neil and Partners, a financial services firm; formerly served as a manager of mortgage-backed securities for Union Bank of Switzerland and the head of mortgage finance at LF Rothschild and Company; Director of CFS Investments New Jersey, Inc., a subsidiary of the Bank. Richard Lashley 41 2000 2002 584,072(6)(7)(13) 6.47% Co-founder and co-owner of PL Capital, an investment management and financial advisory firm; PL Capital is the General Partner of the Financial Edge Fund, LP and the Financial Edge/Strategic Fund, LP.; CPA; formerly a Director in KPMG Peat Marwick's Financial Services Corporate Finance Practice and Assistant to the Director of KPMG Peat Marwick's National Banking and Finance Practice; Advisory Board Member for Clever Ideas- LeCard, Inc., a privately held financial services entity based in Chicago. EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS Thomas J. Seery 55 1976 (12) 104,639(8)(9)(10) 1.15% Executive Vice President-Operations Of the Company and Bank; Director and Chief Executive Officer of CFS Investments, Inc., Director of CFS Insurance Agency, Inc., Director and Vice President of CFS Financial Institute, Inc.
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EXPIRATION SHARES OF OWNERSHIP NAME AND PRINCIPAL DIRECTOR/ OF TERM AS COMMON STOCK AS PERCENT OCCUPATION AT PRESENT OFFICER DIRECTOR/ BENEFICIALLY OF AND FOR PAST FIVE YEARS AGE SINCE(1) OFFICER OWNED(2) CLASS(3) - --------------------------------------------- ------ ------------- ------------- ------------------- ------------------- Catherine Califano 41 1993 (12) 89,754(8)(9) 1.00% Senior Vice President-Chief Financial Officer of the Company and the Bank; Director and Vice President of Columbia Resources Corp.; Director of CFS Investments, Inc.; Director and Vice President of CFSB Funding, Corp.; Administrative Trustee of Haven Capital Trust I and Haven Capital Trust II; Director and Vice President of Columbia Preferred Capital Corporation; Director and Treasurer of CFS Insurance Agency, Inc., Chief Financial Officer of CFS Financial Institute, Inc. Mark A. Ricca 42 1998 (12) 40,264(8)(9)(10)(11) * Senior Vice President-Residential and Consumer Lending and Secretary of the Company and the Bank; President and Director of CFSB Funding Corp.; Director and Secretary of Columbia Resources, Corp.; Administrative Trustee of Haven Capital Trust I and Haven Capital Trust II; President of Columbia Preferred Capital Corporation; Director and Secretary of CFS Investments, Inc.; Director of CFS Insurance Agency, Inc., Director and Secretary of CFS Financial Institute, Inc.; former partner at Ricca & Donnelly, P.C., a law firm. ALL DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY -- -- -- 1,717,596(6)(7)(8) 16.14% AS A GROUP (14 PERSONS) (9)(10)(11)
- -------------------------- * Does not exceed 1.0% of the Company's voting securities. (1) Includes years of service as director of the Bank, prior to the organization of the Company on September 23, 1993. (2) Each person or relative of such person whose shares are included herein, exercises sole or shared voting or dispositive power as to the shares reported. (3) Percentages with respect to each person or group have been calculated on the basis of 9,026,661 shares of Common Stock outstanding as of the Record Date, plus, in the case of each individual, the number of shares issuable upon exercise of options that are exercisable by the individual within 60 days of the Record Date. (4) Mr. Jennings' wife is the first cousin of Mr. Messina. (5) Mr. Worgul retired as Chairman of the Board of the Company and the Bank on April 22, 1998. (FOOTNOTES CONTINUED OF FOLLOWING PAGE) 10 (6) Includes 2,906 shares of restricted stock awarded to each of Messrs. McManus and Dahya and 2,786 shares of restricted stock awarded to each of Messrs. Lashley and Goodbody under the Haven Bancorp, Inc. 1996 Stock Incentive Plan (the "1996 Stock Incentive Plan"), as to which each individual has sole voting power but no investment power. Also includes 406 shares of restricted stock awarded to each of Messrs. Fitzpatrick, Sprotte, Worgul and Levine, and Msgr. Hartman under the 1996 Stock Incentive Plan, as to which each individual has sole voting power but no investment power. (7) Includes 37,194 shares subject to options granted to each of Messrs. Sprotte and Fitzpatrick and 18,602 shares subject to options granted to each of Messrs. Levine and Jennings under the Haven Bancorp, Inc. 1993 Stock Option Plan for Outside Directors ("Directors' Stock Option Plan") which are currently exercisable. Also includes 12,000 shares subject to options granted to each of Messrs. Worgul, Sprotte and Fitzpatrick, 8,000 shares subject to options granted to Messrs. Jennings and Levine, and 20,000 shares subject to options granted to Msgr. Hartman pursuant to the 1996 Stock Incentive Plan, all of which are currently exercisable. Does not include 1,667 shares subject to options granted to each of Messrs. McManus, Dahya, Lashley and Goodbody under the 1996 Stock Incentive Plan, which are not currently exercisable and will not be exercisable within 60 days of the Record Date. (8) Includes 198,374, 153,534, 61,266 and 49,192 shares subject to options granted to Messrs. Worgul, Messina and Seery and to Ms. Califano, respectively, pursuant to the Haven Bancorp, Inc. 1993 Incentive Stock Option Plan ("1993 Incentive Option Plan"), all of which are currently exercisable. Includes 65,333, 16,666, 23,500, 32,000 and 23,000 shares subject to options granted to Messrs. Messina, Jennings, Seery and Ricca and to Ms. Califano, respectively, pursuant to the 1996 Stock Incentive Plan, all of which are currently exercisable. Does not include 16,667, 33,334, 5,000, 19,000 and 4,000 options granted to Messrs. Messina, Jennings, Seery and Ricca and Ms. Califano, respectively, under the 1996 Stock Incentive Plan which are not currently exercisable and will not be exercisable within 60 days of the Record Date. (9) The figures shown include shares held in trust pursuant to the ESOP that were owned as of December 31, 1999 to individual accounts as follows: Mr. Messina, 10,919 shares; Mr. Seery, 8,792 shares; Mr. Ricca, 495 shares; and Ms. Califano, 7,878 shares. Such persons have sole voting power but no investment power, except in limited circumstances, as to such shares. The figures shown do not include 244,365 shares held in trust pursuant to the ESOP that have not been allocated to any individual's account and as to which the members of the Company's ESOP Committee (consisting of Messrs. Sprotte, Levine, Worgul and Dahya) may be deemed to share investment power and as to which the named executive officers may be deemed to share voting power, thereby causing each such member or executive officer to be deemed a beneficial owner of such shares. Each of the members of the ESOP Committee and the executive officers disclaims beneficial ownership of such shares. (10) The figures shown include shares held in the Employer Stock Fund of the Bank's Employee 401(k) Thrift Incentive Savings Plan ("Employee Thrift Savings Plan") at December 31, 1999 as to which each person identified has sole voting and investment power as follows: Mr. Messina, 29,848 shares; Mr. Seery, 7,445 shares; and Mr. Ricca, 1,269 shares. (11) Includes 2,333 shares of restricted stock awarded to Mr. Ricca and 10,000 shares of restricted stock awarded to Mr. Jennings under the 1996 Stock Incentive Plan, as to which each individual has sole voting power but no investment power. (12) Officers serve until their successors have been duly appointed. (13) Consists of 584,072 shares held by members of the PL Capital Group (who together constitute a "group" as that term is defined in Section 13(d)(3) of the Exchange Act). See note 5 to the table under "Security Ownership of Certain Beneficial Owners." MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD The Board of Directors conducts its business through meetings of the Board and through activities of its committees. The Board of Directors meets monthly and may have additional meetings as needed. During fiscal 1999, the Board of Directors of the Company held twelve regular 11 board meetings and three special meetings. All of the directors of the Company attended at least 75% in the aggregate of the total number of the Company's board meetings held and committee meetings on which such director served during fiscal 1999, except for Messrs. McManus and Dahya who were appointed to the Board of Directors in December 1999. The Board of Directors of the Company maintains committees, the nature and composition of which are described below: The Audit Committee of the Company and the Bank for fiscal 1999 consisted of Messrs. Fitzpatrick (Chairman), Levine and Sprotte and Msgr. Hartman. This Committee met five times in fiscal 1999. The Audit Committee selects an independent audit firm to be appointed by the Board of Directors and then submitted for stockholder ratification at the Company's Annual Meeting, approves internal audit schedules and reviews internal audit reports. The Company's Nominating Committee for the 2000 Annual Meeting consists of Messrs. Sprotte (Chairman), Dahya, Fitzpatrick, Jennings and Levine. The Committee considers and recommends the nominees for directors to stand for election at the Company's Annual Meeting. The Company's Certificate of Incorporation and Bylaws also provide for stockholder nominations of directors. These provisions require such nominations to be made pursuant to timely notice in writing to the Secretary of the Company. The stockholder's notice of nomination must contain all information relating to the nominee which is required to be disclosed by the Company's Bylaws and by the Exchange Act. The Nominating Committee met once in preparation for the 2000 Annual Meeting. The Compensation Committee for the Company and Bank consists of Messrs. Sprotte (Chairman), Dahya, Levine, Worgul and Goodbody who will be responsible for the 2000 Compensation Committee Report on Executive Compensation. The Compensation Committee is responsible for determining executive compensation. In 1999, the Compensation Committee consisted of Messrs. Sprotte (Chairman), Levine and Worgul and met twice. Mr. Worgul retired as President of the Company and the Bank on June 30, 1994 and as Chairman of the Board of the Company and the Bank on April 22, 1998. DIRECTORS' COMPENSATION DIRECTORS' FEES. In 1999, directors who were not employees of the Company or the Bank received a retainer of $18,000 a year, one third of which was paid in the form of restricted stock granted pursuant to the 1996 Stock Incentive Plan. The directors who were not employees of the Company or the Bank also received a fee of $1,000 for each Board meeting attended. One third of these fees were paid by the Company. Committee members who were not employees of the Company or the Bank received a fee of $1,500 for each regular and special meeting attended. The Chairman of each Committee received an additional retainer of $1,500 per year. Directors are also eligible for coverage under the Company's health and dental insurance plans in the same manner as employees. DIRECTORS' STOCK OPTION PLAN. Under the Directors' Stock Option Plan, each outside director who was not an officer of the Company or the Bank at the time of the Bank's Conversion was granted options to purchase 37,194 shares of Common Stock at an exercise price of $5.00 per 12 share on the date of grant, September 23, 1993. All stock and option grants have been adjusted, where appropriate, to reflect the two-for-one stock split distributed on November 28, 1997 to holders of record as of October 31, 1997. To the extent options for shares are available for grant under the Directors' Stock Option Plan, each subsequently appointed or elected outside director will be granted options as of the date on which such director is qualified and first begins to serve as an outside director. Pursuant to the Directors' Stock Option Plan, effective October 24, 1996, Messrs. Levine and Jennings were each granted options to purchase 18,602 shares of common stock at an exercise price of $13.41 per share, the fair market value on the date of grant. Generally, all options granted under the Directors' Stock Option Plan become exercisable one year after the date of grant and expire ten (10) years after the date of grant. Upon death, disability or retirement of the participant or upon a Change in Control of the Company or the Bank, as defined in the Directors' Stock Option Plan, all options previously granted would automatically become exercisable. HAVEN BANCORP, INC. 1996 STOCK INCENTIVE PLAN. The Company's stockholders approved the 1996 Stock Incentive Plan at the Annual Meeting held April 24, 1996. On such date, each eligible outside director was granted a non-qualified stock option to purchase 12,000 shares of Common Stock at an exercise price of $12.14 per share. To the extent options for shares are available for grant under the 1996 Stock Incentive Plan, each subsequently appointed or elected outside director will be granted options as of the date on which such outside director is qualified and first begins to serve as an outside director. The Board has broad discretion in granting non-qualified stock option awards to outside directors. The size, vesting schedule and any other terms or conditions of such awards are subject to the sole discretion of the Board. Effective October 24, 1996, Messrs. Levine and Jennings were each granted non-qualified stock options to purchase 8,000 shares of Common Stock at an exercise price of $13.41 per share, the fair market value on the date of grant. Effective March 25, 1997, Msgr. Hartman was granted non-qualified stock options to purchase 20,000 shares of Common Stock at an exercise price of $17.28, the fair market value on the date of grant. Effective January 3, 2000, Messrs. McManus and Dahya were each granted options to purchase 1,667 shares of common stock at the exercise price of $14.78 per share, the fair market value on the date of such grants. In addition, effective April 7, 2000, Messrs. Lashley and Goodbody were each granted options to purchase 1,667 shares of common stock at the exercise price of $15.6875 per share, the fair market value on the date of such grants. All options previously granted under the 1996 Stock Incentive Plan are exercisable in three equal installments beginning one year after the date of grant and expire ten (10) years after the date of grant. Upon death, disability or retirement of the participant or upon a change in control of the Company or the Bank, all options previously granted would automatically become exercisable. Pursuant to the 1996 Stock Incentive Plan, the Board has broad discretion in granting restricted stock awards to outside directors. The size, vesting schedule and any other terms or conditions of such awards are subject to the sole discretion of the Board. Effective January 1, 1996, each eligible outside director was granted 494 shares in lieu of cash. Messrs. Levine and Jennings were subsequently granted 116 shares on October 24, 1996. Effective January 1, 1997, each eligible outside director was granted 420 shares, in lieu of cash, representing one-third of such director's annual retainer for 1997. Msgr. Hartman, after his election to the Board of Directors, was granted 288 shares in lieu of cash equal to one-third of his portion of the annual retainer for 1997 pro rated for his commencement of service on March 25, 1997. Effective January 1, 1998, January 1, 1999, and January 1, 2000, each eligible outside director was granted 263,395 and 406 shares, 13 respectively, in lieu of cash, representing one-third of such director's annual retainer for that year. Messrs. Lashley and Goodbody were each granted 286 shares in lieu of cash, representing one-third of each director's portion of the annual retainer for 2000 pro rated for such director's commencement of service on April 7, 2000. Pursuant to the 1996 Stock Incentive Plan, effective January 3, 2000, each of Messrs. McManus and Dahya, and effective April 7, 2000, each of Messrs. Lashley and Goodbody, was granted 2,500 shares of restricted stock. DIRECTORS' RECOGNITION AND RETENTION PLAN. Under the DRP, each of the six outside directors serving at the time of the Conversion received awards of 12,398 shares. On October 24, 1996, Messrs. Levine and Jennings were each awarded 6,200 shares. On March 25, 1997, Msgr. Hartman was awarded 4,132 shares. Awards to directors vest in three equal annual installments commencing on the first anniversary of the effective date of the award. Awards will be 100% vested upon termination of employment or service as a director due to death, disability or retirement of the director or following a Change in Control of the Bank or the Company, as defined in the DRP. In the event that before reaching normal retirement, a director terminates service with the Bank or the Company, for any reason other than death or disability, such director will forfeit the director's non-vested awards. When shares become vested and are actually distributed in accordance with the DRP, the recipients will also receive amounts equal to any accrued dividends paid with respect to the shares. Prior to vesting, recipients of awards may direct the voting of the shares allocated to them. Shares not subject to an award will be voted by the trustees of the DRP in proportion to the directions provided with respect to shares subject to an award. CONSULTATION AND RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS. Under the Company's Consultation and Retirement Plan for Non-Employee Directors (the "Directors' Retirement Plan"), a director who is not an employee or officer of the Company may be eligible to participate in the Directors' Retirement Plan. Any participant who has served as a director for at least 60 months, has attained age 55 and, after retirement, executes a consulting agreement pursuant to which the participant agrees to provide continuing service to the Bank and the Company, will be eligible to receive monthly retirement benefit payments and continued health benefits under the Directors' Retirement Plan. The annual retirement benefit paid to a participant will be an amount equal to two-thirds of the sum, measured as of the date of retirement, of (i) the amount of retainer fees paid to directors including committee chairmanship retainer fees for committees as to which the participant was chairperson, (ii) the aggregate of the annual Board of Directors committee fees paid to the director based on the number of meetings held by the committees on which the participant served during the calendar year preceding the participant's retirement and (iii) the aggregate of the twelve regular meeting fees of the Board of Directors. If a director terminates or is terminated within one year of a Change in Control, as defined in the Directors' Retirement Plan, he shall be deemed to have thirty-six (36) additional months of service and three (3) additional years of age for purposes of determining his eligibility to receive retirement benefits under the Directors' Retirement Plan. If there is a Change in Control, an eligible director may elect to receive his retirement benefit payment in one lump sum. EXECUTIVE COMPENSATION THE REPORT OF THE COMPENSATION COMMITTEE AND THE STOCK PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY 14 STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS. COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. Under rules established by the SEC, the Company is required to provide certain data and information in regard to the compensation and benefits provided to the Company's Chief Executive Officer and other executive officers of the Company. The disclosure requirements for the chief executive officer and such other executive officers include the use of tables and a report explaining the rationale and considerations that led to fundamental compensation decisions affecting those individuals. In fulfillment of this requirement, the joint Compensation Committee of the Company and Bank (the "Compensation Committee"), at the direction of the Board of Directors, has prepared the following report for inclusion in the proxy statement. The members of the 1999 Compensation Committee were Messrs. Sprotte (Chairman), Levine and Worgul. The Compensation Committee met twice during fiscal year 1999. The Compensation Committee is responsible for establishing the compensation levels and benefits of executive officers of the Bank and the Company. The Compensation Committee establishes compensation on a calendar year basis and was responsible for compensation decisions in 1999. COMPENSATION OF THE CHIEF EXECUTIVE OFFICER AND OTHER EXECUTIVE OFFICERS. The compensation of the Chief Executive Officer and other executive officers consists of base salary, bonus, stock options, restricted stock awards, pension and fringe benefits. Base salary levels are generally within a range consistent and competitive with that of other institutions that are similar to the Bank in asset size, function and geographical markets. The institutions used to compare salaries are not necessarily the same as those which make up the peer group used in the stock performance graph. At a meeting held in February 1999, the Compensation Committee recommended, and the Board of Directors approved, that salaries of the Chief Executive Officer and other executive officers be maintained at 1998 levels. This decision was based on a comparison of compensation levels and financial performance of the Company to the custom peer group as set forth in the SNL Executive Compensation Review For Thrift Institutions 1999 (the "SNL Compensation Review"). The Compensation Committee may authorize the payment of incentive awards to the Chief Executive Officer and other executive officers consisting of bonus, stock options and/or stock awards. Stock options and stock awards made under the compensation plans maintained by the Company serve as a long-term incentive by linking executive compensation with the interests of the Company's stockholders. Stock-based compensation is designed to retain employees and build loyalty while promoting stockholder value. In determining the payment and amount of incentive awards, the Compensation Committee reviews key financial ratios of the Company and pre-defined levels of achievement. The Compensation Committee may also, at its discretion, utilize additional relevant performance information. At its meeting in February 1999, recognizing the contribution of the Chief Executive Officer and the other executive officers to the growth and profitability of the Company in the preceding year, the Compensation Committee awarded stock options to the Chief Executive Officer and Named Executive Officers (as defined below). In addition, in March 1999, the Board of Directors awarded Mr. Jennings restricted stock and stock options under the 1996 Stock 15 Incentive Plan, in recognition of his being named Executive Vice President and Assistant to the President of the Company. CHIEF EXECUTIVE OFFICER. The compensation of the Chief Executive Officer during 1999 consisted of the same elements as for other executive officers. Mr. Messina's base salary remained at $600,000 for fiscal year 1999 and Mr. Messina did not receive a bonus for fiscal year 1999. In reaching this decision, the Compensation Committee reviewed the SNL Compensation Review, including profitability, efficiency and financial performance, as well as compensation paid to chief executive officers of its custom peer group as reflected in the SNL Compensation Review. The Compensation Committee elected not to award a salary increase or bonus to Mr. Messina in recognition of the challenges that faced the Company in 1999 and the environment in which it was operating even though the Company's results for 1999 were significantly better than in prior years. Mr. Messina was awarded 25,000 stock options under the 1996 Stock Incentive Plan in recognition of his contribution to the growth and profitability of the Company in 1998. The grants and awards for the Chief Executive Officer and the grants and awards for Named Executive Officers (as defined below) are reflected in the Summary Compensation Table. COMPENSATION COMMITTEE: 1999 Robert M. Sprotte Michael J. Levine George S. Worgul BOARD OF DIRECTORS: 1999 Michael J. Fitzpatrick Msgr. Thomas J. Hartman George S. Worgul Robert M. Sprotte Philip S. Messina Michael J. Levine William J. Jennings II Michael A. McManus, Jr. Hanif Dahya COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. During the 1999 fiscal year, there were no interlocks, as defined under the rules and regulations of the SEC, between members of the Compensation Committee or executive officers of the Company and corporations with respect to which such persons are affiliated, or otherwise. See "Transactions With Certain Related Persons," below. STOCK PERFORMANCE GRAPH. The following graph shows a comparison of cumulative total stockholder return on the Company's Common Stock, based on the market price of the Common Stock assuming reinvestment of dividends, with the cumulative total return of companies in the Nasdaq Stock Market and in the SNL Thrift Index for the period beginning on December 31, 1994 through December 31, 1999. 16 COMPARISON OF CUMULATIVE TOTAL RETURN AMONG HAVEN BANCORP, INC. COMMON STOCK, NASDAQ U.S. INDEX AND SNL THRIFT INDEX** DECEMBER 31, 1994 - DECEMBER 31, 1999 HAVEN BANCORP, INC. [GRAPHIC OMITTED]
PERIOD ENDING ------------------------------------------------------------------------------------- Index 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 ----- -------- -------- -------- -------- -------- -------- Haven Bancorp, Inc. 100.00 179.06 222.46 355.38 240.65 252.71 NASDAQ-Total US* 100.00 141.33 173.89 213.07 300.25 542.43 SNL Thrift Index 100.00 155.74 202.92 345.28 303.68 248.07
NOTES: A. THE LINES REPRESENT INDEX LEVELS DERIVED FROM COMPOUNDED DAILY RETURNS THAT INCLUDE ALL DIVIDENDS. B. THE INDEXES ARE REWEIGHTED DAILY, USING THE MARKET CAPITALIZATION ON THE PREVIOUS TRADING DAY. C. IF THE INTERVAL, BASED ON THE FISCAL YEAR-END, IS NOT A TRADING DAY, THE PRECEDING TRADING DAY IS USED. D. THE INDEX LEVEL FOR ALL SERIES WAS SET TO $100.00 ON 12/31/94. ** SNL SECURITIES L.C. (C) 2000 *SOURCE: CRSP, CENTER FOR RESEARCH IN SECURITY PRICES, GRADUATE SCHOOL OF BUSINESS, THE UNIVERSITY OF CHICAGO 1999. USED WITH PERMISSION. ALL RIGHTS RESERVED. CRSP.COM. 17 SUMMARY COMPENSATION TABLE. The following table sets forth the compensation paid by the Company and/or Bank for services during the fiscal years ended December 31, 1999, 1998 and 1997, to the Chief Executive Officer and the five other highest paid executive officers (the "Named Executive Officers") of the Company and/or the Bank who each received total salary and bonus in excess of $100,000 in 1999.
LONG TERM COMPENSATION --------------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS --------------------------------------------- --------------------------- ---------- OTHER RESTRICTED SECURITIES ANNUAL STOCK UNDERLYING LTIP ALL OTHER NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION POSITION YEAR ($) ($)(1) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6) ------------------ ---- ------ ----- ------------ ------ ------------ ------- ------------ Philip S. Messina 1999 613,846(7) -- 1,121 -- 25,000 -- 16,655 Chief Executive Officer 1998 578,365 -- 1,800 -- -- -- 39,370 1997 450,481 125,000 2,999 -- -- -- 32,317 William J. Jennings (8) 1999 191,346(7) -- 2,367 200,160 50,000 -- 1,200 President 1998 -- -- -- -- -- -- -- 1997 -- -- -- -- -- -- -- Thomas J. Seery 1999 194,385 -- 450 -- 7,500 -- 15,611 Executive Vice President- 1998 184,808 -- 900 -- -- -- 38,763 Operations 1997 151,607 40,000 1,500 -- -- -- 29,022 Catherine Califano 1999 189,269 -- 450 -- 6,000 -- 14,775 Senior Vice President and 1998 181,538 -- 900 -- -- -- 38,538 Chief Financial Officer 1997 159,519 40,000 1,500 -- -- -- 31,271 Mark A. Ricca (9) 1999 180,538(7) 10,000 1,329 -- 6,000 -- 14,202 Senior Vice President - 1998 -- -- -- -- -- -- -- Residential and Consumer 1997 -- -- -- -- -- -- -- Lending Gerard H. McGuirk (10) 1999 194,385 -- 450 -- 5,000 -- 14,775 Executive Vice President 1998 186,539 -- 750 -- -- -- 38,133 and Chief Lending Officer 1997 164,823 40,000 1,500 -- -- -- 30,901
- --------------------- (1) Bonus shown for the years 1997 through 1999 consists of cash payments made pursuant to the Company's incentive compensation plan awarded for the performance achievements of the Named Executive Officers during the corresponding fiscal year. (2) The amounts listed for 1997 through 1999 include dividends received on restricted stock granted under the 1996 Stock Incentive Plan which are distributed when paid, even if prior to the vesting of restricted stock, and, for Messrs. Messina, Jennings and Ricca, interest earned on deferred compensation under the Company's Key Executive Deferred Compensation Plan (the "Deferred Compensation Plan"). (3) Pursuant to the 1996 Stock Incentive Plan, Mr. Jennings was granted an award of 15,000 shares of restricted stock on March 29, 1999, which award vests in three annual installments commencing on March 29, 2000. Subsequent to the date shares of restricted stock are awarded and prior to the date such awards vest, the recipient is entitled to receive cash dividends declared and paid with respect to such shares of restricted stock. The dollar amount in the 18 table for 1999 is based upon the closing market price of $13.344 per share of Common Stock on March 29, 1999, as reported on the Nasdaq National Market System. (4) Includes options awarded under the Company's 1996 Stock Incentive Plan. For a discussion of the terms of the grants and vesting of options, see the footnote accompanying Fiscal Year End Option/SAR Values Table. (5) The Company does not maintain long-term incentive plans, and, therefore, there were no payments under such plans for fiscal years ending 1999, 1998 or 1997. (6) Amounts represent life insurance premiums paid by the Bank with respect to Messrs. Messina, Jennings, Seery, Ricca and McGuirk and Ms. Califano. Amounts for 1999 include the dollar value of an allocation of Common Stock made to the Named Executive Officer's account under the ESOP during 1999, with respect to the plan year ending December 31, 1998. Based on the closing market price of the Common Stock on December 31, 1998 of $15.41 per share, the market value of such allocation was $10,155 with respect to each of Messrs. Messina, Seery and McGuirk, $7,702 with respect to Mr. Ricca and $10,155 with respect to Ms. Califano. The allocations to be made under the ESOP for the plan year ended December 31, 1999 have not yet been determined. The matching contributions under the Employee Thrift Savings Plan for 1999 for Messrs. Messina, Seery, Ricca and McGuirk and Ms. Califano were $5,000, $3,956, $5,000, $3,120 and $3,120, respectively. (7) Includes $20,000, $11,266 and $5,455 of compensation deferred by Messrs. Messina, Jennings and Ricca, respectively, under the Deferred Compensation Plan. (8) Mr. Jennings served as Consultant to the Company and the Bank from January 1999 through March 1999. From April 1999 through December 21, 1999, Mr. Jennings served as Executive Vice President and Assistant to the President. On December 22, 1999, Mr. Jennings was appointed President and Chief Operating Officer of the Company and the Bank. (9) Effective March 1, 1999, Mark A. Ricca, Esq., General Counsel for the Company and the Bank was appointed to serve as the Secretary and Compliance Officer of the Company and the Bank. On December 22, 1999, Mr. Ricca was named head of the Residential and Consumer Lending Division of the Bank. (10) Mr. McGuirk resigned from the Company and the Bank effective January 3, 2000. Mr. McGuirk's 1999 option grant was forfeited on such date. EMPLOYMENT AGREEMENT. The Company entered into an employment agreement with Mr. Messina, effective as of November 22, 1999, which restated, modified and superseded the Employment Agreements between the Company and Mr. Messina dated November 18, 1994 and September 21, 1995, and the associated Amendatory Agreement dated May 28, 1997 ("Company Employment Agreement"). In addition, the Bank and Mr. Messina entered into a Termination of the Bank Employment Agreement whereby Mr. Messina's Employment Agreement with the Bank, effective as of May 28, 1997 (the "Bank Employment Agreement") was terminated. The restatement of Mr. Messina's Company Employment Agreement and termination of his Bank Employment Agreement has the effect of setting forth in one agreement the terms of Mr. Messina's employment with the Company and with the Bank. The Company Employment Agreement is intended to memorialize the terms of Mr. Messina's employment and to secure the continued availability of his services to the Company and the Bank with a minimum of personal distraction in the event of a proposed or threatened change in control of the Company or the Bank. The continued success of the Company and the Bank depends to a significant degree on Mr. Messina's skills and competence. The Company Employment Agreement provides for a three-year term, and beginning on its effective date, the term of the Company Employment Agreement is automatically extended for one day each day, such that the remaining term is always three years, unless and until either the Board of Directors or Mr. Messina provides written notice to the other party of an intention not to extend the term, at which time the remaining term will be fixed at three years from the date of the written notice. The Company Employment Agreement provides that Mr. Messina will receive an aggregate 19 base salary from the Company and the Bank at an initial annual rate of $600,000, which will be reviewed annually by the Board of Directors of the Company. Mr. Messina's current aggregate base salary under the Company Employment Agreement is $600,000. In addition to base salary, the Company Employment Agreement provides for, among other things, disability pay, participation in stock plans and other employee benefit plans, fringe benefits applicable to executive personnel and supplemental retirement benefits to compensate the executive for the benefits that such executive cannot receive under the tax-qualified employee benefit plans maintained by the Company and the Bank due to the limitations imposed on such plans by the Internal Revenue Code of 1986, as amended (the "Code"). The Company Employment Agreement also provides that the Company will indemnify Mr. Messina during the term of the Company Employment Agreement and for a period of six years thereafter against any costs, liabilities, losses and exposures for acts and omissions in connection with his service as an officer or director of the Company and the Bank, to the fullest extent allowable under federal and Delaware corporate law. The Company Employment Agreement provides for the termination of Mr. Messina's employment by the Company or the Bank for cause at any time. Under the Company Employment Agreement, in the event the Company or the Bank chooses to terminate Mr. Messina's employment for reasons other than for cause, or in the event of his resignation from the Company or the Bank following: (i) a failure to re-elect or re-appoint Mr. Messina to his current offices; (ii) a material breach of the Company Employment Agreement by the Company; or (iii) a Change of Control, as defined in the Company Employment Agreement, the executive or, in the event of his death, his estate, would be entitled to, in addition to any earned wages or benefits due, a payment equal to the salary payable or due during the remaining term of the Company Employment Agreement, the other cash compensation and benefits or present value of such benefits that he would have accrued or received if he had remained employed by the Company during the remaining unexpired term of the Company Employment Agreement, and continued life, health, dental, accident and disability insurance coverage for the remaining unexpired term of the Company Employment Agreement. In the event that the executive's termination of employment occurs following a Change of Control, the insurance coverage described above will be provided for the executive's lifetime and he shall also be entitled to receive continued fringe benefits and perquisites for the remaining unexpired term of the Company Employment Agreement and a payment equal to the difference between the value of his normal and supplemental retirement benefits and an unreduced early retirement benefit commencing at age 55. Payments made to Mr. Messina under the Company Employment Agreement upon a change in control may constitute an "excess parachute payment" as defined under Section 280G of the Code, which may result in the imposition of an excise tax on Mr. Messina and the denial of federal income tax deductions for such excess amounts for the Company. Under the Company Employment Agreement, the Company will indemnify Mr. Messina for such excise taxes and any additional income, employment and excise taxes imposed as a result of such indemnification. In the event that Mr. Messina is terminated for reasons other than for cause, or in the event of his resignation from the Company or the Bank following one of the events described above, the estimated value of the payments Mr. Messina will receive under the Company Employment Agreement is approximately $2,276,000, not including the value of vested and accrued benefits under the Bank's and the Company's compensation and benefits plans that would be payable regardless of the reason for Mr. Messina's termination or the value of the golden parachute 20 excise tax indemnification payment (if any) if termination occurs upon or following a Change of Control. The Company Employment Agreement provides that any compensation or benefits provided to Mr. Messina by the Bank and any other direct or indirect subsidiary of the Company for services performed, shall be applied to offset the obligations of the Company under the Company Employment Agreement, it being intended that the Company Employment Agreement set forth the aggregate compensation and benefits payable to Mr. Messina for all services performed for the Company, the Bank and all of the Company's direct or indirect subsidiaries. CHANGE IN CONTROL AGREEMENTS. To secure the continued availability of the services of the Named Executive Officers in the event of a threatened or actual change in ownership or control, the Bank and the Company have entered into separate Change in Control Agreements with Messrs. Jennings, Seery and Ricca and Ms. Califano. Each Change in Control Agreement with the Bank provides for a two-year term, and commencing on the first anniversary of the date of the Change in Control Agreement and continuing on each anniversary thereafter, the Change in Control Agreement may be extended by the Board of Directors of the Bank for an additional year such that the remaining term of the Bank's Change in Control Agreement shall be two years. Each Change in Control Agreement with the Company provides for a three-year term which automatically extends for one day each day, such that the term will always be three years, until either the Board of Directors of the Company or the executive provides written notice of an intention not to extend the term of the Change in Control Agreement. Each Change in Control Agreement provides that at any time following a Change in Control, as defined in the Change in Control Agreements, of the Company or the Bank, if the Company or the Bank terminates the executive's employment within six (6) months prior to or twelve (12) months after a Change in Control for any reason other than for cause or, in the case of the Bank's Change in Control Agreement, if the executive voluntarily resigns following demotion, loss of title, office or significant authority, a reduction in compensation, or a relocation of the employee's principal place of employment and, in the case of the Company's Change in Control Agreement, if the executive resigns during the thirteenth month following a Change in Control without regard as to whether a change in status, compensation or working conditions or location has occurred, then the executive or, in the event of death, the executive's estate or beneficiaries, as the case may be, would be entitled to receive a payment equal to the salary, bonus and benefits, and perquisites in the case of the Company's Change in Control Agreements, that the employee would have accrued or received if his or her employment continued for the remaining unexpired term of the Change in Control Agreement. The Change in Control Agreements with the Company provide that the Company will indemnify the executive for any excise taxes imposed on "excess parachute payments" deemed made to the executive under Section 280G of the Code and for any additional income, employment and excise taxes imposed as a result of such indemnification. Payments to be made under the Company's Change in Control Agreement with each executive officer will be offset by any payments to be made under the Bank's Change in Control Agreement with such executive. The Company guarantees payments to the executive under the Bank's Change in Control Agreement if the Bank does not pay payments or benefits. The estimated value of the Change in Control Agreements in the event of the executives' termination of employment following a Change in Control is approximately $1,284,000, $611,000, $649,000 and $581,000 for Messrs. Jennings, Seery and Ricca and Ms. Califano, respectively, not including the value of vested and accrued benefits under the Bank's and the Company's compensation and benefits 21 plans that would be payable regardless of the reason for the executives' termination or the value of the golden parachute excise tax indemnification payment (if any) if termination occurs upon or following a Change in Control. INCENTIVE STOCK OPTION PLAN AND 1996 STOCK INCENTIVE PLAN. The Company maintains the Incentive Stock Option Plan (established in 1993) and the 1996 Stock Incentive Plan, which provide discretionary awards to officers and key employees as determined by a committee of disinterested directors who administer the plans. The following table provides certain information with respect to the grants of stock options made during the fiscal year ended December 31, 1999 to each of the Named Executive Officers. The table discloses the gain that would be realized if the stock options granted to the individuals listed were exercised when the Company's stock price had appreciated by the percentage rates indicated from the market price on the date of grant.
OPTION/SAR GRANTS IN LAST FISCAL YEAR INDIVIDUAL GRANTS ----------------------------------------------- NUMBER OF POTENTIAL REALIZED VALUE AT SECURITIES % OF TOTAL ASSUMED ANNUAL RATES OF STOCK UNDERLYING OPTIONS/SARS EXERCISE PRICE APPRECIATION FOR OPTIONS/SARS GRANTED TO OR BASE OPTION TERM GRANTED EMPLOYEES IN PRICE EXPIRATION ------------------------------ NAME (#)(1) FISCAL YEAR (%) ($/SH) DATE 5% ($) 10%($) - -------------------------- -------------- ---------------- ------------- ------------- --------------- -------------- Philip S. Messina 25,000 12.00 13.937 3/01/09 219,123 555,300 William J. Jennings II 50,000 25.00 13.344 3/29/09 419,598 1,063,345 Thomas J. Seery 7,500 4.00 13.937 3/01/09 65,737 166,590 Catherine Califano 6,000 3.00 13.937 3/01/09 52,589 133,272 Mark A. Ricca 6,000 3.00 13.937 3/01/09 52,589 133,272 Gerard H. McGuirk 5,000 2.00 13.937 1/03/00(1) N/A(2) N/A(2)
- ------------------------ (1) The options were granted under the 1996 Stock Incentive Plan and become exercisable in three equal installments commencing March 1, 2000 for Messrs. Messina, Seery and Ricca and Ms. Califano, and March 29, 2000 for Mr. Jennings. All options were granted in tandem with Appreciation Rights which provide that, in the event of a Change in Control, as defined in the 1996 Stock Incentive Plan, the Named Executive Officer may, in lieu of exercising an option, surrender such option and receive a payment in cash, on a per share basis, equal to the difference between the exercise price per share and the greater of (i) the highest price paid per share of the Company's Common Stock by any person who initiated or sought to effect the Change in Control during the one year period ending on the date of the Change in Control or (ii) the average Fair Market Value per share as defined in the 1996 Stock Incentive Plan over the last ten trading days preceding the date of exercise of the Appreciation Right. (2) Mr. McGuirk's options were forfeited upon his resignation from the Company, effective January 3, 2000. 22 The following table provides certain information with respect to the number of shares of Common Stock represented by outstanding options held by the Named Executive Officers as of December 31, 1999. Also reported are the values for "in-the-money" options, which represent the positive spread between the exercise price of any such existing stock options and the year-end price of the Common Stock.
FISCAL YEAR END OPTION/SAR VALUES ------------------------------ ------------------------------- NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE- UNDERLYING UNEXERCISED MONEY OPTIONS/SARS AT - ------------------------- SHARES OPTIONS/SARS FISCAL ACQUIRED VALUE AT FISCAL YEAR END (#) YEAR END ($)(1) ON EXERCISE REALIZED ------------------------------ ------------------------------- NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ------------------------- -------------- ------------ ------------------------------ ------------------------------- Philip S. Messina -- -- 210,534 25,000 1,689,107 36,730 William J. Jennings II -- -- 26,602 50,000 53,204 103,110 Thomas J. Seery -- -- 82,266 7,500 671,200 11,019 Catherine Califano -- -- 70,192 6,000 406,755 8,815 Mark A. Ricca -- -- 32,000 19,000 2,937 5,875 Gerard H. McGuirk -- -- 62,754 -- 329,354 --
- ------------------------ (1) Messrs. Messina and Seery and Ms. Califano have 148,780, 59,512 and 7,438 options respectively, with an exercise price of $5.00. Ms. Califano and Mr. McGuirk each has 40,000 options with an exercise price of $8.47. Mr. Messina has 61,754 options and each of Messrs. Seery and McGuirk and Ms. Califano has 22,754 options with an exercise price of $13.125. Mr. Jennings has 26,602 options with an exercise price of $13.406 and 50,000 options with an exercise price of $13.344. Messrs. Messina, Seery and Ricca and Ms. Califano have 25,000, 7,500, 6,000 and 6,000 options, respectively, with an exercise price of $13.937. Mr. Ricca has 45,000 options with an exercise price of $25.875. At December 31, 1999, the closing price of the Common Stock of the Company was $15.406. DEFINED BENEFIT PLAN. The Bank maintains the CFS Bank Retirement Income Plan, a non-contributory defined benefit pension plan (the "Retirement Plan"). The Retirement Plan was frozen effective as of June 30, 1996. Since the date the Retirement Plan was frozen, no new employees have participated in this program and employees participating in the Retirement Plan when frozen have not been credited with additional years of service. 23 The following table indicates the annual retirement benefit that would be payable as of December 31, 1999 under the Retirement Plan upon retirement at age 65 to a participant electing to receive his retirement benefit in the standard form of benefit (single life annuity), assuming various specified levels of average annual compensation and various specified years of credited service.
AVERAGE 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS ANNUAL OF CREDITED OF CREDITED OF CREDITED OF CREDITED OF CREDITED OF CREDITED COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE(1) ------------ ------------ ----------- ----------- ----------- ----------- ----------- 125,000 22,175 33,262 44,349 55,436 66,524 66,524 150,000 27,425 41,137 54,849 68,561 82,274 82,274 160,000 29,525 44,287 59,049 73,811 88,574 88,574 175,000(2) 32,675 49,012 65,349 81,686 98,024 98,024 200,000(2) 37,925 56,887 75,849 94,811 113,744 113,774 250,000(2) 48,425 72,637 96,849 121,061 145,274(3) 145,274(3) 300,000(2) 58,925 88,387 117,849 147,311(3) 176,774(3) 176,774(3) 400,000(2) 79,925 119,887 159,849(3) 199,811(3) 239,774(3) 239,774(3) 450,000(2) 90,425 135,637(3) 180,849(3) 226,061(3) 271,274(3) 271,274(3) 500,000(2) 100,925 151,387(3) 201,849(3) 252,311(3) 302,774(3) 302,774(3)
(1) Maximum amount of service credited for purposes of the Retirement Plan is 30 years. (2) Annual retirement benefits shown in the table above reflect the current Retirement Plan formula and the Social Security Wage Base in effect during 1996, the year the plan was frozen. Under Section 401(a)(17) of the Code, for plan years beginning in 1994 through 1996, a participant's compensation in excess of $150,000 (as adjusted to reflect cost-of-living increases) was disregarded for purposes of determining average annual earnings. This limitation was increased to $160,000 for plan years beginning 1997 - 1999. For plan year 2000, this limit has increased to $170,000. The amounts shown in the table include the supplemental retirement benefit payable to Mr. Messina under his Company Employment Agreement to compensate for the elimination on includible compensation. (3) These are hypothetical benefits based upon the Retirement Plan's normal retirement benefit formula. The maximum benefit permitted under Section 415 of the Code in 1996 was $120,000, $125,000 for 1997; $130,000 for 1998; and $130,000 for 1999. The maximum benefit permitted under Section 415 of the Code increased to $135,000 for 2000. The amounts shown in the table reflect the supplemental retirement benefits payable to Mr. Messina under his Company Employment Agreement to compensate for the limitation on annual benefits. 24 The following table sets forth the years of credited service (I.E., benefit service) as of June 30, 1996 for each of the following executive officers. CREDITED SERVICE ---------------- YEARS MONTHS ----- ------ Philip S. Messina........................ 32 2 Thomas J. Seery.......................... 21 11 Catherine Califano....................... 3 1 Gerard H. McGuirk ....................... 2 11 KEY EXECUTIVE DEFERRED COMPENSATION PLAN. The Deferred Compensation Plan is an unfunded deferred compensation program that permits employees to defer the receipt of part of their compensation, generally, until the termination of their employment with the Company and its affiliated companies. An employee is eligible to participate in the Deferred Compensation Plan, if, among other things, the employee's compensation equals or exceeds minimum compensation levels. For 1999, the minimum eligible compensation under the Deferred Compensation Plan was $100,000. The amount of the deferral is the lesser of 10% of annual compensation and $20,000. In general, amounts deferred under the Deferred Compensation Plan (and earnings on those amounts) are distributed within thirty (30) business days after termination of employment with the Company for any reason. Accounts under the Deferred Compensation Plan are credited with interest for each calendar year based on the rate paid for one (1) year Certificates of Deposits purchased in New York State from CFS Bank on the last business day of the immediately preceding year. For 1999, the interest rate paid on amounts deferred under the Deferred Compensation Plan was 5.65%. Participants in the Deferred Compensation Plan are immediately 100% vested on all amounts deferred (as adjusted for interest). If employment is terminated for Cause, as defined in the Deferred Compensation Plan, a participant will forfeit 40% of any amount credited or to be credited to his or her account as interest. In general, all distributions from the Deferred Compensation Plan are made in one lump sum. In the event of death of a participant before the participant receives benefits under the Deferred Compensation Plan, payment is made to the participant's designated beneficiary. If no beneficiary is designated or no designated beneficiary survives the participant, benefits are paid to the surviving spouse or to the representative of the estate. Distributions may be made in cases of unforeseeable emergency, as defined under Section 457 of the Code. EXECUTIVE SUPPLEMENTAL RETIREMENT AGREEMENT. The Bank has entered into an agreement to provide supplemental retirement benefits for Mr. Worgul ("Executive"). The agreement is unfunded. As of December 31, 1996, the Company has accrued the entire $1.2 million liability under the unfunded agreement. All obligations arising under the agreement are payable from the general assets of the Bank. However, the Bank is responsible for the payment of premiums on an insurance policy, which would reimburse the Bank for the payments due under the agreement in the event of the Executive's death. The agreement provides for an annual retirement benefit of $120,000 for 10 years after retirement upon reaching the normal retirement age contained in the Retirement Plan. In the event of a change in ownership of the Bank after retirement but prior to the payment 25 of the entire benefit or in the event of the Executive's death after retirement, any unpaid benefit shall be paid in a lump sum to the Executive or the Executive's estate. TRANSACTIONS WITH CERTAIN RELATED PERSONS. The federal banking laws require that all loans or extensions of credit to executive officers and directors must be made on substantially the same terms, including interest rates and collateral, and follow substantially the same credit underwriting procedures as those prevailing at the time for comparable transactions with the other persons and must not involve more than the normal risk of repayment or present other unfavorable features. Michael J. Levine, a director since 1996, has an equity interest in one company that had a commercial real estate loan outstanding with the Bank in 1999, which loan was made prior to the time Mr. Levine became a director. The Board of Directors, at a meeting held December 17, 1997, approved extending the maturity of that loan by ten years at a market interest rate, with no additional funds advanced. At a meeting of the Bank's Board held on October 20, 1999, the Board subsequently approved modifying the prepayment provision of the loan, for which a fee was paid to the Bank. At a meeting of the Board of Directors held February 18, 1998, a loan on Mr. Levine's primary residence in the amount of $200,000 was approved by the Board of Directors. The largest aggregate outstanding balance of these loans in 1999 was approximately $12.9 million. At December 31, 1999, the aggregate balance outstanding for all loans in which Mr. Levine has an equity interest was approximately $12.9 million. The loans to such entities were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and management believes that such loans do not involve more than the normal risk of collectibility or present other unfavorable features. Mr. Ricca was a partner at Ricca & Donnelly, P.C., a law firm, prior to joining the Company in April 1998. Mr. Ricca's brother was, and continues to be, the managing partner at Ricca & Donnelly, P.C. The Company paid Ricca & Donnelly, P.C. approximately $103,000 for legal services provided in 1999. The Company believes that these services and payments were on terms substantially similar to those available from non-affiliated parties. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of the Exchange Act requires that the Company's directors and executive officers, and any person holding more than ten percent of the Company's common stock, file with the SEC reports of ownership and changes in ownership, and that such individuals furnish the Company with copies of the reports. Based solely on the Company's review of the copies of such reports that the Company has received, or written representations from certain reporting persons, the Company believes that all of its executive officers and directors complied with all Section 16(a) filing requirements applicable to them. 26 PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS KPMG LLP were the Company's independent auditors for the fiscal year ended December 31, 1999. The Company's Board of Directors has reappointed KPMG LLP to continue as independent auditors for the Bank and the Company for the year ending December 31, 2000, subject to ratification of such appointment by the stockholders. A representative of KPMG LLP will be present at the Annual Meeting, will be given an opportunity to make a statement if so desired and will be available to respond to appropriate questions from stockholders present at the Annual Meeting. Ratification of the appointment of KPMG LLP as independent auditors of the Company requires the affirmative vote of a majority of the votes cast. Abstentions will have the effect as a vote against this proposal while broker non-votes will have no effect on the vote for this proposal. Unless marked to the contrary, the shares represented by the enclosed BLUE PROXY CARD, if executed and returned, will be voted FOR ratification of the appointment of KPMG LLP as the independent auditors of the Company. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY. ADDITIONAL INFORMATION STOCKHOLDER PROPOSALS To be considered for inclusion in the proxy statement and proxy relating to the Annual Meeting of Stockholders to be held in 2001, a stockholder proposal must be received by the Secretary of the Company at the address set forth on the first page of this Proxy Statement, not later than December 7, 2000. Any such proposal will be subject to applicable laws, rules and regulations, including 17 C.F.R. ss. 240.14a-8 of the Rules and Regulations under the Exchange Act. NOTICE OF BUSINESS TO BE CONDUCTED AT AN 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 Secretary of the Company not less than ninety (90) days before the date originally fixed for such meeting; provided, however, that in the event less than one hundred (100) days notice or prior public disclosure of the date of the Annual Meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the date on which the Company's notice to stockholders of the Annual Meeting date was mailed or such public disclosure was made. The advance notice by stockholders must include the stockholder's name and address, as they appear on the Company's record of stockholders, a brief description of the proposed business, the reason for conducting such business at the Annual Meeting, 27 the class and number of shares of the Company's capital stock that are beneficially owned by such stockholder and any material interest of such stockholder in the proposed business. In the case of nominations to the Board of Directors, certain information regarding the nominee must 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. OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING The Board of Directors knows of no business which will be presented for consideration at the Annual Meeting other than as stated in the Notice of Annual Meeting of Stockholders. 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 such manner as shall be determined by a majority of the Board of Directors. Whether or not you intend to be present at the Annual Meeting, you are urged to sign and return the BLUE PROXY CARD promptly. If you are present at the Annual Meeting and wish to vote your shares in person, your proxy may be revoked in writing and you may vote your shares at the Annual Meeting. A COPY OF THE COMPANY'S FORM 10-K (WITHOUT EXHIBITS) FOR THE YEAR ENDED DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS OF RECORD UPON WRITTEN REQUEST TO HAVEN BANCORP, INC., MR. MARK A. RICCA, SENIOR VICE PRESIDENT AND SECRETARY, 615 MERRICK AVENUE, WESTBURY, NEW YORK 11590. By Order of the Board of Directors, /s/ Mark A. Ricca ------------------- Mark A. Ricca, Esq. Secretary Westbury, New York April 11, 2000 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 AND PROMPTLY RETURN THE ACCOMPANYING BLUE PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. 28 EX-99.1 2 ADDITIONAL EXHIBITS EXHIBIT 99.1 April 11, 2000 Dear Participant: As of March 29, 2000, the trust ("DRP Trust") established for the Columbia Federal Savings Bank (now known as CFS Bank, the "Bank") Recognition and Retention Plan for Outside Directors ("DRP") held 13,982 shares of common stock of Haven Bancorp, Inc. (the "Company"), the parent holding company for the Bank. As a participant in the DRP, you may direct the voting of the shares of the Company's common stock held by the DRP Trust that have been granted to you under the DRP. Chase Manhattan Bank has been appointed as an unrelated corporate trustee for the DRP Trust (the "DRP Trustee"). We, the Board of Directors, are forwarding to you the attached Vote Authorization Form, provided for the purpose of conveying your voting instructions to the DRP Trustee. The DRP Trustee will vote those shares of the Company's common stock held in the DRP Trust that have been granted to participants in accordance with instructions received from the participants. If the DRP Trustee does not receive voting instructions with respect to shares that have been granted to participants, the DRP Trustee will vote such shares in the same proportion as it votes the shares for which it has received voting instructions. At this time to direct the voting of shares granted to you under the DRP, you must complete and sign the enclosed Vote Authorization Form and return it in the accompanying envelope to Ellen Philip Associates, Inc. ("Ellen Philip Associates"). Your vote will not be revealed, directly or indirectly, to any director, officer or other employee of the Company or the Bank. Your shares will be tallied by Ellen Philip Associates on a confidential basis. Ellen Philip Associates will then provide the tabulated results to the DRP Trustee. The DRP Trustee will then vote the shares in the DRP Trust based on the voting instructions it has received from participants, as described above. Sincerely, The Board of Directors HAVEN BANCORP, INC. ANNUAL MEETING OF STOCKHOLDERS MAY 17, 2000 VOTE AUTHORIZATION FORM I, having signed this form, hereby instruct the Columbia Federal Savings Bank Recognition and Retention Plan for Outside Directors ("DRP") Trustee to vote all shares of common stock of Haven Bancorp, Inc. granted to me under the DRP as set forth below at the Annual Meeting of Stockholders to be held on May 17, 2000, and at any adjournment or postponement thereof. Please mark your votes as /X/ indicated in this example THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS. 1. The Election as directors of all nominees listed: (Except as marked to the contrary below) Philip S. Messina, Msgr. Thomas J. Hartman, Michael A. McManus, Jr. FOR VOTE WITHHELD / / / / INSTRUCTION: To withhold your vote for any individual nominee, write that nominee's name on the space provided below: - -------------------------------------------- 2. The ratification of the appointment of KPMG LLP as independent auditors of Haven Bancorp, Inc. for the fiscal year ending December 31, 2000. FOR AGAINST ABSTAIN / / / / / / I acknowledge that I have received from the Company prior to the execution of this vote authorization form, a Notice of Annual Meeting of Stockholders, a Proxy Statement dated April 11, 2000, the Annual Report to Stockholders and a letter dated April 11, 2000 from the Board of Directors. I understand that my voting instructions are solicited by the Board of Directors on behalf of the DRP Trustee for the Annual Stockholders Meeting to be held on May 17, 2000, and at any adjournment or postponement thereof. The DRP Trustee is hereby authorized to vote the shares granted to me, in its trust capacity, as indicated above. ---------------------------------- Signature - ------------------------ Date Please sign, date and return this form in the enclosed business reply envelope. EX-99.2 3 ADDITIONAL EXHIBITS EXHIBIT 99.2 April 11, 2000 Dear Participant: The CFS Bank (the "Bank") 401(k) Plan (the "401(k) Plan") includes an investment fund, known as the Employer Stock Fund, consisting primarily of common stock of the Bank's parent holding company, Haven Bancorp, Inc. (the "Company"). As a participant in the 401(k) Plan with an interest in the Employer Stock Fund, you may direct the voting of the proportion of the shares of the Company's common stock held by the 401(k) Plan Trust that are allocable to your account. Merrill Lynch Trust Company has been appointed as the corporate trustee for the Employer Stock Fund of the 401(k) Plan (the "401(k) Plan Trustee"). The 401(k) Plan Trustee will vote those shares of the Company's common stock held in the 401(k) Plan Trust in accordance with instructions of the participants. We, the Board of Directors, are forwarding to you the attached Proxy Statement, and the Vote Authorization Form, provided for the purpose of conveying your voting instructions to the 401(k) Plan Trustee. At this time to direct the voting of the proportion of the shares allocable to your account under the 401(k) Plan, you must complete and sign the enclosed Vote Authorization Form and return it to Ellen Philip Associates, Inc. ("Ellen Philip Associates") in the accompanying envelope. Your vote will not be revealed, directly or indirectly, to any director, officer or other employee of the Company or the Bank. Your vote will be tallied by Ellen Philip Associates on a confidential basis and then the 401(k) Plan Trustee will vote the shares of the 401(k) Plan Trust based on the voting instructions it has received from participants, as described above. Sincerely, The Board of Directors HAVEN BANCORP, INC. ANNUAL MEETING OF STOCKHOLDERS MAY 17, 2000 VOTE AUTHORIZATION FORM I, having signed this form, hereby instruct the CFS Bank 401(k) Plan ("401(k)") Trustee to vote my proportionate interest in the shares of common stock of Haven Bancorp, Inc. held by the Employer Stock Fund of the 401(k) Plan as set forth below at the Annual Meeting of Stockholders to be held on May 17, 2000, and at any adjournment or postponement thereof. Please mark your votes as /X/ indicated in this example THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS. 1. The Election as directors of all nominees listed: (Except as marked to the contrary below) Philip S. Messina, Msgr. Thomas J. Hartman, Michael A. McManus, Jr. FOR VOTE WITHHELD / / / / INSTRUCTION: To withhold your vote for any individual nominee, write that nominee's name on the space provided below: - --------------------------------------- 2. The ratification of the appointment of KPMG LLP as independent auditors of Haven Bancorp, Inc. for the fiscal year ending December 31, 2000. FOR AGAINST ABSTAIN / / / / / / I acknowledge that I have received from the Company prior to the execution of this vote authorization form, a Notice of Annual Meeting of Stockholders, a Proxy Statement dated April 11, 2000, the Annual Report to Stockholders and a letter dated April 11, 2000 from the Board of Directors. I understand that my voting instructions are solicited by the Board of Directors on behalf of the 401(k) Trustee for the Annual Stockholders Meeting to be held on May 17, 2000, and at any adjournment or postponement thereof. The 401(k) Trustee is hereby authorized to vote the shares allocable to my interest in the 401(k) Plan, in its trust capacity, as indicated above. ---------------------------------- Signature - ------------------------ Date Please sign, date and return this form in the enclosed business reply envelope. EX-99.3 4 ADDITIONAL EXHIBITS EXHIBIT 99.3 April 11, 2000 Dear Participant: As of March 29, 2000, the trust ("ESOP Trust") established for the Columbia Federal Savings Bank (now known as CFS Bank, the "Bank") Employee Stock Ownership Plan ("ESOP") held 631,925 shares of common stock of Haven Bancorp, Inc. (the "Company"), the parent holding company for the Bank, for the benefit of participants in the ESOP. As of the Record Date, March 29, 2000, 387,560 shares of Common Stock in the ESOP had been allocated to participating employees. As a participant in the ESOP, you may direct the voting of the shares of the Company's common stock held by the ESOP Trust allocated to your account. Chase Manhattan Bank has been appointed as the corporate trustee for the ESOP Trust (the "ESOP Trustee"). We, the Board of Directors, are forwarding to you the attached Vote Authorization Form, provided for the purpose of conveying your voting instructions to the ESOP Trustee. The ESOP Trustee will vote those shares of the Company's common stock held in the ESOP Trust allocated to participants in accordance with instructions of the participants. All unallocated shares held in the ESOP Trust, and allocated shares with respect to which no written instructions are received, will be voted by the Trustee in the same proportion as those allocated shares for which voting instructions are received, so long as such vote is in accordance with the provisions of the Employment Retirement Income Security Act of 1974, as amended. At this time to direct the voting of shares allocated to your account under the ESOP, you must complete and sign the enclosed Vote Authorization Form and return it in the accompanying envelope to Ellen Philip Associates, Inc. ("Ellen Philip Associates"). Your vote will not be revealed, directly or indirectly, to any director, officer or other employee of the Company or the Bank. Your shares will be tallied by Ellen Philip Associates and then the ESOP Trustee will vote the shares in the ESOP Trust based on the voting instructions it has received from participants, as described above. Sincerely, The Board of Directors HAVEN BANCORP, INC. ANNUAL MEETING OF STOCKHOLDERS MAY 17, 2000 VOTE AUTHORIZATION FORM I, having signed this form, understand that the ESOP Trustee is the holder of record and custodian of all shares of Haven Bancorp, Inc. (the "Company") common stock allocated to me under the Columbia Federal Savings Bank Employee Stock Ownership Plan and Trust ("ESOP Trust"). Further, I understand that my voting instructions are solicited on behalf of the Company's Board of Directors for the Annual Meeting of Stockholders on May 17, 2000, and at any adjournment or postponement thereof. Accordingly, you are instructed to vote all shares allocated to me and held by the ESOP Trust as set forth below. Please mark your votes as /X/ indicated in this example THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS. 1. The Election as directors of all nominees listed: (Except as marked to the contrary below) Philip S. Messina, Msgr. Thomas J. Hartman, Michael A. McManus, Jr. FOR VOTE WITHHELD / / / / INSTRUCTION: To withhold your vote for any individual nominee, write that nominee's name on the space provided below: - --------------------------------------- 2. The ratification of the appointment of KPMG LLP as independent auditors of Haven Bancorp, Inc. for the fiscal year ending December 31, 2000. FOR AGAINST ABSTAIN / / / / / / I acknowledge that I have received from the Company prior to the execution of this vote authorization form, a Notice of Annual Meeting of Stockholders, a Proxy Statement dated April 11, 2000, the Annual Report to Stockholders and a letter dated April 11, 2000 from the Board of Directors. I understand that my voting instructions are solicited by the Board of Directors on behalf of the ESOP Trustee for the Annual Stockholders Meeting to be held on May 17, 2000, and at any adjournment or postponement thereof. The ESOP Trustee is hereby authorized to vote the shares allocated to me, in its trust capacity, as indicated above. ---------------------------------- Signature - ------------------------ Date Please sign, date and return this form in the enclosed business reply envelope. EX-99.4 5 ADDITIONAL EXHIBITS EXHIBIT 99.4 HAVEN BANCORP, INC. REVOCABLE PROXY ANNUAL MEETING OF STOCKHOLDERS MAY 17, 2000 9:00 A.M. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned hereby appoints Mark A. Ricca and Patricia M. Schaubeck, or either of them, with full power of substitution, to act as attorneys and proxies for the undersigned, and to vote all shares of Common Stock of Haven Bancorp, Inc. which the undersigned is entitled to vote only at the Annual Meeting of Stockholders, to be held on May 17, 2000, at 9:00 a.m., at the Huntington Hilton, 598 Broadhollow Road, Melville, New York, and at any adjournment or postponement thereof. The undersigned hereby revokes all prior proxies. This proxy is revocable and will be voted as directed, but if no instructions are specified, this proxy will be voted FOR each of the proposals listed. If any other business is presented at the Annual Meeting, this proxy will be voted by those named in this proxy in such manner as shall be determined by a majority of the Board of Directors. At the present time, the Board of Directors knows of no other business to be presented at the Annual Meeting. - -------------------------------------------------------------------------------- FOLD AND DETACH HERE Please mark your votes as /X/ indicated in this example THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS. 1. The Election as directors of all nominees listed: (Except as marked to the contrary below) Philip S. Messina, Msgr. Thomas J. Hartman, Michael A. McManus, Jr. FOR VOTE WITHHELD / / / / INSTRUCTION: To withhold your vote for any individual nominee, write that nominee's name on the space provided below: - --------------------------------------- 2. The ratification of the appointment of KPMG LLP as independent auditors of Haven Bancorp, Inc. for the fiscal year ending December 31, 2000. FOR AGAINST ABSTAIN / / / / / / The undersigned acknowledges receipt from the Company prior to the execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy Statement dated April 11, 2000 and the Annual Report to Stockholders. Please sign exactly as name appears on this card. When signing as attorney, executor, administrator, trustee or guardian, please give full title. If shares are held jointly, each holder may sign, but only one signature is required. Date: , 2000 ------------------------------------ Signature ------------------------------------ Signature, if held jointly PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. -----END PRIVACY-ENHANCED MESSAGE-----