SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the
Registrant
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Filed by a
Party other than the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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Clifton Bancorp Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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June 29, 2016
Dear Stockholder:
You are cordially invited to
attend the annual meeting of stockholders of Clifton Bancorp Inc. We will hold the meeting at The Venetian, located at 546 River Drive, Garfield, New Jersey, on August 10, 2016 at 9:00 a.m., local time.
The notice of annual meeting and proxy statement appearing on the following pages describe the formal business to be transacted at the
meeting. Directors and officers of the Company, as well as a representative of BDO USA, LLP, the Companys independent registered public accounting firm, will be present to respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting, whether or not you attend the meeting in person and regardless of the number
of shares you own. To make sure your shares are represented, we urge you to vote via the Internet, telephone or mail. If you attend the meeting, you may vote in person even if you have previously voted via the Internet or telephone or have
previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
Paul M. Aguggia
Chairman, President and Chief Executive Officer
CLIFTON BANCORP INC.
1433 Van Houten Avenue
Clifton, New Jersey 07015
(973) 473-2200
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
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TIME AND DATE
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9:00 a.m. on Wednesday, August 10, 2016
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PLACE
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The Venetian, 546 River Drive, Garfield, New Jersey
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ITEMS OF BUSINESS
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(1)
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The election of two directors to serve for a term of three years and one director to serve for a term of one year;
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(2)
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The ratification of the appointment of BDO USA, LLP as independent registered public accounting firm for the Company for the fiscal year ending March 31, 2017;
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(3)
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An advisory vote on the compensation of the Companys named executive officers as disclosed in this proxy statement; and
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(4)
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Such other business that may properly come before the meeting or any postponements or adjournments of the meeting. Note: The Board of Directors is not aware of any other business to come before the meeting.
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RECORD DATE
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In order to vote, you must have been a stockholder at the close of business on June 17, 2016.
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PROXY VOTING
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It is important that your shares be represented and voted at the meeting. You can vote your shares via the Internet or telephone, or by completing and mailing a proxy card or voting instruction card. You can revoke a
proxy at any time before its exercise at the meeting by following the instructions in the proxy statement.
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BY ORDER OF THE BOARD OF DIRECTORS
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Bart DAmbra
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Executive Vice President and Corporate Secretary
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Clifton, New Jersey
June 29, 2016
NOTE: Whether or not you plan to attend
the annual meeting, please vote via the Internet, by telephone or by completing and mailing a proxy card promptly.
CLIFTON BANCORP INC.
PROXY STATEMENT
GENERAL INFORMATION
We are providing this proxy statement to you in connection with the solicitation of proxies by the Board of Directors of Clifton Bancorp Inc.
(Clifton Bancorp or the Company) for the 2016 annual meeting of stockholders and for any adjournment or postponement of the meeting. Clifton Bancorp is the holding company for Clifton Savings Bank (Clifton Savings
or Bank).
We are holding the 2016 annual meeting at The Venetian, located at 546 River Drive, Garfield, New Jersey, on
August 10, 2016 at 9:00 a.m., local time.
This proxy statement and the proxy card are first being made available to stockholders of
record beginning on or about June 29, 2016.
INFORMATION ABOUT VOTING
Who Can Vote at the Meeting
You are
entitled to vote your shares of Clifton Bancorp common stock that you owned as of June 17, 2016. As of the close of business on June 17, 2016, a total of 23,738,548 shares of Clifton Bancorp common stock were outstanding. Each share of
common stock has one vote.
The Companys articles of incorporation provide that record holders of the Companys common stock
who beneficially own, either directly or indirectly, in excess of 10% of the Companys outstanding shares are not entitled to any vote with respect to those shares held in excess of the 10% limit.
Ownership of Shares; Attending the Meeting
You may own shares of Clifton Bancorp in the following ways:
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Directly in your name as the stockholder of record; or
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Indirectly through a broker, bank or other holder of record in street name.
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If
your shares are registered in your name, you are the holder of record of these shares and we are sending these proxy materials directly to you. As the holder of record, you have the right to give your proxy to us or to vote in person at the meeting.
If you hold your shares in street name, you will need proof of ownership to be admitted to the meeting. A brokerage statement or letter
from a bank or broker are examples of proof of ownership that will allow you to attend the meeting. However, if you want to vote your shares of Clifton Bancorp common stock held in street name in person at the meeting, you must obtain a written
proxy in your name from the broker, bank or other holder of record of your shares.
1
Quorum and Vote Required
Quorum
. We will have a quorum and will be able to conduct the business of the annual meeting if the holders of a majority of the
outstanding shares of common stock entitled to vote are present at the meeting, either in person or by proxy.
Votes Required for
Proposals
. At this years annual meeting, stockholders will elect two directors to serve for a term of three years and one director to serve for a term of one year. In voting on the election of directors, you may vote in favor of the
nominees, withhold votes as to all nominees, or withhold votes as to a specific nominee. There is no cumulative voting for the election of directors. Directors must be elected by a plurality of the votes cast at the annual meeting. This means that
the nominees receiving the greatest number of votes will be elected. In the election of directors, votes that are withheld and broker non-votes will have no effect on the outcome of the election.
In voting on the ratification of the appointment of BDO USA, LLP as the Companys independent registered public accounting firm, you may
vote in favor of the proposal, vote against the proposal or abstain from voting. To ratify the selection of BDO USA, LLP as our independent registered public accounting firm for fiscal 2017, the affirmative vote of a majority of the votes cast at
the annual meeting is required. Abstentions and broker non-votes will have no effect on the vote on this matter.
In voting on the
advisory resolution to approve the compensation of the Companys named executive officers, you may vote in favor of the proposal, against the proposal or abstain from voting. To be approved on an advisory basis, this matter requires the
affirmative vote of a majority of the votes cast at the annual meeting. Abstentions and broker non-votes will have no effect on the vote on this matter. The results of the vote on the compensation of the named executive officers are not binding on
the Board of Directors.
How We Count Votes.
If you return validly signed and dated proxy instructions or attend and
properly vote at the meeting in person, we will count your shares for purposes of determining whether there is a quorum, even if you abstain from voting. A broker non-vote occurs if your shares are not registered in your name (that is,
you hold your shares in street name) and you do not provide the record holder of your shares (usually a bank, broker or other nominee) with voting instructions on any matter as to which a broker may not vote without instructions from
you, but the broker nevertheless provides a proxy for your shares. Broker non-votes, if any, will be counted for purposes of determining the existence of a quorum, but are not considered votes cast with respect to a voting matter.
Effect of Not Casting Your Vote
. If you hold your shares in street name, it is critical that you cast your vote if you want it
to count in the election of directors or with respect to the advisory vote to approve the compensation of our named executive officers. Current regulations restrict the ability of your broker to vote on your behalf in the election of directors and
with respect to compensation-related matters unless you provide voting instructions to your broker. Thus, if you hold your shares in street name and you do not instruct your broker how to vote with respect to the election of directors or the
advisory vote regarding the compensation of our named executive officers, no votes will be cast on your behalf. Your broker has discretion to vote any uninstructed shares on the ratification of the appointment of the Companys independent
registered public accounting firm.
2
Voting by Proxy
The Board of Directors of Clifton Bancorp is sending you this proxy statement for the purpose of requesting that you allow your shares of
Clifton Bancorp common stock to be represented at the annual meeting by the persons named in the enclosed proxy card. All shares of Clifton Bancorp common stock represented at the annual meeting by properly executed and dated proxy cards will be
voted according to the instructions indicated on the proxy card. If you sign, date and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Companys Board of Directors.
You may revoke your proxy at any time before the vote is taken at the meeting. To revoke your proxy you must either advise the Corporate
Secretary of the Company in writing before your common stock has been voted at the annual meeting, deliver a later dated proxy, or attend the meeting and vote your shares in person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.
Instead of voting by mailing a proxy card, registered stockholders can vote their shares of Company common
stock via the Internet or by telephone. The Internet and telephone voting procedures are designed to authenticate stockholders identities, allow stockholders to provide their voting instructions and confirm that their instructions have been
recorded properly. Specific instructions for Internet and telephone voting are set forth on the Companys proxy card. The deadline for voting via the Internet or by telephone is 11:59 p.m., Eastern time, on August 9, 2016.
If you hold your shares in street name, your broker, bank or other holder of record is sending these proxy materials to you. As the beneficial
owner, you have the right to direct your broker, bank or other holder of record how to vote your shares by filling out the voting instruction form that accompanies your proxy materials. Your broker, bank or other holder of record may allow you to
provide voting instructions by telephone or via the Internet. Please see the instruction form provided by your broker, bank or other holder of record that accompanies this proxy statement.
The Board of Directors recommends a vote:
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FOR each of the nominees for director;
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FOR the ratification of the appointment of BDO USA, LLP as the Companys independent registered public accounting firm; and
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FOR the approval of the compensation of the Companys named executive officers.
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If any matters not described in this proxy statement are properly presented at the annual meeting, the persons named in the proxy card will
use their own best judgment to determine how to vote your shares. This includes a motion to adjourn or postpone the annual meeting in order to solicit additional proxies. If the annual meeting is postponed or adjourned, your Clifton Bancorp common
stock may be voted by the persons named in the proxy card on the new annual meeting date as well, unless you have revoked your proxy. The Company does not know of any other matters to be presented at the annual meeting.
3
Participants in the Banks ESOP or 401(k) Savings Plan
If you participate in the Clifton Savings Bank Employee Stock Ownership Plan (the ESOP) or if you hold shares through the Clifton
Savings Bank 401(k) Savings Plan (the 401(k) Plan), you will receive a vote authorization form for each plan that reflects all shares you may direct the trustees to vote on your behalf under the plans. Under the terms of the ESOP, the
ESOP trustee votes all shares held by the ESOP, but each ESOP participant may direct the trustee how to vote the shares of common stock allocated to his or her account. The ESOP trustee, subject to the exercise of its fiduciary duties, will vote all
unallocated shares of Company common stock held by the ESOP and allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions. Under the terms of the 401(k) Plan,
a participant is entitled to direct the trustee as to the shares in the Clifton Bancorp Inc. Stock Fund credited to his or her account. The trustee, subject to its fiduciary duties, will vote all shares for which no directions are given or for which
instructions were not received in the same proportion as shares for which the trustee received timely voting instructions.
The deadline for returning your vote authorization form to each plans trustee is August 3, 2016.
CORPORATE GOVERNANCE AND BOARD MATTERS
Director Independence
The Companys
Board of Directors consists of six directors, all of whom the Board of Directors has determined to be independent under the listing requirements of the Nasdaq Global Select Market, except for Paul M. Aguggia, who serves as Chairman, President and
Chief Executive Officer of Clifton Bancorp and Clifton Savings. In determining the independence of its directors, the Board considered transactions, relationships and arrangements between the Company and its directors the details of which are not
required to be disclosed in this proxy statement under the heading
Other Information Relating to Directors and Executive Officers Transactions with Related Persons,
including loans or lines of credit that the Bank has
directly or indirectly made to each director.
Board Leadership Structure and the Boards Role in Risk Oversight
The Companys Board of Directors endorses the view that one of its primary functions is to protect stockholders interests by
providing independent oversight of management, including the Chief Executive Officer. The Board of Directors has approved a current leadership structure that is comprised of a combined Chairman of the Board and Chief Executive Officer, a Lead
Independent Director, Board committees led by independent directors and active engagement by all directors. The Board believes this structure provides an effective balance between strong Company leadership and appropriate safeguards and oversight by
independent directors.
The Lead Independent Director, who is elected by the independent directors for a one-year term:
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serves as an ex officio voting member of all committees of the Board of Directors;
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serves as the chairman of the Executive Committee of the Board of Directors;
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presides at all meetings of the Board at which the Chairman of the Board is not present, including all meetings of independent directors;
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has the authority to call meetings of the independent directors;
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serves as a liaison between the independent directors and the Chairman of the Board;
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advises and consults with the Chairman and CEO on the need for special meetings, meeting agenda items, and the appropriate amount of time to address particular items;
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recommends the membership and chairman position for each Board committee;
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interviews all director candidates and makes a recommendation to the Nominating and Corporate Governance Committee;
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is available for consultation and communication with stockholders; and
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has the authority to retain advisors and consultants who report directly to the Board of Directors.
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Currently, Joseph C. Smith serves as the Companys Lead Independent Director.
The Chairman of the Board has no greater nor lesser vote on matters considered by the Board than any other director, and the Chairman does not
vote on any related party transaction. All directors of the Company, including the Chairman, are bound by fiduciary obligations, imposed by law, to serve the best interests of the stockholders. Accordingly, in the opinion of the Board of Directors,
separating the offices of Chairman and Chief Executive Officer would not serve to materially enhance or diminish the fiduciary duties of any director of the Company.
To further strengthen the regular oversight of the full Board, various committees of the Companys Board are comprised of independent
directors. The Compensation Committee of the Board consists solely of independent directors. As detailed in its report and the Compensation Discussion and Analysis appearing elsewhere in this proxy statement, the Compensation Committee reviews and
evaluates the performance of all named executive officers of the Company, including the Chief Executive Officer, and reports to the Board. In addition, the Audit/Compliance Committee, which is comprised solely of independent directors, oversees the
Companys financial practices, regulatory compliance, accounting procedures and financial reporting functions. Similarly, the Nominating/Corporate Governance Committee, which is comprised solely of independent directors, oversees the shaping of
governance policies and practices, including recommending to the Board of Directors the corporate governance policies and guidelines applicable to Clifton Bancorp and monitoring compliance with these policies and guidelines. In the opinion of the
Board of Directors, an independent Chairman does not add any material value to this already effective process.
Risk is inherent with
every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk, budgetary risk caused by costs of
governmental mandates for new programs and policies, compliance risk and reputation risk. Management is responsible for the day-to-day management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility
for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as
designed. As a result, the Board of Directors has established an Enterprise Risk Management Committee that reviews and oversees the Companys material business risks by establishing and monitoring policies and procedures designated to identify,
control, monitor and measure its material business risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputational risk. Our executive management team and our Enterprise Risk Manager also attend
Board meetings and are available to address any questions or concerns raised by the Board on risk management and any other matters.
5
Committees of the Board of Directors
The following table identifies the members of the Audit/Compliance Committee, the Nominating/Corporate Governance Committee and the
Compensation Committee as of June 17, 2016. All members of each committee are independent in accordance with the listing standards of the Nasdaq Global Select Market. Each of the committees operates under a written charter that is approved by
the Board of Directors. Each committee reviews and reassesses the adequacy of its charter annually. The charters of all three committees are available on the Companys website (www.cliftonbancorp.com).
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Director
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Nominating/
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Compensation
Committee
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Stephen Adzima
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Paul M. Aguggia
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John H. Peto
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Charles J. Pivirotto
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Cynthia Sisco
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Joseph C. Smith
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Number of Meetings in fiscal 2016
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11
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3
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21
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Audit/Compliance Committee.
The Board of Directors has a
separately-designated standing Audit/Compliance Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit/Compliance Committee meets periodically with the independent registered
public accounting firm, management and the internal auditors to review accounting, auditing, internal control structure and financial reporting matters. The Board of Directors has determined that Charles J. Pivirotto, CPA is an audit committee
financial expert under the rules of the Securities and Exchange Commission. The report of the Audit/Compliance Committee required by the rules of the Securities and Exchange Commission is included in this proxy statement. See
Report of the
Audit/Compliance Committee.
Compensation Committee.
The Compensation Committee approves the compensation
objectives for the Company and the Bank and establishes the compensation for the Chief Executive Officer and, in consultation with the Chief Executive Officer, reviews and approves the compensation for our other executives. See
Compensation
Discussion and Analysis
for more information regarding the role of the Compensation Committee and management in determining and/or recommending the amount or form of executive compensation. The report of the Compensation Committee required
by the rules of the Securities and Exchange Commission is included in this proxy statement. See
Compensation Committee Report.
Nominating/Corporate Governance Committee.
The Nominating/Corporate Governance Committee takes a leadership role in shaping
governance policies and practices, including recommending to the Board of Directors the corporate governance policies and guidelines applicable to Clifton Bancorp and monitoring compliance with these policies and guidelines. In addition, the
Nominating/Corporate Governance Committee is responsible for identifying individuals qualified to become Board members and recommending to the Board the director nominees for election at the next annual meeting of stockholders. It leads the Board in
its annual review of the Boards and Committees performance and recommends director candidates for each committee for appointment by the Board. The procedures of the Nominating/Corporate Governance Committee required to be disclosed by
the rules of the Securities and Exchange Commission are set forth below.
6
Nominating and Corporate Governance Committee Procedures
Minimum Qualifications.
The Nominating/Corporate Governance Committee has adopted a set of criteria that it considers when it
selects individuals to be nominated for election to the Board of Directors. A candidate must meet qualification requirements set forth in any Board or committee governing documents, as well as the Companys bylaws.
The Nominating/Corporate Governance Committee will consider the following criteria in selecting nominees for election or appointment to the
Board of Directors: financial, regulatory and business experience; familiarity with and participation in the local community; integrity, honesty and reputation; dedication to the Company and its stockholders; independence; and any other factors the
Nominating/Corporate Governance Committee deems relevant, including diversity, size of the Board of Directors and regulatory disclosure obligations.
In addition, before nominating an existing director for re-election to the Board of Directors, the Nominating/Corporate Governance Committee
considers and reviews an existing directors Board and committee attendance and performance; length of Board service; experience, skills and contributions that the existing director brings to the Board; and independence.
Director Nomination Process.
The Nominating/Corporate Governance Committee process for identifying and evaluating individuals to
be nominated for election to the Board of Directors is as follows:
Identification.
For purposes of identifying nominees for the
Board of Directors, the Nominating/Corporate Governance Committee relies on personal contacts of the committee members and other members of the Board of Directors as well as its knowledge of members of the Banks local communities. The
Nominating/Corporate Governance Committee will also consider director candidates recommended by stockholders in accordance with the policy and procedures set forth below. The Nominating/Corporate Governance Committee has not previously used an
independent search firm to identify nominees.
Evaluation.
In evaluating potential nominees, the Nominating/Corporate Governance
Committee determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under the selection criteria set forth above. In addition, for prospective nominees, the Nominating/Corporate
Governance Committee will conduct a check of the individuals background and interview the candidate.
Consideration of
Recommendations by Stockholders.
It is the policy of the Nominating/ Corporate Governance Committee to consider director candidates recommended by stockholders who appear to be qualified to serve on the Companys Board of Directors.
However, the Nominating/Corporate Governance Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors and the Nominating/Corporate Governance Committee does not perceive a need to increase the
size of the Board of Directors. In order to avoid the unnecessary use of the Nominating/Corporate Governance Committees resources, the Nominating/Corporate Governance Committee will consider only those director candidates recommended in
accordance with the procedures set forth below.
Procedures to be Followed by Stockholders.
To submit a recommendation of a
director candidate to the Nominating/Corporate Governance Committee, a stockholder must submit the following information in writing, addressed to the Chairman of the Nominating/Corporate Governance Committee, care of the Corporate Secretary, at the
main office of the Company:
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The name of the person recommended as a director candidate;
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All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended;
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The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;
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As to the stockholder making the recommendation, the name and address, as they appear on the Companys books, of such stockholder; provided, however, that if the stockholder is not a registered holder of the
Companys common stock, the stockholder should submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of the Companys common stock;
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A statement disclosing whether such stockholder is acting with or on behalf of any other person and, if applicable, the identity of such person; and
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Proof that the person making the recommendation is herself, himself or itself a stockholder.
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In order for a director candidate to be considered for nomination at the Companys annual meeting of stockholders, the recommendation
must be received by the Nominating/Corporate Governance Committee at least 120 calendar days before the date the Companys proxy statement was released to stockholders in connection with the previous years annual meeting, advanced by one
year.
Board and Committee Meetings
During the year ended March 31, 2016, the Boards of Directors of the Company and the Bank held 30 and 18 meetings, respectively. No
director attended fewer than 75% of the total meetings of the Companys and the Banks respective Boards of Directors and the committees on which such director served.
Code of Ethics and Business Conduct
The
Company maintains a Code of Ethics and Business Conduct that is designed to ensure that the Companys directors and employees meet the highest standards of ethical conduct. The Code of Ethics and Business Conduct, which applies to all employees
and directors, addresses conflicts of interest, the treatment of confidential information, general employee conduct, and compliance with applicable laws, rules and regulations. In addition, the Code of Ethics and Business Conduct is designed to
deter wrongdoing and promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure, and compliance with all applicable laws, rules and regulations.
Director Attendance at the Annual Meeting of Stockholders
The Board of Directors encourages directors to attend the annual meeting of stockholders. All of the Companys directors attended the
fiscal 2015 annual meeting of stockholders.
8
Director Compensation for the 2016 Fiscal Year
The following table provides the compensation received by individuals who served as directors of the Company during the 2016 fiscal year.
Mr. Aguggia receives no separate compensation for his service as a director. The table below shows the full fair value of stock awards and option awards on the date of grant. The actual value of stock awards and option awards depend on a
directors continued service and the market value of Clifton Bancorp common stock at the time of vesting. The awards below vest over a five-year period beginning on September 2, 2016. There can be no assurance that the actual values
received will be at or near the values reflected below.
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Fees Earned
or Paid in
Cash
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Stock
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Option
Awards
(3)
|
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
(4)
|
|
|
All Other
Compensation
(5)
|
|
|
Total
|
|
Stephen Adzima
|
|
$
|
68,350
|
|
|
$
|
377,763
|
|
|
$
|
111,228
|
|
|
$
|
57,542
|
|
|
$
|
3,780
|
|
|
$
|
618,663
|
|
Thomas A. Miller
(6)
|
|
|
68,025
|
|
|
|
377,763
|
|
|
|
111,228
|
|
|
|
|
|
|
|
3,275
|
|
|
|
560,291
|
|
John H. Peto
|
|
|
68,025
|
|
|
|
377,763
|
|
|
|
111,228
|
|
|
|
|
|
|
|
3,275
|
|
|
|
560,291
|
|
Charles J. Pivirotto
|
|
|
68,675
|
|
|
|
377,763
|
|
|
|
111,228
|
|
|
|
38,150
|
|
|
|
3,275
|
|
|
|
599,091
|
|
Cynthia Sisco
|
|
|
68,675
|
|
|
|
377,763
|
|
|
|
111,228
|
|
|
|
28,260
|
|
|
|
3,275
|
|
|
|
589,201
|
|
Joseph C. Smith
|
|
|
68,350
|
|
|
|
377,763
|
|
|
|
111,228
|
|
|
|
|
|
|
|
3,275
|
|
|
|
560,616
|
|
(1)
|
Includes fees earned for service with Clifton Bancorp and Clifton Savings.
|
(2)
|
Reflects the grant date fair value calculated in accordance with FASB ASC Topic 718 regarding outstanding restricted stock awards based upon Clifton Bancorps stock price of $13.84 on September 2, 2015, the
date of grant. At March 31, 2016, the aggregate number of unvested restricted stock award shares held in trust for directors was 28,697 for Mr. Adzima and 27,295 for each other director.
|
(3)
|
Reflects the grant date fair value calculated in accordance with FASB ASC Topic 718 of stock option awards granted on September 2, 2015 based upon a fair value of $1.63 for each option using the Black-Scholes
option pricing model. For information on the assumptions used to compute fair value, see note 10 to the notes to the consolidated financial statements included in the Companys Annual Report on Form 10-K for the year ended March 31, 2016.
The actual value, if any, realized by directors from any option will depend on the extent to which the market value of the common stock exceeds the exercise price of the option on the date the option is exercised. The aggregate outstanding stock
options at March 31, 2016 was 68,238 for each director.
|
(4)
|
Amounts represent the annual change in the actuarial present value of the directors accrued benefit under the Banks Directors Retirement Plan. The present value of the accrued benefit for
Mr. Miller, Mr. Peto and Mr. Smith declined by $39,572, $54,446 and $20,919, respectively.
|
(5)
|
Represents dividends paid on unvested restricted stock awards.
|
(6)
|
Mr. Miller resigned from the Board of Directors effective May 4, 2016. Consequently, effective May 4, 2016, Mr. Miller forfeited all unvested restricted stock and option awards that the Company had
granted to him prior to his resignation. In addition, following his resignation as a director, Mr. Miller received a lump sum payment totaling $636,419 in May 2016 under the Banks Directors Retirement Plan.
|
9
Cash Retainers and Meeting Fees for Non-Employee Directors
The following tables set forth the applicable retainers and fees that were paid to non-employee directors for their service on the Board of
Directors of Clifton Savings and the Board of Directors of Clifton Bancorp during fiscal 2016. Mr. Aguggia did not receive any retainers or fees for his service on the Boards of Directors.
Clifton Savings:
|
|
|
|
|
Annual retainer
|
|
$
|
46,500
|
|
Additional annual retainer for committee chairmen
(1)
|
|
$
|
4,000
|
|
(1)
|
Chairmen of the Audit/Compliance, Nominating/Corporate Governance, Compensation, Investment and Commercial Loan Committees receive committee chairmen fees.
|
Clifton Bancorp:
|
|
|
|
|
Annual retainer
|
|
$
|
9,000
|
|
Additional annual retainer for Audit/Compliance Committee members
|
|
$
|
5,600
|
|
Additional fee per Audit/Compliance Committee meeting attended
|
|
$
|
325
|
|
Directors Retirement Plan
Clifton Savings maintains the Clifton Savings Bank Directors Retirement Plan to provide non-employee directors with supplemental
retirement income. All current nonemployee directors participate in the plan. The plan provides benefits, generally paid in equal monthly installments, upon a directors retirement, death or disability, and upon a change in control of Clifton
Savings or Clifton Bancorp. However, participants may elect that any type of benefit under the plan be paid on an actuarially equivalent lump sum basis so long as the election complies with Section 409A of the Internal Revenue Code.
Upon their retirement following the completion of three years of service and the attainment of age 68, participants receive an annual
retirement benefit, payable for life, equal to a percentage of the sum of the annual fees and retainer paid during the twelve-month period ending on the date preceding retirement. The percentage paid as an annual benefit is determined by multiplying
the participants years of service (up to a maximum of 10) by 10 percent. Alternatively an actuarially determined lump sum payment can be elected.
A participant who completes a minimum of three years of service, regardless of age, may receive death and disability benefits under the plan.
Participants will receive a benefit upon a change in control of Clifton Savings or Clifton Bancorp. The benefit, payable annually for the life of the participant, equals the sum of the annual fees and retainer paid to the participant during the
twelve-month period preceding the date of a termination of service due to a change in control. Alternatively an actuarially determined lump sum payment can be elected.
10
REPORT OF THE AUDIT/COMPLIANCE COMMITTEE
The Companys management is responsible for the Companys internal controls and financial reporting process. The Companys
independent registered public accounting firm is responsible for performing an independent audit of the Companys consolidated financial statements and issuing an opinion on the conformity of those financial statements with generally accepted
accounting principles. The Audit/Compliance Committee oversees the Companys internal controls and financial reporting process on behalf of the Board of Directors.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, the Companys management is also required to prepare, as part of the
Companys 2016 Annual Report on Form 10-K, a report on its assessment of the Companys internal control over financial reporting, including managements assessment of the effectiveness of such internal control. The Companys
independent registered public accounting firm is also required by Section 404 to issue and include, as part of the Companys 2016 Annual Report on Form 10-K, its opinion on the effectiveness of the Companys internal control over
financial reporting.
In this context, the Audit/Compliance Committee has met and held discussions with management, the internal auditors
and the independent accountants. Management represented to the Audit/Compliance Committee that the Companys consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit/Compliance
Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit/Compliance Committee discussed with the independent accountants matters required to be discussed by Auditing
Standard No. 16,
Communications with Audit Committees
, as adopted by the Public Company Accounting Oversight Board, including the quality, not just the acceptability, of the accounting principles, the reasonableness of significant
judgments, and the clarity of the disclosures in the consolidated financial statements.
In addition, the Audit/Compliance Committee has
received the written disclosures and the letter from the independent accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants communications with the
Audit/Compliance Committee concerning independence, and has discussed with the independent accountants the independent accountants independence. In concluding that the independent accountants are independent, the Audit/Compliance Committee
considered, among other factors, whether the non-audit services provided by the independent accountants were compatible with its independence.
The Audit/Compliance Committee discussed with the Companys independent registered public accounting firm the overall scope and plans for
its audit. The Audit/Compliance Committee met with the independent registered public accounting firm, with and without management present, to discuss the results of its examination, its evaluation of the Companys internal controls, and the
overall quality of the Companys financial reporting.
In performing all of these functions, the Audit/Compliance Committee acts only
in an oversight capacity. In its oversight role, the Audit/Compliance Committee relies on the work and assurances of the Companys management, which has the primary responsibility for financial statements and reports, and of the independent
registered public accounting firm which, in its report, expresses an opinion on the conformity of the Companys financial statements to generally accepted accounting principles. The Audit/Compliance Committees oversight does not provide
it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards
and applicable laws and regulations. Furthermore, the Audit/Compliance Committees considerations and
11
discussions with management and the independent accountants do not assure that the Companys consolidated financial statements are presented in accordance with generally accepted accounting
principles, that the audit of the Companys consolidated financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board (United States) or that the Companys independent
accountants are in fact independent.
In reliance on the reviews and discussions referred to above, the Audit/Compliance
Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements be included in the Companys Annual Report on Form 10-K for the year ended March 31, 2016 for filing with the
Securities and Exchange Commission. The Audit/Compliance Committee and the Board of Directors also have appointed, subject to stockholder ratification, the Companys independent accountants for the fiscal year ending March 31, 2017.
Audit/Compliance Committee the Board of Directors of Clifton Bancorp Inc.
Charles J. Pivirotto, Chairman
Stephen Adzima
John H. Peto
Cynthia Sisco
Joseph C. Smith
12
STOCK OWNERSHIP
The following table provides information as of June 17, 2016 about the persons and entities known to Clifton Bancorp to be the beneficial
owners of more than 5% of the Companys outstanding common stock. A person or entity may be considered to beneficially own any shares of common stock over which the person or entity has, directly or indirectly, sole or shared voting authority.
|
|
|
|
|
|
|
|
|
Name and Address
|
|
Number of
Shares Owned
|
|
|
Percent
of Common Stock
Outstanding
(1)
|
|
T. Rowe Price Associates, Inc.
T. Rowe Price Small-Cap Value Fund, Inc.
100 E. Pratt Street
Baltimore, Maryland 21202
|
|
|
2,604,094
|
(2)
|
|
|
11.0
|
%
|
Clifton Savings Bank
Employee Stock Ownership Plan
1433 Van Houten Avenue
Clifton, New Jersey 07015
|
|
|
1,770,508
|
(3)
|
|
|
7.5
|
%
|
Renaissance Technologies LLC
Renaissance Technologies Holdings Corporation
800 Third Avenue
New York, New York 10022
|
|
|
1,329,062
|
(4)
|
|
|
5.6
|
%
|
(1)
|
Based on 23,738,548 shares of the Companys common stock outstanding and entitled to vote as of June 17, 2016.
|
(2)
|
Based on a Schedule 13G/A filed with the U.S. Securities and Exchange Commission on February 11, 2016.
|
(3)
|
Includes 636,525 shares that have been allocated to employee stock ownership plan participants.
|
(4)
|
Based on a Schedule 13G filed with the U.S. Securities and Exchange Commission on February 12, 2016.
|
13
The following table provides information as of June 17, 2016 about the shares of Clifton
Bancorp common stock that may be considered to be beneficially owned by each director, nominee for director, and current named executive officer listed in the
Summary Compensation Table,
and by all directors and executive officers of the
Company as a group. A person may be considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated in the footnotes below, each of the
named individuals has sole voting and sole investment power with respect to the number of shares shown.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of
Shares Owned
(1)(2)
|
|
|
Number of Shares
That May be Acquired
Within 60 Days by
Exercising Options
|
|
|
Percent of
Common
Stock
Outstanding
(3)
|
|
Stephen Adzima
|
|
|
93,987
|
(4)
|
|
|
|
|
|
|
*
|
|
Paul M. Aguggia
|
|
|
247,475
|
(5)
|
|
|
|
|
|
|
1.0
|
%
|
Bart DAmbra
|
|
|
104,096
|
|
|
|
|
|
|
|
*
|
|
Stephen A. Hoogerhyde
|
|
|
95,426
|
|
|
|
|
|
|
|
*
|
|
Patricia C. Hrotko
|
|
|
41,916
|
|
|
|
|
|
|
|
*
|
|
John H. Peto
|
|
|
64,005
|
|
|
|
|
|
|
|
*
|
|
Christine R. Piano
|
|
|
136,702
|
|
|
|
|
|
|
|
*
|
|
Charles J. Pivirotto
|
|
|
41,595
|
(6)
|
|
|
72,453
|
|
|
|
*
|
|
Cynthia Sisco
|
|
|
182,819
|
(7)
|
|
|
72,453
|
|
|
|
1.1
|
%
|
Joseph C. Smith
|
|
|
133,272
|
(8)
|
|
|
|
|
|
|
*
|
|
All directors and executive officers as a group (12 persons)
|
|
|
1,176,823
|
|
|
|
144,906
|
|
|
|
5.6
|
%
|
*
|
Does not exceed 1.0% of the Companys voting securities.
|
(1)
|
Includes shares allocated to the account of individuals under the Banks employee stock ownership plan with respect to which individuals have voting but not investment power as follows: Mr. Aguggia5,482
shares; Mr. DAmbra34,042 shares; Mr. Hoogerhyde29,475 shares; Ms. Hrotko4,052; and Ms. Piano38,942 shares.
|
(2)
|
Includes shares of unvested restricted stock held under the Clifton Bancorp Inc. 2005 Equity Incentive Plan and 2015 Equity Incentive Plan with respect to which individuals have voting but not investment power as
follows: Mr. Adzima28,697 shares; Mr. Aguggia136,475 shares; Messrs. DAmbra and Hoogerhyde and Ms. Hrotko34,119 shares each; Ms. Piano61,414 shares; and each other director27,295 shares each.
|
(3)
|
Based on 23,738,548 shares of the Companys common stock outstanding and entitled to vote as of June 17, 2016, plus the number of shares that may be acquired by each individual (or group of individuals) by
exercising options.
|
(4)
|
Includes 20,080 shares held by a corporation owned by Mr. Adzima and 27,036 shares held by Mr. Adzimas spouse as custodian for their children.
|
(5)
|
Includes 25,518 shares held in trust for Mr. Aguggia under the Banks supplemental executive retirement plan.
|
(6)
|
Includes 5,000 shares held by a corporation owned by Mr. Pivirotto.
|
(7)
|
Includes 78,248 shares held by Ms. Sisco as trustee for a revocable trust under which Ms. Sisco is also a beneficiary.
|
(8)
|
Includes 2,937 shares held by Mr. Smiths son, for which shares Mr. Smith disclaims beneficial ownership.
|
14
ITEMS TO BE VOTED UPON BY STOCKHOLDERS
Item 1 Election of Directors
The Companys Board of Directors currently consists of six members. The Board is divided into three classes with three-year staggered
terms, with one-third of the directors elected each year. Effective May 4, 2016, as a result of Thomas Millers resignation as a director, the Board of Directors reduced the size of the Board from seven to six members. To ensure that
one-third of the Companys directors continue to be elected each year, the Board of Directors has also elected to nominate one director whose term expires at the annual meeting to a one-year term. Accordingly, the Board of Directors has
nominated (i) Stephen Adzima and Charles J. Pivirotto for election at the annual meeting to serve for a three-year term or until their respective successors have been elected and qualified, and (ii) Cynthia Sisco for election at the annual
meeting to serve for a one-year term or until her successor has been elected and qualified. Each of the nominees is currently a director of Clifton Bancorp and Clifton Savings.
Unless you indicate on the proxy card that your shares should not be voted for a certain nominee, the Board of Directors intends that the
proxies solicited by it will be voted for the election of each of the Boards nominees. If a nominee is unable to serve, the persons named in the proxy card will vote your shares to approve the election of any substitute nominee proposed by the
Board of Directors. At this time, the Board of Directors knows of no reason why any nominee might be unable to serve.
The Board of
Directors recommends a vote FOR the election of Messrs. Adzima and Pivirotto and Ms. Sisco.
Information regarding
the Board of Directors nominees and the directors continuing in office is provided below. Unless otherwise stated, each individual has held his or her current occupation for the last five years. The age indicated for each individual is as of
March 31, 2016. The indicated period of service as a director includes the period of service as a director of Clifton Savings. Based on their respective experiences, qualifications, attributes and skills set forth below, the Board of Directors
has determined that each current director and nominee should serve as a director.
Nominees for Election as Directors
The nominees standing for election to serve for a three-year term are:
Stephen Adzima
has been the president of Universal Electric Motor Service Inc., a company that specializes in the sales and
service of electric motors, pumps, controls and generators, since 1978. Age 63. Director since 2012.
Mr. Adzimas background
offers the Board of Directors substantial small company management experience, specifically within the region in which the Bank conducts its business, and provides the Board of Directors with valuable insight regarding the local business and
commercial and consumer environments.
Charles J. Pivirotto
,
a certified public accountant, has been the President of
Pivirotto & Company, CPAs PA, a certified public accounting firm, since 1997. Age 61. Director since 2007.
As a certified
public accountant, Mr. Pivirotto provides the Board of Directors with valuable experience regarding accounting and financial matters.
15
The nominee standing for election to serve for a one-year term is:
Cynthia Sisco
owns and manages an apartment complex and also manages several other residential properties. Age 59. Director
since 2007.
Ms. Siscos background provides the Board of Directors with critical experience in real estate matters, which are
essential to the business of the Company and the Bank.
The following director has a term ending in 2017:
Paul M. Aguggia
has served as the Chairman of the Board, President and Chief Executive Officer of Clifton Bancorp and Clifton
Savings since January 1, 2014. Mr. Aguggia is the former Chairman and leader of the financial institutions practice group of the international law firm Kilpatrick Townsend & Stockton LLP, which has over 600 attorneys and 17
offices worldwide. Mr. Aguggia began his career at Willkie Farr & Gallagher LLP in New York City, and was associated with Muldoon Murphy & Aguggia LLP, a boutique banking law firm, for ten years, serving as Chairman of the
firm from 2004 until its merger with Kilpatrick Townsend & Stockton LLP in 2008. Age 53. Director since 2014.
Mr. Aguggias extensive experience representing financial institutions of various sizes and degrees of complexity for nearly 25
years, including counseling such institutions on regulatory, compliance, operational, corporate governance, public offering, acquisition and various strategic matters, enables him to provide the Board of Directors with the leadership necessary to
oversee the business and operations of Clifton Bancorp and Clifton Savings. In addition, Mr. Aguggias knowledge of Clifton Bancorps and Clifton Savings operations and governance, through his former service as our primary
corporate, securities and bank regulatory counsel, combined with his success and strategic vision, position him well to serve as our Chairman, President and Chief Executive Officer.
The following directors have terms ending in 2018:
John H. Peto
is a real estate investor and previously was the owner of The Peto Agency, a real estate and insurance broker
located in Clifton, New Jersey. Age 70. Director since 1995.
Mr. Petos background provides the Board of Directors with
critical experience in real estate matters, which are essential to the business of the Company and the Bank. In addition, Mr. Petos insurance background provides the Board of Directors with experience with respect to an industry that
complements the financial services provided by the Bank.
Joseph C. Smith
is the President of Smith-Sondy Asphalt
Construction Co., a paving construction company located in Wallington, New Jersey. Age 63. Director since 1994.
Mr. Smiths
background offers the Board of Directors substantial small company management experience, specifically within the region in which the Bank conducts its business, and provides the Board of Directors with valuable insight regarding the local business
and commercial and consumer environments. In addition, Mr. Smith offers the Board of Directors significant business experience from a setting outside of the financial services industry.
Item 2 Ratification of the Independent Registered Public Accounting Firm
The Audit/Compliance Committee of the Board of Directors has appointed BDO USA, LLP to be the Companys independent registered public
accounting firm for the 2017 fiscal year, subject to ratification by stockholders. A representative of BDO USA, LLP is expected to be present at the annual meeting to respond to appropriate questions from stockholders and will have the opportunity
to make a statement should he or she desire to do so.
16
If the ratification of the appointment of the independent registered public accounting firm is
not approved by a majority of the votes cast at the annual meeting, the Audit/Compliance Committee will consider other independent registered public accounting firms. In addition, if the ratification of the independent registered public accounting
firm is approved by stockholders at the annual meeting, the Audit/Compliance Committee may also consider other independent registered public accounting firms in the future if it determines that such consideration is in the best interests of the
Company and its stockholders.
The Board of Directors recommends that stockholders vote FOR the ratification of the
appointment of BDO USA, LLP as the Companys independent registered public accounting firm.
Audit Fees.
The
following table sets forth the fees billed to the Company for the fiscal years ended March 31, 2016 and 2015 by BDO USA, LLP.
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Audit fees
(1)
|
|
$
|
192,324
|
|
|
$
|
190,294
|
|
Audit related fees
|
|
|
|
|
|
|
|
|
Tax fees
(2)
|
|
|
17,290
|
|
|
|
16,917
|
|
All other fees
|
|
|
|
|
|
|
|
|
(1)
|
Includes professional services rendered for the audit of the Companys annual consolidated financial statements and review of consolidated financial statements included in Forms 10-Q, or services normally provided
in connection with statutory and regulatory filings (i.e., attest services required by FDICIA or Section 404 of the Sarbanes-Oxley Act), including out-of-pocket expenses.
|
(2)
|
Tax fees include the preparation of state and federal tax returns.
|
Policy on
Audit/Compliance Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm.
The Audit/Compliance Committee is responsible for appointing, setting compensation, and overseeing the work
of the independent registered public accounting firm. In accordance with its charter, the Audit/Compliance Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent registered public accounting
firm to ensure that the external auditor does not provide any non-audit services to the Company that are prohibited by law or regulation.
In addition, the Audit/Compliance Committee has established a policy regarding pre-approval of all audit and permissible non-audit services
provided by the independent registered public accounting firm. Requests for services by the independent registered public accounting firm for compliance with the auditor services policy must be specific as to the particular services to be provided.
The request may be made with respect to either specific services or a type of service for predictable or recurring services.
During the
year ended March 31, 2016, all services were approved, in advance, by the Audit/Compliance Committee in compliance with these procedures.
17
Proposal 3 Advisory Vote on Executive Compensation
As required by federal securities laws, we are providing our stockholders with the opportunity to cast an advisory vote regarding the
compensation of our named executive officers as disclosed in this proxy statement. This proposal, commonly known as a say-on-pay proposal, gives the Companys stockholders the opportunity to endorse or not endorse the Companys
executive pay program and policies through the following resolution:
RESOLVED, that the compensation paid to the Companys
named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion contained in the
2016 proxy statement, is hereby approved.
At our last four annual meetings, our stockholders overwhelmingly approved the say-on-pay
proposal. As described in the
Compensation Discussion and Analysis
included in this proxy statement, we believe that our executive compensation program is designed to support the Companys long-term success by achieving the
following objectives:
|
|
|
Attracting and retaining talented senior executives;
|
|
|
|
Tying executive pay to Company and individual performance;
|
|
|
|
Supporting our annual and long-term business strategies; and
|
|
|
|
Aligning executives interests with those of the Companys stockholders.
|
We urge
stockholders to read the
Compensation Discussion and Analysis
and the related narrative and tabular compensation disclosure included in this proxy statement. The
Compensation Discussion and Analysis
provides
detailed information regarding our executive compensation program, policies and procedures, as well as the compensation of our named executive officers.
This advisory vote on the compensation of our named executive officers is not binding on us, our Board or the Compensation Committee. However,
the Board and the Compensation Committee will review and consider the outcome of this advisory vote when making future compensation decisions for our named executive officers.
The Board of Directors recommends that stockholders vote FOR the compensation paid to the Companys named executive
officers.
18
COMPENSATION DISCUSSION AND ANALYSIS
We are pleased to provide our stockholders with an overview and analysis of the compensation programs in which the following executive
officers (our named executive officers or NEOs) participate and the process we use to make specific compensation decisions for them:
|
|
|
Name
|
|
Title
|
Paul M. Aguggia
|
|
Chairman of the Board of Directors, President and Chief Executive Officer of the Company and the Bank
|
|
|
Bart DAmbra
|
|
Executive Vice President and Corporate Secretary of the Company and Executive Vice President and Secretary of the Bank
|
|
|
Stephen Hoogerhyde
|
|
Executive Vice President of the Company and Executive Vice President and Chief Lending Officer of the Bank
|
|
|
Christine R. Piano
|
|
Executive Vice President, Chief Financial Officer and Treasurer of the Company and Executive Vice President and Chief Financial Officer of the Bank
|
|
|
Patricia C. Hrotko
|
|
Executive Vice President of the Company and Executive Vice President and Chief Revenue Officer of the Bank
|
Our Business Model and Approach to Driving Shareholder Value
We build value for stockholders by executing on a carefully considered business plan designed to produce solid results. The strength of our
business model has enabled us to weather periods of economic downturn and to benefit from periods of economic expansion. The performance metrics we use to drive our incentive compensation programs encourage behavior that supports our business model
and are consistent with the principles of safety and soundness and overall compliance. Our business model reflects the following key elements:
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Emphasis on core deposit growth;
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Prudent asset generation and diversification;
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Technological advancement with respect to delivery channels;
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Effective customer service and retention strategies;
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Quality control thorough risk assessment and regulatory compliance;
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Expansion into carefully selected market areas; and
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Strategic acquisitions as opportunities arise.
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19
Fiscal 2016 Business and Financial Highlights
Key business and financial highlights for fiscal 2016 include the following:
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Expansion of our Product Portfolio
We expanded our product offerings to consumers and mid-sized businesses.
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Net Income
Our fiscal 2016 net income totaled $5.40 million.
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Strong Loan Growth
Our net loans increased 21.7% year over year and our emphasis on commercial real estate and multi-family lending resulted in a 106.9% increase in that portfolio. The
balance between one- to four-family residential properties and commercial real estate shifted from fiscal 2015, as loans secured by one- to four-family real estate decreased from 86.7% at March 31, 2015 to 79.0% of total loans at March 31,
2016 and loans secured by commercial and multi-family real estate increased from 11.6% at March 31, 2015 to 19.7% of total loans at March 31, 2016.
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Consistent Asset Quality
Our ratio of non-performing loans to total gross loans decreased to 0.47% at March 31, 2016 from 0.88% at March 31, 2015 and our
non-performing assets to total assets decreased to 0.30% at March 31, 2016 from 0.48% at March 31, 2015.
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Expansion of our Banking Footprint
We opened an innovative banking center in Hoboken, New Jersey equipped with advanced technology and reflecting a new, compact model for a
brick-and-mortar branch, and we have also begun development of a new banking center in Montclair, New Jersey during fiscal 2017.
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Capital Management
We deployed capital prudently by growing loans, through programs designed to shift deposit mix, and executing our share repurchase strategy.
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Fiscal 2016 Executive Compensation Highlights
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Base Salary Adjustments.
Following the Compensation Committees annual review, our NEOs, other than Mr. Aguggia, received base salary adjustments that averaged 6.0%, generally consistent with
Bank-wide and market adjustments. Mr. Aguggias base salary was not increased due in part to the Committees desire to shift his compensation mix over time toward greater reliance on variable pay as a component of his total
compensation package.
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Annual Incentive Plan.
The Bank maintains a performance-based annual incentive plan for senior officers, including all NEOs, that ties individual award opportunities to a weighted mix of Company and
individual performance objectives. Under the annual incentive plan, Mr. Aguggia received an award of 12.9% of base salary and awards to other NEOs averaged 12.8% of base salary. All awards were paid in cash after the conclusion of fiscal 2016.
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Equity Incentive Plan.
All of our NEOs received grants of restricted stock and stock options in fiscal 2016. The equity awards, which we believe were fair and reasonable in terms of alignment of our
NEOs interests with stockholders and competitive practices, were based on individual contributions to achieving the Companys strategic goals as well as a review of equity grant practices for newly-converted thrifts such as ourselves. We
believe that the use of multi-year vesting on restricted stock and stock option awards serves as a retention tool for our executives. In addition, we believe that stock options support our growth strategy and reward our NEOs for increases in our
stock price, while restricted stock awards link the value of the equity held by executives with the gains or losses experienced by our shareholders. See
Long-Term Incentive Compensation
for the equity awards granted to our
NEOs in fiscal 2016.
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20
Our Compensation Strategy
Our approach to executive compensation is based on four simple strategic objectives:
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Strategic Objective
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How Our Programs Support our
Strategy
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Pay should reflect
performance and
support our
strategic
goals
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|
Our incentive compensation program supports key elements of our
strategic plan by focusing on Company and individual performance metrics tied to our business strategy.
We link pay to superior Company and individual performance by varying payouts under our
incentive program based on performance results.
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The interests of our
executives should be
aligned with
the
interests of our
stockholders
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A meaningful portion of executive pay is provided in the form of
equity and stock options.
We vest equity and options over an extended period of continued
employment.
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Incentive compensation
programs should
discourage
excessive
risk taking
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Our compensation programs are designed to ensure that we do not create
incentives for our executives to take unnecessary or excessive risks that could undermine the value of our Company.
Our review of the risk profile of our compensation programs is an annual and ongoing
responsibility for our Compensation Committee and our management.
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We must be competitive
in
the marketplace for
talent
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Our compensation plans, including our equity compensation plan, are
designed to give us a competitive edge in the marketplace as we seek talent for our executive ranks.
Through our competitive compensation opportunities, we are able to recruit, retain and
motivate an effective management team in a highly competitive market.
We target pay, including equity-based compensation, at competitive levels relative to
our peers.
Our
Compensation Committee receives the independent advice of a compensation consultant.
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The Governance Framework for Executive Compensation Decisions
All decisions regarding executive compensation are made within the context of a solid governance framework that helps ensure an outcome that is
consistent with our compensation strategy, the creation of stockholder value and the safety and soundness of our banking operations. To that end, we use the following principles to guide the development and implementation of our executive
compensation program:
21
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We use Company and individual performance measures for our annual incentive plan that correlate to our business plan and the creation of stockholder value.
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We design our executive compensation program to discourage excessive risk taking and monitor the implementation of the program regularly to ensure compliance with sound risk management principles and regulatory
requirements.
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We make all key executive compensation decisions and all decisions affecting our NEOs through a committee of independent directors, and we seek advice from an independent compensation consultant on key executive
compensation matters.
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We encourage a meaningful ownership commitment from our senior officers and directors through our stock ownership and retention policy.
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We have a clawback policy that allows us to recapture amounts paid to our executives on the basis of materially inaccurate financial results.
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We do not allow our executives or directors to hedge or pledge Company stock.
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We do not allow single trigger payouts or tax gross-ups under our employment and change in control agreements.
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We do not allow stock option repricing without stockholder approval.
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Our Executive Compensation Decision
Making Process
Key Participants
The Compensation Committee
Our Compensation Committee, all the members of which are independent directors under current Nasdaq listing standards, makes decisions on the
compensation of our key executives, including our NEOs. This responsibility is discharged within the framework of a formal committee charter, which delegates a wide range of strategic and administrative issues to the Committee. The Committee does
not delegate any substantive responsibilities related to the determination of compensation for our NEOs, and the Committee members exercise their independent judgment when they make executive compensation decisions. The Committee meets periodically
throughout the year and, in fiscal 2016, met 21 times.
Key among the Committees responsibilities is the development of, and
monitoring of adherence to, the Companys executive compensation philosophy. In addition, the Committee is responsible for ensuring that our plans and programs comply with all regulatory directives, including consideration of the risk profile
of our compensation programs to ensure that such programs do not encourage unnecessary risk taking by participants. Finally, the Committee is charged with the annual administration of our incentive programs, including the development of plan design,
the selection of performance metrics, the designation of specific performance goals and award opportunities and the certification of performance results. See
Corporate Governance and Board Matters
for a detailed discussion of the
Committees responsibilities and membership.
22
The Committee reviews the compensation of each NEO annually to evaluate whether the
executives pay level is consistent with the goals of our compensation philosophy and risk profile, the performance of both the Company and the individual and whether market practices dictate an adjustment in the form or level of the
executives compensation. As part of this annual review, the Committee considers the executives individual contributions to the financial success of the Company, management of subordinates, contribution to safety and soundness objectives
and his or her long-term potential as a senior executive.
Executive Management
Although the Compensation Committee makes independent determinations on all matters related to compensation of the NEOs, the CEO provides the
Committee with his evaluation of the NEOs performance and makes recommendations regarding base salary and incentive compensation awards. However, the Committee has absolute discretion to accept, reject or modify the CEOs recommendations.
Our CEO plays no role in, and is not present during, discussions regarding his own compensation.
Independent Compensation
Consultant
The Compensation Committee has retained McLagan, an Aon Hewitt Company, as an independent compensation consultant. McLagan
works with the Committee to review our executive compensation program, including the grants of equity-based compensation, and assess our program relative to our performance and the market. McLagan attends Committee meetings as requested and
participates in discussions regarding executive compensation matters. While the Committee considers input from McLagan, the Committees decisions are a reflection of many factors and considerations. Management works with McLagan at the
direction of the Committee to develop materials and analyses that are critical to the Committees evaluations and determinations. McLagan does not provide other significant services to the Company and has no direct or indirect business
relationships with the Company or its affiliates. The Compensation Committee has considered McLagans independence for the 2016 fiscal year and whether its work raised conflicts of interest under Nasdaq listing standards. Considering these
factors, the Committee assessed and determined that the work performed by McLagan does not create any conflict of interest and that McLagan is independent of the Companys management.
Benchmarking
The
Compensation Committee relies on a variety of external sources for executive compensation information, including the American Bankers Association Annual Compensation and Benefits Survey, the New Jersey Bankers Association Compensation Survey and
data provided by McLagan. The Committee evaluates this information, focusing on institutions that have similar characteristics as the Bank, to determine the positioning of compensation for individual executives and to assess whether the Banks
executive compensation structure remains competitive in the markets we serve. The Committee also obtains specific information from McLagan on general industry trends and emerging best practices that may influence the Committees deliberations.
The Committee has not established a formal industry peer group for benchmarking purposes but will do so in the future.
Elements of Compensation
Our executives participate in a competitive compensation program that emphasizes performance and the creation of stockholder value.
The elements of our program, the specific objectives for each element and a summary of how we implement each element are summarized in the table below:
23
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Element
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Objective
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Implementation
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Base Salary
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Provides each executive with fixed compensation.
Reflects the executives position and responsibilities, market competitiveness and
dynamics and our overall pay structure.
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Base salary is subject to annual review based on the Compensation Committees assessment of the executives individual performance and a competitive review of market practices.
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Annual Incentives
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Provides competitive variable cash incentive opportunities that
reward executive performance on Company and individual performance objectives.
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The 2016 program provided award opportunities over a weighted mix of Company and individual performance objectives, ranging from 5% to 15% of base salary.
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Long-Term Incentives
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Provides an incentive for our executives to create stockholder value
over the long-term.
Provides a meaningful portion of compensation paid in stock.
Aligns the compensation interests of our executives with the investment interests of our
stockholders by awarding equity in the Company.
Provides our executives with a
market-competitive program.
Provides a significant retention incentive by
incorporating an extended vesting period.
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Equity compensation is a key component of the overall compensation mix for our NEOs. We made awards in fiscal 2016 based on a variety of factors, including the need to retain key executives, individual performance and our continuing
objective of improving the alignment between key personnel and our stockholders.
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Retirement Benefits
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Participation in the same tax-qualified benefit plans as our
rank-and-file employees to provide our executives with additional income after retirement
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Our retirement program is based on our ESOP, which is funded by Bank contributions, and our 401(k) plan, which currently provides for employee elective deferral contributions and Bank matching contributions. Mr. Aguggia and Ms.
Piano also participate in an excess benefits plan that provides them with benefits that, due to federal tax law limitations, cannot be allocated directly through the ESOP and 401(k) Plan. Mr. Aguggia does not participate in the Banks
Directors Retirement Plan.
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Perquisites
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Limited perquisites that represent a minor portion of the overall
annual compensation of our NEOs.
Perquisites are specifically targeted to items that
help the executive fulfill the requirements of his/her position.
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In 2016, perquisites included an automobile allowance for Mr. Aguggia, Ms. Piano, and Ms. Hrotko and use of a company cellular phone for all NEOs.
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Employment/Change in
Control
Agreements
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Help to ensure the continued availability of our NEOs in key positions
in the event of a Change in Control.
Establishes market-competitive terms and
conditions for the continuing employment of our NEOs.
Assists with an orderly
transition of management if a change in control of the Company were to occur.
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Our current NEO employment and change in control agreements include double trigger change in control protection. The agreements do not provide for tax gross-ups or tax indemnification payments.
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24
Fiscal 2016 Executive Compensation Programs and Decisions
Our executive compensation review process began early in the year when the Compensation Committee, in consultation with our independent
compensation consultant, determined the specific components of executive compensation and established a target pay mix for each NEO for the upcoming year. During this period, the Committee identified and selected the applicable Company and
individual performance metrics for our new annual incentive compensation program. Our fiscal 2016 program included three primary components: (i) base salary, (ii) cash-based, annual incentive awards and (iii) grants of restricted
stock and stock options.
Base Salary
Our named executive officers receive base salaries at levels that reflect the nature, scope, and complexity of their specific positions. The
salaries of our named executive officers are reviewed annually to reflect their performance, ongoing contributions, and competitive market practices. Base salaries reflect the fixed portion of our total compensation and a reference point
for targeting incentive compensation opportunities. As part of our salary review process, we obtain industry data from published sources and our independent compensation consultant to help provide context for our decisions.
Fiscal 2016 Base Salary Adjustments
Consistent with past practice, the Compensation reviewed the base salary levels of our NEOs in late 2015 as part of a Bank-wide review. The
Committee authorized increases averaging 6.0% (ranging from 5.7% to 7.0 %) for each NEO, other than Mr. Aguggia, based on an assessment of their compensation history relative to similarly situated officers at peer institutions, individual
performance, the role of each officer in the Companys senior management team and the significant and continuing contributions of each officer to the success of the Company. Mr. Aguggias base salary was not increased due in part to
the Committees desire to shift his compensation mix over time toward greater reliance on variable pay as a component of his total compensation package.
Annual Incentive Compensation
Prior to
fiscal 2015, our employees, including our NEOs, received discretionary cash bonuses that were based on the Committees assessment of individual and Company performance. In fiscal 2015, the Committee, in consultation with McLagan, initiated a
pay-for-performance incentive plan for officers at the level of senior vice president and above with award opportunities linked to the attainment of specific Company and individual performance objectives. The Committee believes that the plan design
provides specific incentives to achieve desired results and, therefore, enhances the alignment between executive compensation and the Companys strategic objectives. Accordingly, this approach was continued for fiscal 2016.
Under the plan, each executive has a range of award opportunities, expressed as a percentage of base salary, that reflect performance at
threshold, target and maximum levels. The plan also included two gateway requirements that must be satisfied in order for any award to be payable to a participant: (i) the Bank must not be under an order from its regulators and
(ii) individual participants must have a performance rating of Satisfactory or better for the fiscal year. However, even if the gateway requirements are satisfied, no awards are provided for performance below the threshold.
25
Fiscal 2016 Performance Measures
For each participant in the 2016 plan, award opportunities were based on a weighted assessment of three Company financial metrics and three to
five individual performance objectives. Each participant was assigned a different weighting of these elements based on his or her position and role. The Committee selected three financial metrics for the 2016 plan: (i) fiscal year net income,
(ii) net interest margin and (iii) efficiency ratio. The Committee assigned a weighting to each metric to determine its contribution to the portion of the actual award attributable to financial results. The individual objectives were also
weighted and reflected a range of items, including the completion of specific projects or initiatives under the Banks business plan. The CEOs performance with respect to the individual objectives was evaluated by the Compensation
Committee, while other participants were evaluated by the CEO and the Compensation Committee. The following table provides detail on the Company financial metrics that we used in the 2016 plan:
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Fiscal 2016 Financial Metrics
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Threshold
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Target
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Maximum
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Fiscal 2016
Actual
Results
|
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Net Income (50% Weighting)
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$
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4.5 million
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$
|
5.0 million
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$
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5.5 million
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$
|
5.4 million
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|
Net Interest Margin (30% Weighting)
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2.30
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%
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2.37
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%
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2.56
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%
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2.39
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%
|
Efficiency Ratio (20% Weighting)
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72.0
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%
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69.0
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%
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64.0
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%
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68.0
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%
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Fiscal 2016 Incentive Award Opportunities
Award opportunities under the 2016 incentive plan were set by the Compensation Committee based on competitive market practice and defined as a
percentage of each executives base salary at the beginning of the year. All incentive awards were paid in cash. The following table shows the fiscal 2016 award opportunities established by the Compensation Committee for our NEOs and the
relative weighting of Company and individual metrics:
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Award Opportunities
(as % of base salary)
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Goal Weighting
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Threshold
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Target
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|
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Maximum
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Company
|
|
|
Individual
|
|
Paul Aguggia
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|
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5
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%
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10
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%
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|
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15
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%
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80
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%
|
|
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20
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%
|
Bart DAmbra
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|
|
5
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%
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|
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10
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%
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15
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%
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|
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50
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%
|
|
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50
|
%
|
Stephen Hoogerhyde
|
|
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5
|
%
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|
|
10
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%
|
|
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15
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%
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|
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50
|
%
|
|
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50
|
%
|
Christine Piano
|
|
|
5
|
%
|
|
|
10
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%
|
|
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15
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%
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|
|
70
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%
|
|
|
30
|
%
|
Tricia Hrotko
|
|
|
5
|
%
|
|
|
10
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%
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|
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15
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%
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70
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%
|
|
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30
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%
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Fiscal 2016 Annual Incentive Plan Awards
As shown in the table above, the Companys fiscal 2016 results reflected performance between the target and maximum award levels for net
income, net interest margin and efficiency ratio. Each of our NEOs also achieved performance between target and maximum levels for his or her individual incentive goal When considered together with each executives level of performance with
respect to the individual goals, the Compensation Committee authorized an award for our CEO at 12.9% of base salary, and awards averaging 12.8% of base salary for the other NEOs.
26
Long-Term Incentive Compensation
When it was organized in the mutual holding company structure, the Companys ability to grant equity compensation to our NEOs was subject
to significant regulatory restrictions. These restrictions meant that we were unable to grant equity in order to increase our executives equity holdings and their correspondent alignment with shareholders over time. This is evidenced by the
fact that, prior to fiscal 2016, none of our NEOs had received equity awards since 2005, and our CEO had not been granted equity since joining the Company in 2014. Following our second-step conversion in 2014 and shareholder approval of the 2015
Equity Incentive Plan, the Compensation Committee was, for the first time in several years, in a position to provide our NEOs with long-term incentive compensation in the form of restricted stock awards and stock option grants.
In making long-term incentive awards, the Committee considered a variety of factors including (i) the relationship of proposed grants to
each NEOs total compensation, (ii) the performance of NEOs and their contribution to the Companys success, (iii) grant practices among other newly converted financial institutions and other peer institutions and (iv) the
need to attract and retain key personnel. Working with McLagan, the Committee developed an equity award strategy that considered these factors. Specifically, the Committee adopted an approach that would authorize initial one-time grants to key
personnel, including the NEOs, in order to meaningfully increase their alignment with stockholders. The adopted approach also provided for grants to other officers as part of a performance review and overall compensation. Each NEO received
restricted stock awards and stock options that vest over five years on the anniversary of the grant date. The Committee believes that the five-year vesting period is appropriate considering the magnitude of the awards and its desire that the awards
provide a significant retention incentive to recipients. All awards were made under, and are subject to the terms and conditions of, the 2015 Equity Incentive Plan. While we recognize that the magnitude of the one-time stock and option awards is
unusual in terms of normal annual compensation for many banks comparable to our size, we believe that the awards were fair and reasonable in light of the competitive practices of newly-converted thrifts, the absence of equity awards for a
substantial period of time, and the desire to increase the alignment of our NEOs interests with stockholders. For specific information on NEO awards, see
Executive Compensation Grants of Plan-Based Awards.
Other Executive Benefits
Employment Agreements and Change in Control Benefits
Our named executive officers, other than Ms. Hrotko, are covered by employment agreements providing specified severance benefits and
benefit continuation in the event of their termination without cause or for good reason (as defined in the agreement), disability, and after a change in control. Ms. Hrotko entered into a change in control severance agreement with the Bank when
she joined the Bank in 2014. No severance benefits are payable if the executive dies, is terminated for cause or upon the executives voluntary resignation without good reason. In the change in control context, the agreements are double
trigger, requiring both the occurrence of a change in control and the executives involuntary termination of employment or constructive termination for good reason. For additional information regarding the terms of these agreements, see
the section headed
Potential Post-Termination Payments and Benefits
following the
Summary Compensation Table
.
The
Committee, with management support, follows a policy that all employment agreements must reflect the following terms: (i) double trigger change in control benefits and (ii) no indemnification for golden parachute
excise tax liabilities. The Committee believes that the agreements (i) will help retain the NEOs and facilitate an orderly transition during a change in control, (ii) will provide the NEOs with financial protection so they will continue to
act in the best interests of the Company during the change in control process and (iii) reflect an important element of a competitive compensation package for the NEOs.
27
Retirement Benefits; Employee Welfare Benefits
Our principal retirement savings vehicle is our tax-qualified Employee Stock Ownership Plan (the ESOP). In connection with our
second-step conversion, our ESOP acquired an additional 1,023,566 shares to ensure the continued availability of this benefit for our employees. The ESOP has fostered a strong sense among our employees that they are owners with a vested interest in
the success of the Company. We also offer our employees a 401(k) plan that enables our employees to supplement their retirement savings with elective deferral contributions and Bank matching contributions. Mr. Aguggia and Ms. Piano
participate in a non-qualified excess benefits plan that provides them with benefits that cannot be allocated to them under the ESOP or the 401(k) as a result of Internal Revenue Code limits applicable to tax-qualified plans. For additional
information regarding the supplemental retirement benefits plan, please see the section headed
Potential Post-Termination Payments and Benefits
following the
Summary Compensation Table
.
In addition to retirement programs, we provide our employees, including our named executive officers, with coverage under medical, life
insurance, and disability plans on terms consistent with industry practice and available to all employees. We also provide employees with access to a Section 125 Plan to pay their share of the cost of such coverage on a pre-tax basis.
Perquisites
We
provide our named executive officers with limited perquisites to further their ability to promote the business interests of the Company in our markets and to reflect competitive practices for similarly situated officers employed by our peers. The
perquisites are reviewed periodically by the Compensation Committee and adjusted as necessary.
Other Considerations
Risk Management and Our Compensation Programs
A central tenet of our compensation philosophy is to provide incentives that are consistent with prudent risk management while recognizing that
some level of risk is inherent in the operation of our business. Our approach to risk management takes as a starting point the following guidelines:
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Incentive compensation should balance risk and financial results in a manner that does not provide incentives for excessive risk taking.
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Risk management processes and internal controls should reinforce and support the development of balanced incentive compensation arrangements.
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The Bank must have strong and effective corporate governance to help ensure sound compensation practices.
|
The Compensation Committee monitors our incentive compensation programs regularly to ensure that the programs reflect a balanced mix of
incentives that discourage unnecessary or excessive risk taking by our management team and by employees throughout the organization. An important element of our risk management process is the identification of the extent of the Companys risk
appetite, which establishes the baseline for the design of our incentive programs. We maintain a comprehensive risk management process and strong internal controls to manage risks arising out of our incentive compensation program.
28
We do not believe that the risks arising out of our incentive compensation programs are
reasonably likely to have a material adverse effect on the Company. We believe our programs our balanced and do not encourage excessive risk taking by the participants that could threaten the value of the Company. This determination is based on our
consideration of (i) the Boards role in establishing the Companys risk appetite, (ii) the controls we place on our business operations and (iii) the nature of the specific incentive plans and programs we maintain for our
employees.
Stock Ownership and Retention Requirements
We maintain formal stock ownership guidelines for named executive officers and outside directors. While our NEOs and directors own meaningful
interests in the Company, we recognize that the implementation of formal guidelines is considered a best practice and will affirm our formal commitment to stock ownership and retention as a central element of our compensation philosophy. Under the
guidelines, we established the following ownership levels for the NEOs and outside directors:
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Position
|
|
Stock Ownership and
Retention Guidelines
|
CEO
|
|
3x base salary
|
Other Named Executive Officers
|
|
2x base salary
|
Non-Employee Directors
|
|
3x annual retainer and fees
|
Each individual has five years from the date of adoption of the policy (or, if applicable, the point of
initial service) to meet the ownership guidelines. We count awards under our equity compensation program, stock allocated through our ESOP and the related excess benefits plan and shares acquired through our 401(k) plan towards compliance with the
ownership guidelines. The Compensation Committee is charged with maintaining compliance with the stock ownership guidelines.
Recoupment of Incentive Compensation
It has long been our practice to review past incentive compensation awards in light of any material restatement of our financial results. The
Compensation Committee has adopted a formal recoupment or clawback policy that applies to both annual and long-term incentive awards made to our executive officers. Under our policy, the Company may recover or forfeit previously paid or
awarded incentive compensation if the Compensation Committee determines that such compensation was paid on the basis of materially inaccurate financial metrics or financial statements or if such compensation is attributable to actions on the part of
an executive that result in or are reasonably expected to expose the Company to material actual or potential risk.
Hedging and
Pledging of Company Stock
We maintain a formal policy that prohibits our directors and executive officers from hedging the value
of our stock. The policy bars the purchase and sale or puts, calls, options or other derivative securities based on Company stock or other transactions related to the monetization of the value of our stock. In addition, officers and directors are
not allowed to pledge Company stock as collateral or acquire Company stock on margin.
29
Tax and Accounting Considerations
In consultation with our advisors, we evaluate the tax and accounting treatment of each of our compensation programs at the time of adoption,
and on an annual basis, to ensure that we understand the financial impact of each program on the Company. Our analysis includes a detailed review of recently adopted and pending changes in tax and accounting requirements. As part of our review, we
consider modifications and/or alternatives to existing programs to take advantage of favorable changes in the tax or accounting environment or to avoid adverse consequences.
To the greatest extent possible, it is our intent to structure our compensation programs in a tax-efficient manner. As currently structured
and approved, our incentive programs meet the requirements of performance-based pay pursuant to Internal Revenue Code Section 162(m). However, the Compensation Committee has the discretion to provide our executives with non-deductible forms of
compensation.
Equity Compensation Grant and Award Practices
Equity awards are based on the Compensation Committees evaluation of the individuals role in the Company, his or her individual
performance and consideration of peer group practices with respect to similarly situated individuals. As a general matter, the Compensation Committees process has been independent of any consideration of the timing of the release of material
non-public information, including with respect to the determination of grant dates. Similarly, the Company has never timed the release of material non-public information with the purpose or intent of affecting the value of executive compensation. In
general, the release of such information reflects long-established timetables for the disclosure of material non-public information, such as earnings releases or, with respect to other events reportable under federal securities laws, the applicable
requirements of such laws with respect to the timing of disclosure. We set the exercise price of stock options as of the date of Compensation Committee action by reference to the applicable provisions of our equity compensation plan.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis that is required by the rules established by
the Securities and Exchange Commission. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. See
Compensation Discussion and Analysis.
The Compensation Committee of Clifton Bancorp Inc.
Joseph C. Smith, Chairman
Stephen
Adzima
John H. Peto
Charles
J. Pivirotto
Cynthia Sisco
30
EXECUTIVE COMPENSATION
Summary Compensation Table
The following
information is furnished for the Companys named executive officers, as identified by the Company pursuant to the rules of the Securities and Exchange Commission. The table below shows the full fair value of stock awards and option awards on
the date of grant. The actual value of stock awards and option awards depend on an executives continued service and the market value of Clifton Bancorp Inc. common stock at the time of vesting. The awards below vest over a five-year period
beginning on September 2, 2016. There can be no assurance that the actual values received will be at or near the values reflected below.
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|
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|
|
|
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|
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|
|
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|
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|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock
Awards
(1)
|
|
|
Option
Awards
(2)
|
|
|
Non-Equity
Incentive Plan
Compensation
(3)
|
|
|
All Other
Compensation
(4)
|
|
|
Total
|
|
Paul M. Aguggia
Chairman, President and Chief Executive Officer of the Company and the Bank
|
|
|
2016
2015
2014
|
|
|
$
|
650,000
650,000
162,500
|
|
|
$
|
250,000
|
|
|
$
|
1,888,814
|
|
|
$
|
500,524
|
|
|
$
|
83,827
97,500
|
|
|
$
|
261,669
267,442
2,100
|
|
|
$
|
3,384,834
1,014,942
414,600
|
|
Bart DAmbra
(5)
Executive Vice President and Corporate Secretary of the Company and the Bank
|
|
|
2016
2015
2014
|
|
|
|
177,500
167,231
158,762
|
|
|
|
10,192
|
|
|
|
472,207
|
|
|
|
83,420
|
|
|
|
22,543
23,450
|
|
|
|
75,587
60,384
36,665
|
|
|
|
831,257
251,065
205,619
|
|
Stephen Hoogerhyde
Executive Vice President of the Company and Executive Vice President and Chief Lending Officer of the Bank
|
|
|
2016
2015
2014
|
|
|
|
177,500
171,307
164,002
|
|
|
|
10,529
|
|
|
|
472,207
|
|
|
|
83,420
|
|
|
|
23,468
23,100
|
|
|
|
73,422
61,416
36,946
|
|
|
|
830,017
255,823
211,477
|
|
Christine R. Piano, CPA
Executive Vice President, Chief Financial Officer and Treasurer of the Company and Executive Vice President and Chief Financial Officer of the
Bank
|
|
|
2016
2015
2014
|
|
|
|
218,750
193,125
179,197
|
|
|
|
11,504
|
|
|
|
849,970
|
|
|
|
194,648
|
|
|
|
30,266
32,250
|
|
|
|
97,016
67,364
41,276
|
|
|
|
1,390,650
292,739
231,977
|
|
Patricia C. Hrotko
(6)
Executive Vice President of the Company and Executive Vice President and Chief Revenue Officer of the Bank
|
|
|
2016
2015
2014
|
|
|
|
177,500
166,750
|
|
|
|
|
|
|
|
472,207
|
|
|
|
83,420
|
|
|
|
23,998
25,813
|
|
|
|
68,887
|
|
|
|
826,012
192,563
|
|
(1)
|
Reflects the grant date aggregate fair value calculated in accordance with FASB ASC Topic 718 on outstanding restricted stock awards for each of the named executive officers. The amounts were calculated based on Clifton
Bancorps $13.84 stock price as of the date of the September 2, 2015 grant date. When shares become vested and are distributed from the trust in which they are held, the recipient will also receive an amount equal to accumulated cash and
stock dividends (if any) paid with respect thereto.
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(2)
|
Reflects the grant date aggregate fair value calculated in accordance with FASB ASC Topic 718 for outstanding stock option awards for each of the named executive officers based upon a $1.63 fair value for each option
using the Black-Scholes option pricing model. Clifton Bancorp uses the Black-Scholes option pricing model to estimate its compensation cost for stock options awards. For further information on the assumptions used to compute fair value, see note 10
to the notes to the consolidated financial statements included in the Companys Annual Report on Form 10-K for the year ended March 31, 2016. The actual value, if any, realized by a named executive officer from any option will depend on
the extent to which the market value of the common stock exceeds the exercise price of the option on the date the option is exercised. Accordingly, there is no assurance that the value realized by a named executive officer will be at or near the
value estimated above.
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(3)
|
Represents amounts earned under the Clifton Savings Bank Performance Incentive Compensation Plan for fiscal 2016 and paid in the subsequent fiscal year.
|
(4)
|
For 2016, amounts include, but are not limited to, employee stock ownership plan allocations valued at $78,618, $66,273 $64,776, $81,714 and $58,116 for Mr. Aguggia, Mr. DAmbra, Mr. Hoogerhyde and
Ms. Piano and Ms. Hrotko, respectively, and matching contributions under the Banks 401(k) Plan for all executive officers listed. Mr. Aguggia also had a supplemental ESOP benefit and a 401(k) Plan matching contribution made
through the Banks supplemental executive retirement plan. For Mr. Aguggia, Ms. Piano, and Ms. Hrotko amounts also include automobile allowance.
|
31
(5)
|
On April 1, 2016, Mr. DAmbra notified Clifton Bancorp that (i) he will be retiring effective December 31, 2016 and (ii) effective as of April 1, 2016, he would relinquish his duties
as Chief Operating Officer of Clifton Bancorp and Clifton Savings. Effective upon his retirement, Mr. DAmbra will forfeit all unvested restricted stock and option awards that the Company had granted to him prior to the effective time of
his retirement.
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(6)
|
Ms. Hrotko was employed effective April 1, 2014. Accordingly, no compensation information is provided for prior periods.
|
Employment Agreements
Clifton Bancorp
and Clifton Savings have entered into employment agreements with Messrs. Aguggia, DAmbra and Hoogerhyde and Ms. Piano (collectively referred to herein as the executives). Each employment agreement provides for a three-year
term. The term of each of the agreements with Clifton Bancorp automatically extends to a three-year term each day until one party gives the other party notice of its intent not to renew the agreement, at which time the term of the agreement becomes
fixed at three years. The Board of Directors of Clifton Savings may extend the terms of the employment agreements with Clifton Savings annually. The terms of the agreements with Clifton Savings currently expire on December 31, 2018, except for
Mr. DAmbra. On April 1, 2016, Mr. DAmbra voluntarily terminated his employment agreements with Clifton Bancorp and Clifton Savings in connection with his notice to the Company that (i) he will be retiring effective
December 31, 2016 and (ii) effective as of April 1, 2016, he would relinquish his duties as Chief Operating Officer of Clifton Bancorp and Clifton Savings.
Current base salaries for Messrs. Aguggia, DAmbra and Hoogerhyde and Ms. Piano are $650,000, $185,000, $185,000 and $230,000,
respectively. The Company and Bank Compensation Committees annually review the executives base salaries. In addition to base salary, the employment agreements provide for, among other things, participation in stock-based benefit plans and
fringe benefits applicable to each executive. The agreements also provide for certain payments to the executives following their termination of employment due to a change in control, their death, disability, or upon termination without Just Cause
(as defined in each agreement). See
Potential Payments on Termination of Employment or Change in Control
for a discussion of the benefits upon termination under each circumstance.
The Bank or the Company will pay or reimburse the executives for all reasonable costs and legal fees paid or incurred by the executives in any
dispute or question of interpretation relating to the employment agreement if the executive is successful on the merits in a legal judgment, arbitration or settlement. The employment agreements also provide that the Bank and the Company will
indemnify the executives to the fullest extent legally allowable. In addition, the employment agreements provide that, except in the event of a change in control, the executives are subject to a one-year non-compete in the event their employment is
terminated.
On January 6, 2016, the Board of Directors of the Company and the Bank approved certain amendments to the previously
executed employment agreements between the Company, the Bank and Mr. Aguggia. The amendments revised Mr. Aguggias respective employment agreements with the Company and the Bank to provide that, in the event of disability (as such
term is defined in the agreements), Mr. Aguggias obligations to perform services to the Company and the Bank under the employment agreements will terminate and Mr. Aguggia will continue to receive (x) 100% of his monthly base
salary (at the annual rate in effect on his date of termination) through the 180th day following his date of termination by reason of disability and (y) 60% of his monthly base salary from the 181st day following termination through the first
to occur of (i) his death, (ii) the date he attains age 65 or (iii) the third anniversary of his termination by reason of disability. Prior to this amendment to Section 11(b)(ii) of the employment agreements, after the 180th day
following his date of termination, Mr. Aguggia would
32
have been entitled to receive 60% of his monthly base salary through the earlier of his death or the date he attained age 70. The amendments also modified Mr. Aguggias employment
agreement by adopting a best net benefits approach in the event that severance benefits under the agreement or otherwise result in excess parachute payments under Section 280G of the Internal Revenue Code of 1986, as
amended.
Change in Control Agreement
The Bank maintains a change in control agreement with Ms. Hrotko that provides certain severance benefits if her employment is terminated
in connection with a change in control of the Company or the Bank. The agreement provides for a term of twenty-four (24) months. On the anniversary date of the agreement, and following a review of Ms. Hrotkos job performance, the
Board of Directors may extend the agreement for an additional year such that the term of the agreement will remain at twenty-four (24) months. The current term of the agreement runs through April 1, 2018.
See
Potential Post-Termination Benefits
for a discussion of the benefits and payments Ms. Hrotko may receive
under her change in control agreement.
Grants of Plan-Based Awards
Performance Incentive Compensation Plan.
The following table provides information concerning our grants of plan-based awards for
the named executive officers during fiscal 2016 under the Clifton Savings Bank Performance Incentive Compensation Plan.
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|
|
|
|
|
|
|
|
|
|
Name
|
|
Estimated Possible Payouts
Under Non-Equity Incentive Plan Awards (1)
|
|
|
5%
Threshold
|
|
|
10%
Target
|
|
|
15%
Maximum
|
|
Paul M. Aguggia
|
|
$
|
32,500
|
|
|
$
|
65,000
|
|
|
$
|
97,500
|
|
Bart DAmbra
|
|
|
9,250
|
|
|
|
18,500
|
|
|
|
27,750
|
|
Stephen Hoogerhyde
|
|
|
9,250
|
|
|
|
18,500
|
|
|
|
27,750
|
|
Christine R. Piano
|
|
|
11,500
|
|
|
|
23,000
|
|
|
|
34,500
|
|
Patricia C. Hrotko
|
|
|
9,250
|
|
|
|
18,500
|
|
|
|
27,750
|
|
(1)
|
These columns show the possible payouts for each named executive officer under Clifton Savings Banks Performance Incentive Compensation Plan. See
Summary Compensation Table
for actual non-equity
incentive plan awards earned in fiscal 2016 which was paid in fiscal 2017.
|
33
2015 Equity Incentive Plan.
The following table provides information concerning
restricted stock and stock option awards granted to the named executive officers in fiscal 2016 under the Clifton Bancorp Inc. 2015 Equity Incentive Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
Number of Shares of
Stock or Units (1)
|
|
|
Number of Securities
Underlying
Options (2)
|
|
|
Exercise or
Base Price of
Option Awards
|
|
|
Grant Date Fair
Value of Stock
Awards and
Options (3)
|
|
Paul M. Aguggia
|
|
|
09/02/2015
|
|
|
|
136,475
|
|
|
|
|
|
|
$
|
|
|
|
$
|
1,888,814
|
|
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
307,070
|
|
|
|
13.84
|
|
|
|
500,524
|
|
Bart DAmbra
|
|
|
09/02/2015
|
|
|
|
34,119
|
|
|
|
|
|
|
|
|
|
|
|
472,207
|
|
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
51,178
|
|
|
|
13.84
|
|
|
|
83,420
|
|
Stephen Hoogerhyde
|
|
|
09/02/2015
|
|
|
|
34,119
|
|
|
|
|
|
|
|
|
|
|
|
472,207
|
|
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
51,178
|
|
|
|
13.84
|
|
|
|
83,420
|
|
Christine R. Piano
|
|
|
09/02/2015
|
|
|
|
61,414
|
|
|
|
|
|
|
|
|
|
|
|
849,970
|
|
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
119,416
|
|
|
|
13.84
|
|
|
|
194,648
|
|
Patricia C. Hrotko
|
|
|
09/02/2015
|
|
|
|
34,119
|
|
|
|
|
|
|
|
|
|
|
|
472,207
|
|
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
51,178
|
|
|
|
13.84
|
|
|
|
83,420
|
|
(1)
|
For all named executive officers, restricted shares vest in five equal installments beginning on the first anniversary of the grant date.
|
(2)
|
For all named executive officers, options vest in five equal annual installments beginning on the first anniversary of the grant date.
|
(3)
|
Sets forth the grant date fair value of stock and option awards calculated in accordance with FASB ASC Topic 718. The grant date fair value of all restricted stock awards is equal to the number of awards multiplied by
$13.84, the closing price for Clifton Bancorps common stock on the date of grant. The grant date fair value for stock option awards is equal to the number of options multiplied by a fair value of $1.63, which was computed using the
Black-Scholes option pricing model. For further information on the assumptions used to compute fair value, see note 10 to the notes to the consolidated financial statements included in the Companys Annual Report on Form 10-K for the year ended
March 31, 2016.
|
Nonqualified Deferred Compensation
Clifton Savings sponsors a supplemental executive retirement plan to provide for supplemental retirement benefits related to its employee stock
ownership plan and the 401(k) plan. The plan provides benefits to eligible officers (those designated by the Board of Directors of Clifton Savings) that cannot be provided under the 401(k) plan or the employee stock ownership plan as a result of
eligibility requirements of the plans and/or limitations imposed by the Internal Revenue Code, but that would have been provided under the plans, but for these eligibility requirements and/or Internal Revenue Code limitations. Mr. Aguggia and
Ms. Piano are currently the only participants in the plan. Ms. Piano received no benefits under the plan during fiscal 2016. In addition to providing benefits that would otherwise be lost as a result of eligibility requirements or the
Internal Revenue Code limitations on tax-qualified plans, the plan also provides a supplemental benefit upon a change of control prior to the scheduled repayment of the employee stock ownership plan loans. See
Potential Payments on
Termination of Employment or Change in Control
for further discussion of these benefits.
34
The following table provides information with respect to the Banks non-qualified
supplemental executive retirement plan.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Registrant
Contributions in Last
Fiscal Year
(1)
|
|
|
Aggregate
Earnings in
Fiscal 2016
|
|
|
Aggregate Balance
at Last Fiscal Year
End
|
|
Paul M. Aguggia
|
|
Supplemental Executive Retirement Plan
|
|
$
|
145,321
|
|
|
$
|
5,013
|
|
|
$
|
423,534
|
|
(1)
|
Registrant contributions are reported as other compensation in 2016 in the
Summary Compensation Table.
|
Outstanding Option and Restricted Stock Awards at March 31, 2016
The following table provides information concerning unexercised options and unvested shares of restricted stock for each named executive
officer outstanding as of March 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Gramt
Date
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1) (2)
|
|
|
Option Exercise
Price
|
|
|
Option
Expiration Date
|
|
|
Number of
Shares or Units
of Stock That
Have Not
Vested
|
|
|
Market Value of
Shares or Units
of Stock that
Have Not
Vested
(3)
|
|
Paul M. Aguggia
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
307,070
|
|
|
$
|
13.84
|
|
|
|
09/02/2025
|
|
|
|
136,475
|
|
|
$
|
2,063,502
|
|
Bart DAmbra
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
51,178
|
|
|
|
13.84
|
|
|
|
09/02/2025
|
|
|
|
34,119
|
|
|
|
515,879
|
|
Stephen Hoogerhyde
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
51,178
|
|
|
|
13.84
|
|
|
|
09/02/2025
|
|
|
|
34,119
|
|
|
|
515,879
|
|
Christine R. Piano
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
119,416
|
|
|
|
13.84
|
|
|
|
09/02/2025
|
|
|
|
61,414
|
|
|
|
928,580
|
|
Patricia C. Hrotko
|
|
|
09/02/2015
|
|
|
|
|
|
|
|
51,178
|
|
|
|
13.84
|
|
|
|
09/02/2025
|
|
|
|
34,119
|
|
|
|
515,879
|
|
(1)
|
Options vest in five equal installments beginning one year from the date of grant.
|
(2)
|
Restricted shares vest in five equal installments beginning one year from the date of grant.
|
(3)
|
Based upon Clifton Bancorps closing stock price of $15.12 on March 31, 2016.
|
Option Exercises
and Stock Vested
The following table provides information with respect to the exercise of stock option awards for our named executive
officers, on an aggregate basis, during fiscal 2016. Aside from the individual listed below, no named executive officer exercised stock options during fiscal 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option awards
|
|
Name
|
|
Exercise Date
|
|
|
Number of Shares
Acquired on Exercise
|
|
|
Value Realized
on Exercise (1)
|
|
Christine R. Piano
|
|
|
05/12/2015
|
|
|
|
44,981
|
|
|
$
|
158,746
|
|
|
|
|
05/13/2015
|
|
|
|
23,437
|
|
|
|
82,959
|
|
|
|
|
05/14/2015
|
|
|
|
7,104
|
|
|
|
25,216
|
|
(1)
|
The value realized upon exercise is equal to the aggregate fair market value on the date of exercise, less the aggregate exercise price on the grant date, multiplied by the number of shares exercised.
|
35
Potential Payments on Termination of Employment or Change in Control
The following is a description of the potential payments we will make to our named executive officers upon the termination of their employment
or a change in control of the Company and the Bank. In each of the scenarios described below, all benefits credited to Mr. Aguggia and Ms. Piano under the supplemental executive retirement plan are nonforfeitable by the terms of the plan
and, therefore, we will distribute the benefits to them upon termination of employment for any reason.
Payments Made Upon
Termination for Just Cause or Upon Voluntary Resignation (Including Retirement).
If we terminate a named executive officers employment for just cause (as defined in the employment agreements) or if an executive voluntary resigns under
circumstances that would not constitute good reason (as defined in the employment agreements), including retirement, the executive will receive his or her base salary through the date of termination and retain the rights to any vested benefits,
subject to the terms of the plan or arrangement under which we provide those benefits. All vested stock options will remain exercisable in accordance with the terms of the option agreements.
Payments Made Upon Termination Without Just Cause or Resignation for Good Reason.
If we terminate an executives employment
other than for just cause, or an executive voluntarily terminates his or her employment for good reason (as defined in the employment agreement), the executive (or, upon his or her subsequent death, his or her beneficiary) would receive a lump sum
cash payment equal to the sum of (a) the base salary and incentive compensation that would have been paid for the remaining term of the employment agreement; (b) the value of any unvested restricted stock and stock options as of the
termination date (that would not otherwise vest as a result of the termination), plus (c) the value of employee benefits that would have been provided for the remaining term of the employment agreement (based on the most recent level of
contribution, accrual or other participation by or on behalf of the executive). We would also provide continued life, medical, health and disability insurance coverage for the remaining term of the employment agreement. Under the employment
agreements, each executive must adhere to a one-year, non-competition restriction if we terminate his or her employment other than for just cause or if the executive terminates employment for good reason.
Payments Made Upon Disability.
Under Mr. Aguggias employment agreement, if he becomes disabled, we will provide him
with a monthly disability benefit equal to 100% of his monthly base salary through the 180th day following his termination due to disability, and 60% of his base salary from the 181st day after termination through the earlier of (i) his death,
(ii) his attainment of age 65 or (iii) the third anniversary of his termination by reason of disability. Under Mr. Hoogerhydes and Ms. Pianos employment agreements, if either executive becomes disabled, we will
provide him or her with a monthly disability benefit equal to 100% of the executives monthly base salary through the 180
th
day following the executives termination due to disability,
and 60% of the executives base salary from the 181
st
day after termination through the earlier of the executives death or attainment of age 70. All disability payments under the
employment agreements are reduced by the amount of any short- or long-term disability benefits payable to the contracted named executive officers under Bank-sponsored disability plans. Mr. Aguggia, Mr. DAmbra, Mr. Hoogerhyde,
Ms. Piano and Ms. Hrotko all participate in both a short-term and long-term disability plan sponsored by Clifton Savings and are entitled to benefits under the plan based on age and compensation. In addition, during any period of
disability, the executive and his or her dependents will receive all benefits under the plan (including without limitation, retirement plans, medical, and life insurance plans), to the greatest extent possible, on the same terms as if the executive
was actively employed.
36
Payments Made Upon Death.
Under the employment agreements, upon an executives
death, we will pay the executives estate any accrued but unpaid salary or bonus payments through the date of death. In addition, for a period of six months after the executives death, we will continue to provide his or her dependents
medical insurance benefits existing on the date of death and shall pay the executives beneficiary all salary compensation that would otherwise be payable to him or her under the employment agreement. In addition, the beneficiary for each
executive participating in the supplemental executive retirement plan will be entitled to his or her account balance as of his or her date of death.
Upon an executives death, outstanding stock options granted pursuant to our 2015 Equity Incentive Plan will remain exercisable until the
earlier of one year from the date the executive dies or the original expiration of the stock options.
Payments Made Upon
Termination Following a Change in Control.
If we, or our successors, terminate Mr. Aguggias, Mr. DAmbras, Mr. Hoogerhydes or Ms. Pianos employment in connection with or following a change in
control, or if any of these executives terminates employment for good reason in connection with or following a change in control, then, pursuant to the terms of the employment agreements, we will pay the executive a cash severance payment equal to
the greater of (i) the payments and benefits due for the remaining term of the employment agreement or (ii) three times the sum of: (a) the executives average base salary for the five years preceding the change in control (or,
if a lesser period, the executives actual period of employment), (b) the average incentive or bonus compensation paid for the five years preceding the change in control (or, if a lesser period, the executives actual period of
employment), (c) the average income realized on the vesting of stock awards for the five years preceding the change in control (or, if a lesser period, the executives actual period of employment), (d) the average of the contributions
made on an executives behalf to the 401(k) plan or employee stock ownership plan and supplemental plans for the five years preceding the change in control (or, if a lesser period, the executives actual period of employment), and
(e) the average of any other taxable income for the five years preceding the change in control(or, if a lesser period, the executives actual period of employment) excluding income realized with respect to stock options and income related
to the distribution of benefits under any retirement plan. We will also provide the executives and their dependents continued health, medical, life and disability insurance and, if applicable, automobile usage, for three years following termination
of employment.
In addition, the Banks change in control agreement with Ms. Hrotko provides that, in the event that her
employment is terminated in connection with a change in control (as such term defined in the agreement), Ms. Hrotko will be entitled to receive (i) a lump sum payment equal to two times her base salary as of her termination date and
(ii) continued benefit coverage under the Banks health and welfare plans for a period of twenty-four months following her termination of employment.
Section 280G of the Internal Revenue Code provides that severance payments that equal or exceed three times an individuals base
amount are deemed to be excess parachute payments if they are contingent upon a change in control. An individuals base amount is generally equal to an average of the individuals taxable compensation for the five taxable years
preceding the year a change in control occurs. The employment agreements with our current executive officers limit payments made to the executives in connection with a change in control to amounts that will not exceed the limits imposed by
Section 280G. On January 6, 2016, the Board of Directors approved certain amendments to Mr. Aguggias employment agreements with the Company and the Bank that, among other things, adopted a best net benefits approach
in the event that severance benefits under the agreement or otherwise result in excess parachute payments under Section 280G. Applying the best net benefits methodology, the agreement provides for two separate
calculations to address the application of Section 280G to payments that are contingent on a change in control. The first calculation establishes the after-tax benefit to the executive if the aggregate change in control-related payments are
reduced below his Section 280G threshold, thereby avoiding the excise tax. The second calculation determines the after-tax benefit if the payments are made without reduction, and the executives after-tax benefit reflects payment of the
golden parachute excise tax by the executive. The calculation that yields the greatest after-tax benefit to the executive determines whether the executives benefits are subject to reduction or whether the executive will receive all change in
control-related benefits.
37
Under the terms of our ESOP, upon a change in control (as defined in the plan), the plan will
terminate and the plan trustee will repay in full any outstanding acquisition loan. After repayment of the acquisition loan, all remaining shares of Company common stock held in the loan suspense account, all other stock or securities, and any cash
proceeds from the sale or other disposition of any shares of Company common stock held in the loan suspense account will be allocated among the accounts of all participants in the plan who were employed on the date immediately preceding the
effective date of the change in control. The allocations of shares or cash proceeds shall be credited to each eligible participant in proportion to the opening balances in their accounts as of the first day of the valuation period in which the
change in control occurred. Payments under our ESOP are not categorized as parachute payments and, therefore, do not count towards each executives limitation under Section 280G.
Under the terms of the supplemental executive retirement plan, a participant will receive a cash payment in the event of a change in control
equal to the benefit the participant would have received under the employee stock ownership plan had the participant remained employed throughout the term of the loan, less the benefits actually provided under the employee stock ownership plan on
the participants behalf. In addition, all benefits credited to participants under the supplemental executive retirement plan are nonforfeitable and will be distributed upon termination of employment for any reason. Payments under the
Banks supplemental executive retirement plan are not categorized as parachute payments and, therefore, do not count towards a participating executives limitation under Section 280G.
Potential Post-Termination or Change in Control Benefits Tables.
The amount of compensation payable to each of our current named
executive officers upon termination for just cause or upon voluntary resignation, termination without just cause or resignation for good reason, change in control with termination of employment and disability is shown below. The amounts shown assume
that such termination was effective as of March 31, 2016, and thus include amounts earned through such time and are estimates of the amounts which would be paid out to the executives upon their termination. The tables do not reflect the
executives account balances in the Clifton Savings Bank tax-qualified retirement plans to which each executive has a non-forfeitable interest.
38
The following table provides the amount of compensation payable to Mr. Aguggia for each of
the situations listed below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due Upon
|
|
Payment and Benefit
|
|
Termination
For Just Cause
or Voluntary
Resignation
(Including
Retirement)
|
|
|
Termination
Without
Just Cause or
Resignation with
Good Reason
|
|
|
Disability
(1)
|
|
|
Death
|
|
|
Change in
Control
With
Termination
of Employment
|
|
Cash severance payment
|
|
$
|
|
|
|
$
|
5,364,394
|
|
|
$
|
864,012
|
|
|
$
|
366,914
|
|
|
$
|
3,370,170
|
|
Intrinsic value of accelerated stock options
(2)
|
|
|
|
|
|
|
|
|
|
|
393,050
|
|
|
|
393,050
|
|
|
|
393,050
|
|
Health and welfare benefits and fringe benefits
|
|
|
|
|
|
|
66,468
|
|
|
|
66,468
|
|
|
|
11,078
|
|
|
|
66,468
|
|
Intrinsic value of accelerated vesting of restricted
stock
(2)
|
|
|
|
|
|
|
|
|
|
|
2,063,502
|
|
|
|
2,063,502
|
|
|
|
2,063,502
|
|
Additional payment under SERP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,235,256
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total payment
|
|
$
|
|
|
|
$
|
5,430,862
|
|
|
$
|
3,387,032
|
|
|
$
|
2,834,544
|
|
|
$
|
9,128,446
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes termination by reason of disability at March 31, 2016 and payment of disability benefits through third anniversary of termination of employment by reason of disability as reduced by the Banks long and
short-term disability plans.
|
(2)
|
Represents the intrinsic value based on the fiscal 2016 year-end closing price per share of Clifton Bancorp common stock of $15.12.
|
(3)
|
Additional supplemental executive retirement plan benefit paid in the event of a change in control and full repayment of all outstanding employee stock ownership plan loans.
|
(4)
|
Benefit is subject to the best net benefits provision in Mr. Aguggias employment agreement. Applying the best net benefits methodology, the agreement provides for two separate calculations to
address the application of Section 280G to payments that are contingent on a change in control. The first calculation establishes the after-tax benefit to the executive if the aggregate change in control-related payments are reduced below his
Section 280G threshold, thereby avoiding the excise tax. The second calculation determines the after-tax benefit if the payments are made without reduction, and the executives after-tax benefit reflects payment of the golden parachute
excise tax by the executive. The calculation that yields the greatest after-tax benefit to the executive determines whether the executives benefits are subject to reduction or whether the executive will receive all change in control-related
benefits.
|
39
The following table provides the amount of compensation payable to Mr. DAmbra for each
of the situations listed below. As previously disclosed, on April 1, 2016, Mr. DAmbra voluntarily terminated his employment agreements with Clifton Bancorp and Clifton Savings.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due Upon
|
|
Payment and Benefit
|
|
Termination
For Just Cause
or Voluntary
Resignation
(Including
Retirement)
|
|
|
Termination
Without
Just Cause or
Resignation
with Good
Reason
|
|
|
Disability
(1)
|
|
|
Death
|
|
|
Change in Control
With Termination
of Employment
|
|
Cash severance payment
|
|
$
|
|
|
|
$
|
1,767,518
|
|
|
$
|
176,993
|
|
|
$
|
103,772
|
|
|
$
|
744,715
|
|
Intrinsic value of accelerated stock options
(2)
|
|
|
|
|
|
|
|
|
|
|
65,507
|
|
|
|
65,507
|
|
|
|
65,507
|
|
Health and welfare benefits and fringe benefits
|
|
|
|
|
|
|
38,292
|
|
|
|
28,719
|
|
|
|
4,787
|
|
|
|
28,719
|
|
Intrinsic value of accelerated vesting of restricted stock
(2)
|
|
|
|
|
|
|
|
|
|
|
515,879
|
|
|
|
515,879
|
|
|
|
515,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total payment
|
|
$
|
|
|
|
$
|
1,805,810
|
|
|
$
|
787,098
|
|
|
$
|
689,945
|
|
|
$
|
1,354,820
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes termination by reason of disability at March 31, 2016 and payment of disability benefits through Mr. DAmbras 70th birthday. Does not reflect benefits provided under the Banks long and
short-term disability plans.
|
(2)
|
Represents the intrinsic value based on the fiscal 2016 year-end closing price per share of Clifton Bancorp common stock of $15.12.
|
(3)
|
The employment agreement provides that if Mr. DAmbras change in control payments and benefits in the aggregate constitute an excess parachute payment under Section 280G of the Internal Revenue
Code, the total change in control payment will be reduced to $1.00 less than three times Mr. DAmbras base amount as determined in accordance with Section 280G of the Internal Revenue Code.
See Potential Payments on
Termination of Employment or Change in Control Payments Made Upon Termination Following a Change in Control
for the definition of base amount.
|
The following table provides the amount of compensation payable to Mr. Hoogerhyde for each of the situations listed below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due Upon
|
|
Payment and Benefit
|
|
Termination
For Just Cause
or Voluntary
Resignation
(Including
Retirement)
|
|
|
Termination
Without
Just Cause or
Resignation
with Good
Reason
|
|
|
Disability
(1)
|
|
|
Death
|
|
|
Change in Control
With Termination
of Employment
|
|
Cash severance payment
|
|
$
|
|
|
|
$
|
1,802,654
|
|
|
$
|
287,993
|
|
|
$
|
104,234
|
|
|
$
|
749,318
|
|
Intrinsic value of accelerated stock options
(2)
|
|
|
|
|
|
|
|
|
|
|
65,507
|
|
|
|
65,507
|
|
|
|
65,507
|
|
Health and welfare benefits and fringe benefits
|
|
|
|
|
|
|
39,468
|
|
|
|
88,803
|
|
|
|
4,934
|
|
|
|
29,601
|
|
Intrinsic value of accelerated vesting of restricted stock
(2)
|
|
|
|
|
|
|
|
|
|
|
515,879
|
|
|
|
515,879
|
|
|
|
515,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total payment
|
|
$
|
|
|
|
$
|
1,842,122
|
|
|
$
|
958,182
|
|
|
$
|
690,554
|
|
|
$
|
1,360,305
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes termination by reason of disability at March 31, 2016 and payment of disability benefits through Mr. Hoogerhydes 70th birthday. Does not reflect benefits provided under the Banks long and
short-term disability plans.
|
(2)
|
Represents the intrinsic value based on the fiscal 2016 year-end closing price per share of Clifton Bancorp common stock of $15.12.
|
(3)
|
The employment agreement provides that if Mr. Hoogerhydes change in control payments and benefits in the aggregate constitute an excess parachute payment under Section 280G of the Internal Revenue Code,
the total change in control payment will be reduced to $1.00 less than three times Mr. Hoogerhydes base amount as determined in accordance with Section 280G of the Internal Revenue Code.
See Potential Payments on Termination
of Employment or Change in Control Payments Made Upon Termination Following a Change in Control
for the definition of base amount.
|
40
The following table provides the amount of compensation payable to Ms. Piano for each of the
situations listed below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due Upon
|
|
Payment and Benefit
|
|
Termination
For Just Cause
or Voluntary
Resignation
(Including
Retirement)
|
|
|
Termination
Without
Just Cause or
Resignation
with Good
Reason
|
|
|
Disability
(1)
|
|
|
Death
|
|
|
Change in Control
With Termination
of Employment
|
|
Cash severance payment
|
|
$
|
|
|
|
$
|
2,561,092
|
|
|
$
|
568,935
|
|
|
$
|
130,133
|
|
|
$
|
878,414
|
|
Intrinsic value of accelerated stock options
(2)
|
|
|
|
|
|
|
|
|
|
|
152,852
|
|
|
|
152,852
|
|
|
|
152,852
|
|
Health and welfare benefits and fringe benefits
|
|
|
|
|
|
|
38,292
|
|
|
|
172,314
|
|
|
|
4,787
|
|
|
|
28,719
|
|
Intrinsic value of accelerated vesting of restricted
stock
(2)
|
|
|
|
|
|
|
|
|
|
|
928,580
|
|
|
|
928,580
|
|
|
|
928,580
|
|
Additional payment under SERP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
305,696
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total payment
|
|
$
|
|
|
|
$
|
2,599,384
|
|
|
$
|
1,822,681
|
|
|
$
|
1,216,352
|
|
|
$
|
2,294,261
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes termination by reason of disability at March 31, 2016 and payment of disability benefits through Ms. Pianos 70th birthday. Does not reflect benefits provided under the Banks long and
short-term disability plans.
|
(2)
|
Represents the intrinsic value based on the fiscal 2016 year-end closing price per share of Clifton Bancorp common stock of $15.12.
|
(3)
|
Additional supplemental executive retirement plan benefit paid in the event of a change in control and full repayment of all outstanding employee stock ownership plan loans.
|
(4)
|
The employment agreement provides that if Ms. Pianos change in control payments and benefits in the aggregate constitute an excess parachute payment under Section 280G of the Internal Revenue Code, the
total change in control payment will be reduced to $1.00 less than three times Ms. Pianos base amount as determined in accordance with Section 280G of the Internal Revenue Code.
See Potential Payments on Termination of
Employment or Change in Control Payments Made Upon Termination Following a Change in Control
for the definition of base amount.
|
The following table provides the amount of compensation payable to Ms. Hrotko for each of the situations listed below.
Ms. Hrotkos change in control agreement provides for a lump sum cash severance benefit in the event her employment is terminated in connection with a change in control as well as continued health insurance. All outstanding equity awards
held by Ms. Hrotko will also vest upon a change in control.
|
|
|
|
|
|
|
Payments Due Upon
|
|
Payment and Benefit
|
|
Change in Control
With Termination of
Employment
|
|
Cash severance payment
|
|
$
|
370,000
|
|
Health and welfare benefits and fringe benefits
|
|
|
18,656
|
|
Intrinsic value of accelerated stock options
(1)
|
|
|
65,507
|
|
Intrinsic value of accelerated vesting of restricted stock
(1)
|
|
|
515,879
|
|
|
|
|
|
|
Total payment
|
|
$
|
970,042
|
|
|
|
|
|
|
(1)
|
Represents the intrinsic value based on the fiscal 2016 year-end closing price per share of Clifton Bancorp common stock of $15.12.
|
41
OTHER INFORMATION RELATING TO
DIRECTORS AND EXECUTIVE OFFICERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Companys executive officers and directors, and persons who own
more than 10% of any registered class of the Companys equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Executive officers, directors and greater than 10% stockholders are
required by regulation to furnish the Company with copies of all Section 16(a) reports they file.
Based solely on the Companys
review of copies of the reports it has received and written representations provided to it from the individuals required to file the reports, the Company believes that each of its executive officers and directors has complied with applicable
reporting requirements for transactions in Clifton Bancorp common stock during the year ended March 31, 2016.
Policies and Procedures Governing
Related Persons Transactions
We maintain a Policy and Procedures Governing Related Person Transactions, which is a written policy and
set of procedures for the review and approval or ratification of transactions involving related persons. Under the policy, related persons consist of directors, director nominees, executive officers, persons or entities known to us to be the
beneficial owner of more than five percent of any outstanding class of the voting securities of the Company, or immediate family members or certain affiliated entities of any of the foregoing persons.
Transactions covered by the policy consist of any financial transaction, arrangement or relationship or series of similar transactions,
arrangements or relationships, in which:
|
|
|
the aggregate amount involved will or may be expected to exceed $50,000 in any calendar year;
|
|
|
|
the Company is, will, or may be expected to be a participant; and
|
|
|
|
any related person has or will have a direct or indirect material interest.
|
The policy
excludes certain transactions, including:
|
|
|
any compensation paid to an executive officer of the Company if the Compensation Committee of the Board approved (or recommended that the Board approve) such compensation;
|
|
|
|
any compensation paid to a director of the Company if the Board or an authorized committee of the Board approved such compensation; and
|
|
|
|
any transaction with a related person involving consumer and investor financial products and services provided in the ordinary course of the Companys business and on substantially the same terms as those
prevailing at the time for comparable services provided to unrelated third parties or to the Companys employees on a broad basis (and, in the case of loans, in compliance with the Sarbanes-Oxley Act of 2002).
|
42
Related person transactions will be approved or ratified by the Audit/Compliance Committee. In
determining whether to approve or ratify a related person transaction, the Audit/Compliance Committee will consider all relevant factors, including:
|
|
|
whether the terms of the proposed transaction are at least as favorable to the Company as those that might be achieved with an unaffiliated third party;
|
|
|
|
the size of the transaction and the amount of consideration payable to the related person;
|
|
|
|
the nature of the interest of the related person;
|
|
|
|
whether the transaction may involve a conflict of interest; and
|
|
|
|
whether the transaction involves the provision of goods and services to the Company that are available from unaffiliated third parties.
|
A member of the Audit/Compliance Committee who has an interest in the transaction will abstain from voting on approval of the transaction, but
may, if so requested by the chair of the Audit/Compliance Committee, participate in some or all of the discussion.
Transactions with Related Persons
Loans and Extensions of Credit.
The Sarbanes-Oxley Act of 2002 generally prohibits loans by the Company to its executive
officers and directors. However, the Sarbanes-Oxley Act contains a specific exemption from such prohibition for loans by the Bank to its executive officers and directors in compliance with federal banking regulations. Federal regulations require
that all loans or extensions of credit to executive officers and directors of insured financial institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. The Bank is therefore prohibited from making any new loans or extensions of credit to executive officers and directors
at different rates or terms than those offered to the general public. Notwithstanding this rule, federal regulations permit the Bank to make loans to executive officers and directors at reduced interest rates if the loan is made under a benefit
program generally available to all other employees and does not give preference to any executive officer or director over any other employee, although the Bank does not currently have such a program in place.
The outstanding loans made by the Bank to our directors and executive officers and their affiliates were made in the ordinary course of
business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Bank, and did not involve more than the normal risk of collectibility
or present other unfavorable features.
The Company maintains a comprehensive written policy for the review, approval or ratification of
certain transactions with related persons. In accordance with banking regulations and its policy, the Board of Directors reviews all loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans
to such person and his or her related interests, exceed the greater of $25,000 or 5% of the Companys capital and surplus (up to a maximum of $500,000) and such loan must be approved in advance by a majority of the disinterested members of the
Board of Directors. Additionally, pursuant to the Companys Code of Ethics and Business Conduct, all executive officers and directors of the Company must disclose any existing or potential conflicts of interest to the Chief
43
Executive Officer of the Company. Such potential conflicts of interest include, but are not limited to, the following: (i) the Company conducting business with or competing against an
organization in which a family member of an executive officer or director has an ownership or employment interest and (ii) the ownership of more than 5% of the outstanding securities or 5% of total assets of any business entity that does
business with or is in competition with the Company.
SUBMISSION OF BUSINESS PROPOSALS AND STOCKHOLDER NOMINATIONS
The Company must receive proposals that stockholders seek to include in the proxy statement for the Companys next annual meeting no
later than March 1, 2017. If next years annual meeting is held on a date more than 30 calendar days from August 10, 2017, a stockholder proposal must be received by a reasonable time before the Company begins to print and mail its
proxy solicitation material for such annual meeting. Any stockholder proposals will be subject to the requirements of the proxy rules adopted by the Securities and Exchange Commission.
The Companys Bylaws provide that in order for a stockholder to make nominations for the election of directors or proposals for business
to be brought before the annual meeting, a stockholder must deliver notice of such nominations and/or proposals to the Secretary not less than 30 days before the date of the annual meeting; provided that if less than 40 days notice or prior
public disclosure of the date of the annual meeting is given to stockholders, such notice must be received not later than the close of business on the 10th day following the day on which notice of the date of the annual meeting was mailed to
stockholders or prior public disclosure of the meeting date was made. A copy of the Bylaws may be obtained from the Company.
STOCKHOLDER COMMUNICATIONS
The Company encourages stockholder communications to the Board of Directors and/or individual directors. Communications regarding financial or
accounting policies may be made to the Chairman of the Audit/Compliance Committee, Charles J. Pivirotto, at (973) 473-2200. Other communications to the Board of Directors may be made to the Chairman of the Nominating/Corporate Governance
Committee, John H. Peto, or Joseph C. Smith, Lead Independent Director, at (973) 473-2200. Communications to individual directors may be made to such director at (973) 473-2200.
MISCELLANEOUS
The
Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for the reasonable expenses they incur in sending proxy materials to the beneficial owners of Clifton Bancorp common stock. In addition to soliciting proxies by
mail, directors, officers and regular employees of the Company may solicit proxies personally or by telephone without receiving additional compensation.
A copy of the Companys Annual Report on Form 10-K, without exhibits, for the year ended March 31, 2016 as filed with the
Securities and Exchange Commission, will be furnished without charge to persons who were stockholders as of the close of business on June 17, 2016 upon written request to Bart DAmbra, Clifton Bancorp Inc., 1433 Van Houten Avenue, Clifton,
New Jersey 07015.
If you and others who share your address own your shares in street name, your broker or other holder of record may
be sending only one annual report and proxy statement to your address. This practice, known as householding, is designed to reduce our printing and postage costs. However, if a stockholder residing at such an address wishes to receive a
separate annual report or proxy statement in the future, he or she should contact the broker or other holder of record. If you own your shares in street name and are receiving multiple copies of our annual report and proxy statement, you can request
householding by contacting your broker or other holder of record.
44
Whether or not you plan to attend the annual meeting, please vote via the Internet, by telephone
or by completing and mailing a proxy card promptly.
BY ORDER OF THE BOARD OF DIRECTORS
Bart DAmbra
Executive Vice President and Corporate Secretary
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Electronic Voting Instructions
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Available 24 hours a day, 7 days a week!
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Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
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VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE
BAR.
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Proxies submitted by the Internet or telephone must be received by 1:00 a.m., EST, on August 10, 2016.
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Vote by Internet
Go to
www.investorvote.com/CSBK
Or scan the QR code with your
smartphone
Follow the steps
outlined on the secure website
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Vote by telephone
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Call toll free 1-800-652-VOTE (8683) within the USA, US territories &
Canada on a touch tone telephone
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Using a
black ink
pen, mark your votes with an
X
as shown in
this example. Please do not write outside the designated areas.
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x
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Follow the instructions provided by the recorded message
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IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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A
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Proposals THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED NOMINEES AND THE PROPOSALS SET FORTH BELOW.
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1.
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Election of Directors:
Three-Year
Terms:
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For
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Withhold
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For
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Withhold
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01 - Stephen Adzima
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¨
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02 - Charles J. Pivirotto
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One-Year Term:
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For
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Withhold
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03 - Cynthia Sisco
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¨
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For
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Against
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Abstain
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For
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Against
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Abstain
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2.
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The ratification of the appointment of BDO USA, LLP as independent registered public accounting firm of Clifton Bancorp Inc. for the year ending March 31, 2017.
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3.
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The advisory vote to approve the compensation of the Companys named executive officers as disclosed in the Companys proxy statement.
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B
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Non-Voting Items
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Change of Address
Please print your new address below.
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Comments
Please print your
comments below.
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Mark here if you no longer
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Meeting Attendance
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wish to receive paper
annual meeting materials
and instead view them
online.
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Mark the box to the right
if you plan to attend the
Annual Meeting.
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¨
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
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Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If shares are held
jointly, each holder may sign but only one signature is required.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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/ /
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IMPORTANT ANNUAL MEETING INFORMATION
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER
MEETING TO BE HELD ON AUGUST 10, 2016.
THE PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT:
www.investorvote.com/csbk
q
IF YOU HAVE NOT VOTED VIA
THE INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
REVOCABLE PROXY CLIFTON BANCORP INC.
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 10, 2016
9:00 A.M., LOCAL TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John H. Peto and Joseph C. Smith, each with full power of substitution, to act as proxy for the undersigned, and to vote all shares of common stock of the Company which the
undersigned is entitled to vote only at the Annual Meeting of Stockholders, to be held on August 10, 2016, at 9:00 a.m., local time, at the Venetian, 546 River Drive, Garfield, New Jersey with all of the powers the undersigned would possess if
personally present at such meeting, as indicated on this proxy.
This proxy, properly signed and dated, is revocable and will be
voted as directed, but if no instructions are specified, this proxy will be voted FOR each of the nominees and proposals listed. If any other business is presented at the annual meeting this proxy will be voted by the proxies in their
best judgment. At the present time, the Board of Directors knows of no other business to be presented at the annual meeting. This proxy also confers discretionary authority on the Board of Directors to vote with respect to the election of any person
as director where the nominees are unable to serve or for good cause will not serve and matters incident to the conduct of the meeting.
The above signed acknowledges receipt from the Company prior to the execution of this proxy of a Notice of Internet Availability of Proxy Materials that includes instructions on how to electronically access the
Companys Proxy Statement dated June 29, 2016 and 2016 Annual Report to Stockholders.
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IMPORTANT ANNUAL MEETING INFORMATION
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Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
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x
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q
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
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A
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Proposals
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED
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NOMINEES AND THE PROPOSALS SET FORTH BELOW.
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1. Election of Directors:
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Three-Year Terms:
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For
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Withhold
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For
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Withhold
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01 - Stephen Adzima
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¨
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¨
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02 - Charles J. Pivirotto
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¨
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¨
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One-Year Term:
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For
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Withhold
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03 - Cynthia Sisco
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¨
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¨
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For
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Against
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Abstain
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For
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Against
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Abstain
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2. The ratification of the appointment of BDO USA, LLP as independent registered public accounting firm of Clifton Bancorp
Inc. for the year ending March 31, 2017.
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¨
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¨
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¨
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3. The advisory vote to approve the compensation of the Companys named executive officers as disclosed in the
Companys proxy statement.
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¨
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¨
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¨
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B
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
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Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder may sign but only one signature is required.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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/ /
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02E3WA
IMPORTANT ANNUAL MEETING INFORMATION
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER
MEETING TO BE HELD ON AUGUST 10, 2016.
THE PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT:
www.edocumentview.com/csbk
q
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
REVOCABLE PROXY CLIFTON BANCORP INC.
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 10, 2016
9:00 A.M., LOCAL TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John H. Peto and Joseph C. Smith, each with full power of substitution, to act as proxy for the undersigned, and to vote all shares of common stock of the Company which the
undersigned is entitled to vote only at the Annual Meeting of Stockholders, to be held on August 10, 2016, at 9:00 a.m., local time, at the Venetian, 546 River Drive, Garfield, New Jersey with all of the powers the undersigned would possess if
personally present at such meeting, as indicated on this proxy.
This proxy, properly signed and dated, is revocable and will be
voted as directed, but if no instructions are specified, this proxy will be voted FOR each of the nominees and proposals listed. If any other business is presented at the annual meeting this proxy will be voted by the proxies in their
best judgment. At the present time, the Board of Directors knows of no other business to be presented at the annual meeting. This proxy also confers discretionary authority on the Board of Directors to vote with respect to the election of any person
as director where the nominees are unable to serve or for good cause will not serve and matters incident to the conduct of the meeting.
The above signed acknowledges receipt from the Company prior to the execution of this proxy of a Notice of Internet Availability of Proxy Materials that includes instructions on how to electronically access the
Companys Proxy Statement dated June 29, 2016 and 2016 Annual Report to Stockholders.
Dear ESOP Participant:
On behalf of the Board of Directors, I am forwarding to you the attached
YELLOW
vote authorization form for the purpose of conveying to
Pentegra Trust Company, our ESOP Trustee, your voting instructions with respect to the shares of Clifton Bancorp Inc. (the Company) common stock you have allocated to your account. You are being asked to provide voting instructions to
the ESOP Trustee on the proposals presented at the Annual Meeting of Stockholders of the Company to be held on August 10, 2016. Also enclosed are a Notice and Proxy Statement for the Companys Annual Meeting of Stockholders and a Clifton
Bancorp Inc. Annual Report to Stockholders.
As an ESOP participant, you are entitled to instruct the ESOP Trustee how to vote the shares
of the Company in common stock allocated to your ESOP account as of June 17, 2016, the record date for the Annual Meeting.
The ESOP
Trustee will vote all allocated shares of Company common stock as directed by participants. The ESOP Trustee will vote unallocated shares of common stock held in the ESOP Trust and the shares for which timely instructions are not received in a
manner calculated to most accurately reflect the instructions the ESOP Trustee receives from participants, subject to its fiduciary duties.
To direct the ESOP Trustee how to vote the shares of common stock allocated to your ESOP account, please complete and sign the enclosed
YELLOW
vote authorization form and return it in the enclosed, postage-paid envelope no later than
Wednesday, August 3, 2016
. Your vote will not be revealed, directly or indirectly, to any employee or director of the Company or
Clifton Savings Bank.
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Sincerely,
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Paul M. Aguggia
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Chairman, President and Chief Executive Officer
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VOTE AUTHORIZATION FORM
I understand that Pentegra Trust Company (the ESOP Trustee), is the holder of record and custodian of all shares of Clifton
Bancorp Inc. (the Company) common stock under the Clifton Savings Bank Employee Stock Ownership Plan. I understand that my voting instructions are solicited on behalf of the Companys Board of Directors for the Annual Meeting of
Stockholders to be held on August 10, 2016.
You are to vote my shares as follows:
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1.
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The election as directors of all nominees listed (except as marked to the contrary below).
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Stephen Adzima and Charles J. Pivirotto (three-year terms)
Cynthia Sisco (one-year term)
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FOR
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VOTE WITHHELD
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FOR ALL EXCEPT
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¨
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INSTRUCTION: To withhold your vote for any individual nominee, mark For All Except and write that
nominees name on the line provided below.
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2.
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The ratification of the appointment of BDO USA, LLP as independent registered public accounting firm of Clifton Bancorp Inc. for the year ending March 31, 2017.
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FOR
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AGAINST
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ABSTAIN
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3.
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The advisory vote to approve the compensation of the Companys named executive officers as disclosed in the Companys proxy statement.
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FOR
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AGAINST
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ABSTAIN
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED
NOMINEES AND THE PROPOSALS SET FORTH IN (2) AND (3) ABOVE.
The ESOP Trustee is hereby authorized to vote all shares of Company common stock allocated to me in its trust capacity as indicated above.
Please date, sign and return this form in the enclosed postage-paid envelope
no later than August 3, 2016.
Dear 401(k) Plan Participant:
On behalf of the Board of Directors, I am forwarding to you the attached
BLUE
vote authorization form for the purpose of conveying to
Pentegra Trust Company, the 401(k) Plan Trustee, your voting instructions with respect to the shares of Clifton Bancorp Inc. (the Company) common stock you have credited to your account in the Clifton Savings Bank 401(k) Savings Plan
(the 401(k) Plan). You are being asked to provide voting instructions to the 401(k) Plan Trustee on the proposals presented at the Annual Meeting of Stockholders of the Company to be held on August 10, 2016. Also enclosed are a
Notice and Proxy Statement for the Companys Annual Meeting of Stockholders and a Clifton Bancorp Inc. Annual Report to Stockholders.
As a participant in the 401(k) Plan, you are entitled to direct the 401(k) Plan Trustee how to vote the shares of Company common stock
credited to your account as of June 17, 2016, the record date for the Annual Meeting. To direct the 401(k) Plan Trustee how to vote the shares credited to your account, please complete and sign the enclosed
BLUE
vote authorization form
and return it in the enclosed, postage-paid envelope no later than
Wednesday, August 3, 2016
. Your vote will not be revealed, directly or indirectly, to any employee or director of the Company or Clifton Savings Bank.
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Sincerely,
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Paul M. Aguggia
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Chairman, President and Chief Executive Officer
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VOTE AUTHORIZATION FORM
I understand that Pentegra Trust Company (the Trustee) is the holder of record and custodian of all shares of Clifton Bancorp Inc.
(the Company) common stock credited to me under the Clifton Savings Bank 401(k) Savings Plan. I understand that my voting instructions are solicited on behalf of the Companys Board of Directors for the Annual Meeting of
Stockholders to be held on August 10, 2016.
You are to vote my shares as follows:
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1.
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The election as directors of all nominees listed (except as marked to the contrary below).
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Stephen Adzima and Charles J. Pivirotto (three-year terms)
Cynthia Sisco (one-year term)
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FOR
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VOTE WITHHELD
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FOR ALL EXCEPT
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¨
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¨
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¨
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INSTRUCTION: To withhold your vote for any individual nominee, mark For All Except and write that
nominees name on the line provided below.
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2.
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The ratification of the appointment of BDO USA, LLP as independent registered public accounting firm of Clifton Bancorp Inc. for the year ending March 31, 2017.
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FOR
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AGAINST
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ABSTAIN
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¨
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¨
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3.
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The advisory vote to approve the compensation of the Companys named executive officers as disclosed in the Companys proxy statement.
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FOR
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AGAINST
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ABSTAIN
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¨
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¨
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¨
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED
NOMINEES AND THE PROPOSALS SET FORTH IN (2) A ND (3) ABOVE.
The Trustee is hereby authorized to vote all shares of Company common stock allocated to me in its trust capacity as indicated above.
Please date, sign and return this form in the enclosed postage-paid envelope
no later than August 3, 2016.
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