-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QvLiFKWeA3017Nt0dJE0HDNc99LeDCBxuNrZDg+wRcNGz4uoFAjkFwSYMaaD4TU9 5r18NP1IvDpy4WQe3kCP1A== 0000083246-95-000008.txt : 19950615 0000083246-95-000008.hdr.sgml : 19950615 ACCESSION NUMBER: 0000083246-95-000008 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950516 FILED AS OF DATE: 19950315 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: 95521067 BUSINESS ADDRESS: STREET 1: 452 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2125256100 DEF 14A 1 MARCH 15, 1995 PROXY STATMENT PROXY STATMENT 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 Specified in its 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) Payment of Filing Fee (Check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) [LOGO] REPUBLIC NEW YORK CORPORATION 452 Fifth Avenue New York, New York 10018 March 15, 1995 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 Tuesday, May 16, 1995 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 1994 Annual Report of Republic New York Corporation. Very truly yours, Walter H. Weiner, Chairman of the Board [LOGO] REPUBLIC NEW YORK CORPORATION 452 Fifth Avenue New York, New York 10018 ______________________ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS May 16, 1995 ______________________ 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 Tuesday, May 16, 1995 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 1995 Long-Term Incentive Stock Plan; 3. Approval of selection of auditors; and 4. 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 8, 1995. By Order of the Board of Directors, WILLIAM F. ROSENBLUM, JR., Senior Vice President and Corporate Secretary March 15, 1995 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. REPUBLIC NEW YORK CORPORATION 452 Fifth Avenue New York, New York 10018 ________________ PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS May 16, 1995 ________________ 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 16, 1995. 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 8, 1995. At such date, 52,260,388 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 to Republic Corporation stockholders on March 15, 1995. 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 nineteen. If elected, each nominee will serve until the next Annual Meeting of Stockholders and until the election and qualification of his or her successor. Each of the nominees named below is presently a director of Republic Corporation and, with the exception of Peter J. Mansbach, was elected to such office at last year's Annual Meeting. Mr. Mansbach was elected a director on July 20, 1994 at a regular 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") and Republic Bank for Savings ("RBS"), Republic Corporation's principal subsidiaries) and the number of shares of Republic Corporation's Common Stock beneficially owned by each, as of December 31, 1994.
Beneficial Director Ownership of Nominee and Age Since Principal Occupation Shares Kurt Andersen . . . 1988 Executive Vice President of Republic Bank, 29,025 shs. 50 years Regional (Far East) General Manager and Manager of Republic Bank's Hong Kong Branch and Manager of Republic Bank's wholly-owned subsidiary in Singapore. Director of Republic Bank since 1991. Cyril S. Dwek . . . 1974 Vice Chairman of the Board of Republic 64,894 shs. 58 years Bank and Vice Chairman of Republic Cor- poration. Director of Republic Bank and director of RBS since 1990. Ernest Ginsberg . . 1985 Vice Chairman of the Board of Republic 21,148 shs. 63 years Bank and Vice Chairman (and General Counsel until April 1994) of Republic Corporation. Director of Republic Bank and of RBS. Nathan Hasson . . . . . . 1993 Vice Chairman of the Board and Treasurer 22,887 shs. 49 years of Republic Bank and Vice Chairman of Republic Corporation since January, 1993. Director of Republic Bank and director of RBS since 1990. Jeffrey C. Keil . . . . 1978 Vice Chairman of the Board of Republic 14,167 shs. 51 years Bank and President of Republic Corpora- tion. Director of Republic Bank and of RBS. Peter Kimmelman . . . . 1979 A private investor. Director of Republic 2,362 shs. 50 years Bank and of RBS. Leonard Lieberman . . 1990 A director (and Chairman, President and 750 shs. 65 years Chief Executive Officer, from January 1991 to May 1991) of Outlet Communi- cations, Inc. Director of Republic Bank since 1990 and of RBS since 1992. Also a director 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. 81 years Inc., an investment banking firm. Also a director of Financial Federal Corporation. Director of Republic Bank and of RBS. Peter J. Mansbach . . . . . 1994 Chairman of the Executive Committee of the 21,100 shs. 54 years Board of Directors of Republic Corporation 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 Chairman of the Executive Committee of 7,500 shs. 69 years RBS since May 1990. Director of Republic Bank and of RBS. James L. Morice . . . . . 1987 Partner, Mirtz Morice, Inc., a management 330 shs. 57 years consulting firm. Director of Republic Bank and of RBS. E. Daniel Morris. . . . . 1993 Chairman of the Board of Republic New York 1,000 shs. 53 years Trust Company of Florida, N.A., a wholly- owned subsidiary of Republic Corporation, since January 1995. Prior thereto, 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. President of Corsair Capital Corporation, a private investment bank, 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. Janet L. Norwood . . . . 1992 Senior Fellow of The Urban Institute, a research 750 shs. 71 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 104,250 shs. 65 years Officer of RBS since May 1990 (and President from May 1990 to March 1991). Vice Chairman of the Board of Republic Bank since March 1991 and Vice Chairman of Republic Corporation since April 1991. Director of Republic Bank since 1990 and of RBS since 1990. Vito S. Portera . . . . . . 1986 Vice Chairman of Republic Corporation and 27,254 shs. 52 years Vice Chairman of the Boards of Republic Bank and RBS. Director of Republic Bank. Also, Chairman of the Board of Republic International Bank of New York, the Miami, Florida Edge Act subsidiary of Republic Bank. William P. Rogers . . . . . 1989 Senior Partner, Rogers & Wells, attorneys. 30,000 shs. 81 years Director of Republic Bank. Dov C. Schlein . . . . . . 1987 President of Republic Bank and Vice Chair- 21,850 shs. 47 years man of Republic Corporation. Director of Republic Bank and of RBS. Walter H. Weiner . . . . . 1978 Chairman of the Board and Chief Executive 46,380 shs. 64 years Officer of Republic Bank and Republic Corporation. Director of Republic Bank and of RBS. Peter White . . . . . . . . 1974 Senior Consultant to Republic Bank. 33,256 shs. 92 years Director of Republic Bank. _____________ No director's ownership of shares of Common Stock exceeded one percent (1%) of the outstanding shares of such class. Includes 10,000 shares for Kurt Andersen, 13,250 shares for Ernest Ginsberg, 13,437 shares for Nathan Hasson, 5,000 shares for Jeffrey C. Keil, 21,000 for Peter J. Mansbach, 54,100 shares for John A. Pancetti, 11,000 shares for Vito S. Portera,14,500 shares for Dov C. Schlein and 10,000 shares for Walter H. Weiner which were awarded pursuant to Republic Corporation's 1985 Restricted Stock Plan and which are subject to a substantial risk of forfeiture for various restricted periods, the latest of which expires on January 15, 1999. Includes 7,898 shares which Mr. Ginsberg owns jointly with his wife. Includes 9,450 shares which Mr. Hasson owns jointly with his wife. Includes 6,467 shares allocated to the Republic New York Corporation Common Stock Fund in Mr. Keil's account under Republic Bank's Profit Sharing and Savings Plan. Includes 337 shares owned by Mr. Kimmelman's wife in which he disclaims any beneficial interest. Includes 30 shares owned by Mr. Morice's son in which he disclaims any beneficial interest. Includes 50,000 shares which Mr. Pancetti owns jointly with his wife. Includes 7,350 shares which Mr. Schlein owns jointly with his wife. Includes 25,949 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. 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, 1994, all nominees as a group beneficially owned 455,605 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 Filings. 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 by Peter J. Mansbach in November 1994 for a purchase of stock of the Corporation in August 1994. Directors' Committees The Board of Directors of Republic Corporation has established Audit, Community Reinvestment Act, Credit Review, Employee Compensation and Benefits, Executive, Finance, Investment, Nominating, Public Responsibility and Risk Assessment Committees. The Audit Committee of the Board of Directors of Republic Corporation, consisting of Morris Hirsch(*), 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 1994, the Audit Committee held eight meetings and took action once by Unanimous Written Consent. The Community Reinvestment Act Committee, consisting of Albert S. Corwen(*), 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 and RBS, including the review and supervision of Republic Corporation's compliance with the respective Community Reinvestment Acts of the federal government and the State of New York. During 1994, the Community Reinvestment Act Committee held eleven meetings. The Credit Review Committee, consisting of Morris Hirsch, 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 1994, the Credit Review Committee held nine meetings. The Employee Compensation and Benefits Committee, composed of three outside directors, Peter Kimmelman, James L. Morice (Chairman) and Wilbur M. Rabinowitz(*), oversees the compensation for officers and employees of Republic Corporation and its subsidiaries. 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 1994, the Employee Compensation and Benefits Committee held ten meetings. The Executive Committee, consisting of Peter J. Mansbach (Chairman), Peter Kimmelman, William C. MacMillen, Jr. 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 1994, the Executive Committee held six meetings and took action eleven times by Unanimous Written Consent. The Finance Committee, consisting of Jeffrey C. Keil (Chairman), 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 1994, the Finance Committee did not hold any meetings but instead took action twice by Unanimous Written Consent. The Investment Committee, consisting of Morris Hirsch, Peter Kimmelman, Leonard Lieberman (Chairman), E. Daniel Morris, Janet L. Norwood and John A. Pancetti, and Mr. Keil as an ex-officio member, authorizes and supervises Republic Corporation's investments in securities and other property. During 1994, the Investment Committee held eleven meetings. The Nominating Committee consists of Wilbur M. Rabinowitz, 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 in March 1995 to consider and recommend the slate of nominees presented to the 1995 Annual Meeting of Stockholders. The Public Responsibility Committee consists of Ernest Ginsberg, Leonard Lieberman, Javier Perez de Cuellar(*), Wilbur M. Rabinowitz and William P. Rogers (Chairman). 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 1994, the Public Responsibility Committee held five 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. Portera, 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 1994, the Risk Assessment Committee held eleven meetings. During 1994, Republic Corporation's Board of Directors held five meetings. With the exception of Messrs. Hasson, Perez de Cuellar, Rogers and Jacques Tawil(*), each director attended 75 percent or more of the aggregate number of meetings held during 1994 of the Board of Directors of Republic Corporation and the committees thereof, if any, on which he or she served. __________ (*) Not standing for reelection to the Board of Directors. Compensation of Directors and Executive Officers Director 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 the 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 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, 1994, directors of Republic Corporation who were not officers received retainer and meeting fees from Republic Corporation ag- gregating $134,600. In addition, in connection with services provided as a director, consulting fees were paid in 1994 to Morris Hirsch in the amount of $100,000, Janet L. Norwood in the amount of $50,000, Jacques Tawil in the amount of $100,000 and Peter White in the amount of $59,838. In lieu of directors' fees, William P. Rogers received an aggregate of $150,000 for the fiscal year ended December 31, 1994 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 Compensation Committee Report Strategy. Since 1980, when Walter H. Weiner became Chief Executive Officer, Republic Corporation has developed an overall compensation strategy that bases a 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") 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"). The Compensation 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 14 and 16 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. In connection with implementing this strategy, Republic Corporation has a policy of maintaining base salaries for executive officers at a constant level and uses the bonus to reflect each executive officer's contribution to Republic Corporation's performance. Stock Performance Graphs. The five-year comparative stock performance graph on page 14 is included as required by Securities and Exchange Commission rules. As explained in the preceding paragraph, the Compensation 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 Compensation Committee's view is that the graph on page 16 of the twenty-five year comparative stock performance gives 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. Deductibility. In order to comply with Section 162(m) of the Internal Revenue Code governing the deductibility of annual executive officer compensation above $1 million, the Board of Directors of Republic Corporation adopted, and the shareholders approved at the April 1994 Annual Meeting, the Performance Based Plan. In addition, Republic Corporation has entered into agreements with such officers to defer any future annual compensation in excess of the $1 million limitation, should it become necessary to do so. Chief Executive Officer's Compensation for 1994. Since becoming Chief Executive Officer of Republic Corporation in January 1980, Mr. Weiner's base salary has remained the same 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 was originally based on certain provisions that existed in his employment agreement, which expired by its terms on December 31, 1989. In 1994, the Compensation Committee granted Mr. Weiner an award under the Performance Based Plan which effectively continued this arrangement. Pursuant to such award, Mr. Weiner's performance-based bonus in 1994 of $1,035,000 was determined by multiplying $4.39 (the amount by which the earnings per share for 1994 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 considering Mr. Weiner's performance, the Compensation Committee also awarded him 5,000 shares of restricted stock pursuant to the terms of Republic Corporation's 1985 Restricted Stock Plan when it met in March 1995 to consider restricted stock awards for the executive officers based on performance in 1994. In 1994, the Committee awarded 5,000 shares of restricted stock to Mr. Weiner for his performance in 1993. The decisions to grant such awards, including the determination of the sizes thereof, were based on the Committee's subjective evaluations of Mr. Weiner's contribution toward Republic Corporation's success in expanding its income, client base and products and its overall performance in 1993 and 1994. Compensation Policies Applicable to Executive Officers for 1994. The Performance Based Plan also determined the 1994 performance-based bonus compensation of the executive officers below the level of Chief Executive Officer. By using the increase in earnings per share as the basis of determining this portion of the annual bonuses below the level of Chief Executive Officer, Republic Corporation is giving recognition to the fact that the management is shared by the Chief Executive Officer and the other 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. The Compensation Committee awarded an amount of notional shares for each executive officer pursuant to the Performance Based Plan which took into consideration each such relationship, which was then multiplied by the increase in earnings per share in 1994 over the base year established by the Committee (i.e., 1979), as was the case for the Chief Executive Officer. The Committee also considered the recommendations of the Chief Executive Officer, which, in this regard, were part of a subjective evaluation of the performance of the individual executive officer and the relevant business units, in determining a supplemental annual bonus for executive officers below the level of Chief Executive Officer. The Committee may award all or part of either the plan-based or supplemental portion of the bonus in the form of restricted stock. The restricted stock awarded in March 1995 will be issued pursuant to the terms of Republic Corporation's 1985 Restricted Stock Plan. The restricted stock award to Mr. Keil made by the Compensation Committee in March 1995, including the determination of the size thereof, was based on the subjective evaluation by the Chief Executive Officer and the Compensation Committee of his individual performance in 1994. A portion of the restricted stock awards received by Messrs. Portera and Schlein in March 1995 was based on the subjective evaluation by the Chief Executive Officer and the Compensation Committee of their individual performances in 1994, and a portion of such awards was made in connection with amounts payable related to corporate performance in 1994 pursuant to the Performance Based Plan. The restricted stock awarded in May 1994, to Messrs. Keil, Portera and Schlein was awarded pursuant to the terms of the 1985 Restricted Stock Plan and such awards, including the determination of the size thereof, were based on the subjective evaluation by the Chief Executive Officer and the Compensation Committee of their individual performances in 1993. In determining the restricted stock awards, the Chief Executive Officer and the Compensation Committee also considered each executive officer's total compensation for the previous three years. 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 1994, approximately 75% of the executive compensation of the Chief Executive Officer and the executive officers below the level of the Chief Executive Officer consisted of these variable performance-related elements. The Compensation 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. In addition, taking into account Republic Corporation's efforts to control expenses, and in recognition of management's cautious approach to uncertainties in the coming year, the Compensation Committee determined that it was appropriate that Mr. Weiner's and the other executive officers' total compensation decrease from 1993 levels. Thus, even though earnings per share increased by 9% in 1994, Mr. Weiner's total compensation for 1994 decreased 12.1% from 1993 levels and aggregate total compensation for the other executive officers decreased 10.9% from 1993 levels. JAMES L. MORICE, Chairman PETER KIMMELMAN WILBUR M. RABINOWITZ (*) __________ (*) Not standing for reelection to the Board of Directors. 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 Salary ($) Bonus ($) Awards ($) Compensation ($) - --------------------------- ---- ---------- --------- ---------------------- -------------------- Walter H. Weiner 1994 220,750 1,035,000 240,625 7,763 Chairman of the Board and 1993 220,750 1,255,000 228,437 7,763 Chief Executive Officer of 1992 220,750 732,375 248,750 7,763 Republic Corporation and of Republic Bank Jeffrey C. Keil 1994 220,000 1,035,000 240,625 7,763 President of Republic Cor- 1993 220,000 1,388,000 228,437 7,763 poration and Vice Chair- 1992 220,000 1,162,862 - 7,763 man of the Board of Republic Bank Dov C. Schlein 1994 200,000 730,000 240,625 7,763 Vice Chairman of Republic 1993 200,000 850,000 228,437 7,763 Corporation and President 1992 200,000 650,000 248,750 7,763 of Republic Bank Cyril S. Dwek 1994 250,000 700,000 - 7,763 Vice Chairman of Republic 1993 200,000 775,000 - 7,763 Corporation and Vice 1992 200,000 525,000 - 7,763 Chairman of the Board of Republic Bank Vito S. Portera 1994 300,000 450,000 192,500 7,763 Vice Chairman of Republic 1993 300,000 550,000 182,750 7,763 Corporation and Vice 1992 300,000 425,000 199,000 7,763 Chairman of the Boards of Republic Bank and of RBS __________________________________ Awards of restricted stock have been made pursuant to the terms of Republic Corporation's 1985 Restricted Stock Plan to Walter H. Weiner, Jeffrey C. Keil, Dov C. Schlein and Vito S. Portera. As of December 31, 1994, Mr. Weiner owned an aggregate of 10,000 restricted shares (5,000 of which were awarded on May 17, 1994 for 1993 performance, and 5,000 of which were awarded on April 21, 1993 for 1992 performance), Mr. Keil owned an aggregate of 5,000 restricted shares (all of which were awarded on May 17, 1994 for 1993 performance), Mr. Schlein owned an aggregate of 14,500 restricted shares (including 5,000 shares awarded on May 17, 1994 for 1993 performance and 5,000 shares awarded on April 21, 1993 for 1992 performance), and Mr. Portera owned an aggregate of 11,000 restricted shares (of which 4,000 shares were awarded on August 1, 1994 for 1993 performance and 4,000 shares were awarded on April 21, 1993 for 1992 performance). The value of these restricted shares 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. At December 31, 1994, such shares of restricted stock awarded to Messrs. Weiner, Keil, Schlein and Portera had an aggregate value of $452,500, $226,250, $656,125, and $497,750, respectively. Pursuant to the terms of Republic Corporation's 1985 Restricted Stock Plan, participants in such Plan receive all dividends paid on their shares of restricted stock, or may be given the option by the Compensation Committee to elect to receive additional restricted shares in lieu of such dividend payments. Under the 1995 Long-Term Incentive Stock Plan, participants will continue to receive all dividends paid on their restricted shares, or may be given the option by the Compensation Committee to elect to receive additional restricted shares in lieu of such dividend payments. Awards of restricted shares to executive officers for corporate or individual performance in 1994 under Republic Corporation's 1985 Restricted Stock Plan have been made by the Compensation Committee at a meeting on March 6, 1995. For 1994, a portion of Mr. Schlein's and Mr. Portera's restricted stock award constituted part of their Performance Based Plan compensation for such year. The compensation reported represents the amount of the annual company allocations under the Profit Sharing and Savings Plan. Each executive officer is fully vested in such amounts under the Plan.
Aggregated Fiscal Year End Option Values The following table sets forth the value of any unexercised options held by executive officers named in the Summary Compensation Table at December 31, 1994.
Number of Securities Value of Unexercised Underlying Unexercised In-the-Money Options Options at Fiscal Year End (#) at Fiscal Year End ($) Name Exercisable/Unexercisable Exercisable/Unexercisable Walter H. Weiner -0- -0- -0- -0- Jeffrey C. Keil -0- -0- -0- -0- Dov C. Schlein 22,500 -0- 486,877 -0- Cyril S. Dwek -0- -0- -0- -0- Vito S. Portera 11,250 -0- 243,439 -0- _____________________ Such options were granted at the market price on January 15, 1986 (the date of grant) pursuant to Republic Corporation's 1985 Incentive Stock Option Plan and 1985 Stock Option Plan. They became exercisable on January 15, 1991 and will continue to be exercisable as to all or any part thereof until January 15, 1996.
Pension Plan The following table sets forth the estimated annual benefits payable upon retirement at age 65 in 1995 pursuant to Republic Bank's Retire- ment 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 . . . . . . . . $29,931 $39,908 $49,885 $59,862 $62,987 150,000 . . . . . . . 36,306 48,408 60,510 72,612 76,362 175,000 . . . . . 36,306 48,408 60,510 72,612 76,362 200,000 . . . . . 36,306 48,408 60,510 72,612 76,362 225,000 . . . . . 36,306 48,408 60,510 72,612 76,362 250,000 . . . . . 36,306 48,408 60,510 72,612 76,362 300,000 . . . . . 36,306 48,408 60,510 72,612 76,362 400,000 . . . . . 36,306 48,408 60,510 72,612 76,362 450,000 . . . . . 36,306 48,408 60,510 72,612 76,362 500,000 . . . . . 36,306 48,408 60,510 72,612 76,362 ___________ During 1995, the maximum annual benefit as a result of the Tax Reform Act of 1986 is $120,000. These figures have been limited by the annual compensation cap of $150,000 in 1995 resulting from the Omnibus Budget and Reconciliation Act of 1993.
The amounts in the foregoing table do not reflect various survivorship options which participants 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 Walter H. Weiner . . . . 15 $240,000 Jeffrey C. Keil . . . . 20 240,000 Dov C. Schlein . . . . . 18 200,000 Cyril S. Dwek . . . . . 29 200,000 Vito S. Portera . . . . 26 300,000 _____________________ Such amounts are subject to an annual compensation cap of $150,000 for 1995 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 1995 is $25,920. Employment Agreements Vito S. Portera, a director and executive officer of Republic Corporation, has an employment agreement with Republic Corporation and Republic Bank dated as of May 27, 1988, as amended March 7, 1989. The agreement provides for a base annual salary of $300,000 ($100,000 of which is for Mr. Portera's continuing service as Chairman of the Board of Republic International Bank of New York, 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, 1994, Mr. Portera received a cash bonus of $450,000 (which amount is included in the Summary Compensation Table above). Also, pursuant to his agreement, in 1988, Mr. Portera was awarded 18,000 shares (27,000 shares after giving effect to the 3-for-2 stock split distributed in October 1991) of Restricted Stock with a five-year Restricted Period. For tax planning purposes, the end of such Restricted Period was accelerated to December 31, 1992 along with the Restricted Periods for certain awards of Restricted Stock to all senior officers of Republic Corporation. At such date, such shares had a fair market value of $1,262,250. 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. As of December 31, 1994, the outstanding principal amount of Mr. Portera's mortgage had been reduced to $488,611. Also, effective 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. Mr. Portera's agreement provides that its term will be automatically extended for three successive annual terms unless (i) Republic Corporation and Republic Bank elect not to extend Mr. Portera's employment for a successive term upon at least one year's written notice given prior to the commencement of such successive annual term or (ii) Mr. Portera elects not to extend his employment for a successive term upon at least six months' written notice given prior to the commence- ment of such successive annual term. In accordance with such provision, the term of Mr. Portera's agreement has been extended for two years until December 31, 1996. 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, 1989, and reinvestment of all dividends). [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: 12/31/89 $ 100 $ 100 $ 100 FYE 12/31/90 99 97 69 FYE 12/31/91 144 126 101 FYE 12/31/92 148 152 137 FYE 12/31/93 150 166 168 FYE 12/31/94 150 168 164
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 1969, 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, 1969, and reinvestment of all dividends as indicated under 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: 12/31/69 $ 100 $ 100 $ 100 FYE 12/31/70 129 104 108 FYE 12/31/71 132 119 122 FYE 12/31/72 241 142 159 FYE 12/31/73 138 121 179 FYE 12/31/74 84 89 121 FYE 12/31/75 95 122 132 FYE 12/31/76 141 151 157 FYE 12/31/77 141 139 131 FYE 12/31/78 195 148 141 FYE 12/31/79 227 175 158 FYE 12/31/80 559 232 190 FYE 12/31/81 716 220 218 FYE 12/31/82 750 267 272 FYE 12/31/83 748 327 304 FYE 12/31/84 846 347 355 FYE 12/31/85 1,127 457 522 FYE 12/31/86 1,948 541 604 FYE 12/31/87 1,545 569 445 FYE 12/31/88 1,530 664 587 FYE 12/31/89 1,881 874 720 FYE 12/31/90 1,867 847 497 FYE 12/31/91 2,708 1,105 725 FYE 12/31/92 2,780 1,325 986 FYE 12/31/93 2,825 1,447 1,213 FYE 12/31/94 2,815 1,466 1,184
[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.] Transactions with Management and Related Persons During 1994, 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 and RBS, 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 three executive officers (all of whom are also directors of Republic Corporation), outstanding in the aggregate principal amount of $2,809,564 as of December 31, 1994. Such loans were made at more favorable effective rates, including the waiver of "points", than were available to customers of Republic Bank and RBS 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, holds five European banks and its stock is held, as of December 31, 1994, by Republic Bank (48.8%), by Saban S.A. ("Saban"), a Panamanian corporation wholly-owned by Edmond J. Safra (20.7%), and by international investors (30.5%). 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, 1994, Safra Republic had total assets of $12.5 billion, total deposits of $9.4 billion and total stockholders' equity of approximately $1.2 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 1994 of approximately $7,949,000. 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, Keil and Weiner, who are directors and 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 arise 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. 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 shareholders. As of December 31, 1994, approximately 28.6% 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 $764,000 during 1994 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, 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, which are related through family members to Edmond J. Safra. Such relationships include credit transactions, deposit relationships, foreign exchange dealings, precious metals dealings, and securities clearing transactions. 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. Ownership of Voting Securities Certain Beneficial Owners Set forth below is certain information as of December 31, 1994 as to the persons who own, or 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 . . . . 15,032,812(a) 28.6% 2, Place du Lac Geneva, Switzerland Mellon Bank Corporation . . 4,052,000(b) 7.7% One Mellon Bank Center Pittsburgh, Pennsylvania 15258 ___________________ (a) Mr. Safra is the principal stockholder of Republic Corporation through his ownership of all the outstanding shares of Saban, which owns 15,003,036 shares of Republic Corporation (including 14,473,958 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. Mr. Safra, through Saban and RNYC Holdings Limited, has 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 lapses on April 28, 1995, unless extended. If all such shares of Common Stock were acquired, Mr. Safra would increase his ownership to approximately 32.5% of the Corporation's outstanding Common Stock. As of March 8, 1995, Mr. Safra had acquired 91,850 additional shares, bringing his stock ownership to 15,124,662 shares or 28.9% of the outstanding Common Stock. (b) Mellon Bank Corporation and various of its direct or indirect subsidiaries (including but not limited to the subsidiaries of The Boston Company, Inc.) beneficially own such shares of Republic Corporation in their various fiduciary capacities. As a result, another entity in every instance is entitled to dividends or proceeds of sale.
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, 1994, 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 (19 persons) . . 455,605 shs. .9% APPROVAL OF 1995 LONG-TERM INCENTIVE STOCK PLAN Description of 1995 Long-Term Incentive Stock Plan The following description of the Plan is a summary, does not purport to be detailed and is qualified in its entirety by reference to the provisions of the Plan itself. A copy of the Plan is attached hereto, and additional copies may be obtained by writing to the Corporate Secretary, Republic New York Corporation, 452 Fifth Avenue, New York, New York 10018. General. The Board of Directors has adopted the 1995 Long-Term Incentive Stock Plan (the "Plan") which is being submitted for the approval of the stockholders of Republic Corporation at this Annual Meeting. The Plan is designed to consolidate Republic Corporation's 1985 Incentive Stock Option Plan, 1985 Non-Qualified Stock Option Plan, and 1985 Restricted Stock Plan (together, the "Prior Plans") on an on- going basis and provides for the award of Incentive Stock Options, Non- Qualified Stock Options, Stock Appreciation Rights, Restricted Stock, and Phantom Stock (as such terms are defined below) and other stock- based awards (each, an "Award"), all on a stand-alone, combination or tandem basis, to eligible persons. (Awards previously granted under the Prior Plans will remain outstanding and be administered in compliance with the terms and conditions of the applicable Prior Plan.) Assuming stockholder approval, awards will be granted, beginning with the 1995 Plan Year. The Plan provides that it shall terminate on the tenth anniversary of its approval. Class of Persons Eligible to Receive Awards. The Plan 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. Participants in the Plan are also eligible to participate in Republic Corporation's other incentive compensation and bonus plans. Administration. The Plan will be administered by the Employee Compensa- tion and Benefits Committee (the "Committee") of the Board of Directors of Republic Corporation, the members of which will consist solely of members of the Board of Directors who are "disinterested persons" 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 Plan. The Plan provides that the Committee shall have full authority to (i) designate from among those eligible the persons who will participate in the Plan ("Participants"); (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of shares of Republic Corporation 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 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 action that the Committee deems necessary or desirable for the administration of the Plan. The Committee will 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 Republic Corporation or a subsidiary and to eliminate any conflict between such contract and the provisions of the Plan, subject to Rule 16b-3 and Section 162(m) of the Code and the rules and regulations promulgated thereunder. Material Features of the Plan. Options (each, an "Option") to purchase Shares, which may be non-qualified or incentive stock options, may be granted under the Plan 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 Plan), 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 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 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. 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 Plan 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 Plan. Subject to the terms of the Plan, the Committee shall determine the terms and conditions of such Awards at the time of grant. A Participant's rights and interests under the Plan (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. There will be 1,140,801 shares of Common Stock of Republic Corporation available for Awards pursuant to the Plan, representing the number of shares authorized for awards, but not presently awarded, under the Prior Plans. 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, shall reduce the number of shares remaining, with the exception that any Shares which are forfeited by the Participant in accordance with the terms of the Plan, 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 shall be 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 Plan is 100,000 Shares in total. Amendment and Termination. The Plan 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 Plan or, from time to time, modify or amend the Plan as it may deem advisable; provided, however, that the Board of Directors may not make any amendments to the Plan without stockholder approval where such approval is required to comply with Rule 16b-3 or any other applicable law, regulation or stock exchange rule; provided, further, however, that no such amendment or termination may affect the rights of a Participant under an outstanding Award without the consent of the Participant. Awards. Awards for the 1995 Plan Year, which are not currently determinable, are to be made at a meeting of the Committee scheduled to be held prior to May 16, 1995. Certain Federal Income Tax Consequences of Options. Certain of the federal income tax consequences to optionees and Republic Corporation of Options granted under the Plan 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 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 exercises such Non-Qualified Option, the employee will recognize ordinary compensation 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 approval of the 1995 Long-Term Incentive Stock Plan. Approval of the Plan 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 Plan, 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 28.9% of the outstanding Common Stock (see "Ownership of Voting Securities" above) as of the date hereof, has indicated his intention to vote his shares in favor of such approval. 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 and of RBS since 1987. 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 ques- tions 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 1996 Annual Meeting, such stockholder's proposal must be received by November 15, 1995 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. General Only stockholders of record at the close of business on March 8, 1995 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 approval of the 1995 Long-Term Incentive Plan and for approval of the selection of audi- tors. 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 15, 1995 New York, New York By Order of the Board of Directors, WILLIAM F. ROSENBLUM, JR., Senior Vice President and Corporate Secretary [Front Side] PROXY REPUBLIC NEW YORK CORPORATION PROXY Annual Meeting of Stockholders May 16, 1995 This Proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints, jointly and severally, Peter Kimmelman, James L. Morice and William C. MacMillen, Jr., 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 16, 1995, 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, and FOR Item 3 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] PLEASE MARK YOUR CHOICE ON ITEMS 1, 2, AND 3 LIKE THIS X IN BLUE OR BLACK INK. ____________________ ____________ ACCOUNT NUMBER COMMON The Board of Directors recommends a vote "FOR ALL NOMINEES" in Item 1. Item 1 -- Election of the following nominees as Directors: K. Andersen, C. Dwek, E. Ginsberg, N. Hasson, J. Keil, P. Kimmelman, L. Lieberman, W. MacMillen, P. Mansbach, M. Mertz, J. Morice, E. Daniel Morris, J. Norwood, J. Pancetti, V. Portera, W. Rogers, D. Schlein, W. Weiner, P. White. FOR WITHHOLD Withhold for the following only: (Write the ALL FOR ALL name of the nominee(s) in the space below) NOMINEES NOMINEES ____ _____ ____________________________________________ The Board of Directors recommends a vote "FOR" Item 2. Item 2 - Approval of 1995 Long-Term Incentive Stock Plan For Against Abstain ___ ___ ___ The Board of Directors recommends a vote "FOR" Item 3. Item 3 - Approval of selection of auditors For Against Abstain ___ ___ ___ I PLAN TO ATTEND MEETING ___ Receipt is hereby acknowledged of the Republic New York Corporation Notice of Meeting and Proxy Statement. Signature(s)___________________________________ Date_______________, 1995 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 16, 1995 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 14. 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 presention found immediately Stock Index and S&P Money Center preceding where the graph would Banks Index, omitted from page 16. appear. Proxy Statement Dated March 15, 1995 Republic New York Corporation EXHIBIT INDEX No. Exhibit Description 99 1995 Long-Term Incentive Stock Plan EX-99 2 LONG-TERM INCENTIVE STOCK PLAN EXHIBIT A 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 members of the Board of Directors who are "disinterested persons" within the meaning of Rule l6b-3 and are "outside directors" for purposes of Section 162(m)(4)(C) of the Code. (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 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 Rule 16b-3 and 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, to the extent permitted by Rule 16b-3. (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 1,140,800 Shares. (b) Subject to Section 4(a) hereof and to the restrictions imposed by Rule 16b-3 and 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 cancelled, 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 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 cancelled 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 cancelled and terminated forthwith. After such three-month period, such Option to the extent otherwise outstanding shall be deemed cancelled 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 cancelled 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, to the extent permitted by Rule 16b-3, 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 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 cancelled 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 (to the extent permitted by Rule 16b-3) 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 cancelled 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 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. 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. (iv) Registration. Any Restricted Stock granted under the 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 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 the foregoing and to the extent permitted by Rule 16b-3, 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, including, without limitation, the imposition of conditions intended to avoid liability against the individual under Section 16(b) of the Exchange Act. (d) Restrictions on Sale and Exercise. With respect to officers of the Company, for purposes of Section 16 of the Exchange Act, and if required to comply with such Act and the rules promulgated thereunder, no Share acquired by such person pursuant to the grant of any Award or the exercise or redemption thereof, as the case may be, may be sold until after six months from the date of the grant of the Award. (e) 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. (f) 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. (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 Rule 16b-3 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 Rule 16b-3 and 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, including, with respect to those Participants who are officers for purposes of Section 16 of the Exchange Act, Rule 16b-3. 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 (including Rule 16b-3), 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 (including Rule l6b-3) 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. (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. -----END PRIVACY-ENHANCED MESSAGE-----