-----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, OUc7bolH0laffDsHvEWU3pZp57NFgobtm1v1mGMcAf+yEzEN8wbZkDRLDjcjtJuN oGm7fPruq2D79gbqyqbjMg== 0000083246-97-000005.txt : 19970401 0000083246-97-000005.hdr.sgml : 19970401 ACCESSION NUMBER: 0000083246-97-000005 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970528 FILED AS OF DATE: 19970331 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REPUBLIC NEW YORK CORP CENTRAL INDEX KEY: 0000083246 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 132764867 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07436 FILM NUMBER: 97571809 BUSINESS ADDRESS: STREET 1: 452 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2125256100 DEF 14A 1 PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [X] Check the appropriate box: [X] Definitive Proxy Statement REPUBLIC NEW YORK CORPORATION (Name of Registrant as Specifies in it Charter) William F. Rosenblum, Jr., Esq. Senior Vice President, Deputy General Counsel and Secretary Republic New York Corporation (Name of Person(s) Filing Proxy Statement) [LOGO GRAPHIC OMITTED] REPUBLIC NEW YORK CORPORATION 452 Fifth Avenue New York, New York 10018 March 31, 1997 DEAR STOCKHOLDER: The Directors and Officers of Republic New York Corporation cordially invite you to attend the Annual Meeting of Stockholders of the Corporation to be held on Wednesday, May 28, 1997 at 11:00 A.M., New York time. The meeting will be held at the office of the Corporation at 452 Fifth Avenue, New York, New York. Notice of the Annual Meeting and Proxy Statement are enclosed. You are urged to mark, sign, date and mail the enclosed proxy immediately. By mailing your proxy now you will not be precluded from attending the meeting. Your proxy is revocable; in the event you find it convenient to attend the meeting, you may, if you wish, withdraw your proxy and vote in person. For your information, enclosed is the 1996 Annual Report of Republic New York Corporation. Very truly yours, WALTER H. WEINER, Chairman of the Board [LOGO GRAPHIC OMITTED] REPUBLIC NEW YORK CORPORATION 452 Fifth Avenue New York, New York 10018 ---------------------- NOTICE OF ANNUAL MEETING OF STOCKHOLDERS May 28, 1997 ---------------------- NOTICE IS HEREBY GIVEN THAT, pursuant to the call of the Board of Directors of Republic New York Corporation ("Republic Corporation"), the Annual Meeting of Stockholders of Republic Corporation will be held on Wednesday, May 28, 1997 at 11:00 A.M., New York time, at 452 Fifth Avenue, Borough of Manhattan, City and State of New York, for the purpose of considering and voting upon the following matters described in the attached Proxy Statement: 1. Election of directors; 2. Approval of the increase of shares available for awards pursuant to the 1995 Long Term Incentive Stock Plan; 3. Approval of the extension of the curation of the Restricted Stock Election Plan; 4. Approval of selection of auditors; and 5. Any other business which may properly be brought before the meeting or any adjournment thereof. The record date and hour for determining stockholders entitled to notice of and to vote at the meeting, including any adjournment thereof, have been fixed as of the close of business on March 13, 1997. By Order of the Board of Directors, WILLIAM F. ROSENBLUM, JR., Senior Vice President and Corporate Secretary March 31, 1997 YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU ATTEND THE MEETING, YOU MAY NEVERTHELESS, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE IN PERSON. [LOGO GRAPHIC OMITTED] REPUBLIC NEW YORK CORPORATION 452 Fifth Avenue New York, New York 10018 ----------------- PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS May 28, 1997 ----------------- This Proxy Statement is furnished to the stockholders of Republic New York Corporation ("Republic Corporation") in connection with the solicitation of proxies by the Board of Directors of Republic Corporation for the Annual Meeting of Stockholders to be held on May 28, 1997. The record date and hour for determining the stockholders of Republic Corporation entitled to notice of and to vote at the meeting have been fixed as of the close of business on March 13, 1997. At such date, 54,775,947 shares of Republic Corporation Common Stock were outstanding and entitled to vote. Each share of Republic Corporation Common Stock held on the record date entitles the holder thereof to one vote for each director being elected (with no cumulative voting permitted) and to one vote on each other matter. This Proxy Statement and the form of proxy furnished herewith were first sent or given to Republic Corporation stockholders on March 31, 1997. For Employees of Republic Corporation, Republic Bank and Subsidiaries. If you are a participant in the Profit Sharing and Savings Plan of Republic National Bank of New York, you will receive a separate proxy card for all the shares of Republic Corporation Common Stock you own through such Plan that will serve as your voting instructions card for Republic National Bank of New York as Plan Trustee. Your instructions to the Plan Trustee will be held in strict confidence and will be made available only to the inspectors of election at the Annual Meeting, none of whom is an employee of Republic Corporation or any of its subsidiaries. Pursuant to the terms of such Plan, any shares held by the Plan Trustee as to which it has not received voting instructions by May 21, 1997 will be voted in the same manner, proportionately, as the shares as to which voting instructions have been received. 1 ELECTION OF DIRECTORS In accordance with the By-Laws of Republic Corporation, the number of directors of Republic Corporation to be elected at the Annual Meeting has been established at twenty-three. If elected, each nominee will serve until the next Annual Meeting of Stockholders and until the election and qualification of his or her successor. With the exception of Robert A. Cohen, Thomas F. Robards and George T. Wendler, each of the nominees named below is presently a director of Republic Corporation and was elected to such office at last year's Annual Meeting. Mr. Cohen was elected a director on March 5, 1997 at a special meeting of the Board of Directors of Republic Corporation. A plurality of the votes cast at the meeting is required for the election of directors. Neither abstentions nor broker non-votes have any effect on the election of directors. If any nominee becomes unwilling or unable to accept nomination or election, which is not anticipated, it is intended that the persons acting under the proxy will vote for the election in his or her stead of such other person as the Nominating Committee of the Board of Directors may recommend. Listed below are the names and ages of the nominees, the year in which each first became a director, their principal occupations for the past five years (including, where applicable, positions with Republic National Bank of New York ("Republic Bank"), Republic Corporation's principal subsidiary) and the number of shares of Republic Corporation's Common Stock beneficially owned by each, as of December 31, 1996.
Beneficial Director Ownership of Nominee and Age Since Principal Occupation Shares (1) - --------------- -------- -------------------- ----------- Kurt Andersen . . . . . . . . 1988 Vice Chairman of the Board of Republic 38,275 shs. 52 years Bank, since June 1995, and Regional General (2) Manager of Republic Bank's operations throughout the Asia Pacific region. Executive Vice President of Republic Bank, Regional (Far East) General Manager of Republic Bank's Hong Kong Branch and Manager of Republic Bank's wholly-owned subsidiary in Singapore through June 1995. Director of Republic Bank since 1991. Robert A. Cohen . . . . . . . 1997 Vice Chairman of the Board of Republic Bank and ----- 48 years Vice Chairman of Republic Corporation since March 1997. Formerly, Executive Vice President, General Manager and Chief Executive Officer of Credit Lyonnais Americas for over five years. Cyril S. Dwek . . . . . . . . . 1974 Vice Chairman of the Board of Republic 64,894 shs. 60 years Bank and Vice Chairman of Republic Corporation. Director of Republic Bank. Ernest Ginsberg . . . . . . . 1985 Vice Chairman of the Board of Republic 32,662 shs. 65 years Bank and Vice Chairman (and General (2)(3) Counsel until April 1994) of Republic Corporation. Director of Republic Bank. Nathan Hasson . . . . . . . 1993 Vice Chairman of the Board and Treasurer 30,401 shs. 51 years of Republic Bank and Vice Chairman (2)(4) of Republic Corporation since January 1993. Director of Republic Bank. Peter Kimmelman . . . . . . 1979 A private investor. Director of Republic 2,362 shs. 52 years Bank. (5) (table continued on next page) 2 Beneficial Director Ownership of Nominee and Age Since Principal Occupation Shares (1) - --------------- -------- -------------------- ----------- Richard A. Kraemer . . . . 1996 Vice Chairman of the Board of Republic Bank 1,000 shs. 52 years since March 1996 and Vice Chairman of Republic Corporation since April 1996. Formerly, Chairman of the Board and Chief Executive Officer of Brooklyn Bancorp, Inc., corporate parent to CrossLand Federal Savings Bank, from August 1993 until its acquisition by Republic Corporation in February 1996. President, CEO and Chairman of the Executive Committee of CrossLand Federal Savings Bank from January 1992 to August 1993. Prior to January 1992, Chairman and CEO of The Bowery Savings Bank and Home Savings Bank. Leonard Lieberman . . . . . . 1990 Director of Republic Bank. Also a director 750 shs. 67 years of various companies, including Celestial Seasonings, Inc., Sonic Corp., and La Petite Academy, Inc. William C. MacMillen, Jr. . 1974 President of William C. MacMillen & Co., 6,702 shs. 83 years Inc., an investment firm. Also a director of Financial Federal Corporation. Director of Republic Bank. Peter J. Mansbach . . . . . . . . 1994 Chairman of the Executive Committee of the 21,100 shs. 57 years Board of Directors of Republic Corporation (2) since July 1994, and of Republic Bank since June 1994. Previously, a partner at the law firm of Kronish, Lieb, Weiner & Hellman. Martin F. Mertz . . . . . . . . . 1987 Director of Republic Bank. Formerly, Chairman of 7,500 shs. 71 years the Executive Committee of Republic Bank for Savings, from May 1990 until January 1996. James L. Morice . . . . . . . . 1987 Partner, Mirtz Morice, Inc., a management 1,027 shs. 59 years consulting firm. Director of Republic Bank. (6) E. Daniel Morris. . . . . . . . 1993 President of Corsair Capital Corporation, a 1,000 shs. 55 years private investment firm, since October 1992, having been a private investor for over one year prior thereto, and President and Chief Executive Officer of the U.S. investment banking affiliate of Barclays Bank from January 1989 to July 1991. Formerly, Chairman of the Board of Republic New York Trust Company of Florida, N.A., a wholly-owned subsidiary of Republic Corporation, from January 1995 to April 1996. Also, a Director and the Chief Executive Officer of Republic New York Securities Corporation, Republic Corporation's wholly-owned broker-dealer subsidiary, from April to December 1994. (table continued on next page) 3 Beneficial Director Ownership of Nominee and Age Since Principal Occupation Shares (1) - --------------- -------- -------------------- ----------- Janet L. Norwood . . . . . . . 1992 Senior Fellow of The Urban Institute, a research 750 shs. 73 years organization in Washington, D.C., since January 1992. Commissioner of the Bureau of Labor Statistics of the U.S. Department of Labor for over three years prior thereto. Director of Republic Bank since 1992. John A. Pancetti . . . . . . . . 1990 Chairman of the Board and Chief Executive Officer 40,150 shs. 67 years of Republic Bank for Savings from May 1990 (7) until January 1996 (and President from May 1990 to March 1991). Vice Chairman of the Board of Republic Bank from March 1991 until January 1996, and Vice Chairman of Republic Corporation from April 1991 until January 1996. Director of Republic Bank. Vito S. Portera . . . . . . . . 1986 Vice Chairman of Republic Corporation and 15,115 shs. 54 years Vice Chairman of the Board of Republic (2)(8) Bank. Director of Republic Bank. Also, Chairman of the Board of Republic Inter- national Bank of New York Miami, the Florida Edge Act subsidiary of Republic Bank. Thomas F. Robards . . . . . . . ----- Executive Vice President, Treasurer and Chief 23,510 shs. 50 years Financial Officer - Financial Planning and (2) Treasury of Republic Corporation since July 1995. Prior thereto, Executive Vice President and Treasurer of Republic Corporation for over four years. William P. Rogers . . . . . . 1989 Senior Partner, Rogers & Wells, attorneys. 30,000 shs. 83 years Director of Republic Bank. Elias Saal . . . . . . . . . . 1995 Vice Chairman of Republic Corporation since 24,000 shs. 44 years July 1995 and Vice Chairman of the Board, since June 1995, and Chief Trading Officer, since July 1995, of Republic Bank. Executive Vice President of Republic Bank prior to June 1995. Director of Republic Bank since October 1995. Dov C. Schlein . . . . . . . . 1987 President of Republic Bank and Vice Chair- 35,145 shs. 49 years man of Republic Corporation. Director of (2)(9) Republic Bank. George T. Wendler ----- Executive Vice President and Chairman of the 17,297 shs. 52 years Credit Committee of Republic Corporation (2)(10) since October 1994 and a director and Vice Chairman of the Board of Republic Bank since June 1995. Prior thereto, Executive Vice President of Republic Bank for over four years. Walter H. Weiner . . . . . . 1978 Chairman of the Board and Chief Executive 55,988 shs. 66 years Officer of Republic Bank and Republic (2)(11)(12) Corporation. Director of Republic Bank. Peter White . . . . . . . . . 1974 Senior Consultant to Republic Bank. 33,256 shs. 94 years Director Emeritus of Republic Bank. - ----------- (footnotes on next page) 4 (footnotes from table on previous page) (1) As of December 31, 1996, no nominee's ownership of shares of Common Stock exceeded one percent (1%) of the outstanding shares of such class. (2) Includes 6,334 shares for Kurt Andersen, 13,600 shares for Ernest Ginsberg, 16,000 shares for Nathan Hasson, 21,000 for Peter J. Mansbach, 15,000 shares for Vito S. Portera, 16,250 shares for Thomas F. Robards, 20,300 shares for Dov C. Schlein, 11,375 shares for George T. Wendler and 18,483 shares for Walter H. Weiner which were awarded pursuant to Republic Corporation's 1985 Restricted Stock Plan and 1995 Long Term Incentive Stock Plan, and which are subject to a substantial risk of forfeiture for various restricted periods, the latest of which expires on January 15, 2001. (3) Includes 19,062 shares which Mr. Ginsberg owns jointly with his wife. (4) Includes 14,401 shares which Mr. Hasson owns jointly with his wife. (5) Includes 337 shares owned by Mr. Kimmelman's wife in which he disclaims any beneficial interest. (6) Includes 300 shares which Mr. Morice owns jointly with his wife, 627 shares in a company profit sharing plan, 70 shares in a company pension trust account, and 30 shares owned by Mr. Morice's son, in which 30 shares Mr. Morice disclaims any beneficial interest. (7) Includes 40,000 shares which Mr. Pancetti owns jointly with his wife. (8) Includes 75 shares held by a trust controlled by Mr. Portera. (9) Includes 13,395 shares which Mr. Schlein owns jointly with his wife, and 1,450 shares owned by Mr. Schlein's children, in which 1,450 shares Mr. Schlein disclaims any beneficial interest. (10) Includes 5,922 shares which Mr. Wendler owns jointly with his wife. (11) Includes 27,324 shares for Walter H. Weiner which were issued pursuant to Republic Corporation's Restricted Stock Election Plan and which are subject to a substantial risk of forfeiture until December 31, 1997. (12) Includes 3,105 shares owned by a Keogh Plan pension trust of which Mr. Weiner is the beneficiary and 2,100 shares owned by Mr. Weiner's wife in which he disclaims any beneficial interest.
As of December 31, 1996, all nominees as a group beneficially owned 482,884 shares of Republic Corporation's Common Stock or approximately .9% of the outstanding shares. For certain information concerning business relationships and transactions between Republic Corporation, its subsidiaries and affiliates and certain nominees, see "Transactions with Management and Related Persons" below. Section 16(a) Beneficial Ownership Reporting Compliance. All Forms 3, 4 and 5 were filed in a timely fashion and in compliance with the applicable securities laws and regulatory requirements, with the exception of the Form 4 filed in March 1997 by Richard Spikerman for one sale of shares in October 1996 and one sale of shares in December 1996. Directors' Committees The Board of Directors of Republic Corporation has established Audit, Community Reinvestment Act, Credit Review, Executive, Finance, Human Resources, Investment, Nominating, Public Responsibility and Risk Assessment Committees. 5 The Audit Committee of the Board of Directors of Republic Corporation, consisting of Peter Kimmelman, Leonard Lieberman, William C. MacMillen, Jr. (Chairman), Janet L. Norwood and William P. Rogers, recommends the selection of the independent auditors, reviews the plan for the current year's audit and the results of the prior year's audit, approves the non-audit professional services provided by such auditors, and reviews and supervises the scope and adequacy of Republic Corporation's internal audit and internal accounting controls. No member of the Committee is an officer or employee of Republic Corporation. During 1996, the Audit Committee held seven meetings. The Community Reinvestment Act Committee, consisting of Martin F. Mertz, James L. Morice (Chairman), John A. Pancetti, Walter H. Weiner and Peter White, is responsible for, and coordinates at the holding company level, the Community Reinvestment Act activities of Republic Bank, including the review and supervision of Republic Corporation's compliance with the Community Reinvestment Act of the federal government. During 1996, the Community Reinvestment Act Committee held eight meetings. The Credit Review Committee, consisting of Peter Kimmelman (Chairman), Leonard Lieberman, William C. MacMillen, Jr., E. Daniel Morris, Janet L. Norwood, John A. Pancetti, Walter H. Weiner and Peter White, reviews and monitors Republic Corporation's Credit Policy Statement and the net debit cap levels. During 1996, the Credit Review Committee held seven meetings. The Executive Committee, consisting of Jeffrey C. Keil (who is not standing for re-election), Peter Kimmelman, William C. MacMillen, Jr., Peter J. Mansbach (Chairman), Dov C. Schlein and Walter H. Weiner, meets, when necessary, between meetings of the Board of Directors with the authority to exercise all the powers of the Board of Directors to the extent permitted by law and Republic Corporation's By-Laws. During 1996, the Executive Committee held six meetings and took action seven times by Unanimous Written Consent. The Finance Committee, consisting of Jeffrey C. Keil (Chairman) (who is not standing for re-election), E. Daniel Morris, Dov C. Schlein and Walter H. Weiner, is charged with monitoring the capital adequacy of Republic Corporation and developing and supervising programs to fund the capital requirements of Republic Corporation and its subsidiaries and recommending to the Board of Directors the means necessary to carry out such programs. Pursuant to delegated authority from the Board of Directors, the Finance Committee establishes the price and related terms of certain securities publicly offered by Republic Corporation. During 1996, the Finance Committee did not hold any meetings but instead took action once by Unanimous Written Consent. The Human Resources Committee (formerly the Employee Compensation and Benefits Committee), composed of three outside directors, Peter Kimmelman, Leonard Lieberman and James L. Morice (Chairman), oversees Republic Corporation's human resources management policies and practices and the compensation and benefits of its officers and employees. The Committee considers and recommends to the Board of Directors compensation plans and benefit programs in which officers and employees of Republic Corporation and its subsidiaries are eligible to participate and administers such plans and programs, with the authority to grant any awards or benefits thereunder. During 1996, the Human Resources Committee held eleven meetings. The Investment Committee, consisting of Peter Kimmelman, Leonard Lieberman (Chairman), E. Daniel Morris, Janet L. Norwood and John A. Pancetti, and Mr. Hasson as ex officio member, authorizes and 6 supervises Republic Corporation's investments in securities and other property. During 1996, the Investment Committee held four meetings. The Nominating Committee consists of E. Daniel Morris, Dov C. Schlein and Walter H. Weiner (Chairman). Its principal function is to consider and propose to the Board of Directors a slate of nominees for election to the Board of Directors each year at the Annual Meeting of Stockholders. Such Committee will consider candidates suggested by stockholders by a letter directed to the Corporate Secretary of Republic Corporation. The Nominating Committee acted by consent in March 1997 to recommend the slate of nominees presented to the 1997 Annual Meeting of Stockholders. The Public Responsibility Committee consists of Ernest Ginsberg, Leonard Lieberman, William P. Rogers (Chairman), and Walter H. Weiner. This Committee assists Republic Corporation in endeavoring to maintain the highest legal and ethical standards as well as assists in evaluating other aspects of Republic Corporation's activities and proposed activities in relation to its overall public responsibility and public image. During 1996, the Public Responsibility Committee held seven meetings. The Risk Assessment Committee consists of Peter Kimmelman, Leonard Lieberman, William C. MacMillen, Jr., E. Daniel Morris, Janet L. Norwood (Chairwoman) and William P. Rogers, with Messrs. Schlein and Weiner as ex officio members. The Committee, established in July 1993, was created to identify, measure and monitor risk relating to all activities of, and products offered by, Republic Corporation, including evaluating the methodology employed by management in determining the nature of risk inherent in a particular activity or product. During 1996, the Risk Assessment Committee held eight meetings. During 1996, Republic Corporation's Board of Directors held six meetings. With the exception of Messrs. Andersen, Portera and White, each director attended 75 percent or more of the aggregate number of meetings held during 1996 of the Board of Directors of Republic Corporation and the committees thereof, if any, on which he or she served. Compensation of Directors and Executive Officers Directors Compensation Directors of Republic Corporation who are also officers of Republic Corporation or any of its subsidiaries do not receive compensation for their services as directors. Other directors of Republic Corporation, who are not officers of Republic Corporation or any of its subsidiaries and who are not otherwise compensated through additional arrangements with any such entities, generally are paid a quarterly retainer of $1,500 to attend directors' meetings of Republic Corporation and $500 for each meeting they attend of the Board and $400 for each meeting they attend of a committee of the Board of which they are a member (except that the Chairman of a committee receives an attendance fee of $750). Other directors of Republic Corporation, who are not officers of Republic Corporation or any of its subsidiaries and who are otherwise compensated through additional arrangements with any such entities, generally are paid a quarterly retainer of $800 to attend directors' meetings of Republic Corporation and $300 for each meeting they attend of the Board and $250 for each meeting they 7 attend of a committee of the Board of which they are a member (except that the Chairman of a committee receives an attendance fee of $400). For the fiscal year ended December 31, 1996, directors of Republic Corporation who were not officers received meeting fees from Republic Corporation aggregating $82,525. In addition, in connection with services provided as a director, fees were paid in 1996 to each of Peter Kimmelman, Leonard Lieberman, William MacMillen and James Morice in the amount of $45,500, and to Janet L. Norwood in the amount of $50,000. In lieu of directors' fees, William P. Rogers received an aggregate of $150,000 for the fiscal year ended December 31, 1996 as compensation for serving as a director of Republic Corporation as well as for serving as a director of and a senior consultant to Republic Bank. Executive Compensation Human Resources Committee Report Responsibilities and Composition of the Committee. The Human Resources Committee of the Board of Directors of Republic Corporation (the "Committee") reviews and approves the compensation levels for Republic Corporation's executive officers and oversees and administers Republic Corporation's compensation and benefits programs. All the members of the Committee are independent, non-employee directors who are not eligible to participate in the programs that the Committee oversees. The following report describes the actions of the Committee regarding compensation paid to the Chief Executive Officer and the named executive officers for 1996. Compensation Policies and Strategy. The main components of total compensation for Republic Corporation's executive officers are base salary and annual incentive awards. A portion of the annual incentive awards may be awarded in the form of restricted stock. Republic Corporation has a policy of maintaining base salaries for executive officers at a constant level and using annual incentive awards to reflect each executive officer's contribution to Republic Corporation's performance. Republic Corporation established a practice of linking executive compensation to corporate performance long before the current widespread application of the concept. Since 1980, when Walter H. Weiner became Chief Executive Officer, Republic Corporation has developed an overall compensation strategy that provides for the determination of a significant portion of executive officer compensation in relation to Republic Corporation's performance as measured by the increase in its fully diluted earnings per common share ("earnings per share") for the year over a base year of 1979, adjusted for stock splits. This strategy has been incorporated into the awards granted to the Chief Executive Officer and the named executive officers under the 1994 Performance Based Incentive Compensation Plan (the "Performance Based Plan"), discussed below. The Committee believes that an increase in earnings per share is a more accurate measure of executive performance than an increase in cumulative total shareholder return (see the stock performance graphs on pages 16 and 18 of this Proxy Statement). Management has a more direct impact on earnings, by being able to increase productivity and control expenses, than it does on shareholder return, which is also subject to changes in market conditions that are beyond management's control. 8 During 1995, Republic Corporation began an intensive corporate-wide review of its operations, called "Project Excellence Plus", to strengthen its customer focus and to improve productivity and operating efficiency. The implementation phase of this Project commenced in the second quarter of 1995 and was completed in the first half of 1996. Project Excellence Plus has resulted in substantial operating efficiencies and cost savings to Republic Corporation which began to be realized in 1996. In 1995, at the time of the implementation of such Project, the Chief Executive Officer and certain other executive officers each voluntarily reduced their annual base salaries by $20,000. In 1996, when the benefits of the Project began to be realized, such reductions were restored. Stock Performance Graphs. The five-year comparative stock performance graph on page 16 is included as required by Securities and Exchange Commission rules. As explained in the preceding section, the Committee believes that executive compensation should be related to earnings per share rather than to cumulative total return, and that cumulative total return over five years is not necessarily a meaningful indicator of management's performance. Because Republic Corporation's compensation policies are designed to encourage executive officers to manage for the long term rather than the short-term, the Committee's view is that the graph on page 18 of the twenty-five year comparative stock performance presents a more meaningful picture of the relationship between Republic Corporation's management philosophy and its stock's market performance than does the five-year graph. Performance Based Plan. As noted above, Republic Corporation's established strategy of linking a significant portion of executive officer compensation to increased productivity and cost control, as measured by the increase in its earnings per share, was incorporated into the Performance Based Plan. The Performance Based Plan was adopted by the Board of Directors and approved by the stockholders in 1994 and complies with Section 162(m) of the Internal Revenue Code governing the deductibility of annual executive officer compensation in excess of $1 million. In addition to adopting the Plan, Republic Corporation has a policy of entering into agreements with its executive officers to defer future annual compensation in excess of the $1 million limitation, should it become necessary to do so. Prior to the beginning of each Plan Year, the Committee considers awards for the Chief Executive Officer and the other executive officers. The Committee determines who will participate in the Plan for the upcoming year, the Base Year (which may not be prior to 1979) and the notional number of shares ("Award Multiple") of Republic Corporation's Common Stock to be used solely for the purpose of calculating the maximum amount payable to each participant ("Award"). Following the completion of the Plan Year, the maximum amount payable to each participant is determined by multiplying (i) the amount by which the earnings per share for the Plan Year (adjusted to eliminate the effect of amounts paid or accrued with respect to any Award) exceeds the earnings per share for the Base Year (adjusted as is necessary to preserve inter-period comparability between earnings per share for the Base Year and the Plan Year for any Award), by (ii) the Award Multiple for each participant. The Committee has the discretion to reduce the amount payable pursuant to such Awards and to distribute a portion of the final amount payable in the form of restricted stock. It is also possible for the Committee to award the Chief Executive Officer and the other named executive officers compensation in excess of the Plan awards but any such amounts must be included in the calculation of the $1 million annual limitation on the deductibility of any such officer's compensation. 9 Chief Executive Officer's Compensation for 1996. Since becoming Chief Executive Officer of Republic Corporation in January 1980, Mr. Weiner's base salary has not increased and his annual bonus has been related to the amount by which the earnings per share for the year exceeds the earnings per share for the base year of 1979, multiplied by an attributed notional amount of shares used solely for the purpose of calculating Mr. Weiner's bonus. This method of determining Mr. Weiner's annual bonus, originally based on certain provisions in his employment agreement (which expired by its terms on December 31, 1989), has been effectively continued through the Performance Based Plan, as described above. For 1996, the Committee granted Mr. Weiner an award under the Performance Based Plan pursuant to which he was eligible to receive a performance-based bonus of $1,358,437 determined by multiplying $5.75 (the amount by which the earnings per share for 1996 exceeded the earnings per share in 1979, as adjusted pursuant to the Performance Based Plan) by 236,250 (the notional amount of shares awarded by the Committee). This notional amount of shares is based on the amount that was used in the formula under Mr. Weiner's original employment agreement and reflects all stock splits since the 1979 base year. In certifying Mr. Weiner's award pursuant to the Performance Based Plan, the Committee determined that $1,328,937 of such amount would be distributed in the form of cash and the remaining portion in the form of 300 shares of restricted stock under the 1995 Long Term Incentive Stock Plan. In considering Mr. Weiner's individual performance in 1996, the Committee awarded him an additional 5,000 shares of restricted stock pursuant to the terms of the 1995 Long Term Incentive Stock Plan. The decision to grant these shares was based on the Committee's subjective evaluation of Mr. Weiner's contribution toward Republic Corporation's overall performance in 1996, particularly its success in increasing revenues and enhancing client relationships. Named Executive Officers' Compensation for 1996. The Performance Based Plan also provides for the determination of the maximum amount of the performance-based bonus compensation of the named executive officers. By using the increase in earnings per share as the basis of determining this portion of the incentive compensation for such executive officers, Republic Corporation is giving recognition to the fact that management is shared by the Chief Executive Officer and the named executive officers as a team and, therefore, the performance of Republic Corporation, as measured by the increase in earnings per share, reflects the joint efforts of the group. Accordingly, each executive officer's award under the Performance Based Plan reflects such officer's responsibilities in relation to those of the Chief Executive Officer and to the overall management of Republic Corporation. For 1996, the Committee set a different Award Multiple for each of the named executive officers which took into consideration each such relationship, which was then multiplied by the increase in earnings per share in 1996 over the base year established by the Committee (i.e., 1979) to determine the maximum amount payable to each such officer pursuant to the Plan. The final bonus payments which the Committee certified for such executive officers for 1996 pursuant to the Performance Based Plan were in keeping with the amounts called for by the Plan formula. The Committee considered the recommendations of the Chief Executive Officer in deciding to supplement the cash bonuses of Messrs. Schlein, Saal and Dwek and to award shares of restricted stock to Messrs. Schlein, Saal and Portera pursuant to the 1995 Long Term Incentive Stock Plan. The decision to grant such awards was primarily based on the subjective evaluation by the Chief Executive Officer and the Committee of each such officer's individual performance and contribution in 1996 to Republic Corporation's 10 successful efforts at revenue enhancement and cost control. A portion of the restricted stock award granted to Mr. Portera was made in connection with the amount payable pursuant to his Performance Based Plan award for 1996. Conclusion. Through the programs described above, a significant portion of Republic Corporation's executive officer compensation is based on corporate performance and an evaluation of the results of each officer's individual performance. For 1996, approximately 85% of the total compensation of the Chief Executive Officer and the other named executive officers consisted of these variable performance-related elements. The Committee intends to continue its policy of relating executive compensation to corporate performance, as measured by the increase in earnings per share, as well as to individual performance. Taking into account Republic Corporation's overall performance during 1996, the Committee determined that it was appropriate that Mr. Weiner's and each of the other executive officer's total compensation be increased for 1996 compared to 1995 levels. Based on the approximately 34% increase in earnings per share and each individual's contribution to Republic Corporation's continued success in increasing revenues and enhancing client relationships in 1996, Mr. Weiner's total compensation for 1996 increased approximately 44% from 1995 levels and the other named executive officers' aggregate total compensation for 1996 increased approximately 47% from 1995 levels. JAMES L. MORICE, Chairman PETER KIMMELMAN LEONARD LIEBERMAN 11 Summary Compensation Table The following table sets forth the cash and noncash compensation for each of the last three fiscal years awarded to or earned by the Chief Executive Officer and the four other most highly compensated executive officers of Republic Corporation.
Long Term Annual Compensation Compensation Restricted Stock All Other Name and Principal Position Year 1 Salary ($) 2 Bonus ($) Awards ($) 3,4,5 Compensation ($) 6 - --------------------------- ----- ------------ --------- ------------------ ----------------- Walter H. Weiner 1996 220,750 1,328,937 471,700 7,736 Chairman of the Board and 1995 207,673 755,000 176,250 5,725 Chief Executive Officer of 1994 220,750 1,035,000 240,625 7,763 Republic Corporation and of Republic Bank Dov C. Schlein 1996 200,000 1,310,000 462,800 7,736 Vice Chairman of Republic 1995 186,923 570,000 135,125 5,725 Corporation and President 1994 200,000 730,000 240,625 7,763 of Republic Bank Elias Saal 1996 200,000 1,200,000 436,100 98,136 Vice Chairman of Republic 1995 200,000 712,500 ------- 47,114 Corporation and Vice Chairman of the Board of Republic Bank Cyril S. Dwek 1996 250,000 1,045,000 ------- 7,736 Vice Chairman of Republic 1995 236,923 515,000 ------- 5,725 Corporation and Vice 1994 250,000 700,000 ------- 7,763 Chairman of the Board of Republic Bank Vito S. Portera 1996 300,000 635,000 225,500 7,736 Vice Chairman of Republic 1995 286,923 465,000 ------- 5,725 Corporation and Vice 1994 300,000 450,000 192,500 7,763 Chairman of the Board of Republic Bank - --------------------------- (1) In accordance with the rules of the Securities and Exchange Commission, compensation information is provided for the last three fiscal years, except with respect to Mr. Saal who became an executive officer of Republic Corporation in 1995. (2) The amounts of base salary represent the dollar value earned by the named executive officers during the last three fiscal years. (3) Awards of restricted stock for performance in 1996 were made on March 27, 1997 pursuant to the terms of Republic Corporation's 1995 Long Term Incentive Stock Plan to Mr. Weiner (5,300 restricted shares), Mr. Schlein (5,200 restricted shares), Mr. Saal (4,900 restricted shares) and Mr. Portera (2,500 restricted shares). A portion of Messrs. Weiner's, Schlein's and Portera's restricted stock award constituted part of their Performance Based Plan compensation for 1996. Awards of restricted stock for performance in 1994 and 1995 were made on March 6, 1995 and March 20, 1996, respectively, pursuant to the terms of Republic Corporation's 1985 Restricted Stock Plan and 1995 Long Term Incentive Stock Plan, respectively, to Messrs. Weiner, Schlein and Portera. (footnotes continued on next page) 12 (footnotes continued from previous page) For 1994, a portion of Mr. Schlein's and Mr. Portera's restricted stock award constituted part of their Performance Based Plan compensation for such year. For 1995, a portion of Mr. Schlein's restricted stock award constituted part of his Performance Based Plan compensation for such year. The value of each restricted stock award was calculated by multiplying the closing market price of Republic Corporation's Common Stock on the date of the award by the number of shares awarded. (4) As of December 31, 1996, Mr. Weiner owned an aggregate of 18,483 restricted shares (3,000 of which were awarded for 1995 performance and 5,000 of which were awarded for 1994 performance), Mr. Schlein owned an aggregate of 20,300 restricted shares (including 2,300 shares awarded for 1995 performance and 5,000 shares awarded for 1994 performance) and Mr. Portera owned an aggregate of 15,000 restricted (of which 4,000 shares were awarded for 1994 performance). At December 31, 1996, such shares of restricted stock held by Messrs. Weiner, Schlein and Portera had an aggregate value of $1,508,675, $1,656,988 and $1,224,375, respectively. (5) Pursuant to the terms of Republic Corporation's 1985 Restricted Stock Plan, which expired as of December 31, 1995, participants in such Plan received all dividends paid on their shares of restricted stock or were given the option by the Human Resources Committee to elect to receive additional restricted shares in lieu of such dividend payments. Under the 1995 Long Term Incentive Stock Plan, participants continue to receive all dividends paid on their restricted shares, or may be given the option by the Human Resources Committee to elect to receive additional restricted shares in lieu of such dividend payments. (6) The compensation reported represents the amount of the annual company allocations under the Profit Sharing and Savings Plan. Each executive officer is fully vested in such amounts under the Plan. In addition, the amounts reported for Mr. Saal represent the value of annual lease payments made by Republic Bank for Mr. Saal's temporary residence.
Pension Plan The following table sets forth the estimated annual benefits payable upon retirement at age 65 in 1997 pursuant to Republic Bank's Retirement Plan (which is a defined benefit plan) in relation to specified classifications of average base salary for the highest paid five consecutive years during the last ten years of employment (excluding bonuses, overtime and other adjustments to base salary) and years of creditable service:
Average Annual Salary for Five Highest Paid Years of Service Consecutive Years During Last Ten Years 15* 20* 25* 30* 35* - ----------------------- --- --- --- --- --- $125,000 . . . . . . . . . . . . . . $ 29,680 $ 39,570 $ 49,460 $ 59,350 $ 62,480 150,000 . . . . . . . . . . . . . . 36,050 48,070 60,090 72,100 75,850 175,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 200,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 225,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 250,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 300,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 400,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 450,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 500,000 ** . . . . . . . . . . 38,600 51,470 64,340 77,200 81,200 - ----------- * During 1997, the maximum annual benefit as a result of the Tax Reform Act of 1986 is $125,000. ** These figures have been limited by the annual compensation cap of $160,000 in 1997 resulting from the Omnibus Budget and Reconciliation Act of 1993.
13 The amounts in the foregoing table do not reflect various survivorship options which part icipants may elect under the Retirement Plan and, depending on the survivorship arrangement chosen, such amounts could be substantially reduced. The following table presents (a) the credited years of service pursuant to the Retirement Plan and (b) the current remuneration covered by the Plan (i.e., base salary) for each of the five most highly compensated executive officers of Republic Corporation.
Credited Years Covered By Name of Service Retirement Plan (1) Walter H. Weiner . . . . . . 17 $220,750 Dov C. Schlein . . . . . . . 20 200,000 Elias Saal . . . . . . . . 14 200,000 Cyril S. Dwek . . . . . . . 31 250,000 Vito S. Portera . . . . . . 29 300,000 - -------------------- (1) Such amounts are subject to an annual compensation cap of $160,000 for 1997 in accordance with the Omnibus Budget and Reconciliation Act of 1993.
Benefits under the Retirement Plan are based on the participant's base salary (which does not include bonuses, expense allowances, profit sharing contributions, fees, overtime and other special payments) and length of employment. The Retirement Plan provides that, in general, the normal benefit to which a participant is entitled at or after age 65 or after completion of at least 30 years of service is an annual amount equal to 1.2% of average annual compensation (as defined) up to covered compensation (as defined) plus 1.7% of average annual compensation in excess of covered compensation, times years of service up to 30, plus .5% of average annual compensation times the number of years of service in excess of 30 years of service. For purposes of the Plan, average annual compensation means the participant's average compensation during the participant's highest paid five consecutive years of employment during the participant's last ten years of employment and covered compensation means the average of the Social Security wage bases for the 35 years ending with the participant's Social Security retirement age (which is between ages 65 and 67 depending on the year the participant was born). For example, the covered compensation amount for a participant attaining age 65 in 1997 is $29,304. Employment Agreements Vito S. Portera, a director and executive officer of Republic Corporation, had an employment agreement with Republic Corporation and Republic Bank dated as of May 27, 1988 (as amended March 7, 1989) which terminated pursuant to its terms on December 31, 1996. The agreement provided for a base annual salary of $300,000 ($100,000 of which was for Mr. Portera's continuing service as Chairman of the Board of Republic International Bank of New York (Miami), Republic Bank's Miami, Florida Edge Act subsidiary) and an annual bonus of not less than $200,000. For the fiscal year ended December 31, 1996, Mr. Portera received a cash bonus of $635,000 (which amount is included in the Summary Compensation 14 Table above). At the time he entered into his agreement, Mr. Portera received a twenty-three year residential first mortgage loan from Republic Corporation to finance the purchase of his relocated residence in New York State in the amount of $1,000,000 at an annual interest rate of 10% with principal payments commencing in the ninth year. In February 1994, Republic Corporation and Mr. Portera agreed to a modification of the rate payable on the mortgage to 6.125%, adjustable every three years until maturity on May 1, 2023. As of December 31, 1996, the outstanding principal amount of Mr. Portera's mortgage had been reduced to approximately $475,000. In January 1997, Mr. Portera prepaid the mortgage in full. The agreement also provided that Republic Corporation and Republic Bank would buy Mr. Portera's house at any time during the term of the agreement upon Mr. Portera's election. Republic Corporation and Republic Bank have agreed to extend such option beyond December 31, 1996 for so long as Mr. Portera remains in their employ, plus six months after termination of his employment, subject to termination of such option by Republic Corporation and Republic Bank upon twelve months' prior written notice. 15 Five-Year Comparative Stock Performance The following graph compares the cumulative total shareholder return on the Common Stock of Republic Corporation for the last five fiscal years with the cumulative total return on the Standard & Poor's 500 Stock Index and the Standard & Poor's Money Center Bank Index over the same period (assuming the investment of $100 in the Common Stock of Republic Corporation, the S&P 500 and the S&P Money Center Banks on December 31, 1991, and reinvestment of all dividends as indicated below the graph). [GRAPH - Comparison of Five-Year Cumulative Total Return Among Republic New York Corporation, S&P 500 Stock Index and S&P Money Center Banks Index - has been omitted. The information set forth in such graph is found in the table "Comparison of Five-Year Cumulative Total Return..." below.] Comparison of Five-Year Cumulative Total Return Among Republic New York Corporation, S&P 500 Stock Index and S&P Money Center Banks Index
Measurement Period Republic Corporation S&P Money Center Banks (Fiscal Year Covered) (formerly Republic Bank) S&P 500 Index (formerly S&P Banks NYC) ----------------------- ------------------------ ------------- ------------------------ Measurement Point: 12/31/91 $ 100 $ 100 $ 100 FYE 12/31/92 103 108 136 FYE 12/31/93 104 118 167 FYE 12/31/94 104 120 163 FYE 12/31/95 146 165 265 FYE 12/31/96 196 202 397
16 Twenty-Five Year Comparative Stock Performance Generally, Republic Corporation's Common Stock is viewed as a long-term investment. The following table of the values at the relevant year end accompanies the graph on the next page to provide a comparison of the cumulative total shareholder return on the Common Stock of Republic Corporation, since its issuance in July 1974 (when Republic Corporation became the holding company for Republic Bank) and prior thereto on the Common Stock of Republic Bank, since 1971, with the cumulative total return on the Standard & Poor's 500 Stock Index and the Standard & Poor's Money Center Bank Index (the Standard & Poor's Banks New York City Index prior to April 1987) over the same period (assuming the investment of $100 in the Common Stock of Republic Corporation's predecessor, Republic Bank, the S&P 500 and the S&P Money Center Banks' predecessor, the S&P Banks New York City, on December 31, 1971, and reinvestment of all dividends as indicated below the graph).
Measurement Period Republic Corporation S&P Money Center Banks (Fiscal Year Covered) (formerly Republic Bank) S&P 500 Index (formerly S&P Banks NYC) ----------------------- ------------------------ ------------- ------------------------ Measurement Point: 12/31/71 $ 100 $ 100 $ 100 FYE 12/31/72 183 119 130 FYE 12/31/73 105 102 146 FYE 12/31/74 64 75 99 FYE 12/31/75 72 103 108 FYE 12/31/76 107 127 128 FYE 12/31/77 107 118 107 FYE 12/31/78 148 126 115 FYE 12/31/79 172 149 129 FYE 12/31/80 425 197 155 FYE 12/31/81 544 188 178 FYE 12/31/82 570 228 223 FYE 12/31/83 569 278 249 FYE 12/31/84 643 296 290 FYE 12/31/85 856 389 426 FYE 12/31/86 1,481 460 493 FYE 12/31/87 1,175 485 363 FYE 12/31/88 1,163 564 479 FYE 12/31/89 1,430 741 588 FYE 12/31/90 1,419 718 406 FYE 12/31/91 2,058 935 592 FYE 12/31/92 2,113 1,005 806 FYE 12/31/93 2,148 1,106 991 FYE 12/31/94 2,140 1,121 967 FYE 12/31/95 3,009 1,538 1,570 FYE 12/31/96 4,038 1,888 2,350
17 [GRAPH - Comparison of Twenty-Five-Year Cumulative Total Return Among Republic New York Corporation, S&P 500 Stock Index and S&P Money Center Banks Index - has been omitted. The information set forth in such graph is found in the table "Comparison of Twenty-Five-Year Cumulative Total Return..." above.] 18 Transactions with Management and Related Persons During 1996, certain directors and executive officers of Republic Corporation or persons related to them were customers of, and had transactions with, Republic Corporation and its subsidiaries, including Republic Bank, in the ordinary course of business; additional transactions may be expected to take place in the ordinary course of business in the future. In most cases, all such outstanding loans and commitments were made upon substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and did not involve more than normal risks of collectibility or present other unfavorable features. In addition, Republic Corporation carries mortgage loans made to seven executive officers (all of whom are also directors of Republic Corporation), outstanding in the aggregate principal amount of $2,233,545 as of December 31, 1996, and, as of the date hereof, Mr. Robert A. Cohen has a $900,000 30-year mortgage at market rates secured by his residence, and an $800,000 5-year unsecured loan at market rates. Such loans were made at more favorable effective rates, including the waiver of "points", than were available to customers of Republic Bank generally, although no more favorable than the terms available to other employees of Republic Corporation and its subsidiaries who are not executive officers. Safra Republic Holdings S.A. ("Safra Republic"), a Luxembourg holding company established by Republic Corporation in 1988, owns five European banks; its stock is held, as of December 31, 1996, by Republic Bank (49.1%), by Saban S.A. ("Saban"), a Panamanian corporation wholly-owned by Edmond J. Safra (20.8%), and by international investors (30.1%). Safra Republic and Republic Bank, although independently managed, cooperate closely and have formulated their policies based on certain common principles. Each of Safra Republic's banks and Republic Bank also acts as principal correspondent bank to each other's respective locations around the world. At December 31, 1996, Safra Republic had total assets of $17.2 billion, total deposits of $13.3 billion and total stockholders' equity of approximately $1.6 billion. In addition, Republic National Bank of New York (Suisse) S.A. ("RNB Suisse"), the Geneva-based banking subsidiary of Safra Republic and an affiliate of Republic Bank, leases office space in various locations in Geneva, Switzerland for use in its banking business from Edmond J. Safra and several real estate companies owned by Mr. Safra. Such transactions involved aggregate rental payments for 1996 of approximately $9,503,295. The rents pursuant to all such leases are based on independent appraisals of the fair rental value of such properties. Such transactions were conducted in the normal course of business on substantially the same terms as those prevailing for comparable transactions with other persons and do not involve more than the normal risk of collectibility nor present other unfavorable features. Messrs. Dwek and Weiner, who are directors and/or executive officers of Republic Corporation and Republic Bank, are also directors of Safra Republic. Accordingly, situations will arise from time to time in which potential conflicts of interest could be present for such persons. In addition, the nature of the businesses of Safra Republic's banks and Republic Bank is such that competing interests among such companies may also arise with respect to, among other things, areas of business in which such companies compete, business dealings among such companies, the election of directors, issuances of capital stock, declaration of dividends and similar corporate matters, corporate opportunities in which such companies have an interest and other matters involving the use of Republic Bank's trade name and trademarks and Republic Bank's legal and regulatory status. 19 There are no agreements or arrangements that restrict or otherwise govern competition between the two organizations in markets where both are entitled or wish to act, nor is either of them obligated to advise the other of particular business opportunities. All business transactions between Safra Republic's banks and Republic Bank are conducted on an arm's-length basis, and it is their intention to resolve all such conflicts described above consistent with each organization's responsibilities to its stockholders. As of December 31, 1996, approximately 27.7% of Republic Corporation's Common Stock was beneficially owned, through three wholly-owned corporations, by Edmond J. Safra. See "Ownership of Voting Securities -- Certain Beneficial Owners" below. Mr. Safra, in addition to being the principal stockholder of Republic Corporation, is Honorary Chairman of the Boards of Directors of Republic Corporation and Republic Bank. Mr. Safra is also Chairman of the Board of Safra Republic and of RNB Suisse. As Chairman of the Board of RNB Suisse, Mr. Safra earned approximately $814,000 during 1996 for services performed for RNB Suisse. The advice of Mr. Safra, as Republic Corporation's principal stockholder, is often sought by Republic Corporation with respect to major policy decisions and other significant matters. In addition, Republic Corporation and its subsidiaries, principally Republic Bank and its subsidiaries, have a broad range of business relationships with Banco Safra S.A., a Brazilian banking corporation, and its United States national bank subsidiary, Safra National Bank of New York, and Banque Safra-Luxembourg S.A., a Luxembourg banking corporation, all of which are associated through family members with Edmond J. Safra. Such relationships include credit transactions, deposit relationships, foreign exchange dealings, precious metals dealings, and securities clearing transactions and custodial services. Such transactions have been conducted in the normal course of Republic Corporation's business on substantially the same terms as those prevailing for comparable transactions with other customers or suppliers and have not involved more than normal risks of collectibility or any other unfavorable features. Republic New York (U.K.) Limited, a wholly-owned subsidiary of Republic Bank, has also entered into a number of relationships with Banco Safra S.A. and its subsidiaries as an underwriter or dealer involved in the issuance of securities by them. In December 1996, Republic New York (U.K.) Limited became a Joint Lead Manager and Dealer on the U.S.$250,000,000 Global Medium Term Note Program established by Globex Utilidades S.A., a Brazilian corporation which is approximately 38.5% owned by Mrs. Lily Safra, the wife of Mr. Safra. The first issuance off the Program of U.S.$100,000,000 aggregate principal amount of notes, on terms then prevailing in the market as established among the Managers, was consummated in December 1996, and Republic New York (U.K.) Limited received fees and commission of approximately U.S.$140,000 in connection therewith. 20 Ownership of Voting Securities Certain Beneficial Owners Set forth below is certain information as of December 31, 1996 as to the persons who are known by Republic Corporation to own beneficially more than five percent of the outstanding Common Stock of Republic Corporation. Amount and Nature Percent Name and Address of Beneficial Ownership of Class ----------------------- -------- Edmond J. Safra . . . . . . .. . . . . . . 15,258,812 (a) 27.7% 2, Place du Lac Geneva, Switzerland - ------------------- (a) Mr. Safra is the principal stockholder of Republic Corporation through his ownership of all the outstanding shares of Saban, which owns 15,229,036 shares of Republic Corporation (including 14,699,958 shares through its wholly-owned subsidiary, RNYC Holdings Limited, a Gibraltar bank holding company), and of another corporation which owns 29,776 shares of Republic Corporation. On October 28, 1994, Mr. Safra, through Saban and RNYC Holdings Limited, received approval from the Board of Governors of the Federal Reserve System to acquire up to two million additional shares of Republic Corporation Common Stock, which approval, as extended, lapses on April 28, 1997, unless further extended. If the remaining 1,730,400 shares of Common Stock covered by the approval were acquired, Mr. Safra would increase his ownership to approximately 30.9% of the Corporation's outstanding Common Stock. Mr. Safra has acquired no additional shares since December 31, 1996. Management Information concerning the beneficial ownership of Republic Corporation's Common Stock by each director is set forth in the table under "Election of Directors" above. The following table shows, as of December 31, 1996, the beneficial ownership of Republic Corporation's Common Stock by all directors and executive officers of Republic Corporation as a group. Amount and Nature Percent of Beneficial Ownership of Class ----------------------- -------- All directors and executive officers as a group (27 persons) . . . . . . . 550,991 shs. 1.0% 21 APPROVAL OF INCREASE OF SHARES AWARDABLE UNDER THE 1995 LONG TERM INCENTIVE STOCK PLAN The Board of Directors proposes to amend the 1995 Long Term Incentive Stock Plan (the "LTISP") to increase by 1,500,000 the number of shares available for awards pursuant to the LTISP. The following description of the LTISP is a summary, does not purport to be detailed and is qualified in its entirety by reference to the provisions of the LTISP itself. A copy of the LTISP may be obtained by writing to the Corporate Secretary, Republic New York Corporation, 452 Fifth Avenue, New York, New York 10018. General. The LTISP was approved by the stockholders at the 1995 Annual Meeting. The LTISP provides for stock-based awards as incentive compensation to officers and employees of Republic Corporation and its subsidiaries. These awards may take the form of Restricted Stock, Incentive Stock Options, Non-Qualified Stock Options, Phantom Stock and Stock Appreciation Rights(as such terms are defined below) and other stock-based awards tied to shares of Republic Corporation's Common Stock (each, an "Award"), all on a stand-alone, combination or tandem basis, to eligible persons. The LTISP provides that it shall terminate on the tenth anniversary of its approval. When initially approved, the LTISP had 1,140,800 shares available for awards; however, as of March 13, 1997, there were approximately 166,000 shares remaining authorized but not yet awarded under the LTISP. The Board of Directors recommends that the total number of shares available for award pursuant to the LTISP be increased by 1,500,000 shares to 2,640,800 shares, and considers it appropriate pursuant to Section 10 of the LTISP to submit such increase for approval by the stockholders. Class of Persons Eligible to Receive Awards. The LTISP is designed to attract and retain officers and employees of Republic Corporation and its subsidiaries who make a material contribution to the successful operation of Republic Corporation and its subsidiaries. Presently, there are approximately 5,500 persons who are eligible to participate in the LTISP. Participants in the LTISP are also eligible to participate in Republic Corporation's other incentive compensation and bonus plans. Administration. The LTISP is administered by the Human Resources Committee (the "Committee") of the Board of Directors of Republic Corporation, the members of which consist solely of members of the Board of Directors who are "non-employee directors" within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are "outside directors" for purposes of Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the "Code"). No member of the Committee (see "Directors' Committees" above under "Election of Directors") may be granted an award under the LTISP. The LTISP provides that the Committee shall have full authority to (i) designate from among those eligible the persons who will participate in the LTISP ("Participants"); (ii) determine the type or types of Awards to be granted to each Participant under the LTISP; (iii) determine the number of shares of Republic Corporation's Common Stock ("Shares") to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, or other property, or cancelled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other 22 Awards, or other property, and other amounts payable with respect to an Award under the LTISP shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the LTISP and any instrument or agreement relating to, or Award made under, the LTISP; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the LTISP; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the LTISP. The Committee will have the power to vary or waive any provision of the LTISP in respect of a Participant and his Award in order to satisfy the terms of such Participant's employment contract with the Republic Corporation or a subsidiary and to eliminate any conflict between such contract and the provisions of the LTISP, subject to Section 162(m) of the Code and the rules and regulations promulgated thereunder. Material Features of the LTISP. An Award of restricted stock ("Restricted Stock") is an award of Shares which is subject to such restrictions as the Committee deems appropriate, including forfeiture conditions and restrictions on transfer for a period specified by the Committee. In the case of Restricted Stock, if a Participant's employment with Republic Corporation or any of its subsidiaries or affiliates is terminated by reason of the Participant's death or disability, the Participant or the Participant's legal representative, beneficiary, heir or transferee, as the case may be, shall be entitled to the Shares of Restricted Stock of such Participant, free of any and all restrictions imposed at the time of grant, and Republic Corporation will deliver such Shares to such person within sixty days of receipt by the Committee of evidence satisfactory to establish such death or disability and, if applicable, the right of such legal representative, beneficiary, heir or transferee to receive such Shares. The Committee will establish rules regarding the right of Participants to elect to receive additional Shares of Restricted Stock in lieu of any dividends which would otherwise be payable on account of Shares of Restricted Stock held by such a Participant. If a Participant's employment is terminated for any reason other than death or disability, all shares of Restricted Stock will be forfeited. Options (each, an "Option") to purchase Shares, which may be non-qualified or incentive stock options, may be granted under the LTISP at an exercise price determined by the Committee at the time the Option is granted; provided, however, that in the case of (i) an Option granted to a "covered employee" within the meaning of Section 162(m)(3) of the Code and (ii) an incentive stock option, the exercise price will be at least 100% of the fair market value of a Share determined on the date of grant (110% of fair market value in the case of an incentive stock option granted to a ten percent stockholder). In the case of Options, if a Participant's employment with Republic Corporation or any of its subsidiaries or affiliates is terminated by reason of the Participant's death or disability, or if the Participant dies within three months of the date of retirement from such employment, all outstanding Options of such Participant shall become exercisable by the Participant or the Participant's legal representative, beneficiary, heir or transferee, as the case may be, within one year from the date of such death or disability, except to the extent that such Options expire by their terms during such one-year period prior to the exercise thereof. Upon Retirement from such employment (as defined in the LTISP), a Participant's outstanding Options become immediately exercisable in full for the three-month period following such retirement; any Options not exercised during that period, or which expire by their terms during that period prior to the exercise thereof, shall terminate. If a Participant's employment with Republic Corporation or any of its subsidiaries or affiliates is terminated by reason of (i) discharge by Republic Corporation or such subsidiary or affiliate for cause or (ii) voluntary separation on the part of the Participant, unless Republic Corporation or his employing company or companies otherwise consents, any outstanding Option, whether exercisable or unexercisable, will be forfeited. A Participant who leaves such employment for a reason other than death, disability, Retirement, termination for cause or voluntary separation on the part of the Participant without 23 the consent of Republic Corporation or his employing company or companies, may exercise his or her outstanding Options during the three-month period following such departure, subject to the expiration of Options which by their terms expire during such period prior to exercise thereof. An Award of phantom stock ("Phantom Stock") entitles the recipient, upon lapse of any restrictions, to the fair market value (in cash or shares of Common Stock) of one share of Republic Corporation's Common Stock for each Phantom Stock share. An Award of Stock Appreciation Rights ("SARs") entitles the recipient to receive (in cash or shares of Common Stock) the difference between the fair market value of a share of Common Stock on the date of exercise of the SAR and the exercise price (which shall not be less than the fair market value of such share of Common Stock on the date of grant). In the case of Phantom Stock and SARs, the grant price, term, methods of exercise, methods of settlement, risk of forfeiture and any other terms and conditions of an Award shall be determined by the Committee at the time of the grant, reflected in the Award notification and subject to the terms of the LTISP and any applicable Award Agreement. The Committee may also grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares and deemed by the Committee to be consistent with the purposes of the LTISP. Subject to the terms of the LTISP, the Committee shall determine the terms and conditions of such Awards at the time of grant. A Participant's rights and interests under the LTISP (including the right to payment of any unpaid Award) may not be assigned or transferred except in the case of the Participant's death to the Participant's designated beneficiary or, in the absence of such designation, by will or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may approve the transfer of Options by a Participant to one or more members of the Participant's immediate family or to a trust (including a revocable trust) for the benefit thereof. No Award shall be subject to execution, attachment or other process. Number of Shares. Assuming stockholder approval of the subject proposal, an aggregate of 2,640,800 shares of Common Stock of Republic Corporation will be available for awards pursuant to the LTISP. Such number of Shares is subject to adjustment in the event of a reorganization, recapitalization, merger, consolidation, spin-off, extraordinary dividend or other distribution or similar transaction. Each Award, including Awards of Phantom Stock and SARs, reduces the number of shares remaining, with the exception that any Shares which are forfeited by the Participant in accordance with the terms of the LTISP, and any shares underlying an Award of Options, Phantom Stock or SARs which are allowed to lapse or expire or are forfeited in accordance with the terms of the Award are added back to the number of shares available for Awards. The maximum number of Shares that may be awarded to any single Participant during any one-year period pursuant to one or more awards of Options or SARs under the LTISP is 100,000 Shares in total. Amendment and Termination. The LTISP may be terminated at any time, or modified or amended from time to time, in any case by the affirmative vote of the holders of a majority of the outstanding shares of the Common Stock of Republic Corporation present or represented and entitled to vote at a duly held stockholders' meeting. The Board of Directors may at any time terminate the LTISP or, from time to time, modify or amend the LTISP as it may deem advisable; provided, however, that the Board of Directors may not make any amendments to the LTISP without stockholder approval where such approval is required to comply with any applicable law, regulation or stock exchange rule; provided, further, however, that no such 24 amendment or termination may affect the rights of a Participant under an outstanding Award without the consent of the Participant. Awards. Since its inception in 1995, awards made pursuant to the LTISP have been solely in the form of Restricted Stock. On March 27, 1997, approximately 398,000 shares of Restricted Stock were awarded to officers and employees of Republic Corporation and its subsidiaries in recognition of 1996 performance, as set forth in the table below. The issuance of approximately 231,000 of the shares awarded is subject to stockholder approval of the proposed increase in shares available for awards pursuant to the LTISP. PLAN BENEFITS 1995 Long Term Incentive Stock Plan
Name and Position Dollar Value ($)1 Number of Units ----------------- ---------------- --------------- Walter H. Weiner . . . . . . . . . . . . . $ 471,700 5,300 Dov C. Schlein . . . . . . . . . . . . . . 462,800 5,200 Elias Saal . . . . . . . . . . . . . . . . 436,100 4,900 Cyril S. Dwek . . . . . . . . . . . . . . . 0 0 Vito S. Portera . . . . . . . . . . . . . 225,500 2,500 All Executive Officers . . . . . . . . . . 2,513,004 28,236 Non-Executive Officer Directors Group . . . 0 0 Non-Executive Officer Employee Group . . . 32,878,914 369,426 1 The value of the Restricted Stock was calculated by multiplying the closing market price of Republic Corporation's Common Stock on the date of the award by the number of shares awarded.
Certain Federal Income Tax Consequences of Options. Certain of the federal income tax consequences to optionees and Republic Corporation of Options granted under the LTISP should generally be as set forth in the following summary. An employee to whom an incentive stock option (an "Incentive Stock Option") which qualifies under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") is granted will not recognize income at the time of grant or exercise of such Option. No federal income tax deduction will be allowable to the employee's employer upon the grant or exercise of such Incentive Stock Option. However, upon the exercise of an Incentive Stock Option, any excess in the fair market value of the Common Stock over the exercise price generally will be included in the employee's alternative minimum taxable income. When the employee sells such shares more than one year after the date of transfer of such shares and more than two years after the date of grant of such Incentive Stock Option, the employee will normally recognize a long-term capital gain or loss equivalent to the difference, if any, between the sale prices of such shares and the exercise price. If the employee does not hold such shares for the required period, when the employee sells such shares, the employee will recognize ordinary compensation income (unless the amount realized on the sale of such shares is less than or equal to the aggregate Option exercise price for such shares) and possibly capital gain or loss, in such amounts as are prescribed by the Code and the regulations thereunder, and the employee's employer will generally be entitled to a federal income tax deduction in the amount of the ordinary compensation income. An employee to whom an Option which does not qualify under Section 422 of the Code (a "Non-Qualified Option") is granted will not recognize income at the time of the grant of such Option. When such employee 25 exercises such Non-Qualified Option, the employee will recognize ordinary compensation income equal to the difference, if any, between the exercise price paid and the fair market value, as of the date of Option exercise, of the shares the employee receives. The tax basis of such shares to such employee will be equal to the exercise price paid plus the amount includible in the employee's gross income, and the employee's holding period for such shares will commence on the date on which the employee recognized taxable income in respect of such shares. Subject to the applicable provisions of the Code and regulations thereunder, the employee's employer will generally be entitled to a federal income tax deduction in respect of a Non-Qualified Option in an amount equal to the ordinary compensation income recognized by the employee. Stockholder Approval The Board of Directors recommends a vote FOR the increase of shares available for awards under the 1995 Long Term Incentive Stock Plan. Approval of the increase requires the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote. For purposes of determining such number of shares present or represented and entitled to vote with respect to the LTISP, abstentions will be counted (and will therefore be the equivalent of a "No" vote), but broker non-votes will not be counted. Edmond J. Safra, who owns approximately 27.7% of the outstanding Common Stock (see "Ownership of Voting Securities" above), has indicated his intention to vote his shares in favor of such approval. APPROVAL OF EXTENSION OF RESTRICTED STOCK ELECTION PLAN The Board of Directors proposes to amend the Restricted Stock Election Plan (the "RSEP") to extend the operation of the RSEP by five years until December 31, 2002. The following description of the RSEP is a summary, does not purport to be detailed and is qualified in its entirety by reference to the provisions of the RSEP itself. A copy of the RSEP may be obtained by writing to the Corporate Secretary, Republic New York Corporation, 452 Fifth Avenue, New York, New York 10018. General. The RSEP was approved by the stockholders at the 1988 Annual Meeting. The purpose of the RSEP is to provide an additional incentive to Participants who contribute materially to the enhancement of the performance of Republic Corporation and its subsidiaries by giving them an equity interest which will benefit from any enhanced performance. The RSEP is administered by the Human Resources Committee (the "Committee") of the Board of Directors of Republic Corporation and allows selected employees, who are entitled to and have elected to receive deferred cash compensation ("Deferred Compensation") from Republic Corporation, to elect to receive Restricted Stock in lieu of all or a portion of such Deferred Compensation. The Committee has the exclusive power to select the Participants in the RSEP solely from those employees of Republic Corporation and its subsidiaries who are entitled to receive Deferred Compensation. Presently, there are approximately twelve persons who qualify as Participants under the RSEP. The basis of participation and a brief description of the RSEP are set forth below. Participants in the RSEP may also be entitled to participate in Republic Corporation's other incentive compensation and bonus plans, including the LTISP. 26 Administration. The Committee has the exclusive power to select the employees who will be Participants and to determine the Restricted Period applicable to each issuance of Restricted Stock under the RSEP. The Committee has the power to adopt such rules and regulations as it deems appropriate for administration of the RSEP and has full authority to interpret the RSEP in its exclusive discretion. No member of the Committee (see "Directors' Committees" above) is eligible to participate in the RSEP. All members of the Committee shall at all times be "non-employee directors" as that term is defined in Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934, as amended. Selection of Participants and Elections. During each calendar year that the RSEP is in existence, the Committee has the exclusive power to (i) select the Participants in the RSEP and (ii) determine the Restricted Period and its application to the shares issued to each Participant. Assuming stockholder approval of the subject proposal, no more than an aggregate of 375,000 shares of Common Stock, subject to adjustment as described below, may be issued pursuant to the RSEP during the period ending on December 31, 2002. Within fifteen days after the receipt by a Participant of a notice from Republic Corporation setting forth the amount of such Participant's Deferred Compensation in any year, such Participant must notify the Committee in writing of the portion of the Participant's Deferred Compensation which the Participant elects to receive in the form of Restricted Stock. A Participant who has made such an Election shall receive the number of shares of Restricted Stock equal to the quotient of (i) the dollar value of the Deferred Compensation elected to be received in the form of Restricted Stock, divided by (ii) the Market Value of Republic Corporation's Common Stock as of the date of the Participant's Election. Market Value is defined under the RSEP as the average closing price of Republic Corporation's Common Stock on the New York Stock Exchange for a period of five trading days commencing with the date on which Market Value is to be determined. At the same time, the Participant shall also elect either (i) to reinvest cash dividends to be received in Restricted Stock or (ii) to be paid such cash dividends. If a Participant elects to receive a portion of his Deferred Compensation in the form of Restricted Stock, the Participant will not be entitled to sell, assign, transfer, pledge or otherwise encumber the Restricted Stock during a period (the "Restricted Period") which will be determined by the Committee for each issuance of Restricted Stock. The Restricted Period may vary by Participant, except that a Participant whose right to Deferred Compensation remains contingent at the time of any election will have a Restricted Period expiring when such contingency does. Except for such restrictions on alienation of his interest in the Restricted Stock, a Participant will have all other rights of a stockholder, including the right to receive dividends and the right to vote his shares of Restricted Stock. In connection with the issuance of his Restricted Stock, a Participant is required to enter into an agreement (the "Participant's Agreement") with Republic Corporation relating to the Restricted Stock. If, prior to the expiration of the Restricted Period, a Participant ceases to be employed by Republic Corporation or a subsidiary for any reason, other than death or disability, he will forfeit any Restricted Stock of which he is the beneficial owner and, pursuant to the Participant's Agreement, will transfer such shares back to Republic Corporation. If the Participant ceases to be employed during the Restricted Period due to his death or disability, all Restricted Stock issued to him will immediately become free of all restrictions, and the certificates representing such shares will be delivered to the Participant (or the Participant's estate) within 60 days of the event giving rise to such termination of employment. In the event of a change in the number of outstanding shares of Common Stock by reason of a stock dividend or stock split, recapitalization, merger, consolidation, combination or exchange of shares, the 27 maximum aggregate number and class of shares which may be issued pursuant to the RSEP may be adjusted by the Committee, whose determination will be conclusive. Amendment and Termination. The Board of Directors may amend the RSEP from time to time without approval by the stockholders of Republic Corporation, but no such amendment may (i) without the stockholders' approval, extend the RSEP's duration or increase the maximum number of shares of Restricted Stock that may be issued pursuant to the RSEP (except as provided in the preceding paragraph) or (ii) without a Participant's consent, impair the rights of any Participant in the Restricted Stock. Additionally, the Board of Directors has the right to terminate the RSEP at any time. Assuming stockholder approval, the RSEP will terminate on December 31, 2002, unless further extended by the Board of Directors, subject to stockholder approval. Awards. Restricted Stock is expected to be issued to the current participants in the RSEP during 1997 pursuant to such participants' election to reinvest their cash dividends in additional shares of Restricted Stock. Such amounts are not currently determinable, however, due to the unforseeability of the market price of Republic Corporation's Common Stock on the relevant dividend dates. Set forth in the table below are the amounts of Restricted Stock issued pursuant to the RSEP in respect of awards and reinvested dividends for 1996. PLAN BENEFITS Restricted Stock Election Plan -----------------------------------
Name and Position Dollar Value ($)1 Number of Units ----------------- ---------------- --------------- Walter H. Weiner . . . . . . . . . . . . $ 40,324 641 Dov C. Schlein . . . . . . . . . . . . . 0 0 Elias Saal . . . . . . . . . . . . . . . 0 0 Cyril S. Dwek . . . . . . . . . . . . . . 0 0 Vito S. Portera . . . . . . . . . . . . . 0 0 All Executive Officers . . . . . . . . . . 40,324 641 Non-Executive Officer Directors Group . . 0 0 Non-Executive Officer Employee Group . . . 101,241 1,726 - ------------ 1 The value of the Restricted Stock is the sum of the applicable market values (as determined in accordance with the RSEP) of Republic Corporation's Common Stock on the relevant dates of the awards and reinvested dividends.
Stockholder Approval The Board of Directors recommends a vote FOR the extension of the Restricted Stock Election Plan. Approval of the extension requires the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote. For purposes of determining such number of shares present or represented and entitled to vote with respect to the RSEP, abstentions will be counted (and will therefore be the equivalent of a "No" vote), but broker non-votes will not be counted. Edmond J. Safra, who owns approximately 27.7% of the outstanding Common Stock (see "Ownership of Voting Securities" above), has indicated his intention to vote his shares in favor of such approval. 28 APPROVAL OF SELECTION OF AUDITORS The Board of Directors considers it appropriate to submit for approval by the stockholders its selection of KPMG Peat Marwick LLP, as auditors of the financial statements of Republic Corporation for the current fiscal year. KPMG Peat Marwick LLP, independent certified public accountants, have examined the financial statements of Republic Corporation since it commenced operations in 1974. Such firm has also examined the financial statements of Republic Bank since 1966. The appointment of the firm was recommended to the Board of Directors of Republic Corporation by its Audit Committee. No member of the Audit Committee is an officer or employee of Republic Corporation. A representative of the firm will be present at the meeting to make a statement, if he desires to do so, and to respond to appropriate questions by stockholders. The Board of Directors recommends a vote FOR the approval of the selection of auditors. MISCELLANEOUS Other Matters As of the date hereof, Republic Corporation has not been informed of any matters to be presented by or on behalf of Republic Corporation or its Board of Directors for action at the meeting other than those listed in the notice of meeting and referred to herein. If any other matters come before the meeting or any adjournment thereof, it is intended that the proxies will be voted in respect thereof in accordance with the judgment of the person or persons voting the proxies. Stockholders' Proposals If any stockholder intends to present a proposal for inclusion in the proxy material for the 1998 Annual Meeting, such stockholder's proposal must be received by November 30, 1997 at Republic Corporation's executive offices at 452 Fifth Avenue, New York, New York 10018, Attention: the Corporate Secretary. The submission must also meet the other requirements of Rule 14a-8 of the Securities and Exchange Commission applicable to stockholder proposals. Solicitation of Proxies The cost of solicitation of proxies will be borne by Republic Corporation. In addition to the use of the mails, proxies may be solicited by personal interview, telephone and telegraph. Banks, brokerage houses and other institutions, nominees or fiduciaries will be requested to forward the soliciting material to their principals and to obtain authorizations for the execution of proxies. Directors, officers and regular employees of Republic Corporation and Republic Bank may also solicit proxies by such methods without additional remuneration therefor. Republic Corporation will, upon request, reimburse banks, brokerage houses and other institutions, nominees and fiduciaries for expenses in forwarding proxy solicitation material to their principals. 29 General Only stockholders of record at the close of business on March 13, 1997 will be entitled to notice of and to vote at the meeting. Stockholders are urged to mark, date and sign the enclosed form of proxy, solicited on behalf of the Board of Directors, and return it at once in the envelope enclosed for that purpose. Unless instructed otherwise, proxies will be voted for the election of directors, for the increase in shares available for awards pursuant to the 1995 Long Term Incentive Stock Plan, for the extension of the duration of the Restricted Stock Election Plan and for approval of the selection of auditors. On any such matter generally a vote of a majority of the votes cast on the matter will be required for approval. Broker non-votes and abstentions will not be counted for purposes of determining the number of votes cast. The proxy does not affect the right to vote in person at the meeting and may be revoked prior to its exercise by appropriate notice to the undersigned. Dated: March 31, 1997 New York, New York By Order of the Board of Directors, WILLIAM F. ROSENBLUM, JR., Senior Vice President and Corporate Secretary 30 [Front Side] REPUBLIC NEW YORK CORPORATION PROXY Annual Meeting of Stockholders May 28, 1997 This Proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints, jointly and severally, Peter Kimmelman, William C. MacMillen, Jr., and James L. Morice, each with the power to appoint his substitute, and hereby authorizes them to vote all shares of Republic New York Corporation Common Stock that the undersigned is entitled to vote, at the Annual Meeting of Stockholders of the Corporation to be held at 452 Fifth Avenue, City and State of New York, on May 28, 1997, at 11:00 A.M., or any adjournment thereof, in accordance with the instructions on the reverse side hereof and in their discretion upon such other business as may properly come before the meeting. Unless instructions are given on the reverse side, this Proxy will be voted FOR the election of nominees for director, FOR Item 2, FOR Item 3 and FOR Item 4 listed on the reverse side hereof. With respect to matters as to which discretionary authority is granted above, this Proxy will be voted in accordance with the best judgment of the proxies hereinabove appointed. Please mark, date and sign this Proxy on the reverse side hereof and return it promptly whether or not you expect to attend the meeting. You may nevertheless vote in person if you do attend. (Continued and to be signed on other side) [Back Side] [X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. The Board of Directors recommends a vote "FOR ALL NOMINEES" in Item 1, and "FOR" Items 2, 3, and 4. FOR ALL WITHHOLD FOR Director Nominees: Item 1-- Election of K. Andersen J. Morice the following [ ] [ ] R. Cohen E. Daniel Morice nominees as C. Dwek J. Norwood Directors: E. Ginsberg J. Pancetti N. Hasson V. Portera P. Kimmelman T. Robards R. Kraemer W. Rogers L. Lieberman E. Saal W. MacMillen W. Weiner P. Mansbach G. Wendler P. White Withhold for the following only: (Write the name of the nominee(s) in the space below) - --------------------------------------------- FOR AGAINST ABSTAIN Item 2 - Approval of increase of [ ] [ ] [ ] shares in the 1995 Long-Term Incentive Stock Plan Item 3 - Approval of extension of the [ ] [ ] [ ] Restricted Stock Election Plan Item 4 - Approval of selection of [ ] [ ] [ ] auditors I PLAN TO ATTEND MEETING [ ] Receipt is hereby acknowledged of the Republic New York Corporation Notice of Meeting and Proxy Statement. Signature(s)______________________________________ Date _________1997 NOTE: Please sign as name appears hereon. Joint owners should each sign. If signer is a corporation, please sign the full corporate name by duly authorized officer. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. Appendix A Republic New York Corporation Proxy Statement Annual Meeting of Stockholders May 28, 1997 Graphic Image Material Cross-Reference Index Information Conveyed by Omitted Graphic Image Omitted Graphic Image - --------------------- --------------------- Graphs: Comparison of Five-Year Cumulative The information presented graphically Total Return Among Republic New York has been replaced in this filing by a Corporation, S&P 500 Stock Index and tabular presentation of such infor- S&P Money Center Banks Index, omitted mation inserted where the graph would from page 16. appear. Comparison of Twenty-Five Year The information presented graphically Cumulative Total Return Among is presented in this filing by the Republic New York Corporation, S&P tabular presentation found immediately Stock Index and S&P Money Center preceding where the graph would Banks Index, omitted from page 18. appear. Proxy Statement Dated March 31, 1997 Republic New York Corporation EXHIBIT INDEX No. Exhibit Description 99.1 Long Term Incentive Stock Plan 99.2 Restricted Stock Election Plan EX-99.1 2 LONG TERM INCENTIVE STOCK PLAN OF REPUBLIC NEW YORK CORPORATION AND ITS SUBSIDIARIES Section 1. Purpose. The Long Term Incentive Stock Plan (the "Plan") is designed to attract and retain the services of selected employees who are in a position to make a material contribution to the successful operation of the business of Republic New York Corporation and its subsidiaries. The Plan provides for the granting of stock options, stock appreciation rights, restricted stock, phantom stock, other stock-based awards or any combination of the foregoing to eligible participants. Section 2. Definitions. For the purpose of the Plan, the following terms shall have the meanings set forth below: (a) "Affiliate" means any related entity designated by the Committee. (b) "Award" means an Incentive Stock Option, Non-Qualified Stock Option, Stock Appreciation Right, Restricted Stock, Phantom Stock or Other Stock-Based Award. (c) "Award Agreement" means a written agreement setting forth the terms and conditions of each Award made under the Plan. (d) "Board of Directors" means the Board of Directors of the Company. (e) "Code" means the Internal Revenue Code of 1986, as amended from time to time. (f) "Committee" means the Employee Compensation and Benefits Committee of the Board of Directors or such other committee of the Board of Directors as may be designated by the Board of Directors from time to time to administer the Plan. The members of the Committee shall consist solely of two or more members of the Board of Directors who are "non-employee directors" within the meaning of Rule l6b-3 and are "outside directors" for purposes of Section 162(m) of the Code. To the extent that no Committee exists which has the authority to administer the Plan, the functions of the Committee shall be exercised by the Board of Directors. If for any reason the appointed Committee does not meet the requirements of Rule 16b-3 or Section 162(m) of the Code, such noncompliance with the requirements of Rule 16b-3 or Section 162(m) of the Code shall not affect the validity of the awards, grants, interpretations or other actions of the Committee. (g) "Company" means Republic New York Corporation. (h) "Employee" means an employee of the Company or a Subsidiary. (i) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (j) "Fair Market Value" means, with respect to a Share, the average of the high and low sales prices of a Share as reported on the New York Stock Exchange Composite Tape on the valuation date, or, if there were no sales reported on the valuation date, on the next preceding date on which such prices were reported. (k) "Incentive Stock Option" means an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto. (l) "Non-Qualified Stock Option" means an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option. (m) "Option" means an Incentive Stock Option or a Non-Qualified Stock Option. (n) "Other Stock-Based Award" means any right granted under Section 6(e) of the Plan. (o) "Participant" means a person who has been selected by the Committee to receive an Award under the Plan. (p) "Phantom Stock" means any rights granted under Section 6(d) of the Plan. (q) "Plan Year" means the calendar year. (r) "Restricted Period" means the period or periods designated by the Committee in respect of any Award of Restricted Stock or any part or parts of such Award. (s) "Restricted Stock" means the Shares that have been granted to a Participant subject to the restrictions referred to in Section 6(c)(ii), so long as such restrictions are in effect. (t) "Retirement" means retirement under the Company's, a Subsidiary's or an Affiliate's retirement plan and shall include early retirement if available under such retirement plan. (u) "Rule l6b-3" means Rule l6b-3 promulgated by the Securities and Exchange Commission under the Exchange Act or any successor rule or regulation thereto. (v) "Shares" means shares of common stock, par value $5.00 per share, of the Company. (w) "Stock Appreciation Right" means any right granted under Section 6(b) of the Plan. (x) "Subsidiary" means any corporation or other legal entity, domestic or foreign, more than 50% of the voting equity of which is owned or controlled, directly or indirectly, by the Company. Section 3. Plan Administration. (a) The Plan shall be administered by the Committee. Subject to the terms of the Plan, the Committee shall have full authority to (i) designate Participants from among those eligible, (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances (taking into consideration, among other things, the avoidance of liability under Section 16(b) of the Exchange Act) Awards may be settled or exercised in cash, Shares, other securities, or other property, or canceled, forfeited, or suspended; (vi) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, or other property, and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other 2 action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all persons, including the Company, any Subsidiary, any Participant, any holder or beneficiary of any Award, any Share owner, and any Employee. (b) The Committee shall have the power to vary or waive any provision of the Plan in respect of a Participant and his Award in order to satisfy the terms of such Participant's employment contract with the Company or a Subsidiary and to eliminate any conflict between such contract and the provisions of the Plan, subject to Section 162(m) of the Code and the rules and regulations promulgated thereunder. (c) The Committee shall have the power to vary or waive any terms or conditions under any Award (other than an Option or Stock Appreciation Right granted to a "covered employee" within the meaning of Section 162(m) of the Code and the rules and regulations promulgated thereunder) theretofore granted, prospectively or retroactively. (d) No waiver or variance of any provision of the Plan or an Award pursuant to this Section 3 may materially adversely affect the rights conferred by an Award without the consent of the recipient thereof. Section 4. Capital Stock Subject to the Provisions of the Plan. (a) The Shares awarded under the Plan may be authorized but unissued Shares as the Board of Directors may from time to time determine. Subject to adjustment pursuant to Section 11 hereof, the total number of Shares available and reserved for the grant of Awards under the Plan (including as to Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, such number of Shares) shall be 2,640,800 Shares. (b) Subject to Section 4(a) hereof and to the restrictions imposed by Section 422 of the Code, there shall be available for Awards under the Plan: (i) Shares represented by Options to the extent such Options are canceled, forfeited, surrendered, terminated or expire unexercised; (ii) the excess number of Shares subject to variable Awards that become fixed at less than the maximum number of Shares subject to such Awards; and (iii) Shares of Restricted Stock that have been forfeited. Section 5. Eligibility. Any Employee or officer of the Company or any Subsidiary selected by the Committee is eligible to receive an Award. Section 6. Awards. (a) Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine: (i) Exercise Price. The exercise price per Share purchasable under an option shall be determined by the Committee at the time the Option is granted; provided, however, in the case of an Option granted to a "covered employee" within the meaning of Section 162(m)(3) of the Code and the regulations issued thereunder, the exercise price per Share 3 shall be at least 100% of the Fair Market Value of a Share, determined at the time the Option is granted. (ii) Option Term. The term of each Option shall be fixed by the Committee at the time the Option is granted, but such term shall not exceed ten years from the date of grant. ----------- (iii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms, including, without limitation, cash, Shares, or any combination thereof, having a fair market value on the exercise date equal to the relevant exercise price, in which payment of the exercise price with respect thereto may be made or deemed to have been made. (iv) Effect of Termination of Employment. Death or Disability. A. In the event of termination of the employment or other relationship of a Participant with the Company, a Subsidiary or an Affiliate following the date of issuance of an Option to him either by reason of (i) a discharge by the Company, a Subsidiary or an Affiliate for cause or (ii) voluntary separation on the part of the Participant and without the written consent of the Company or his employing company or companies, any outstanding Option, whether exercisable or unexercisable, shall be canceled and terminated forthwith. B. In the event of termination of the employment or other relationship of a Participant with the Company, a Subsidiary or an Affiliate (otherwise than by reason of his death, disability or Retirement or pursuant to Section 6(a)(iv)(A)), such Participant (or any person or entity that acquired such Option by gift or otherwise) may exercise, within three months after such termination, any outstanding Option but only to the extent that the Option is otherwise exercisable at the time of such termination and only to the extent that the Option does not by its terms expire prior to the exercise thereof. Any Option to the extent that it is unexercisable at the time of such termination shall be canceled and terminated forthwith. After such three-month period, such Option to the extent otherwise outstanding shall be deemed canceled and terminated forthwith. C. Subject to Section 6(a)(iv)(D), if the employment of a Participant with the Company, a Subsidiary or an Affiliate shall be terminated by reason of the Participant's Retirement, any outstanding Option held by a Participant shall thereupon become immediately exercisable in full and the Participant or such person or entity that acquired such Option by gift or otherwise shall have the right, at any time within three months after such Retirement, to exercise such Option to the extent that such Option does not by its terms expire prior to the exercise thereof. After such three-month period, such Option to the extent otherwise outstanding shall be deemed canceled and terminated forthwith. D. If a Participant dies while employed by, or engaged in such other relationship with, the Company, any Subsidiary or any Affiliate or shall die within three months after his Retirement, any outstanding Option shall become immediately exercisable in full and the estate of the Participant or any person or entity that acquired such Option by bequest or inheritance or any person or entity that acquired such Option by gift or otherwise shall have the right at any time within one year after the death of the Participant to exercise such Option, but only to the extent that the Option by 4 its terms does not expire prior to the exercise thereof. After such one-year period, such Option to the extent otherwise outstanding shall be deemed canceled and terminated forthwith. The Committee in its discretion may, at any time before or after the grant of an Option, extend the one-year period for exercise provided in the first and second preceding sentences by a period of up to two additional years. E. In the event of the termination of employment or other relationship of a Participant by reason of the Participant's disability, any outstanding Option held by the Participant or any person or entity that acquired such Option by gift or otherwise shall thereupon become immediately exercisable in full and the Participant or such person or entity that acquired such Option by gift or otherwise shall have the right to exercise such Option held by him or it at any time within one year after such termination, but only to the extent the Option by its terms does not expire prior to the exercise thereof. After such one-year period, such Option to the extent otherwise outstanding shall be deemed canceled and terminated forthwith. For purposes of the Plan, a Participant is "disabled" if he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The Committee shall determine the form and manner of proof acceptable to establish the fact of disability. (v) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code, as amended from time to time, or any successor provision thereto, and any regulations promulgated thereunder. To the extent Section 422 of the Code, as amended from time to time, requires certain provisions to be set forth in a written plan, said provisions are incorporated herein by reference and, to the extent inconsistent with the Plan, such provisions shall control. In addition to any other terms and provisions required by Section 422 of the Code and by Sections 6(a)(i) through (iv), Incentive Stock Options shall be subject to the following conditions: A. Incentive Stock Options shall be granted only to Employees. B. Except as provided in Section 6(a)(v)(C), the exercise price of each Share subject to an Incentive Stock Option shall be at least 100% of the Fair Market Value of a Share, determined at the time the Option is granted. C. A Participant shall not, immediately before an Incentive Stock Option is granted, own stock representing more than 10% of the voting power or value of all classes of stock of the Company or a Subsidiary. This requirement shall not be applicable if (i) the exercise price of each Share subject to the Incentive Stock Option to be granted is at least 110% of the Fair Market Value of a Share, determined at the time the Option is granted, and (ii) the Option is not exercisable after the expiration of five years from the date such Option is granted. D. To the extent that the aggregate Fair Market Value (determined at the time(s) of the grant of the Option(s)) of the stock with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. E. Up to the maximum number of Shares available for the grant of Awards shall be 5 available for the grant of Incentive Stock Options. (b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants. Subject to the terms of the Plan and any applicable Award Agreement, a Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, as determined by the Committee, cash in an amount of, or Shares having a Fair Market Value equal to, the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which shall not be less than the Fair Market Value of one Share on the date of the grant of the Stock Appreciation Right. Subject to the terms of the Plan, the grant price, term, methods of exercise, methods of settlement, the rights (if any) upon termination of employment or other relationship and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee at the time of grant and set forth in the Award Agreement, but in no event shall a Stock Appreciation Right have a term in excess of ten years. If granted in connection with an Option, such Stock Appreciation Rights shall be subject to the same terms and conditions as the related Option. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate. (c) Restricted Stock. The Committee is hereby authorized to grant Awards of Restricted Stock to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine. (i) Restricted Period. The Restricted Period with respect to each award of Restricted Stock shall be determined by the Committee at the time the Restricted Stock is awarded. (ii) Transferability. Shares of Restricted Stock awarded to Participants may not be sold, assigned, transferred, pledged or otherwise encumbered during the Restricted Period applicable to such Shares, except as hereinafter provided. Except for such restrictions, the Participant, as owner of such Shares, shall have all the rights of a stockholder, including (but not limited to) the right to receive all dividends paid on such Shares (subject to the provisions of Section 6(c)(iii)) and the right to vote such Shares. (iii) Reinvestment of Cash Dividends. A. Subject to the terms, conditions and guidelines provided or to be provided by the Committee, Participants who have been awarded Shares of Restricted Stock and who have been selected by the Committee (whether before or after the grant) to be eligible under this Section 6(c)(iii) shall be entitled to elect in writing to receive, in lieu of the cash dividends, if any, that would otherwise be paid on such Shares, additional Shares of Restricted Stock, which shall be subject to such restrictions and other terms and conditions as are established by the Committee in accordance with Section 3 hereof. B. The Committee may, in its sole discretion, permit persons holding shares of Restricted Stock granted pursuant to plans other than the Plan to elect in writing to receive, in lieu of the cash dividends, if any, that would otherwise be paid on such shares, Shares of Restricted Stock which shall be subject to such restrictions and other terms and conditions as are established by the Committee in accordance with Section 3 hereof. (iv) Registration. Any Restricted Stock granted under the Plan may be evidenced 6 in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. If any stock certificate is issued in respect of Shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock. (v) Termination of Employment. Unless the Committee determines otherwise, if the employment or other relationship of a Participant with the Company, a Subsidiary or an Affiliate terminates for any reason (other than death or disability), all Shares of Restricted Stock theretofore awarded to him shall, upon such termination, be forfeited and returned to the Company. If a Participant's employment or other relationship terminates by reason of death or disability, then any Shares of Restricted Stock owned by such Participant shall become free of the restrictions imposed by Section 6(c)(ii), and the Company will deliver such Shares to him or his legal representative, beneficiary, heir or transferee within 60 days of the Committee's receipt of evidence satisfactory to establish such death or disability and, if applicable, the right of such legal representative, beneficiary, heir or transferee to receive such Shares. (vi) Issuance of Shares. As soon as practicable after the restrictions imposed by Section 6(c)(ii) expire, the Company shall deliver to the Participant (or his legal representative, beneficiary, heir or transferee) a certificate, without a legend referred to in Section 6(c)(iv) hereof, representing the number of Shares equal to the number of Shares of Restricted Stock as to which the restrictions have expired. (d) Phantom Stock. The Committee is hereby authorized to grant shares of Phantom Stock to Participants. Subject to the terms of the Plan and any applicable Award Agreement, a share of Phantom Stock granted under the Plan shall confer on the Participant a right to receive, upon redemption thereof, as determined by the Committee, cash in an amount of, or Shares having a Fair Market Value equal to, the Fair Market Value of one Share on the date of redemption. Subject to the terms of the Plan, the Committee shall determine at the time of grant the term, methods of redemption, methods of settlement, the rights (if any) upon termination of employment or other relationship, whether and on what terms a Participant shall be entitled to a cash dividend paid with respect to a Share during the period a share of Phantom Stock is outstanding, and any other terms and conditions of any share of Phantom Stock. The Committee may impose such conditions or restrictions on the redemption of any share of Phantom Stock as it may deem appropriate. (e) Other Stock-Based Awards. The Committee is hereby authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, as are deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan, the Committee shall determine the terms and conditions of such Awards at the time of grant. Section 7. Award Agreements. Each Award under the Plan shall be evidenced by an Award Agreement setting forth the terms and conditions of the Award and executed by the Company and the Participant. Section 8. Assignability. Each Award granted under the Plan shall be transferable only by will or the laws of descent and distribution. An Award granted under the Plan shall be exercisable or redeemable, during the lifetime of the Participant only by the Participant to whom the Award is granted. Notwithstanding 7 the foregoing, the Committee, in its discretion, may at any time permit, subject to such terms and conditions as the Committee may impose, the transfer by gift of an Option by any Participant solely to one or more members of the Participant's immediate family or to a trust (including a revocable trust) for the benefit thereof; it being understood that such Option shall continue to be subject to termination upon the death, disability or termination of employment of such Participant pursuant to Sections 6(a)(iv)(A) through (E). Notwithstanding the foregoing, an Option transferred in accordance with the provisions of this Section 8 by a Participant to a revocable trust shall be reacquired by the Participant upon the revocation of such trust. Except as otherwise provided in this Section 8, no Award granted under the Plan or any of the rights and privileges thereby conferred shall be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and no such Award, right, or privilege shall be subject to execution, attachments or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Award, or of any right or privilege conferred thereby, contrary to the provisions hereof, or upon the levy of any attachment or similar process upon such Award, right or privilege, the Award and such rights and privileges shall immediately become null and void. Section 9. Other Terms and Conditions. (a) Rights as a Stockholder. A Participant shall have no rights as a stockholder with respect to Shares covered by an Award until the date the Participant is the holder of record of such Shares. No adjustment will be made for dividends or other rights for which the record date is prior to such date. (b) No Obligation to Exercise. The grant of an Award shall impose no obligation upon the Participant to exercise the Award. (c) Withholding. The Company and any Subsidiary shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan, or from any other payment due to the Participant, the amount (in cash or Shares or any combination thereof) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Award or under the Plan and to take such other action as may be necessary in the opinion of the Company or Subsidiary to satisfy all obligations for the payment of such taxes. (d) Transfers to and from the Company, a Subsidiary or an Affiliate. So long as the Participant remains (or immediately thereafter becomes) an employee, officer or director of, or a consultant to, the Company, any Subsidiary or any Affiliate, the termination of such Participant's employment or other relationship with the Company or any Subsidiary or any Affiliate shall not be deemed to constitute a termination of employment or of such other relationship for purposes of the Plan. (e) Maximum Awards. The maximum number of Shares that may be issued to any single Participant during any one-year period during the term of the Plan pursuant to any one or more grants of Options and Stock Appreciation Rights under the Plan is 100,000 Shares in total. Section 10. Termination, Modification and Amendments. (a) The Plan may be terminated at any time or may be modified or amended from time to time by the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Company present or represented and entitled to vote at a duly held stockholders' meeting. 8 (b) The Board of Directors may at any time terminate the Plan or from time to time make such modifications or amendments of the Plan as it may deem advisable; provided, however, that the Board of Directors shall not make any amendments to the Plan without the approval of at least the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Company present or represented and entitled to vote at a duly held stockholders' meeting where such approval is required to comply with Section 162(m) or any other applicable law, regulation or stock exchange rule. (c) No termination, modification or amendment of the Plan may materially adversely affect the rights conferred by an Award without the consent of the recipient thereof. Section 11. Recapitalization The aggregate number of Shares as to which Awards may be granted to Participants, the number of Shares thereof covered by each outstanding Award, and the price per share thereof in each such Award, shall all be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a subdivision or consolidation of Shares or other capital adjustment, or the payment of a stock dividend or other increase or decrease in such Shares, effected without receipt of consideration by the Company, or other change in corporate or capital structure; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated. The Committee may also make the foregoing changes and any other changes, including changes in the classes of securities available, to the extent it is deemed necessary or desirable to preserve the intended benefits of the Plan for the Company and the Participants in the event of any other reorganization, recapitalization, merger, consolidation, spin-off, extraordinary dividend or other distribution or similar transaction, to the extent permitted by Section 422 of the Code. Section 12. Miscellaneous. (a) No Right to Employment. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or in any other relationship with, the Company, a Subsidiary or an Affiliate. Further, the Company, each Subsidiary and each Affiliate expressly reserves the right at any time to dismiss a Participant free from any liability or any claim under the Plan, except as provided herein or in any Award Agreement issued hereunder. (b) Governing Law . To the extent that federal laws do not otherwise control, the Plan shall be construed in accordance with and governed by the laws of the State of New York. (c) Savings Clause. The Plan is intended to comply in all respects with applicable laws and regulations,. If any one or more of the provisions of the Plan shall be held invalid, illegal or unenforceable in any respect under applicable law and regulation, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provision shall be deemed null and void; however, to the extent permissible by law, any provision which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit the Plan to be construed in compliance with all applicable laws so as to foster the intent of the Plan. (d) Allocation of Awards. The Committee shall from time to time make such allocations of the expense of Awards among the Company and its Subsidiaries as it shall deem appropriate. 9 (e) Effect on Other Employee Compensation. The Plan shall not be deemed an exclusive method of providing incentive compensation for the Employees, nor shall it preclude the Board of Directors from authorizing or approving other forms of incentive compensation. No Award under the Plan shall be taken into account in determining a Participant's compensation for the purposes of any group life insurance or other employee benefit plan. (f) Deductibility Under Section 162(m) of the Code. Awards granted under the Plan to Participants whom the Committee reasonably believes may be subject to Section 162(m) of the Code shall not be exercisable, and payment under the Plan in connection with such an Award shall not be made, unless and until the Committee has determined in its sole discretion that such exercise or payment would not be subject to Section 162(m) of the Code. Section 13. Effective Date and Term. The Plan shall become effective in the Plan Year in which it is first approved by the holders of a majority of the Shares having voting power present in person or represented by proxy at a duly constituted meeting of the stockholders at which a quorum is present. With respect to the first Plan Year, and any subsequent Plan Years in which stockholder approval is required to amend the Plan, the Committee may make awards subject to approval of the holders of the Common Stock at the next Annual Meeting thereof. The Plan shall terminate on the tenth anniversary of the effective date of the Plan. No Awards shall be granted after the termination of the Plan. 10 EX-99.2 3 RESTRICTED STOCK ELECTION PLAN OF REPUBLIC NEW YORK CORPORATION AND SUBSIDIARIES (As amended effective March 5, 1997, subject to stockholder approval) Section 1 - Purpose This Restricted Stock Election Plan (the "Plan") is designed to attract and retain the services of selected employees who are in a position to make a material contribution to the successful operation of the business of Republic New York Corporation. The Plan provides an election pursuant to which selected employees who are entitled to and have elected to receive deferred cash compensation from the Corporation shall be, in addition, entitled to elect to receive Restricted Stock in lieu of all or a portion of such deferred compensation. Section 2 - Definitions 2.1 "Adoption Date" shall mean the date on which this Plan is adopted by the Board of Directors. 2.2 "Board of Directors" shall mean the Board of Directors of the Corporation. 2.3 "Cash Portion" shall have the meaning assigned to it in Section 3.2 hereof. 2.4 "Committee" shall mean the Employee Compensation and Benefits Committee of the Board of Directors. 2.5 "Corporation" shall mean RNYC or any Subsidiary. 2.6 "Deferred Compensation" shall mean the right, pursuant to a Participant's Plan, to receive cash compensation in a given year with respect to a Participant's performance in a prior year. 2.7 "Election" shall have the meaning assigned to it in Section 3.2 hereof. 2.8 "Market Value" of Stock as of any date shall mean the average closing price of Stock on the New York Stock Exchange for the period of five (5) Trading Days commencing with the date on which the Market Value is to be determined or, if such a day is not a Trading Day, on the first Trading Day thereafter; provided, however, that the Market Value shall not be less than the par value per share. 2.9 "Participant" shall mean an employee of the Corporation selected by the Committee pursuant to Section 7.2 hereof. 2.10 "Participant's Plan" shall mean a bonus or incentive plan, agreement, arrangement or grant in existence on the Adoption Date or thereafter created, other than a qualified cash or deferred arrangement pursuant to Section 401(k) of the Internal Revenue Code, pursuant to which a Participant is entitled to Deferred Compensation. 2.11 "Plan" shall mean this Restricted Stock Election Plan of Republic New York Corporation and Subsidiaries. 2.12 "Plan Year" shall mean each twelve month period beginning January 1 and ending on December 31. 2.13 "Restricted Period" shall mean the period or periods designated by the Committee in respect of any shares of Restricted Stock, or any part or parts thereof issued with respect to any Participant. 2.14 "Restricted Stock" shall mean the shares of Stock which have been issued to a Participant pursuant to Section 5.1 and 5.5 and subject to the restrictions referred to in Section 5.3, so long as such restrictions are in effect. 2.15 "RNYC" shall mean Republic New York Corporation. 2.16 "Stock" shall mean the Common Stock, $5.00 par value per share, of RNYC. 2.17 "Stock Portion" shall have the meaning assigned to it in Section 3.2 hereof. 2.18 "Subsidiary" shall mean any corporation or other legal entity, domestic or foreign, more than 50% of the voting stock of which is owned or controlled, directly or indirectly, by RNYC. 2.19 "Trading Day" shall mean any day on which the New York Stock Exchange is open for trading. Section 3 - Restricted Stock Elections 3.1 Under the Plan, elections to receive Restricted Stock, as described in Section 3.2 below, may be made by any Participant. 3.2 Within the periods described below, any Participant may inform the Corporation in writing (the "Election") of the portion of the Participant's Deferred Compensation which the Participant elects to be treated as though constituted of cash (the "Cash Portion") and the portion of such Deferred Compensation with respect to which the Participant elects to receive in the form of Restricted Stock under Section 5.1 (the "Stock Portion"). The Participant must make an Election (a) within thirty (30) days of the Adoption Date, with respect to any Deferred Compensation the Participant is entitled to on the Adoption Date, and (b) with respect to Deferred Compensation the Participant shall become entitled to after the Adoption Date, within fifteen (15) days after the Participant's receipt of notice from the Corporation setting forth the amount of the Participant's Deferred Compensation in respect of the most recent period under the Participant's Plan (or, in the event the Participant shall object in conformity with the provisions of the Participant's Plan to the information in such notice, within fifteen (15) days after the final determination of such amount). The Election, once made by the Participant, shall be irrevocable. The Election to receive Restricted Stock shall be deemed to represent the Participant's relinquishment of his rights to the payment in cash of such Deferred Compensation as consideration for the issuance of the Restricted Stock. 3.3 Notwithstanding the foregoing, no Election may be made pursuant to Sections 3.1 and 3.2 if the number of shares to be issued under Section 5.1 pursuant to such Election would be in excess of the number of shares of Stock remaining available under Section 6. 2 Section 4 - Increases and Decreases of Stock and Cash Portions After an Election 4.1 After an Election, the Cash Portion shall be increased if, and to the extent, then provided by the Participant's Plan. After an Election, the Stock Portion shall be subject to the provisions of the Plan and, except as provided in Section 4.2, shall not be subject to the provisions of the Participant's Plan. 4.2 Any decrease in accrued Deferred Compensation pursuant to the Participant's Plan for any period following an Election shall be allocated between the Cash Portion and the Stock Portion in proportion to their relative values, resulting in a reduction in the amount of the deemed cash in the Cash Portion and a reduction in the number of shares of Restricted Stock in the Stock Portion. If a fraction of a share would result from any such reduction in the number of shares, the number of shares shall be revised to the next lower whole number of shares and an appropriate adjustment shall be made to the Cash Portion. The value of the Stock Portion for this purpose shall be equal to the product of (a) the number of shares of Restricted Stock in the Stock Portion, multiplied by (b) the Market Value of the Stock on the last day of the period under the Participant's Plan in which the decrease in Deferred Compensation occurred. In the case of any reduction in the number of shares of Restricted Stock in the Stock Portion pursuant to this Section 4.2, the amount of shares represented by the reduction shall be forfeited by Participant and cancelled by the Corporation. Section 5 - Restricted Stock 5.1 (a) A Participant who has made an Election shall receive that number of shares of Restricted Stock equal to the quotient of (i) the dollar value of the Stock Portion, divided by (ii) the Market Value of the Stock as of the date of the Participant's Election. If a fraction of a share would result from such computation, the number of shares shall be revised to the next lower whole number of shares and, if there is a Cash Portion, an appropriate adjustment shall be made to the Cash Portion. (b) For the purposes of the computations under this Section 5.1, if a Participant shall be issued a share of Restricted Stock which the Committee determines is a share acquired by the Corporation during the three week period prior to such issuance, the Market Value of such share shall mean the Corporation's purchase price (including any applicable commissions and other such costs for such share). Notwithstanding the foregoing or the definition of Market Value under Section 2.8, the Market Value for purposes of the computations under this Section 5.1 shall not be less that one hundred and thirty percent (130%) of the book value per share of Stock (determined in accordance with RNYC's generally utilized accounting principles) as of the end of the quarter prior to the date in which the Market Value is to be determined. 5.2 Prior to the issuance of Restricted Stock by the Corporation, the Participant shall, subject to the terms of this Plan, enter into an agreement with the Corporation in a form specified by the Committee, agreeing to the terms and conditions of the issuance and to such other matters as the Committee shall have determined in its sole discretion. 5.3 Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered during the Restricted Period applicable to such shares, except as hereinafter provided. Except for such restrictions, the Participant, as owner of such shares, shall have all the rights of a stockholder, including (but not limited to) the right to vote such shares. Notwithstanding the foregoing, the Participant's right to receive dividends declared with respect to such shares shall be subject to the provisions of Sections 5.5 and 5.10. 3 5.4 Shares of Restricted Stock shall be deemed issued on the close of business on the fifth Trading Day commencing with the date on which the Market Value of such shares is determined or, if such day is not a Trading Day, on the first Trading Day thereafter. Any Restricted Stock granted under this Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. If any stock certificate is issued in respect of shares of Restricted Stock granted under this Plan, such certificate shall be registered in the name of the Participant, shall be deposited by him with the Corporation together with a stock power endorsed in blank and shall bear the following (or a similar legend): "The transferability of the shares of stock represented hereby is subject to the terms and conditions (including forfeiture) contained in Section 5 of the Restricted Stock Election Plan of Republic New York Corporation and Subsidiaries and an Agreement entered into between the registered owner and Republic New York Corporation. A copy of such Plan and Agreement is on file in the Office of the Secretary of Republic New York Corporation at the principal office of such Corporation in New York." 5.5 (a) At the time a Participant makes an Election, the Participant shall also elect either (i) to reinvest cash dividends with respect to the Restricted Stock to be received pursuant to that Election or (ii) to be paid such cash dividends. The election under this Section 5.5(a), once made, shall be irrevocable. (b) A Participant who elects under Section 5.5(a) to reinvest cash dividends shall receive upon such reinvestment that number of shares of Restricted Stock equal to the quotient of (i) the cash dividends declared with respect to the Participant's then outstanding Restricted Stock, divided by (ii) the Market Value of the Stock as of the ex-dividend date. If a fraction of a share would result from such computation, the number of shares shall be revised to the next lower whole number of shares and, if there is a Cash Portion, an appropriate adjustment shall be made to the Cash Portion. Restricted Stock issued under this Section 5.5 shall be subject to the same restrictions as the underlying Restricted Stock and shall, if represented by a certificate, be deposited with the Corporation pursuant to Section 5.4. (c) If a Participant shall be issued a share of Restricted Stock under this Section 5.5 which the Committee determines is a share acquired by the Corporation during the three week period prior to such issuance, the Market Value of such share for purposes of computations under Section 5.5(b) shall mean the Corporation's purchase price (including any applicable commissions and other such costs for such share), and an appropriate adjustment shall be made to the number of Shares of Restricted Stock to be received under this Section 5.5. 5.6 If a Participant ceases to be an employee of the Corporation for any reason other than death or disability, all shares of Restricted Stock theretofore issued to him shall, upon such cessation of employment, be forfeited and cancelled by the Corporation. 5.7 If a Participant ceases to be an employee of the Corporation by reason of death or disability, and the period, if any, during which there may be a decrease in the Participant's accrued Deferred Compensation under the Participant's Plan has expired, then any shares of Restricted Stock owned by such Participant shall become free of the restrictions imposed by Section 5.3, and the Corporation will deliver to him (or his legal representative, beneficiary or heir) pursuant to Section 5.8, within 60 days after cessation of employment, shares of Stock. If any period during which there may be a decrease in the Participant's accrued Deferred Compensation has not expired, 4 then any shares of Restricted Stock owned by such Participant shall become free of the restrictions imposed by Section 5.3 upon the expiration of such period, and the Corporation will deliver to him (or his legal representative, beneficiary or heir) pursuant to Section 5.8, within 60 days after expiration of such period, shares of Stock. 5.8 As and when the Restricted Period expires, the Corporation shall deliver to the Participant (or his legal representative, beneficiary or heir) a certificate, without the legend referred to in Section 5.4, representing the number of shares of Stock equal to the number of shares of Restricted Stock deposited with it by the Participant pursuant to Section 5.4, as to which the Restricted Period has expired. When all restrictions have expired, the agreement referred to in Section 5.2 shall be terminated. 5.9 The shares of Restricted Stock issued under the Plan shall be shares of Stock and may be authorized but unissued shares, authorized and unissued shares reserved for issuance or shares acquired by the Corporation and held in its treasury, as the Committee may from time to time determine. 5.10 In the event of any change in the outstanding shares of Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares which may be issued under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of Stock or other securities received by a Participant with respect to shares of Restricted Stock will be subject to the same restrictions and shall, if represented by a certificate, be deposited with the Corporation. 5.11 If the Corporation shall be reorganized with or into another corporation, each Participant who has received Restricted Stock shall be required to deposit with the surviving corporation the stock, securities or other property that he is entitled to receive by reason of his ownership of Restricted Stock, and such stock, securities or other property shall become subject to the restrictions imposed by Section 5.3 and shall, if represented by a certificate, bear an appropriate legend similar in form and substance to the legend set forth in Section 5.4. Section 6 - Amount of Shares Subject to the provisions of Section 5.10, no more than 375,000 shares of Stock may be issued under Section 5.1 during the period ending on December 31, 2002; provided that any shares of Restricted Stock that have been forfeited pursuant to Section 5.6 or 5.7 shall be restored to the status of authorized and unissued shares reserved for issuance pursuant to the Plan. The number of shares of Stock that may be issued under Section 5.5 shall not be limited. Section 7 - Administration 7.1 The Plan shall be administered by the Committee. A member of the Committee shall not participate in any decision directly related to such member's participation in the Plan. Any member of the Committee may resign at any time. The Board of Directors may remove any member of the Committee at any time and may fill any vacancy in the Committee. 7.2 The Committee shall have the exclusive power to select the Participants in the Plan solely from those employees of the Corporation who are on the Adoption Date or who thereafter become entitled to receive Deferred Compensation. The Committee shall notify each Participant in writing of his status as a Participant within a reasonable time after his selection. 5 7.3 The Committee also shall have the exclusive power to determine the Restricted Stock; provided, however, that if a Participant's Plan provides for a decrease or adjustment in the accrued Deferred Compensation of a Participant for any period following an Election, the Restricted Period for Restricted Stock issued to such Participant shall not be less than the period during which such decrease or adjustment may occur. The Committee shall notify a Participant in writing of the Restricted Period within the period during which the Participant is entitled to make an Election hereunder. 7.4 The Committee's interpretation of the Plan shall be final and binding on each and every Participant. 7.5 The Committee shall have the authority to establish, adopt or revise such rules or regulations relating to the Plan as it may deem necessary or advisable for the administration of the Plan. 7.6 All determinations by the Committee as to the Market Value and number of shares issued from time to time pursuant to this Plan shall be, in the absence of manifest error, binding on the Participants. Section 8 - Allocation of Expenses The Committee shall from time to time make such allocations of the expense of Restricted Stock issued pursuant to the Plan among RNYC and its Subsidiaries as it shall deem appropriate. Section 9 - Effective Date of Plan; Amendment or Termination 9.1 The Plan shall become effective upon adoption by the Board of Directors. The Plan shall be subject to approval by the affirmative vote of the holders of a majority of the outstanding shares of Stock within one year following adoption of the Plan by the Board of Directors, and all Restricted Stock issued prior to such approval shall be subject thereto. In the event such approval is withheld, all shares of Restricted Stock which may have been issued hereunder shall be forfeited by the Participant and cancelled by the Corporation, and the Plan and all Elections shall become null and void. In addition, in the event such approval is withheld, a Participant's Deferred Compensation shall be treated as if it had been continuously subject to the Participant's Plan. 9.2 The Board of Directors may amend any provision of the Plan at any time; provided, however, that without the approval of holders of the Common Stock, no amendment may be made that would increase the maximum number of shares to be issued under the Plan during the period ending on December 31, 1997 or extend such period. The Board of Directors shall also have the right to terminate the Plan at any time. Except with the consent of the Participant, no amendment, suspension or termination shall impair the rights of any Participant in any Stock or Restricted Stock issued to such Participant under the Plan. Section 10 - Miscellaneous 10.1 The fact that an employee is a Participant shall not confer on him any right to be retained in the employ of the Corporation. 10.2 No issuance of Stock under this Plan shall be taken into account in determining a Participant's compensation for the purpose of any group life insurance or other employee benefit plan. 6 10.3 This Plan shall not be deemed an exclusive method of providing incentive compensation for the employees of the Corporation, nor shall it preclude the Board of Directors from authorizing or approving other forms of incentive compensation. 10.4 All expenses and costs in connection with the operation of the Plan shall be borne by the Corporation. 10.5 The Corporation shall have the right to collect the amount of any taxes required by law to be withheld by the Corporation under applicable income tax laws from a Participant by reason of such Participant's election to receive Restricted Stock in lieu of Deferred Compensation under the Plan. If directed by a Participant, the Corporation may withhold and collect the amount of any additional taxes in excess of the rate mandated by law which the Participant may be obligated to pay in respect of any such election under the Plan. The Committee, in its sole discretion, may allow an eligible Participant (or such Participant's legal representative, beneficiary or heir) to elect to satisfy such obligation in whole or in part by electing (1) to have the Corporation withhold a portion of the Stock that would otherwise be delivered to the Participant (or to the Participant's legal representative, beneficiary or heir) or (2) to unconditionally agree to deliver Stock already owned by such Participant having a fair market value equal to the amount of such taxes. The fair market value of the shares to be withheld or delivered, as the case may be, shall be the average of the highest and lowest sale price of the Stock on the New York Stock Exchange Composite Tape on the date that the amount of the tax to be withheld shall be determined. 7 -----END PRIVACY-ENHANCED MESSAGE-----