SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
The Bank of New York Company, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) 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):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[GRAPHIC OMITTED] One Wall Street, New York, NY 10286
================================================================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
of The Bank of New York Company, Inc. (the "Company")
WHERE: AT THE BANK OF NEW YORK, 101 BARCLAY STREET, NEW YORK, NEW YORK.
WHEN: ON TUESDAY, APRIL 12, 2005, 9:00 A.M. LOCAL TIME.
TO VOTE ON THE FOLLOWING MATTERS:
1. To elect thirteen directors to hold office until the next Annual Meeting
of Shareholders and until their respective successors have been elected
and qualified;
2. To ratify the appointment by the Audit and Examining Committee of the
Board of Directors of Ernst & Young LLP as the Company's independent
public accountants for the current fiscal year;
3. To consider a shareholder proposal with respect to cumulative voting;
4. To consider a shareholder proposal with respect to executive
compensation; and
5. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Shareholders of record at the close of business on February 22, 2005 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment.
YOUR VOTE IS IMPORTANT
PLEASE VOTE REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING AND
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, SO THAT YOUR VOTE MAY BE COUNTED.
You can vote by:
o Internet;
o telephone; or
o completing, dating, signing and mailing the enclosed proxy card promptly
in the return envelope provided.
We hope you will be able to attend.
By order of the Board of Directors,
/s/ Thomas A. Renyi /s/ Raymond J. Dorado
Thomas A. Renyi Raymond J. Dorado
CHAIRMAN OF THE BOARD ASSISTANT SECRETARY
March 14, 2005
TABLE OF CONTENTS
Notice of Annual Meeting.............................................................................. Cover
Who Can Vote.......................................................................................... 1
What is a Proxy....................................................................................... 1
How to Vote........................................................................................... 1
Board of Directors and Director Compensation.......................................................... 2
Director Independence........................................................................ 3
Communications with the Board................................................................ 3
Committees of the Board...................................................................... 3
Compensation Committee Interlocks............................................................ 5
Charitable Contributions..................................................................... 5
ITEM 1: ELECTION OF DIRECTORS........................................................................ 5
Nominees for Election as Directors........................................................... 5
Security Ownership by Management............................................................. 11
2004 Audit Committee Report........................................................................... 11
Audit Fees, Audit Related Fees, Tax Fees, All Other Fees.............................................. 14
Other Services Provided by Ernst & Young LLP.......................................................... 15
Executive Compensation and Other Information.......................................................... 15
Summary Compensation Table............................................................................ 16
Option Grants......................................................................................... 17
Option Exercises...................................................................................... 17
Compensation and Organization Committee Report on Executive Compensation for 2004..................... 18
Stock Performance Graph............................................................................... 22
Employment Agreements and Related Matters............................................................. 23
Pension Plan Table and Discussion..................................................................... 25
Equity Compensation Plans............................................................................. 26
Directors' and Officers' Liability Insurance.......................................................... 26
Certain Relationships and Related Transactions........................................................ 26
Section 16(a) Beneficial Ownership Reporting Compliance............................................... 28
Stock Ownership of Certain Beneficial Owners.......................................................... 28
ITEM 2: RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS............................................... 28
ITEM 3: SHAREHOLDER PROPOSAL WITH RESPECT TO CUMULATIVE VOTING....................................... 29
ITEM 4: SHAREHOLDER PROPOSAL WITH RESPECT TO EXECUTIVE COMPENSATION.................................. 30
Shareholder Proposals for the 2006 Annual Meeting..................................................... 31
Exhibit A: Guidelines for Determining Director Independence........................................... A-1
Exhibit B: Audit and Examining Committee Charter...................................................... B-1
[GRAPHIC OMITTED] One Wall Street, New York, NY 10286
================================================================================
PROXY STATEMENT
THIS IS YOUR PROXY STATEMENT. IT GIVES YOU THE INFORMATION YOU NEED TO VOTE
YOUR SHARES AT THE 2005 ANNUAL MEETING OF SHAREHOLDERS.
This Proxy Statement and the enclosed proxy card are being sent to you by the
Board of Directors of The Bank of New York Company, Inc. (the "Company", "we" or
"us") in connection with the solicitation of proxies for the Annual Meeting of
Shareholders (the "Annual Meeting"). This Proxy Statement and the accompanying
form of proxy are first being sent to shareholders on or about March 14, 2005.
THE ANNUAL MEETING WILL BE HELD ON APRIL 12, 2005 AT THE BANK OF NEW YORK, 101
BARCLAY STREET, NEW YORK, NEW YORK, AT 9:00 A.M. LOCAL TIME.
WHO CAN VOTE. The Board of Directors has fixed February 22, 2005 as the Record
Date. Only shareholders whose names appeared on the books of the Company at the
close of business on the Record Date will be entitled to be notified of and to
vote at the Annual Meeting or any adjournment. The outstanding voting stock of
the Company on the Record Date was 779,219,922 shares of Common Stock ($7.50 par
value) ("Common Stock"). Each share is entitled to one vote. The Company's
By-laws state that the presence at the Annual Meeting of the holders of a
majority of the shares of the Company entitled to vote at such meeting
constitutes a quorum for the transaction of business.
WHAT IS A PROXY? A proxy is an authorization to vote. Your proxy gives us
authority to vote your shares and tells us how to vote your shares at the Annual
Meeting or any adjournment. Three officers of the Company, who are called
"proxies" and are named on the proxy card, will vote your shares at the Annual
Meeting according to the instructions you give on the proxy card, or by
telephone or Internet. A proxy card is enclosed.
HOW TO VOTE.
You can vote your shares by proxy by:
1. Internet;
2. telephone; or
3. completing, dating, signing and mailing the enclosed proxy card in the
return envelope provided.
Read the enclosed card for instructions on how to vote over the Internet or by
telephone.
You have the right to revoke your proxy at any time before it is voted by filing
with the Office of the Secretary of the Company a written revocation or a duly
executed proxy bearing a later date. You may attend the Annual Meeting and vote
in person, whether or not you previously submitted a proxy.
Each proxy submitted will be voted as directed, but if you sign and return a
proxy card without giving specific voting instructions, your shares will be
voted for the election of the nominees for directors named in this Proxy
Statement, for ratification of the appointment of Ernst & Young LLP as the
Company's independent public accountants, and against the shareholder proposals
set forth in Items 3 and 4 of this Proxy Statement. We are not now aware of any
other matters to be presented except for those described in this Proxy
Statement. If any other matters are presented at the meeting, the proxies may
use their own judgment to decide how to vote your shares. Should any nominee for
director named in this Proxy Statement become unable or unwilling to accept
nomination or election, which is not anticipated, the persons acting as proxies
will vote for the election of such other person, if any, as the
1
Board of Directors may recommend. If the Annual Meeting is adjourned, your
shares may be voted by the proxies on the new meeting date unless you have
revoked your proxy.
THE NOMINEES FOR DIRECTOR WHO RECEIVE THE HIGHEST NUMBER OF "FOR" VOTES CAST
WILL BE ELECTED. THE "FOR" VOTE OF A MAJORITY OF THE VOTES CAST IS SUFFICIENT TO
RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AND APPROVE THE SHAREHOLDER
PROPOSALS.
FOR PURPOSES OF DETERMINING THE VOTES CAST WITH RESPECT TO ANY MATTER PRESENTED
FOR CONSIDERATION AT THE ANNUAL MEETING, ONLY THOSE VOTES CAST "FOR" OR
"AGAINST" ARE COUNTED. PURSUANT TO NEW YORK LAW, ABSTENTIONS, BROKER "NON-VOTES"
(OR VOTES "WITHHELD" IN THE ELECTION OF DIRECTORS) WILL NOT BE COUNTED. A BROKER
NON-VOTE OCCURS WHEN A BROKER, BANK OR OTHER NOMINEE WHICH HOLDS COMPANY SHARES
RETURNS A PROXY TO THE COMPANY BUT CANNOT VOTE THE SHARES IT HOLDS BECAUSE IT
HAS NOT RECEIVED VOTING INSTRUCTIONS FROM THE SHAREHOLDER AND THE MATTER TO BE
VOTED ON IS NOT "ROUTINE" UNDER NEW YORK STOCK EXCHANGE ("NYSE") RULES. NYSE
RULES ALLOW BROKERS, BANKS AND OTHER NOMINEES TO VOTE SHARES HELD BY THEM ON
MATTERS THAT THE NYSE DETERMINES TO BE ROUTINE, EVEN THOUGH THE BROKER, BANK OR
NOMINEE HAS NOT RECEIVED INSTRUCTIONS FROM THE SHAREHOLDER.
The Company will pay the cost of soliciting proxies. In addition to soliciting
proxies by mail, proxies may be solicited in person or by telephone, fax or
e-mail by officers and regular employees of the Company and its subsidiaries who
will not be specifically compensated therefor. The Company has engaged Morrow &
Co., Inc. to assist in the solicitation of proxies for a fee of $17,500 plus
reimbursement for out-of-pocket expenses. The Company will also reimburse
brokers or other persons holding shares in their names or in the names of their
nominees for their reasonable out-of-pocket expenses in forwarding proxies and
proxy material to the beneficial owners of such shares.
BOARD OF DIRECTORS AND DIRECTOR COMPENSATION
The Company is a financial holding company whose principal subsidiary is The
Bank of New York (the "Bank"). The Company and the Bank are incorporated under
the laws of the State of New York. The interests of shareholders are represented
by the Board of Directors (the "Board"), which oversees the business and
management of the Company. Information concerning the members of the Board of
Directors who are standing for re-election is set forth below under the caption
"Nominees for Election as Directors." This solicitation of proxies is intended
to give all shareholders a chance to vote for the persons who are to be their
representatives in the governance of the Company.
In accordance with New York law, the Company's By-laws set forth the Board's
responsibilities and establish various corporate authorizations. The By-laws
also deal with the organization of the Board, which is described below. The
Board has the power to amend the By-laws. The Board has adopted Corporate
Governance Guidelines and a Code of Conduct which are available on the Company's
website, www.bankofny.com.
Directors are elected to serve until the next annual meeting of shareholders and
until their successors have been elected and qualified.
During 2004, the Board of Directors of the Company met a total of ten times.
Each incumbent director attended at least 75% of the aggregate number of
meetings of the Board of Directors and the committees thereof on which such
director served during 2004. The Board of the Bank, which during 2004 included
all the members of the Board of Directors of the Company, met a total of ten
times.
Non-management directors, all of whom were determined to be independent (as
discussed below) met in Executive Session without management five times during
2004. Until April, 2004, these sessions were chaired by Mr. Luke, who is
Chairman of the Nominating and Governance Committee, and after April, 2004,
these sessions were chaired by Mr. Kogan, who is Chairman of the Compensation
and Organization Committee. Pursuant to the Company's Corporate Governance
Guidelines, the position of Presiding Director at Executive Sessions (the
"Presiding Director") rotates among the Chairmen of the Nominating and
Governance Committee, the Compensation and Organization Committee and the Audit
and Examining Committee.
2
All directors then serving on the Board attended the 2004 Annual Meeting of
Shareholders except Mr. Biondi. Directors are expected to attend the annual
meeting of shareholders, except in extenuating circumstances.
DIRECTOR INDEPENDENCE
The Board of Directors has determined that all of the directors, other than
Messrs. Renyi, Hassell and Griffith, are independent under the NYSE Listing
Standards, which set forth certain criteria for determining whether a director
is independent. The Board's determinations of director independence were made in
accordance with the Guidelines for Determining Director Independence, which are
included in this Proxy Statement as Exhibit A and which also appear on the
Company's website, www.bankofny.com. Please also see "Certain Relationships and
Related Transactions."
COMMUNICATIONS WITH THE BOARD
The procedure for communicating with the non-management director presiding at
Executive Sessions or the entire Board is set forth on the Company's website,
www.bankofny.com.
COMMITTEES OF THE BOARD
The Board of Directors of the Company has appointed several committees which
have responsibility for particular corporate matters and has adopted the
committee charters referred to below. There follows a description of these
committees and their functions, including certain information concerning the
directors who serve on such committees and are standing for re-election.
The Board of Directors of the Company has a Nominating and Governance Committee
(the "Nominating Committee") whose members during 2004 were Messrs. Luke
(Chairman), Kogan, Malone and Pozen. All of the members of the Nominating
Committee are independent under the NYSE Listing Standards. The Nominating
Committee is responsible for identifying individuals qualified to become members
of the Board of Directors and recommending to the Board of Directors the
Corporate Governance Guidelines of the Company. The Nominating Committee's
charter is available on the Company's website, www.bankofny.com. The Nominating
Committee is willing to consider nominees for future election to the Board
recommended by shareholders. Shareholders may submit in writing the names and
qualifications of proposed nominees to the Nominating Committee, c/o the Office
of the Secretary of the Company. Nominees proposed by shareholders receive the
same consideration and evaluation as nominees proposed by management or
directors. The Nominating Committee identifies candidates among individuals
recommended to the Nominating Committee and may also search for candidates,
based upon the needs of the Company for particular expertise or experience,
through search firms and business contacts. The Nominating Committee reviews the
qualifications of individuals suggested by shareholders, management and
directors as potential candidates. The criteria for selecting nominees for
election as directors of the Company include, but are not limited to,
experience, accomplishments, education, skills, and personal and professional
integrity. The Nominating Committee met two times during 2004.
The Board of Directors of the Company annually appoints an Audit and Examining
Committee (the "Audit Committee") whose members during 2004 were Ms. Rein
(Chairman), and Messrs. Donofrio, Kowalski, Myners, Pozen and Richardson. The
Board determined that all of the directors who serve on the Audit Committee are
independent under Securities and Exchange Commission ("SEC") regulations
implementing the audit committee member requirements of the Sarbanes-Oxley Act
of 2002 and are also independent under the NYSE Listing Standards. The functions
of the Audit Committee are described in its charter, a copy of which is attached
to this Proxy Statement as Exhibit B and is also available on the Company's
website, www.bankofny.com. Two of the members of the Audit Committee each serve
on the audit committees of two other public companies. In accordance with the
provisions of the Audit Committee Charter, the Board has determined that their
duties on the other boards do not impair their ability to serve effectively on
the Audit Committee of the Company. The Board of Directors has determined that
all members of the Audit Committee are financially literate. A number of the
members of the Audit Committee are considered by the Board to have financial
expertise, and, in 2004, the Board named Ms. Catherine A. Rein as the Company's
audit
3
committee financial expert, as defined under SEC regulations. The Audit
Committee met seven times in 2004.
The Board of Directors of the Company has a Compensation and Organization
Committee (the "Compensation Committee") whose members during 2004 were Messrs.
Kogan (Chairman), Biondi, Luke and Malone. The Board determined that all of the
directors who serve on the Compensation Committee are independent under the NYSE
Listing Standards. The Compensation Committee, whose charter is available on the
Company's website, www.bankofny.com, is responsible for matters of executive
compensation and administration of the Company's incentive compensation plans.
The Compensation Committee met five times during 2004.
The Board of Directors of the Company has a Pension Committee whose members
during 2004 were Messrs. Richardson (Chairman) and Scott and Ms. Rein. The
Pension Committee is responsible for overseeing the funded status of the
Company's plans that are subject to the Employee Retirement Income Security Act
of 1974, for periodically amending such plans to meet the Company's objectives
as plan sponsor, and for reporting to the Board on these matters. The Pension
Committee met two times during 2004.
The Board of Directors of the Company has a Risk Committee whose members during
2004 were Messrs. Donofrio (Chairman), Kowalski, Myners, Richardson, Roberts and
Scott and Ms. Rein. The Risk Committee assists the Board of Directors in
assessing and reviewing the risk management activities of the Company and its
subsidiaries, including those risks associated with the extension of credit and
market activities. The Risk Committee met four times during 2004.
The Board of Directors of the Company has an Executive Committee whose members
during 2004 were Messrs. Renyi (Chairman), Donofrio, Griffith, Hassell, Kogan,
Kowalski, Luke, Malone, Richardson and Roberts and Ms. Rein. The Executive
Committee has the full authority of the Company's Board of Directors, except for
limitations relating to major corporate matters. The Executive Committee held no
meetings in 2004.
During 2004, each director who was not an officer of the Company or its
subsidiaries received an annual retainer of $30,000 and 2,400 shares of Common
Stock pursuant to the Directors' Retainer Plan. In addition, each director who
was not an officer of the Company or its subsidiaries received a fee of $1,800
for each meeting of the Board and of any committee which the director attended.
The Chairman of the Audit Committee received an additional annual retainer of
$10,000, the Chairman of the Risk Committee received an additional annual
retainer of $7,000, the Chairman of the Compensation Committee received an
additional annual retainer of $5,000, and the Chairmen of the other committees
of the Board each received an additional annual retainer of $3,000. A director
who serves on the boards of both the Company and the Bank receives only one
retainer. If the boards of the Company and the Bank meet on the same day, only
one meeting fee is paid for attendance at both meetings.
Officers of the Company and its subsidiaries do not receive any compensation for
service on the boards of the Company or its subsidiaries, or the committees of
the boards.
Under the Deferred Compensation Plan for Non-Employee Directors of The Bank of
New York Company, Inc. (the "Directors' Deferred Compensation Plan"), each
director who is not an officer of the Company or any of its subsidiaries may
elect to defer payment of all or a portion of the director's annual retainer and
meeting fees. In accordance with the director's election, pursuant to the terms
of the Directors' Deferred Compensation Plan, deferred retainer and meeting fees
are allocated to accounts on the Company's books corresponding to selected
investment funds which were available in 2004 under the Company's Employee
Savings & Investment Plan. The accounts are adjusted to reflect the investment
performance of such funds. All payments are made in cash, except that payment is
made in shares of Common Stock with respect to amounts allocated to the Company
stock fund. The Directors' Deferred Compensation Plan contains provisions for
the payment of each director's account balance upon such director's termination
following a Change of Control (as defined in the Directors' Deferred
Compensation Plan), retirement, death or other termination of services as a
director. The Directors' Deferred Compensation Plan is not funded and payments
are made from the Company's general assets.
4
On September 9, 2003, Mr. Kogan and Schering-Plough Corporation, of which Mr.
Kogan is the former Chairman/CEO, entered into a settlement with the U.S.
Securities and Exchange Commission to resolve issues arising from the SEC's
inquiry into certain meetings by Schering-Plough Corporation with investors.
Without admitting or denying any allegations of the SEC, Mr. Kogan agreed in
connection with the settlement not to commit any future violations of Regulation
FD and related securities laws.
COMPENSATION COMMITTEE INTERLOCKS
Mr. Malone, a member of the Compensation Committee, had certain business
relationships with the Company which are disclosed under the caption "Certain
Relationships and Related Transactions" in this Proxy Statement.
CHARITABLE CONTRIBUTIONS
In 2004, the Company did not make any contributions to any charitable
organization of which a director of the Company was an executive officer which
exceeded the greater of $1 million or two percent of the charitable
organization's consolidated gross revenues.
MR. GRIFFITH
After nearly four decades of dedicated service, Alan R. Griffith, Vice Chairman
since 1994, announced his plans to retire. Accordingly he will not be standing
for re-election to the Board.
MR. POZEN
Mr. Pozen announced that he will not be standing for re-election as a member of
the Board due to the Company's expanding activities in investment management and
the potential for future conflicts with his chairmanship of MFS Investment
Management.
ITEM 1. ELECTION OF DIRECTORS
Unless contrary instructions are given, the persons designated as proxies intend
to vote on behalf of shareholders for the election of the nominees listed in the
following pages. If any nominee becomes unable or unwilling to accept nomination
or election, the persons designated as proxies intend to vote on behalf of
shareholders for the election of such other person, if any, as the Board of
Directors may recommend. The directors elected will hold office until the next
annual meeting and until their successors have been elected and qualified.
NOMINEES FOR ELECTION AS DIRECTORS
The following pages show each nominee for election as a director, his or her
age, his or her principal occupation during the past five years, certain other
directorships and trusteeships held, the year in which he or she became a
director of the Company, and his or her holdings of Common Stock, all as of
February 22, 2005. All nominees who are presently serving as directors were
elected to their present term of office by the shareholders.
5
The following information has been furnished by the nominees.
NOMINEE,
YEAR ELECTED
A DIRECTOR
AND SECURITIES PRINCIPAL OCCUPATION
OWNED (1) AND OTHER INFORMATION
================================================================================
[GRAPHIC OMITTED] SENIOR MANAGING DIRECTOR OF WATERVIEW ADVISORS LLC,
INVESTMENT ADVISER TO WATERVIEW PARTNERS LLC, A PRIVATE
FRANK J. EQUITY LIMITED PARTNERSHIP FOCUSED ON MEDIA AND
BIONDI, JR. ENTERTAINMENT
1995
COMMON SHARES: Senior Managing Director of WaterView Advisors LLC
27,319 (formerly Biondi, Reiss Capital Management LLC) from March,
1999 to present. Chairman and Chief Executive Officer of
Universal Studios from 1996 through 1998. Director of
Amgen, Inc., The Bank of New York, Harrah's Entertainment,
Inc., Hasbro, Inc. and the Museum of Television & Radio.
Age 60.
[GRAPHIC OMITTED] SENIOR VICE PRESIDENT, TECHNOLOGY AND MANUFACTURING OF IBM
CORPORATION, DEVELOPER AND MANUFACTURER OF ADVANCED
NICHOLAS M. INFORMATION TECHNOLOGIES
DONOFRIO
1999 Senior Vice President, Technology and Manufacturing of IBM
COMMON SHARES: Corporation from August, 1997 to present. Senior Vice
15,603 President, Server Group of IBM Corporation from January,
1995 to August, 1997. Director of The Bank of New York.
Member of the Board of Trustees of Rensselaer Polytechnic
Institute. Chairman Emeritus of the Board of Directors of
the National Action Council for Minorities in Engineering,
Inc. (NACME). Age 59.
[GRAPHIC OMITTED] PRESIDENT OF THE BANK OF NEW YORK COMPANY, INC. AND THE
BANK OF NEW YORK
GERALD L.
HASSELL President of The Bank of New York Company, Inc. and The
1998 Bank of New York since September, 1998. Senior Executive
COMMON SHARES: Vice President of The Bank of New York Company, Inc. from
1,028,894 August, 1998, and Senior Executive Vice President and Chief
Commercial Banking Officer of The Bank of New York from
December, 1994 to September, 1998. Executive Vice President
of The Bank of New York from June, 1990 to December, 1994.
Director of The Bank of New York and Private Export Funding
Corporation. Trustee of Big Brothers/Big Sisters of New
York City. Member of the Financial Services Roundtable and
Financial Services Forum. Member of Board of Visitors of
Duke University Fuqua School of Business. Age 53.
6
NOMINEE,
YEAR ELECTED
A DIRECTOR
AND SECURITIES PRINCIPAL OCCUPATION
OWNED (1) AND OTHER INFORMATION
================================================================================
[GRAPHIC OMITTED] RETIRED PRESIDENT AND CHIEF EXECUTIVE OFFICER OF
SCHERING-PLOUGH CORPORATION, MANUFACTURER OF PHARMACEUTICAL
RICHARD J. AND CONSUMER PRODUCTS
KOGAN
1996 President and Chief Executive Officer of Schering-Plough
COMMON SHARES: Corporation from November, 1996 to April, 2003. Chairman
21,600 from November, 1998 to November, 2002. President from 1986
to November, 1998. Principal of The KOGAN Group LLC.
Director of The Bank of New York and Colgate-Palmolive
Company. Member of the Board of Trustees of New York
University and The Saint Barnabas Corporation and Medical
Center. Member of the Council on Foreign Relations. Age 63.
[GRAPHIC OMITTED] CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF TIFFANY & CO.,
INTERNATIONAL DESIGNERS, MANUFACTURERS AND DISTRIBUTORS OF
MICHAEL J. JEWELRY AND FINE GOODS
KOWALSKI
2003 Chairman of Tiffany & Co. from January, 2003 to present,
COMMON SHARES: and Chief Executive Officer since February, 1999. President
10,966 of Tiffany & Co. from January, 1996 to January, 2003.
Executive Vice President from March, 1992 to January, 1996.
Chief Operating Officer from January, 1997 to February,
1999. Director of The Bank of New York, Fairmont Hotels &
Resorts, Inc., Tiffany & Co. and Jewelers of America.
Trustee of the Wildlife Conservation Society and the
National Parks Conservation Association. Age 52.
[GRAPHIC OMITTED] CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF MEADWESTVACO
CORPORATION, MANUFACTURER OF PAPER, PACKAGING AND SPECIALTY
JOHN A. CHEMICALS
LUKE, JR.
1996 Chairman of MeadWestvaco Corporation from December, 2002 to
COMMON SHARES: present and Chief Executive Officer since January, 2002.
21,200 President of MeadWestvaco Corporation from January, 2002 to
April, 2003. Chairman, President and Chief Executive
Officer of Westvaco Corporation from 1996 to January, 2002.
President and Chief Executive Officer of Westvaco
Corporation from 1992 to January, 2002. Director of
American Forest and Paper Association, The Bank of New
York, FM Global, MeadWestvaco Corporation, The Timken
Company, The Tinker Foundation and the United Negro College
Fund. Trustee of Lawrence University and the American
Enterprise Institute for Public Policy Research. Age 56.
7
NOMINEE,
YEAR ELECTED
A DIRECTOR
AND SECURITIES PRINCIPAL OCCUPATION
OWNED (1) AND OTHER INFORMATION
================================================================================
[GRAPHIC OMITTED] CHAIRMAN OF LIBERTY MEDIA CORPORATION, PRODUCER AND
DISTRIBUTOR OF COMMUNICATIONS, INFORMATIONAL PROGRAMMING
JOHN C. AND ELECTRONIC RETAILING SERVICES
MALONE
1986 Chairman of Liberty Media Corporation from October, 1990 to
COMMON SHARES: present. Chairman, CEO and President of Liberty Media
44,400 International, Inc. from June, 2004 to present. Chairman of
Tele-Communications, Inc. from November, 1996 and Chief
Executive Officer from January, 1994 to March, 1999.
Director of The Bank of New York, CATO Institute, Liberty
Media Corporation, Liberty Media International, Inc. and
UnitedGlobalCom, Inc. Member of Shareholders Committee of
Discovery Communications, Inc. Age 63.
[GRAPHIC OMITTED] CHAIRMAN OF GUARDIAN MEDIA GROUP PLC, A UK MEDIA BUSINESS
WITH INTERESTS IN NATIONAL AND COMMUNITY NEWSPAPERS,
PAUL MAGAZINES AND RADIO
MYNERS, CBE
2002 Chairman of Guardian Media Group plc from 2000 to present.
COMMON SHARES: Chairman of Marks and Spencer PLC from 2004 to present.
10,200 Chairman of Gartmore Investment Management plc from 1986 to
2001. Director of The Bank of New York and Marks & Spencer
PLC. Chairman of Aspen Insurance Holdings Limited. Chairman
of Tate. Trustee of Glyndebourne Opera. Age 56.
[GRAPHIC OMITTED] SENIOR EXECUTIVE VICE PRESIDENT AND CHIEF ADMINISTRATIVE
OFFICER OF METLIFE, INC., INSURANCE AND FINANCIAL SERVICES
CATHERINE A.
REIN Senior Executive Vice President and Chief Administrative
1981 Officer of Metlife, Inc. from January, 2005 to present.
COMMON SHARES: President and Chief Executive Officer of Metropolitan
75,507 Property and Casualty Insurance Company from March, 1999 to
January, 2005. Senior Executive Vice President-Business
Services Group and Corporate Development and Services of
Metropolitan Life Insurance Company from February, 1998 to
March, 1999. Director of The Bank of New York, FirstEnergy
Corp. and New England Financial, Inc. Trustee of the New
York University Law Center Foundation. Age 62.
8
NOMINEE,
YEAR ELECTED
A DIRECTOR
AND SECURITIES PRINCIPAL OCCUPATION
OWNED (1) AND OTHER INFORMATION
================================================================================
[GRAPHIC OMITTED] CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE BANK OF NEW
YORK COMPANY, INC. AND THE BANK OF NEW YORK
THOMAS A.
RENYI Chairman of The Bank of New York Company, Inc. and The Bank
1992 of New York since February, 1998. Chief Executive Officer
COMMON SHARES: of The Bank of New York Company, Inc. since July, 1997.
1,450,957 President of The Bank of New York Company, Inc. from March,
1992 to September, 1998. Chief Executive Officer of The
Bank of New York since January, 1996 and President from
December, 1994 to September, 1998. Chief Operating Officer
of The Bank of New York from December, 1994 to January,
1996. Vice Chairman of The Bank of New York from 1992 to
1994. Director of The Bank of New York, Lincoln Center for
the Performing Arts, The New York Clearing House, Public
Service Enterprise Group, Inc. and United Way of New York
City. Member of the Board of Managers of The New York
Botanical Garden. Member of the Boards of Trustees of Bates
College and Rutgers, the State University. Member of the
Board of Executives of the New York Stock Exchange. Age 58.
[GRAPHIC OMITTED] PRESIDENT AND CHIEF EXECUTIVE OFFICER OF W.K. KELLOGG
FOUNDATION, A PRIVATE FOUNDATION
WILLIAM C.
RICHARDSON President and Chief Executive Officer of W.K. Kellogg
1998 Foundation since August, 1995. President and Professor of
COMMON SHARES: Health Policy and Management, Johns Hopkins University from
16,814 1990 to 1995. Director of The Bank of New York, Kellogg
Company, Exelon Corporation and CSX Corporation. Trustee of
the W.K. Kellogg Foundation Trust. Age 64.
[GRAPHIC OMITTED] CHAIRMAN AND CEO OF COMCAST CORPORATION, DEVELOPER, MANAGER
AND OPERATOR OF BROADBAND COMMUNICATION NETWORKS AND
BRIAN L. PROVIDER OF CONTENT
ROBERTS
1999 Chairman of Comcast Corporation from June, 2004 to present
COMMON SHARES: and CEO since November, 2002. President of Comcast
18,271 Corporation since 1990. Director of The Bank of New York,
Comcast Corporation and Comcast Holdings Corporation. Age
45.
9
NOMINEE,
YEAR ELECTED
A DIRECTOR
AND SECURITIES PRINCIPAL OCCUPATION
OWNED (1) AND OTHER INFORMATION
================================================================================
[GRAPHIC OMITTED] CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF CORN
PRODUCTS INTERNATIONAL, INC., GLOBAL PRODUCERS OF
SAMUEL C. CORN-REFINED PRODUCTS AND INGREDIENTS
SCOTT III
2003 Chairman and Chief Executive Officer of Corn Products
COMMON SHARES: International, Inc. since 2001. President since 1997 and
9,149 Chief Operating Officer from 1997 to 2001. Director of The
Bank of New York, Corn Products International, Inc. and
Motorola, Inc. Age 60.
--------------------------------------------------------------------------------
(1) Includes shares held individually or jointly with others or in the name
of a bank, broker or nominee for the individual's account.
10
SECURITY OWNERSHIP BY MANAGEMENT
The following table indicates the beneficial ownership of the Company's Common
Stock as of February 22, 2005, by each of the directors (including all nominees
for re-election), the chief executive officer and the other five most highly
compensated executive officers and all directors and executive officers of the
Company as a group, based upon information supplied by each of the directors and
officers. No director or officer currently holds any shares of the Company's
Preferred Stock.
SHARES OF SHARES THAT MAY BE
COMMON STOCK ACQUIRED WITHIN PERCENT OF
BENEFICIALLY 60 DAYS BY COMMON
NAME OF BENEFICIAL OWNER OWNED EXERCISE OF OPTIONS TOTAL STOCK (1)
------------------------------ ----------------- --------------------- -------------- ------------
Frank J. Biondi, Jr............... 27,319 -- 27,319
Nicholas M. Donofrio.............. 15,603 -- 15,603
Alan R. Griffith.................. 1,116,953(2) 1,345,339 2,462,292
Gerald L. Hassell................. 1,028,894(3) 1,703,673 2,732,567
Richard J. Kogan.................. 21,600 -- 21,600
Michael J. Kowalski............... 10,966 -- 10,966
John A. Luke, Jr.................. 21,200 -- 21,200
John C. Malone.................... 44,400 -- 44,400
Donald R. Monks................... 560,868 1,109,666 1,670,534
Paul Myners....................... 10,200 -- 10,200
Robert C. Pozen................... 4,450 -- 4,450
Catherine A. Rein................. 75,507 -- 75,507
Thomas A. Renyi................... 1,450,957 3,699,802 5,150,759
William C. Richardson............. 16,814 -- 16,814
Brian L. Roberts.................. 18,271 -- 18,271
Samuel C. Scott III............... 9,149 -- 9,149
Bruce W. Van Saun ................ 400,494 818,639 1,219,133
Joseph M. Velli .................. 1,003,594(4) 1,152,006 2,155,600
All directors and executive
officers of the Company, as a
group (a total of 24 persons,
including those named above).... 6,893,861 12,725,508 19,619,369 2.52%
--------------
(1) All percentages are less than 1% of the Company's outstanding shares of
Common Stock except as indicated.
(2) Excludes 99,320 shares held by Mr. Griffith's spouse as to which shares
he disclaims beneficial ownership.
(3) Excludes 60,000 shares held by Mr. Hassell's spouse as to which shares
he disclaims beneficial ownership and includes 57,854 shares held by
two family trusts.
(4) Excludes 1,135 shares held by Mr. Velli's spouse as to which shares he
disclaims beneficial ownership.
2004 AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company assists the Board
of Directors in fulfilling its statutory and fiduciary responsibilities with
respect to internal controls, accounting policies, and auditing and reporting
practices. The Audit Committee assists the Board in its oversight of (i) the
integrity of the financial statements and the financial reporting process; (ii)
compliance with legal and regulatory requirements; (iii) the independent public
accountants' qualifications and independence; and (iv) the performance of the
independent public accountants and the Company's internal audit function.
11
The Audit Committee consists of independent directors meeting the requirements
of the guidelines specified in the Company's Corporate Governance Guidelines and
the additional requirements imposed upon audit committees by the Securities and
Exchange Commission (SEC). All members of the Audit Committee are "financially
literate," and collectively the members have such other qualifications as are
mandated by the SEC and NYSE Listing Standards. Two of the members of the Audit
Committee each serve on the audit committees of two other public companies. In
accordance with the provisions of the Audit Committee Charter, the Board has
determined that their duties on the other boards do not impair their ability to
serve effectively on the Audit Committee of the Company.
The Audit Committee is entitled to place reasonable reliance on (i) the
integrity of those persons and organizations within and outside the Company from
whom and from which the Audit Committee receives information and (ii) the
accuracy of the financial and other information provided to the Audit Committee
by such persons or organizations. Actual knowledge to the contrary with respect
to either of the above items will be promptly reported to the Board by the Audit
Committee.
The Audit Committee has established procedures for the receipt, treatment and
retention of complaints related to accounting, internal accounting controls,
auditing matters, and other situations which affect or could potentially affect
the accuracy of the books and records of the Company.
Management of the Company is responsible for the preparation, presentation and
integrity of the Company's consolidated financial statements. Management is
responsible for maintaining appropriate accounting and financial reporting
principles and policies as well as for maintaining internal control and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The Company's independent public accountants,
Ernst & Young LLP, are responsible for planning and performing proper audits,
including an audit of the Company's annual consolidated financial statements
filed on Form 10-K, and other procedures, including reviews of the Company's
unaudited interim consolidated financial statements prior to the filing of each
quarterly report on Form 10-Q. The Audit Committee is responsible for
maintaining open communication between the Audit Committee and the independent
public accountants, internal auditors, management, and the Board.
In 2004, management and the independent public accountants (Ernst & Young LLP)
detailed the methodology selected to evaluate the system of internal controls
over financial reporting and disclosure, utilizing the framework in INTERNAL
CONTROL - INTEGRATED FRAMEWORK issued by the Committee of Sponsoring
Organizations of the Treadway Commission. During 2004, management documented the
system of internal controls over financial reporting and disclosure, tested the
controls for adequacy and evaluated the effectiveness of the system in
compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of
2002 and related regulations. The Audit Committee met with management, internal
audit and the independent public accountants periodically during 2004 to receive
status reports on the results of the documentation, testing, and evaluations of
the system of internal controls over financial reporting and disclosure. As of
December 31, 2004, management provided the Audit Committee with a report of
their review on the design and operating effectiveness of internal controls over
financial reporting and disclosure. This report was included in the Company's
Annual Report on Form 10-K. The Committee has reviewed this report and discussed
with management the process and results of the evaluation of the system of
internal controls over financial reporting and disclosure. The Committee
continues to monitor the Company's process for evaluating the design and
operating effectiveness of internal controls over financial reporting and
disclosure and will continue this monitoring process going forward in 2005.
The Audit Committee reviewed the audited consolidated financial statements in
the Company's Annual Report with management, and has discussed with management
(i) the quality, not just the acceptability, of the Company's accounting
principles; (ii) the reasonableness of significant financial reporting issues
and judgments made in connection with the preparation of the financial
statements, including any significant changes in the Company's selection or
application of accounting principles and any major issues regarding the adequacy
of the Company's internal controls; (iii) the effect of any significant
regulatory and accounting initiatives, as well as off-balance sheet structures,
on the financial statements; (iv) any special audit steps adopted in light of
any material control deficiencies; and (v) the clarity of disclosures made in
the financial statements. The Audit Committee also reviewed the Company's
disclosures under "Management's Discussion and Analysis of Financial Condition
and
12
Results of Operations" included in the Company's Annual Report on Form 10-K.
In conjunction with the reviews of the Company's 10-K and 10-Qs, the Audit
Committee also received a report from the Disclosure Committee of the Company
and reviewed the process for the CEO and CFO quarterly certifications of the SEC
filings, as well as the Company's disclosure controls and procedures, including
any changes or deficiencies. The Audit Committee has reviewed a report from the
CEO and CFO made in connection with their certification of the Company's 10-K
and 10-Qs about (i) any significant deficiencies in the design or operation of
internal controls or material weaknesses therein and (ii) any fraud involving
management or other employees who have a significant role in the Company's
internal controls.
The Audit Committee has discussed with the Company's independent public
accountants, who are responsible for expressing an opinion on the conformity of
the audited financial statements with generally accepted accounting principles,
the independent public accountants' judgments as to the quality, not just the
acceptability, of the Company's accounting principles as applied in financial
reporting, the reasonableness of significant financial reporting issues and
judgments, the clarity of the disclosures in the consolidated financial
statements, management's assessment of the effectiveness of internal controls
over financial reporting, the independent public accountants' opinion on the
effectiveness of internal controls over financial reporting and any matters
required to be discussed by Statement on Auditing Standards No. 61, as modified
or supplemented.
In addition, as required by Independence Standards Board Standard No. 1, the
Audit Committee has: (i) received from the Company's independent public
accountants written disclosure of all relationships, if any, between the
Company's independent public accountants and its related entities and the
Company and its related entities that in the independent public accountants'
professional judgment may reasonably be thought to bear on their independence;
(ii) received a letter from the Company's independent public accountants
confirming that in the independent public accountants' professional judgment,
they are independent of the Company; and (iii) discussed with the Company's
independent public accountants their independence from management and the
Company. The independent public accountants reported that it provided expatriate
tax services to an employee of the Company in China that represents a violation
of the auditor independence rules. From December 1999 through September 2001 and
again in January 2004, the independent public accountants received funds from
the Company and one expatriate employee that were deposited into the independent
public accountants' account in a local financial institution and forwarded to
the local taxing authority. This represented a violation based on the
prohibition of an auditor from having custody of assets of the audit client,
even on a temporary basis. The fees paid to Ernst & Young LLP for these services
were approximately $2,000 in 2004, $1,000 in 2001, and the amounts relating to
the period prior to 2001 are believed to be similar. After review, it was
determined by the independent public accountants that their independence as it
relates to the Company was not impaired. The Audit Committee has reviewed this
situation and concurred with the assessment by the independent public
accountants. In further assessing the independence of Ernst & Young LLP, the
Committee has received and reviewed a report by the independent public
accountants describing: (i) the independent public accountants' internal
quality-control procedures; (ii) material issues raised by the most recent
internal quality-control review, or peer review of the firm, or by any inquiry
or investigation by governmental or professional authorities, within the past
five years, respecting one or more independent audits carried out by the firm,
and any steps taken to deal with such issues; and (iii) all relationships
between the independent public accountants and the Company. The Audit Committee
has also considered that the provision of non-audit services to the Company by
Ernst & Young LLP is compatible with maintaining their independence.
The Audit Committee discussed with the Company's internal auditors and
independent public accountants the overall scope and plans for their respective
audits, matters related to the conduct of the audit including the adequacy of
staffing, and the results of the audit. The Audit Committee meets with the
internal auditors and independent public accountants, with and without
management present, to discuss the results of their examinations, their
evaluations of the Company's internal controls and the overall quality of the
Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board approved) that
the audited consolidated financial statements be
13
included in the Annual Report
on Form 10-K for the year ended December 31, 2004, which is filed with the
Securities and Exchange Commission. The Audit Committee has obtained assurance
from the independent public accountants that the audit was conducted in a manner
consistent with Section 10A of the Securities Exchange Act of 1934. The Audit
Committee has, after evaluating the independent public accountants'
qualifications, performance and independence, as well as evaluating the
performance of the lead engagement partner, appointed, subject to shareholder
ratification, Ernst & Young LLP as the Company's independent public accountants.
By: The Audit Committee
March 7, 2005
Catherine A. Rein
Michael J. Kowalski
Paul Myners
Robert C. Pozen
William C. Richardson
AUDIT FEES, AUDIT-RELATED FEES, TAX FEES, ALL OTHER FEES
The Company utilizes the services of Ernst & Young LLP for various audit, tax,
and other non-audit services. The aggregate fees billed to the Company by Ernst
& Young LLP for their audit of the Company's annual financial statements and
reviews of the interim financial statements in the Company's Forms 10-K and 10-Q
for the years ended December 31, 2004 and December 31, 2003 was $5.3 million and
$4.3 million, respectively. The increase in the audit fees charged to the
Company primarily relates to the increased scope of work performed to comply
with Section 404 of the Sarbanes-Oxley Act of 2002.
The aggregate fees billed to the Company by Ernst & Young LLP for all services
for the year ended December 31, 2004 and 2003 were as follows:
FEE TYPE 2004 2003
-------------------- -------------------
AUDIT FEES................................... $ 5,338,000 $ 4,293,000
-------------------- -------------------
AUDIT RELATED FEES
Service Organization Reports ("SAS 70
reports"), Internal Control and other
Regulatory Reports...................... 2,581,000 1,827,000
Other Audit Related Fees.................. 248,000 757,000
-------------------- -------------------
Total Audit Related Fees..................... 2,829,000 2,584,000
-------------------- -------------------
TAX FEES..................................... 2,185,000 1,403,000
-------------------- -------------------
All Other Fees
Compliance and Advisory Services.......... 429,000 1,303,000
WTC Disaster Non-Audit Related............ -- 125,000
-------------------- -------------------
Total All Other Fees......................... 429,000 1,428,000
-------------------- -------------------
Total for All Non-Audit Fees................. 5,443,000 5,415,000
-------------------- -------------------
Total for all E&Y Fees....................... $ 10,781,000 $ 9,708,000
==================== ===================
14
The Company did not engage Ernst & Young LLP to provide any professional
services with respect to financial information systems design and implementation
for the years ended December 31, 2004 or 2003.
The Audit Committee is responsible for the pre-approval of all audit and
permitted non-audit services performed by the independent public accountants,
Ernst & Young LLP. The Audit Committee will not engage the independent public
accountants to perform the specific non-audit services which are precluded by
law or regulation or any services which would impair the independence of the
independent public accountants. The Audit Committee has established policies and
procedures for the pre-approval of audit and non-audit services for which the
Company engages Ernst & Young LLP. The Audit Committee has pre-approved certain
specific services ("Class Approval"), for which management may retain Ernst &
Young LLP subject to the review and approval of the Chief Auditor of the Company
prior to the engagement of Ernst & Young LLP. All such Class Approvals would be
presented to the Audit Committee for ratification at the next subsequent Audit
Committee meeting. All other services would require the separate approval of the
Audit Committee prior to engagement of Ernst & Young LLP ("Specific Approval").
The Committee has delegated the authority for Specific Approval to the Chairman
of the Audit Committee. All such Specific Approvals are reported at the next
subsequent Audit Committee meeting. All Audit Related, Tax and All Other
services were pre-approved by the Audit Committee pursuant to these policies and
procedures.
OTHER SERVICES PROVIDED BY ERNST & YOUNG LLP
Ernst & Young LLP also provided other services to associated entities of the
Company that were charged directly to those entities. These amounts included
$1.1 million for the audits of mutual funds and other funds advised by the Bank.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following tables present information concerning compensation for the chief
executive officer and the five other most highly compensated executive officers
for services in all capacities to the Company and its subsidiaries during the
years indicated.
15
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------ -----------------------------------
BONUS (D) AWARDS PAYOUTS
------------------------ ------------------------ ----------
VALUE OF OTHER RESTRICTED
NAME AND PERFORMANCE ANNUAL STOCK SECURITIES ALL OTHER
PRINCIPAL SHARES COMPENSATION AWARDS UNDERLYING LTIP COMPENSATION
POSITION YEAR SALARY($) CASH EARNED(1) ($) ($) OPTIONS(#) PAYOUTS($) ($)(2)
--------- ---- --------- ---------- ----------- ------------ ----------- ---------- ---------- -----------
(A) (B) (C) (E) (F) (G) (H) (I)
Thomas A.
Renyi.... 2004 $1,000,000 $3,000,000 $4,862,610 -- -- 340,000 -- $ 80,448
Chairman
and Chief 2003 1,000,000 3,524,000 6,359,040 -- 2,870,000(3) 650,000 -- 53,939
Executive
Officer 2002 1,000,000 0 610,980 -- 771,421 650,000 -- 53,866
-------------------------------------------------------------------------------------------------------------------
Gerald L.
Hassell.. 2004 800,000 2,000,000 3,890,088 -- -- 175,000 -- 44,256
President 2003 696,153 2,411,000 5,087,232 -- 1,599,000(3) 375,000 -- 37,550
2002 650,000 0 356,405 -- 460,224 375,000 -- 35,013
-------------------------------------------------------------------------------------------------------------------
Alan R.
Griffith.
Vice 2004 625,000 1,955,000 2,917,566 -- -- 140,000 -- 54,622
Chairman 2003 598,077 1,716,000 2,861,568 -- 1,271,000(3) 275,000 -- 32,260
2002 575,000 0 280,021 -- 295,880 250,000 -- 30,973
-------------------------------------------------------------------------------------------------------------------
Bruce W.
Van Saun. 2004 600,000 1,877,000 2,917,566 -- -- 140,000 -- 31,351
Senior
Executive
Vice 2003 542,308 1,648,000 2,861,568 -- 1,168,500(3) 275,000 -- 29,252
President
and Chief 2002 475,000 0 234,209 -- 278,805 210,000 -- 25,586
Financial
Officer
-------------------------------------------------------------------------------------------------------------------
Joseph M.
Velli.... 2004 625,000 1,250,000 2,431,305 -- 787,500(4) 150,000 -- 36,581
Senior
Executive 2003 538,558 1,100,000 1,589,760 -- 758,500(3) 325,000 -- 28,895
Vice
President
(5) 2002 525,000 400,000 254,575 -- -- 260,000 -- 28,280
-------------------------------------------------------------------------------------------------------------------
Donald R.
Monks.... 2004 525,000 1,125,000 2,431,305 -- 787,500(4) 150,000 -- 38,079
Senior
Executive 2003 525,000 1,000,000 1,589,760 -- 656,000(3) 325,000 -- 26,250
Vice
President
(5) 2002 452,885 325,000 254,575 -- -- 250,000 -- 22,644
--------------
(1) The value of the 2004 performance shares earned is the value on December
31, 2004, of performance share awards made under the Company's 1999 and
2003 Long-Term Incentive Plans and earned based on 2004 performance.
Under the conditions of each award, shares are generally forfeitable if
the officer's employment terminates prior to February 8, 2007, except in
the case of retirement, disability, death or a Change in Control (as
defined in the 1999 and 2003 Long-Term Incentive Plans). Prior to
vesting, dividends are paid on outstanding shares. The number of shares
which were earned based on 2004 performance and the value thereof on
December 31, 2004, for the Named Executive Officers are shown below.
SHARES EARNED AS VALUE OF SHARES
OF DECEMBER 31, 2004 EARNED AS OF DECEMBER 31, 2004
BASED ON 2004 BASED ON 2004
PERFORMANCE PERFORMANCE
-------------------- ------------------------------
Renyi........... 145,500 $4,862,610
Hassell......... 116,400 3,890,088
Griffith........ 87,300 2,917,566
Van Saun........ 87,300 2,917,566
Velli........... 72,750 2,431,305
Monks........... 72,750 2,431,305
(2) The items included under column (i) for 2004 consist of the following
amounts for Messrs. Renyi, Hassell, Griffith, Van Saun, Velli and Monks,
respectively: (i) annual Company contributions on behalf of the named
employees under the Company's Employee Savings & Investment Plan and
Excess Contribution Plan, amounting to $29,225, $25,225, $21,725,
$21,225, $21,725 and $19,725, (ii) annual allocations under the Company's
Employee Stock Ownership Plan of $1,378, $1,103, $861, $827, $861 and $0,
(iii) taxable payments made to the named executives to cover premiums for
universal life insurance policies owned by the executives, and (iv)
annual premiums paid by the Company for executive long-term disability
insurance.
(3) Based on 2002 performance, the Named Executive Officers were each awarded
restricted shares in March 2003.
(4) Based on 2003 performance, Messrs. Velli and Monks were each awarded
restricted shares in March 2004.
(5) Officer of The Bank of New York.
16
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS (1)
NUMBER
OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION GRANT DATE
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE PRESENT VALUE (2)
---------------- ---------------- ------------------ ------------ --------------- -------------------
(A) (B) (C) (D) (E) (F)
Renyi.......... 340,000 4.71 $ 33.09 3/4/2014 $ 2,121,600
Hassell........ 175,000 2.43 $ 33.09 3/4/2014 1,092,000
Griffith....... 140,000 1.94 $ 33.09 3/4/2014 873,600
Van Saun....... 140,000 1.94 $ 33.09 3/4/2014 873,600
Velli.......... 150,000 2.08 $ 33.09 3/4/2014 936,000
Monks.......... 150,000 2.08 $ 33.09 3/4/2014 936,000
--------------
(1) All options were granted at market price on March 4, 2004. For each
Named Executive Officer, all of the options are non-qualified stock
options and become exercisable one-third per year over three years from
the grant date.
(2) The Grant Date Present Value is based on the Black-Scholes model adapted
for use in valuing executive stock options. There is no assurance the
value realized by an executive will be at or near the value estimated by
the Black-Scholes model. The actual value, if any, an executive may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised. In determining the
Black-Scholes value, the following underlying assumptions were used: (i)
stock price volatility over the expected future life of the option; (ii)
dividend yield represents the expected annual dividend yield of the
Common Stock; (iii) the risk-free rate of return is 2.6%; and (iv) an
expected option life of 5 years.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
SHARES --------------------- -------------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
-------------- ------------ -------------- --------------------- -------------------------
(A) (B) (C) (D) (E)
Renyi........ 186,556 $ 4,209,698 3,221,135 / 990,001 $ 17,675,692 / $4,571,207
Hassell...... 86,556 1,927,819 1,395,340 / 550,000 6,307,479 / 2,630,250
Griffith..... 132,352 3,050,331 1,123,672 / 406,668 6,849,670 / 1,932,707
Van Saun..... 0 0 610,306 / 393,334 964,906 / 1,932,707
Velli........ 0 0 907,006 / 453,334 4,697,310 / 2,279, 003
Monks........ 13,444 300,776 867,999 / 450,001 3,947,100 / 2,279,003
17
COMPENSATION AND ORGANIZATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION FOR
2004
PRINCIPLES AND PROGRAM
The Company's executive compensation program is a pay for performance program.
It is designed to:
o motivate executives to enhance shareholder value with compensation
plans that tie reward to Company performance; and
o target executive compensation at a level to ensure the Company's
ability to attract and retain superior executives.
The Compensation and Organization Committee of the Board of Directors has the
responsibility for the design, implementation and administration of the
Company's executive compensation program. All of the directors on the
Compensation and Organization Committee have been determined by the Board of
Directors to be "independent" within the meaning of the New York Stock Exchange
Rules. In addition, the Company has determined that each complies with SEC and
Department of Treasury rules concerning the independence of outside directors.
To meet the above objectives, the program, which has both cash and equity
elements, consists of base salary, an annual cash incentive bonus, share grants
and stock options. In determining executive compensation, the Compensation and
Organization Committee evaluates both the total compensation package and its
individual elements. As part of its review, the Compensation and Organization
Committee considers Company performance, individual performance and the relative
compensation levels of other executive officers. In 2004, the Compensation and
Organization Committee also engaged its independent compensation consultant to
review the Company's entire executive compensation program, both generally and
against our competitors. Key competitors consist of the Company's peer group
used for the five-year comparison of total shareholder return. It is expected
that total compensation will vary annually based on Company and individual
performance. The Compensation and Organization Committee and the management of
the Company believe that compensation should be based on both short-term and
long-term measurements and be directly and visibly tied to Company performance,
thus introducing substantial risk in the payout levels.
In evaluating the Company's 2004 financial performance, the Compensation and
Organization Committee considered a variety of factors. The overall market
environment in 2004 was uneven. After a strong first quarter, conditions
weakened in the second and third quarters, particularly for equity volumes, as
concerns mounted over geopolitical issues such as oil prices and the conflict in
Iraq. However, market conditions improved in the fourth quarter, particularly
after the Presidential election in November. Despite the uneven market
environment and negative impact of the charge related to a reserve for the
anticipated settlement of the RW Leasing matter, the Company's net income
increased by 24.5%, from $1,157 million to $1,440 million, and earnings per
share grew by 21.7%, from $1.52 in 2003 to $1.85 in 2004. This performance
reflects sound growth across nearly all the Company's securities services and
fiduciary businesses as well as excellent results from the credit portfolio.
Throughout the year, the Company maintained its investment spending in
technology, business continuity, quality initiatives and marketing and branding.
Moreover, the Company's debt ratings remained strong and capital levels were in
excess of the regulatory minimums for a "well capitalized" bank.
Following is a description of the elements of executive compensation and a
review of Mr. Renyi's compensation levels for 2004:
BASE SALARY
Base salary levels for executive officers are determined by the Compensation and
Organization Committee. The Compensation and Organization Committee assesses a
number of factors in fixing the base salary of the executive officers (including
the Named Executive Officers) such as the level of responsibility of the
particular position, the individual's performance, the Company's overall
financial performance, and the business and inflationary climate. In considering
base salary levels, the Compensation and Organization Committee considers all of
these factors without giving specific weight to any one factor.
18
Base salary levels of executive officers are reviewed every quarter by the
Compensation and Organization Committee; individual increases generally occur
every two years, but are occasionally awarded more or less frequently in
exceptional circumstances. Because of the substantial risk in the payout levels
of the long-term incentive plan, the Compensation and Organization Committee
believes that base salary levels for the executives named in the Summary
Compensation Table should be at or above median for the peer group. An
independent compensation consultant periodically reviews the competitiveness of
executive salaries and the Compensation and Organization Committee examines the
compensation consultant's recommendation in considering salary changes. The
Company also takes into account the ability to deduct compensation for tax
purposes as described in the last paragraph of this report. Mr. Renyi's base
salary of $1,000,000 was unchanged in 2004 and remains at the same level it has
been since 2000.
Performance evaluations of other executive officers are reviewed with the
Compensation and Organization Committee by the Chief Executive Officer. To
ensure that compensation policy for the top executive officers is consistent
with overall Company financial performance and executive compensation
strategies, the Compensation and Organization Committee reviews the compensation
awarded to approximately 50 of the Bank's most highly compensated executives.
ANNUAL CASH INCENTIVE BONUSES
Annual cash incentive bonuses are designed to provide a short-term (one-year)
incentive to executive officers. Annual cash incentive bonuses to executive
officers named in the Summary Compensation Table are generally determined based
on performance against pre-established corporate goals but may also be increased
or decreased on a discretionary basis. Annual cash incentive bonuses to other
executive officers are based on a subjective evaluation of their individual
contribution to the Company's financial performance for the year. Heads of major
business units and other key officers are eligible for cash incentive payments.
The Compensation and Organization Committee approves all senior management
annual cash incentive bonuses.
In the case of Mr. Renyi, his annual cash incentive bonus for 2004, as
determined pursuant to normalized net income results against goals that were
established at the beginning of 2004, would have been $4,735,000. Messrs. Renyi
and Hassell recommended to the Compensation and Organization Committee that
their individual cash incentive bonuses be reduced from the amounts allowable
pursuant to the pre-established goals in view of the RW Leasing matter and other
regulatory issues. In response, the Compensation and Organization Committee
reduced Mr. Renyi's bonus to $3,000,000. Similarly, the Compensation and
Organization Committee reduced Mr. Hassell's annual cash incentive bonus from
$3,220,000 to $2,000,000. Mr. Renyi's 2003 annual cash incentive bonus was
determined pursuant to normalized net income goals that were established at the
beginning of 2003. Although his annual cash incentive bonus payout would have
been $3,661,000 based solely on these performance goals, Mr. Renyi received
$3,524,000, the maximum 2003 annual cash incentive bonus payable to a covered
employee under the incentive plan at that time.
SHARE GRANTS
The Compensation and Organization Committee strongly endorses the use of
performance shares as an important component of long-term incentive compensation
for the most senior management. Performance share earn outs fluctuate based on
Company results against pre-established goals over designated performance
periods. The Company generally grants performance shares every three years to
provide long-term incentives, with annual performance periods over the term of
the three year grant.
Restricted share grants are generally made to other executive officers but may
also be granted to senior management in special situations. Restricted shares
vest, generally, 3 years after grant without regard to performance goals and are
intended to provide an incentive to recipients to remain employed with the
Company and to contribute to overall Company performance and the enhancement of
shareholder value.
The independent compensation consultant retained by the Compensation and
Organization Committee periodically reviews the value of long-term incentive
grants (which includes stock options, performance shares and restricted stock)
awarded by competitors to their senior management. In light
19
of this review, the Compensation and Organization Committee reduced the emphasis
on stock options as long-term incentive compensation and increased the emphasis
on performance share grants. The Compensation and Organization Committee
believes this shift creates a better balance of long-term incentive compensation
and further aligns senior management compensation and shareholder interests and
thereby promotes the objective of enhancing shareholder value.
In 2003, performance share grants were made covering performance for calendar
years 2003, 2004 and 2005. These performance shares are earned based on (1)
return on equity adjusted for non-recurring items and (2) a comparison against
the reported return on equity of our peer group. For 2004, Mr. Renyi earned
194,000 shares, which was 97% of his 200,000 share grant. As was the case with
their annual cash incentive bonuses, Messrs. Renyi and Hassell recommended to
the Compensation and Organization Committee that their earned performance shares
be reduced from the amounts earned pursuant to these goals in view of the RW
Leasing matter and other regulatory issues. In response, the Compensation and
Organization Committee reduced the earned shares for Mr. Renyi from 194,000 to
145,500 shares. Similarly, the Compensation and Organization Committee reduced
Mr. Hassell's earned performance shares from 155,200 to 116,400 shares. The
value of these reduced earned shares as of 12/31/2004 is reported in footnote
(1) of the Summary Compensation Table on page 16. For 2003, Mr. Renyi earned
192,000 shares which was 96% of his 200,000 share grant; the value of these
shares was $6,359,040 as of 12/31/2003.
STOCK OPTION GRANTS
Stock options are designed to provide long-term (ten-year) incentives and
rewards tied to the price of the Company's Common Stock. Given the fluctuations
of the stock market, there is not always a direct correlation between stock
price performance and financial performance. The Compensation and Organization
Committee believes that stock options, which provide value to participants only
when the Company's shareholders benefit from stock price appreciation, are an
important component of the Company's executive compensation program. The number
of options currently held by an officer is not a factor in determining
individual grants.
During 2004, approximately 1,800 key officers received stock option grants
including all executive officers. The number of option shares granted is based
on a subjective evaluation of an individual's contribution to Company financial
performance and his/her position and salary level in the Company. Stock options
are issued annually at an exercise price equal to 100% of the fair market value
of the Company's Common Stock on the date of grant. Vesting terms for stock
options for the Named Executive Officers are shown in the footnotes to the
Option Grants in the Last Fiscal Year table in this Proxy Statement; the term of
the options is ten years from the grant date.
Based on data prepared by the independent compensation consultant, the
Compensation and Organization Committee believes the Company's long-term
incentive grants are appropriate in the context of the overall compensation
packages of senior management and those of the senior management of competitors.
Mr. Renyi received 340,000 option shares in March 2004.
STOCK OWNERSHIP GUIDELINES
The Compensation and Organization Committee established formal stock ownership
guidelines in 2005 for executive officers named in the Summary Compensation
Table and certain other senior executives. These officers will be expected, over
time, to acquire shares of Company stock equal in value to at least five to
fifteen times their base salary amounts, depending on their positions. Mr.
Renyi's ownership guideline is fifteen times his base salary. For these
purposes, Company stock includes shares owned outright, unvested performance
shares, unvested restricted shares and shares held in the Company's employee
stock purchase and retirement plans but exclude outstanding unexercised stock
options. The guidelines terminate upon an executive reaching age 60 after which
one-third of the affected shares may be sold in each of the following three
years. The guidelines lapse upon an executive's retirement. Although ownership
level of Company Common Stock by senior executives meets these guidelines by a
substantial margin, the Compensation and Organization Committee believes
establishing formal guidelines further aligns senior executive and shareholder
interests and thereby promotes the objective of enhancing shareholder value.
20
INDIRECT COMPENSATION
In addition to the direct compensation described, the Company also provides
benefits to executive officers. These benefits include the retirement plans
described in this Proxy Statement and the benefits referred to in footnote 2
(iii) of the Summary Compensation Table. The Company does not have employment
agreements with its senior management providing for severance payments, except
in the context of a change in control of the Company. The purpose of these
benefits and arrangement is ensuring the Company's ability to attract and retain
superior executives in the most efficient manner. The Compensation and
Organization Committee periodically reviews these benefits and arrangements and
considers them in the context of its direct compensation decisions.
DEDUCTIBILITY OF COMPENSATION
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), the Company will not be able to take tax deductions for employee
remuneration to the named executives to the extent such remuneration exceeds $1
million and is not based on performance as defined in Section 162(m) of the
Code. The Company has modified its incentive compensation plans, has obtained
and intends to seek in the future the necessary shareholder approvals and has
established the requisite performance measurements to enable compensation paid
under those plans to be deductible. In order to maintain the desired degree of
management flexibility to award compensation based upon individual performance,
compensation which does not qualify for the deduction may also be paid.
By: The Compensation and
Organization Committee,
March 8, 2005
Richard J. Kogan
Frank J. Biondi, Jr.
John A. Luke, Jr.
John C. Malone
21
THE BANK OF NEW YORK COMPANY, INC.
COMPARISONS OF FIVE-YEAR TOTAL SHAREHOLDER RETURN
--------------------------------------------------------------------------------
[GRAPH OMITTED]
[FOLLOWING DATA REPRESENTS LINE CHART IN THE PRINTED PIECE]
TOTAL SHAREHOLDER RETURN
(5 YEARS)
12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
---------- ---------- ----------- ---------- ---------- -----------
The Bank of New York Company, Inc....... $ 100.00 $ 139.62 $ 105.04 $ 63.64 $ 89.99 $ 92.95
Peer Group.............................. $ 100.00 $ 120.73 $ 120.65 $ 104.17 $ 148.69 $ 162.28
S&P 500................................. $ 100.00 $ 89.86 $ 78.14 $ 59.88 $ 75.68 $ 82.49
Value of assumed $100 Investment on December 31, 1999 in The Bank of New York
Company, Inc. Common Stock, in the Standard & Poor's 500 Stock Index and in the
Peer Group Index; Dividends are reinvested.
Peer Group
BANK OF AMERICA CORPORATION
CITIGROUP INCORPORATED
FLEETBOSTON FINANCIAL CORPORATION (1)
J.P.MORGAN CHASE & CO. (2)
LEHMAN BROTHERS
MELLON FINANCIAL CORPORATION
MERRILL LYNCH & CO. INCORPORATED
MORGAN STANLEY
THE PNC FINANCIAL SERVICES GROUP, INC.
STATE STREET CORPORATION
WACHOVIA CORPORATION (3)
(1) Effective April 1, 2004 Bank of America Corporation completed its
acquisition of Fleet Boston Financial Corporation; return history for the
Peer Company Group includes Fleet Boston Financial Corporation prior to
April 1, 2004.
(2) Return history of Chase Manhattan Bank through December 29, 2000, when
Chase merged with J.P. Morgan & Company; 2001, 2002, 2003 and 2004
results are for J.P. Morgan Chase & Co.
(3) During 2001 First Union Corporation acquired Wachovia Corporation and
assumed the Wachovia Corporation name; return history is that of First
Union prior to the September 2001 merger completion.
22
EMPLOYMENT AGREEMENTS AND RELATED MATTERS
The executive officers named in the Summary Compensation Table in this Proxy
Statement are currently parties to the agreements described below.
Severance Agreements. The Severance Agreements for Messrs. Renyi, Hassell,
Griffith, Van Saun, Velli and Monks (the "Severance Agreements") generally
provide that in the event that, within 24 months following a "Change in Control"
(as defined below) of the Company, such executive officer either (i) receives
notice that his employment will terminate for any reason other than death,
retirement, Cause or Disability (as defined in the Severance Agreements) or (ii)
gives notice that his employment will terminate for Good Reason (as defined in
each Severance Agreement), such executive officer will be provided with
severance pay in an amount equal to 3 times (2 times for Messrs. Velli and
Monks) the sum of the officer's (x) annual salary rate prior to a notice of
termination (or, if higher, the annual salary rate immediately prior to the
Change in Control) and (y) highest annual bonus earned during the last 3 (2 for
Messrs. Velli and Monks) completed fiscal years immediately preceding the
executive officer's termination date (the "Bonus Amount"); the severance payment
will also include an amount equal to the lump sum actuarial equivalent of the
additional benefit which the officer would have received under the Company's
Retirement, Excess Benefit and Supplemental Executive Retirement Plans if his
employment had continued for 3 (2 for Messrs. Velli and Monks) additional years,
his age were increased by 3 (2 for Messrs. Velli and Monks) years and he
continued to receive salary equal to the annual salary rate in effect
immediately prior to the Change in Control and bonus compensation equal to the
Bonus Amount. Should the executive officer be subject to the excise tax on
"excess parachute payments" as a result of such payment and payments under other
plans due to a Change in Control, an additional payment will be made to restore
the after-tax severance payment to the same amount which the executive officer
would have retained had the excise tax not been imposed.
The initial term of the Severance Agreements, was July 11, 2000 to December 31,
2000. Thereafter, they automatically renew each January 1st for consecutive one
year periods unless terminated by either party on 90 days prior notice,
provided, that notwithstanding any such notice, the Severance Agreements will
continue in effect for 24 months after a Change in Control which occurs during
the term or any renewal thereof.
Other Employee Benefit Matters. Under the 1993, 1999 and 2003 Long-Term
Incentive Plans, in the event of a Change in Control (as defined below), (i) the
restrictions applicable to all shares of restricted stock and restricted share
units shall lapse and such shares and share units shall be deemed fully vested,
(ii) all restricted stock granted in the form of share units shall be paid in
cash, (iii) 200% of all performance shares granted in the form of shares of
Common Stock or share units shall be deemed to be earned in full and fully
vested, (iv) 200% of all performance shares granted in the form of share units
shall be paid in cash, and (v) any participant who holds a stock option that is
not exercisable in full shall be entitled to receive a cash payment as provided
below with respect to the portion of the stock option which is not then
exercisable. The amount of any cash payment in respect of a restricted share
unit or performance share unit shall be equal to: (A) in the event the Change in
Control is the result of a tender offer or exchange offer for Common Stock, the
final offer price per share paid for the Common Stock or, if higher, the highest
fair market value of the Common Stock during the 90-day period ending on the
date of the Change in Control or (B) in the event the Change in Control is the
result of any other occurrence, the highest fair market value of the Common
Stock during the 90-day period ending on the date of the Change in Control. The
amount to be paid in respect of the portion of any stock option which is not
exercisable shall be equal to the result of multiplying the number of shares of
Common Stock covered by such portion of the stock option by the difference
between (x) the per share value of Common Stock determined pursuant to the
preceding sentence, or such lower price as the Compensation and Organization
Committee may determine with respect to any incentive stock option to preserve
its incentive stock option status, and (y) the per share exercise price of such
stock option.
The Company entered into a trust agreement with an independent trustee in 1993
to establish a trust (the "Trust") to provide for the payment of amounts due to
Messrs. Renyi, Hassell, Griffith, Velli, Monks and later, Mr. Van Saun (and
certain other senior executives) upon a Change in Control (as defined below) of
the Company. The terms of the Trust provide for the payment to Messrs. Renyi,
Hassell, Griffith, Van Saun, Velli and Monks (and certain other senior
executives) of the severance
23
pay payable to them pursuant to their Severance Agreements described above. The
Trust also provides for the payment of amounts due to participants under the
Company's Supplemental Executive Retirement Plan and Excess Benefit Plan which
include Messrs. Renyi, Hassell, Griffith, Van Saun, Velli and Monks (and certain
other senior executives). The Trust is revocable at any time at the option of
the Company prior to a Change in Control. After the occurrence of a Change in
Control, the Trust will become irrevocable and will be used for the exclusive
purpose of providing benefits to such persons. The Trust is funded by the
deposit of an irrevocable letter of credit in the amount of $277 million issued
by an entity unaffiliated with the Company.
Change in Control. A "Change in Control" for purposes of the Severance
Agreements of Messrs. Renyi, Hassell, Griffith, Van Saun, Velli and Monks, the
Trust, the Supplemental Executive Retirement Plan and Excess Benefit Plan, the
1993, 1999 and 2003 Long-Term Incentive Plans is deemed to occur if (A) any
"person" (as such term is defined in Section 3(a)(9) and as used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding the Company or any of its subsidiaries, a trustee or
any fiduciary holding securities under an employee benefit plan of the Company
or any of its subsidiaries, an underwriter temporarily holding securities
pursuant to an offering of such securities or a corporation owned, directly or
indirectly, by stockholders of the Company in substantially the same proportion
as their ownership of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of then outstanding securities ("Voting Securities") of the Company, unless the
acquisition of Voting Securities is in connection with an acquisition by the
Company of a business or operation of or controlled by such person, a majority
of the Board approve a resolution providing that the acquisition does not
constitute a Change in Control and such person does not become the owner of 35%
or more of the Voting Securities; or (B) during any period of not more than two
years, individuals who constitute the Board as of the beginning of the period
and any new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction described in
clause (A) or (C) of this sentence) whose election by the Board or nomination
for election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at such time or whose election or nomination for election was previously
approved (the "Incumbent Directors"), cease for any reason to constitute a
majority thereof; or (C) the consummation of the merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in (i) the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity or, if
applicable, of the ultimate parent corporation which has beneficial ownership of
at least 95% of the Voting Securities of the surviving entity) at least 60% of
the combined voting power of the Voting Securities of the Company or of such
surviving entity (or such ultimate parent corporation) outstanding immediately
after such merger or consolidation and (ii) the Incumbent Directors constituting
at least a majority of (x) the board of directors of the surviving entity and of
any corporation that owns 25% or more but less than 50% of the Voting Securities
of such surviving entity or (y) the board of directors of any corporation that
owns at least 50% of the Voting Securities of such surviving entity; or (D) the
shareholders of the Company approve a plan of complete liquidation of the
Company; or (E) the consummation of the sale or disposition by the Company of
all or substantially all of the Company's assets. Notwithstanding anything
contained herein to the contrary, if a Change in Control occurs under clause (C)
of the definition thereof under the 1993, 1999 or the 2003 Long-Term Incentive
Plans, no amendment to the provisions of this Section which is adopted in
connection with or as a consequence of the Change in Control shall be effective
if it adversely affects a Participant unless the Company's Chief Executive
Officer immediately prior to such Change in Control serves as Chief Executive
Officer for 2 years thereafter of the Surviving Corporation and, if applicable,
of any corporation that owns at least 50% of the Voting Securities of the
Surviving Corporation.
All of these agreements are being reviewed by the Company to determine whether
changes are required to comply with recent tax legislation.
24
PENSION PLAN TABLE AND DISCUSSION
The Company sponsors three defined benefit plans for its eligible U.S. based
employees, generally, in participating business units: The Retirement Plan of
The Bank of New York Company, Inc. (the "Tax-qualified Pension Plan"), a
benefits restoration plan (the "Excess Plan") and a supplemental executive
retirement plan (the "SERP"). The Tax-qualified Pension Plan is a tax-qualified
defined benefit plan that provides participants with a monthly annuity or a lump
sum based on years of service and a percentage of final average pay at
retirement, subject to certain minimum service requirements. Final average pay
for this purpose is the average of a participant's base salary, subject to the
compensation limit applicable to tax-qualified plans ($205,000 for 2004), for
the five highest paid years out of the last ten years. Some senior executives,
including all of the individuals listed in the Summary Compensation Table, also
participate in the Excess Plan and the SERP. The Excess Plan provides for a lump
sum payment that restores benefits under the Tax-qualified Pension Plan that are
reduced by some of the limits applicable to tax-qualified plans. The SERP
provides for either a lump sum or annual installments based on the Tax-qualified
Pension Plan's formula with respect to final average pay at retirement, reduced
by benefits payable from the Tax-qualified Pension Plan and the Excess Plan.
Under the SERP, final average pay is the average of an employee's base salary
and bonus over the three highest paid years out of the last ten years.
The following table sets forth the estimated total annual pension benefit from
the three defined benefit plans in the form of a straight life annuity payable
on retirement at age 60 to participating employees based on their covered
remuneration and years of credited service.
YEARS OF CREDITED SERVICE
----------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
-------------- ---------- -------------- -------------- -------------- -------------- --------------
500,000 120,285 160,380 200,475 240,051 277,551 315,051
1,000,000 244,035 325,380 406,725 486,801 561,801 636,801
1,500,000 367,785 490,380 612,975 733,551 846,051 958,551
2,000,000 491,535 655,380 819,225 980,301 1,130,301 1,280,301
2,500,000 615,285 820,380 1,025,475 1,227,051 1,414,551 1,602,051
3,000,000 739,035 985,380 1,231,725 1,473,801 1,698,801 1,923,801
3,500,000 862,785 1,150,380 1,437,975 1,720,551 1,983,051 2,245,551
As of December 31, 2004, Thomas A. Renyi, had $3,174,667 of covered remuneration
and 33 years of service; Gerald L. Hassell had $2,220,333 and 28 years; Alan R.
Griffith had $1,832,000 and 38 years; Bruce W. Van Saun had $1,733,333 and 7
years, Joseph M. Velli had $1,475,000 and 20 years, and Donald R. Monks had
$1,341,667 and 32 years. The estimated total annual pension benefit from the
preceding chart, when expressed as a lump sum payment as of December 31, 2004
was: Thomas A. Renyi, $22,869,046, Gerald L. Hassell, $13,599,309, Alan R.
Griffith, $13,941,732, Bruce W. Van Saun, $2,512,864, Joseph M. Velli
$6,455,744, and Donald R. Monks, $7,909,684. These amounts assume payment to
such individuals is made at age 60 (or current age, if older) using appropriate
lump sum conversion factors in effect as of December 31, 2004. Messrs. Renyi,
Hassell, Van Saun, Velli and Monks are not generally vested in their SERP
benefits unless they terminate service on or after age 60.
25
EQUITY COMPENSATION PLANS
NUMBER OF
SECURITIES TO BE NUMBER OF SECURITIES
ISSUED UPON REMAINING AVAILABLE FOR
EXERCISE OF WEIGHTED-AVERAGE FUTURE ISSUANCE UNDER
OUTSTANDING EXERCISE PRICE OF EQUITY COMPENSATION PLANS
OPTIONS, WARRANTS OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (A))
PLAN CATEGORY (A) (B) (C)
---------------- --------------------- ------------------------- ---------------------------
Equity compensation
plans approved by
security holders (1)(2). 68,809,804 $ 34.89 37,360,036
Equity compensation
plans not approved by
security holders (1)(2). 480,800
----------------- ------------ ----------------
Total..................... 68,809,804 $ 34.89 37,840,836
================= ============ ================
(1) As of December 31, 2004.
(2) All equity compensation plans providing for the issuance of options for
the purchase of equity securities have been approved by shareholders. No
warrants or rights are issuable under any equity compensation plan. The
only equity compensation plan not approved by shareholders is the
Directors' Retainer Plan pursuant to which a portion of directors'
retainer fees are paid in shares of Company Common Stock.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company has purchased directors' and officers' liability and corporate
reimbursement insurance, covering all directors and officers of the Company and
all subsidiaries, from the following underwriters: National Union Fire Insurance
Company of Pittsburgh, PA, ACE USA, St. Paul, Chubb and various other domestic
and international insurance companies. These policies are dated December 1, 2004
at a total premium expense for a one year period of $6,546,200, paid by the
Company, and are due to expire December 1, 2005.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In the ordinary course of business, certain of the Company's subsidiaries have
had, and expect to continue to have, banking and fiduciary transactions with a
number of the Company's directors and executive officers and their associates
and members of their immediate families. Such transactions are all on terms
comparable to similar transactions with others who are not within such group.
Certain of the Company's executive officers and directors are executive
officers, directors or beneficial owners of 10 percent or more of any class of
equity securities of corporations, or members of partnerships, which are
customers of or suppliers to the Company and its subsidiaries. As such customers
or suppliers, their transactions were in the ordinary course of business, except
as noted herein. Such customer transactions include borrowings from the
Company's bank subsidiaries, all of which were made in the ordinary course of
business and on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
others and did not involve more than the normal risk of collectability or
present other unfavorable features at the time credit was extended.
During 2004, John C. Malone, a director of the Company, was also Chairman of
Liberty Media Corporation ("LMC") and Chairman, CEO and President of Liberty
Media International, Inc. ("LMI"). During 2004, the Company made loans to LMC
and certain of its affiliated entities at floating interest rates. The only
indebtedness to the Company outstanding at any time during 2004, net of loans
participated to the Bank, was pursuant to the total return swaps (discussed
below) and a $34.5 million loan made by the Company under a syndicated credit
facility to an affiliate of LMC, which was subsequently participated to the
Bank. The borrower of the $34.5 million subsequently ceased to be an affiliate
of LMC. In addition to indebtedness to the Company, the Bank made loans, which
were
26
outstanding in 2004, to LMC and certain of its affiliated companies and to
LMI and certain of its affiliated companies.
During 2004, loans which had been made prior to 2004 to two entities affiliated
with LMC continued to be classified by the Bank as potential problem loans.
Outstanding loans to these two entities totaled approximately $21 million at
their month end high point during 2004 and approximately $10.3 million at
year-end. In May, the Bank received $4 million in payment of a $10.2 million
loan to one entity as the borrower concluded insolvency proceedings and the Bank
wrote off approximately $6.2 million of the loan. At year-end, the outstanding
amount of the classified loan to the other entity was approximately $10.3
million, and the loan has been non-performing since June 2004. The Company
agreed to provide up to $1.5 million of debtor-in-possession financing to this
entity in 2005 to facilitate an orderly sale of the businesses of the entity.
The Bank may incur a loss on a portion of its current $10.3 million loan. A
third entity affiliated with LMC owed the Bank approximately $4 million in
settlement of a foreign exchange transaction due in October 2002. As part of a
restructuring in September 2004, the Bank recovered $3 million and wrote off $1
million.
The Company entered into total return swap transactions with LMC involving LMC's
publicly traded debt securities. In connection with the transactions, the
Company purchased publicly traded debt securities of LMC (the "Debt
Securities"). Pursuant to the terms of each total return swap, the Company paid
LMC interest based upon the face amount and stated interest rate of the Debt
Securities and LMC paid the Company interest at market rates on the fair market
value of the Debt Securities at the date the swap was entered into (the
"Purchase Price"). Upon maturity of each transaction, the Company was obligated
to pay LMC any appreciation, and LMC was obligated to pay the Company any
depreciation, in the value of the Debt Securities between the date of purchase
and the maturity date. LMC posted cash collateral equal to 10% of the fair value
of the Debt Securities. The transactions were terminated upon LMC's purchase of
the Debt Securities from the Company at the Purchase Price. The aggregate
notional principal amount of the total return swaps was $35 million. There were
no total return swaps between the Company and LMC outstanding on December 31,
2004.
The Board considered credit exposures to LMC and to LMI and their affiliates
when determining the independence of Mr. Malone. After a review of the status of
the exposures, including a review of the problem loans and the total return
swaps cited herein, the Board determined that the Company's relationships with
LMC and LMI and their affiliates were not material to Mr. Malone personally and
would not jeopardize Mr. Malone's judgments on behalf of the Company. The Board
also determined that the aggregate size of the problem loans and the swaps was
immaterial relative to the assets of LMC and that termination of the loans or
the swaps would not reasonably be expected to have a material and adverse effect
on the financial condition or results of operations of LMC.
During 2004, Brian L. Roberts, a director of the Company, was also Chairman and
CEO of Comcast Corporation ("Comcast"). During 2004, the Company made loans to
certain of Comcast's affiliated companies at floating interest rates. The only
indebtedness to the Company outstanding at any time during 2004, net of loans
participated to the Bank, was a $50 million loan made by the Company, in 2004,
under a syndicated credit facility to an affiliate of Comcast, which was
subsequently participated to the Bank. At year-end 2004, there were no loans
outstanding from the Company to Comcast or any of its affiliated entities.
Prior to 2004, the Bank made a loan under a syndicated credit facility to an
entity in which Comcast subsequently acquired an interest. Prior to Comcast's
acquisition of its interest in the borrower, approximately $33 million of the
loan had been classified as a potential problem loan. During 2004, the loan
continued to be classified as a potential problem loan and from January through
March 2004, the borrower was not in compliance with a leverage covenant
applicable to the facility. With the consent of the lenders, the borrower sold
assets and repaid a portion of the loan. The credit agreement was then modified
and the borrower is in compliance with its covenants. At year-end 2004,
outstandings had declined to approximately $19 million, and the loan was
performing as agreed but continued to be classified as a potential problem loan.
27
The Board considered credit exposures to Comcast and its affiliates when
determining the independence of Mr. Roberts. After a review of the status of the
exposures, including a review of the potential problem loan cited herein, the
Board determined that the Company's relationships with Comcast and its
affiliates were not material to Mr. Roberts personally and would not jeopardize
Mr. Roberts' judgments on behalf of the Company. The Board also determined that
the size of the potential problem loan was immaterial relative to Comcast's
assets and that termination of the loan would not reasonably be expected to have
a material and adverse effect on the financial condition or results of
operations of Comcast.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers ("Reporting Persons") to file with the
Securities and Exchange Commission and the NYSE, within specified due dates,
reports relating to their ownership of and transactions in the Company's equity
securities.
Based solely on a review of the copies of such reports furnished to the Company
and written representations that no other reports were required, the Company
believes that during 2004 its Reporting Persons have complied with all
applicable Section 16(a) filing requirements on a timely basis.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of December 31, 2004
concerning persons which to the knowledge of the Company had beneficial
ownership of more than 5% of the voting securities indicated.
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
-------------------------- --------------------------- -------------------------- --------------------------
Common Stock Capital Research
and Management Company (1) 54,150,000 7.0%
333 South Hope Street
Los Angeles, CA 90071
--------------
(1) Capital Research and Management Company, an investment adviser and a
wholly owned subsidiary of The Capital Group Companies, Inc. had sole
dispositive power with respect to all of the reported shares as a result
of acting as investment adviser to various investment companies which
are subsidiaries of The Capital Group Companies, Inc.
ITEM 2. PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has appointed Ernst & Young LLP to
serve as the Company's independent public accountants for the year 2005 and the
Board of Directors recommends that shareholders ratify such appointment at the
Annual Meeting.
Representatives of Ernst & Young LLP are expected to attend the Annual Meeting,
to have an opportunity to make a statement, if they desire to do so, and to be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU MARK YOUR PROXY FOR THE
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
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ITEM 3. SHAREHOLDER PROPOSAL
SHAREHOLDER PROPOSAL WITH RESPECT TO CUMULATIVE VOTING
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, N.W.
Suite 215, Washington, DC 20037, who is the owner of 1,002 shares of the Common
Stock of the Company, has advised the Company that she intends to present the
following proposal at the Annual Meeting:
RESOLVED: "That the stockholders of Bank of New York, assembled in Annual
Meeting in person and by proxy, hereby request the Board of Directors to take
the necessary steps to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes as
shall equal the number of shares he or she owns multiplied by the number of
directors to be elected, and he or she may cast all of such votes for a single
candidate, or any two or more of them as he or she may see fit."
PROPONENT'S STATEMENT IN SUPPORT OF RESOLUTION:
REASONS: "Many states have mandatory cumulative voting, so do National Banks."
"In addition, many corporations have adopted cumulative voting. A director
elected through cumulative voting could be more inclined to vote for issues
favored by outside independent shareowners. According to the 2004 proxy
statement loans made to entities affiliated with two directors were classified
as potential problem loans (see pages 24-25 of the 2004 proxy statement).
Directors elected through cumulative voting might ask questions about whether
loans were made to some politicians, the auditing of some New York City and
STATE pension funds, and other timely topics, such as having the annual meeting
date and time where more outside independent shareholders could attend."
"If you AGREE, please mark your proxy FOR this resolution."
MANAGEMENT RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Board believes that the current voting procedure, where each share is
entitled to one vote for each nominee for director is inherently fair and
representative of the interests of all of the Company's shareholders. Cumulative
voting, as suggested by the proponent, would make it possible for shareholders
representing a minority of all shares to elect a director to represent their own
particular interests. This could result in a Board of Directors on which each
director advocates the particular position of the group which elected him or
her, rather than the positions that are in the best interests of your Company
and all shareholders. Effective corporate governance requires a board whose
members can all work together effectively without political or personal
conflicts. Board candidates who are primarily anchored to single-issue causes
are not likely to be legitimate representatives of the entire ownership. The
current one-share one-vote system should be retained.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU MARK YOUR
PROXY AGAINST ADOPTION OF THIS SHAREHOLDER PROPOSAL.
29
ITEM 4. SHAREHOLDER PROPOSAL
SHAREHOLDER PROPOSAL WITH RESPECT TO EXECUTIVE COMPENSATION
Mr. William Steiner, 112 Abbottsford Gate, Piermont, New York 10968, who is the
owner of 1,400 shares of the Common Stock of the Company, has advised the
Company that he intends to present the following proposal at the Annual Meeting.
RESOLVED, Shareholders recommend that our Corporation's by-laws be amended by
adding the following new Section:
"Section A.1. Executive Compensation. From the date of adoption of this section
no officer of the Corporation shall receive annual compensation in excess of the
limits established by the U.S. Internal Revenue Code for deductibility of
employee remuneration, without approval by a vote of the majority of the
stockholders within one year preceding the payment of such compensation. The
only exception would be interference with un-removable contractual obligations
prior to this proposal.
For purposes of the limit on executive compensation established by this Section,
the Corporation may exclude compensation that qualifies either as
"performance-based compensation" or as an "incentive stock option" within the
meaning of the Internal Revenue Code only if:
(a) in the case of performance-based compensation, the Corporation
shall first have disclosed to stockholders the specific performance goals and
standards adopted for any performance-based compensation plan, including any
schedule of earned values under any long-term or annual incentive plan; and
(b) in the case of incentive stock options, the Corporation shall
record as an expense on its financial statements the fair value of any stock
options granted."
PROPONENT'S STATEMENT IN SUPPORT OF RESOLUTION:
This proposal was submitted by William Steiner, 112 Abbottsford Gate, Piermont,
NY 10968.
This proposal would require that our company not pay any executive compensation
in excess of the amount the Internal Revenue Code permits to be deducted as an
expense for federal income tax purposes, without first securing shareholder
approval.
Currently, the Code provides that publicly held corporations generally may not
deduct more than $1 million in annual compensation for any of the company's five
highest-paid executives. The Code provides an exception for certain kinds of
"performance-based compensation."
Under this proposal our company would be able to pay "performance-based
compensation" in excess of the deductibility limit, so long as the company has
disclosed to shareholders the performance goals and standards the Board has
adopted under these plans. This proposal also provides an exception for
incentive stock options, if the Board has recorded the expense of such options
in its financial statements.
A proposal similar to this was submitted by Amanda Kabn-Kirty to MONY Group and
received a 38% yes-vote as a more challenging binding proposal at the MONY 2003
annual meeting. The 38% yes-vote was more impressive because:
1) This was the first time this proposal was ever voted.
2) The proponent did not even solicit shareholders votes.
I think it is reasonable to require our company to fully disclose to
shareholders both the costs and the terms of its executive compensation plans,
if the Board wishes to pay executives more than the amounts that are generally
deductible under federal income taxes.
30
MANAGEMENT RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Board believes that this proposal could hinder the Company's ability to
attract and retain highly qualified senior executives. While the compensation
philosophy of the Company, as set forth in the Compensation Committee Report
which appears in this Proxy Statement, is to tie compensation to performance,
your Company needs flexibility to tailor competitive employment packages to
individual circumstances. The compensation paid by the Company is consistent
with industry practice and has been reviewed by a committee of independent
directors in the case of senior executive officers.
The fundamental difference between the Board and the Compensation Committee's
current executive compensation program and the shareholder proposal is the lack
of flexibility in the proposal. The Board and the Compensation Committee believe
that it is important to preserve the flexibility of the Company's compensation
program so that the Company can choose incentives that best balance the variety
of goals that your Company seeks to pursue through its compensation
arrangements. Limiting the Compensation Committee's ability to design
competitive compensation programs would place your Company at a significant
competitive disadvantage in the recruitment and retention of senior executives.
The Board believes that its current executive compensation program meets the
concerns of shareholders that executive compensation be tied to the Company's
performance and provide long-term incentives to executives, while providing the
Board and the Compensation Committee with the flexibility necessary to recruit
and retain senior executives in a competitive environment.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU MARK YOUR
PROXY AGAINST ADOPTION OF THIS SHAREHOLDER PROPOSAL.
SHAREHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING
In accordance with the rules of the Securities and Exchange Commission (the
"SEC"), shareholders who intend to present proposals at the 2006 Annual Meeting
of Shareholders must submit such proposals in time for them to be received by
the Company on or before December 13, 2005, for inclusion in the Company's Proxy
Statement and form of proxy relating to that meeting. A shareholder proposal
submitted outside the process of SEC Rule 14a-8 is considered untimely if it is
not received by January 12, 2006.
Raymond J. Dorado
March 14, 2005 Assistant Secretary
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EXHIBIT A
GUIDELINES FOR DETERMINING DIRECTOR INDEPENDENCE
A substantial majority of the Board of Directors will be independent, as that
term is defined in any applicable laws and regulations including the listing
standards of the New York Stock Exchange. The Company recognizes that
Independent Directors and Directors who are deemed not independent all make
valuable contributions to the Board and to the Company by reason of their
experience and judgment.
A Director will be considered independent only if the Board has affirmatively
determined that the Director has no material relationship with the Company that
would impair his or her independent judgment. The Board will review factors
affecting independence at the time a Director is proposed for election or
re-election. In the process of making such determinations, the Board will
consider the nature, extent and materiality of the Director's relationships with
the Company and the Board will apply the following guidelines:
o A Director will be deemed not to be independent by the Board of
Directors if the Board finds that
(a) a Director is employed by the Company or a Director's
immediate family member is employed by the Company as an
executive officer, other than as an interim executive officer;
(b) a Director or a Director's immediate family member receives
more than $100,000 per year in compensation from the Company,
other than Director's fees, pension or other forms of deferred
compensation that is for prior service and not contingent upon
continued service, compensation for former service as an
interim Chairman or CEO, or compensation received by an
immediate family member for service as an employee below the
level of executive officer;
(c) a Director or an immediate family member of the Director is a
current partner of a firm that is the Company's external
auditor; a Director is a current employee of a firm that is
the Company's external auditor; a Director has an immediate
family member who is a current employee of a firm that is the
Company's external auditor and who participates in the firm's
audit, assurance or tax compliance (but not tax planning)
practice; or a Director or an immediate family member of the
Director was within the past three years (but no longer is) a
partner or employee of a firm that is the Company's external
auditor and personally worked on the Company's audit within
that time;
(d) a Director or a Director's immediate family member is employed
as an executive officer by another entity whose compensation
committee includes any present executive of the Company;
(e) a Director is currently employed, or a Director's immediate
family member is currently employed as an executive officer,
by an entity (including a tax exempt entity) that makes
payments to, or receives payments from, the Company for goods
or services (other than charitable contributions) in an amount
that exceeds, in a single fiscal year, the greater of $1
million or two percent of that entity's consolidated gross
revenues; or
(f) any of the situations described in (a), (b), (c), (d) or (e)
above existed within the past three years; provided, however,
that (i) prior to November 4, 2004, a one-year look back
period will apply, (ii) with respect to (c) above, if a
Director was independent upon application of the one year test
but not deemed independent when the three year test was
applied, then the Company has until after its first annual
meeting after June 30, 2005 to take action in light of the
Director's change in status, (iii) in applying the look back
in (d) above, the Director would not be deemed to be
independent only if he/she or an immediate family member of
the Director were an executive officer of the other entity at
the same time that a present executive officer of the Company
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served on the other entity's compensation committee, and (iv)
consideration of the financial test in (e) above will only be
required if a Director or a Director's immediate family member
is currently employed by an entity which is making payments to
or receiving payments from the Company.
Additionally, the Company will disclose in its Annual Proxy
Statement any charitable contributions to any charitable
organization in which a Director serves as an executive officer, if
within the preceding three years, contributions, excluding matching
gifts, in a single fiscal year exceeded the greater of $1 million
or two percent of the charitable organization's consolidated gross
revenues, and, in such case, the Board will consider the
materiality of such contributions.
For purposes of this document "family member" includes a director's
spouse, parents, children, siblings, mothers-in-law,
fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law,
sisters-in-law and anyone (other than domestic employees) who
shares the director's home.
o A Director will be deemed not to be independent by the Board
of Directors if the Board finds that a Director has material
business arrangements with the Company which would jeopardize
the Director's judgment. The Board will review for materiality
all business arrangements between the Company and the Director
and all business arrangements between the Company and an
entity for which the Director serves as an officer or general
partner or owns more than five percent. Arrangements are not
material and not likely to jeopardize the Director's judgment,
and thereby his/her independence, if
(a) the arrangements are usually and customarily offered
to customers by the Company;
(b) the arrangements are offered on substantially similar
terms as those prevailing at the time for comparable
transactions with other customers under similar
circumstances;
(c) in the event that (i) a proposed arrangement were not
made or (ii) an existing arrangement were terminated
in the normal course of business, that action would
not reasonably be expected to have a material and
adverse effect on the financial condition, results of
operations, or business of the recipient;
(d) in the case of extensions of credit, the credit
extended is not more than five percent of the assets
of the borrower or in the case of credit extensions
to a family of entities, the aggregate credit
extended is not more than five percent of the total
assets of the combined entities;
(e) in the case of extensions of credit, the credits are
not in payment default; and
(f) in the case of personal loans, all such loans to
Directors are subject to and compliant with
Regulation O of the Federal Reserve Bank.
In applying the factors listed in (a) through (f) above, the Board will consider
such other factors as it may deem necessary to arrive at sound determinations as
to the independence of each Director, and such factors may override the
conclusions of independence or non-independence that would be reached simply by
applying the guidelines. In such cases, the basis for independence
determinations will be disclosed in the Company's Annual Proxy Statement.
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EXHIBIT B
AUDIT AND EXAMINING COMMITTEE CHARTER
I. GENERAL
This Charter sets forth the authority and responsibilities of the Audit and
Examining Committee (the "Committee") of the Board of Directors (the "Board") of
The Bank of New York Company, Inc. (the "Company") and The Bank of New York (the
"Bank").
The Committee assists the Board in fulfilling its statutory and fiduciary
responsibilities with respect to internal controls, accounting policies, and
auditing and financial reporting practices. The Committee assists the Board in
its oversight of (i) the integrity of the Company's financial statements and the
financial reporting process, (ii) compliance with legal and regulatory
requirements, (iii) the independent public accountant's qualification and
independence, and (iv) the performance of the independent public accountants and
the Company's internal audit function.
The Committee will report its activities to the Board on a regular basis and
make such recommendations, as the Committee deems necessary or appropriate.
The Committee is entitled to place reasonable reliance on (i) the integrity of
those persons and organizations within and outside the Company from whom and
from which it receives information and (ii) the accuracy of the financial and
other information provided to the Committee by such persons or organizations,
absent actual knowledge to the contrary which will be promptly reported to the
Board of Directors.
The function of the Committee is oversight. The management of the Company is
responsible for the preparation, presentation and integrity of the Company's
consolidated financial statements. Management is responsible for maintaining
appropriate accounting and financial reporting principles and policies as well
as internal controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. The independent public
accountants are responsible for planning and performing proper audits, including
an audit of the Company's annual consolidated financial statements filed on Form
10-K, and other procedures, including reviews of the Company's unaudited interim
consolidated financial statements prior to the filing of each quarterly report
on Form 10-Q. The Committee is responsible for maintaining open communication
between the Committee and the independent public accountants, internal auditors,
management, and the Board of Directors.
The Committee will have full access to the Company's books, records, facilities,
and personnel. The Committee has the authority and available funding to perform
or supervise special investigations, to engage outside experts, including legal
and accounting experts, and to incur administrative expenses in connection with
fulfilling its obligations. The Committee will have the sole authority to
approve fees and related terms of engagements for outside experts.
The Committee will conduct an annual self-evaluation of its effectiveness.
This charter will be published on the Company's Website and in the Annual Proxy
Statement, and will be available in written form upon request.
The Committee will review and assess the adequacy of this written charter
annually and recommend changes to the Board of Directors when necessary.
II. MEMBERSHIP
The Committee members will be appointed by the Board of Directors, and the
Chairman of the Committee will be designated by the Board. The Committee will
consist of three or more members who are all Independent Directors meeting the
requirements of applicable laws, regulations and the listing standards of the
New York Stock Exchange as determined by the Board of Directors in its
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business judgment, and the selection of members will be based on the specific
needs of the Company and regulation.
With respect to Committee members, the basis for determining independence will
be the director independence guidelines specified in the Company's Corporate
Governance Guidelines plus additional requirements imposed upon audit committees
by the Securities and Exchange Commission: (i) the Committee members will not
receive, directly or indirectly through their affiliations or relatives, any
consulting, advisory or other compensatory fee from the Company or its
subsidiaries other than Director's Fees as defined in the Company's Corporate
Governance Guidelines and fixed amounts of compensation under a retirement plan
for prior service, and (ii) the Committee members cannot be "affiliated persons"
of the Company as such term is described in the Securities and Exchange
Commission rules implementing Section 301 of the Sarbanes-Oxley Act of 2002.
The composition of the Committee and its independence will be reviewed annually
by the Board of Directors.
Should there be members who sit simultaneously on the Audit Committees of three
or more public companies, the Board will determine if their duties on other
boards impair their ability to serve effectively on the Audit and Examining
Committee of the Company, and such determinations will be disclosed in the
Annual Proxy Statement.
All members of the Committee will be "financially literate," and collectively
the members shall have such other qualifications as mandated by the Securities
and Exchange Commission. As required by New York Stock Exchange Listing
Standards or by law or regulation, at least one member will have "accounting or
related financial management expertise." To the extent that the Committee may
have an "audit committee financial expert," as defined in regulations of the
Securities and Exchange Commission, the designation of a person as the Company's
audit committee financial expert will not impose any duties, obligations or
liability on that person that are greater than those imposed on other members of
the Committee and the Board who do not carry this designation, nor will it
affect the duties, obligations or liability of any other member of the Committee
or the Board. The Board of Directors will perform an annual review to confirm
the qualifications and independence of the Committee. Committee members will
serve at the pleasure of the Board and may be removed by the Board of Directors
in its discretion.
III. MEETINGS
The Committee will meet as often as necessary to fulfill its duties and
responsibilities.
Minutes of all meetings will be approved by the Committee and maintained.
The Committee will meet separately at least quarterly with each of management,
the Chief Auditor, the General Counsel and the independent public accountants,
providing sufficient time to discuss any matters that the Committee or any of
these persons or firms believes should be discussed.
The Committee may request any officer or employee of the Company or outside
counsel to the Company or independent public accountants or any special counsel
or advisors to the Committee to attend a meeting of the Committee or to meet
with any members of, or consultants to, the Committee.
IV. DUTIES AND RESPONSIBILITIES
A. MATTERS TO BE REVIEWED AND DISCUSSED BY THE COMMITTEE
The Committee will review management's assessment of the adequacy of internal
controls, and the resolution of identified material weaknesses and reportable
conditions in internal controls, including the prevention and detection of
management override or compromise of internal controls.
The Committee will review the Report on Internal Controls that is filed within
the Company's Annual Report. That report will state the responsibilities of
management for establishing and maintaining an adequate internal control
structure and procedures for financial reporting and contain an assessment of
the effectiveness of such structure and procedures. The Committee will also
review the
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independent public accountants' examination of management's assertion regarding
the Company's internal control over financial reporting.
The Committee will discuss with management, the Chief Auditor and/or the
independent public accountants, as appropriate, significant proposed or
contemplated changes to the Company's auditing and accounting principles,
policies, controls, procedures and practices, and will inquire about significant
risks and exposures, if any, and the steps taken to monitor and minimize such
risks.
The Committee will review and discuss with management and the independent public
accountants the scope of services required at the commencement of the audit,
matters relating to the conduct of the audit, and the results of the audit.
The Committee, or in its discretion, the Chairman of the Committee, will discuss
with management, the Chief Auditor and/or the independent public accountants, as
appropriate, the Company's financial earnings press releases and financial
information and earnings guidance provided to analysts and rating agencies.
The Committee will review with management, the independent public accountants,
and the Chief Auditor the Company's annual consolidated financial statements and
the related opinion thereon, prior to filing with the Securities and Exchange
Commission. The Chief Executive Officer, Chief Financial Officer, and Chief
Auditor will be present at this review, which will include a review of (i) the
Company's disclosures under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" to be included in the Company's Annual
Report on Form 10-K, (ii) the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures, on the financial statements, (iii)
significant financial reporting issues and judgments made in connection with the
preparation of the financial statements, including any significant changes in
the Company's selection or application of accounting principles, any major
issues regarding the adequacy of the Company's internal controls, and any
special audit steps adopted in light of material control deficiencies, and (iv)
any other matters to be reviewed per the requirements of the Securities and
Exchange Commission, other regulatory agencies, or the New York Stock Exchange.
The Committee will review the independent public accountants' judgment about the
quality of accounting principles as applied in financial reporting, and will
review and assess the reasonableness of analyses prepared by management and the
independent public accountants setting forth significant financial reporting
issues and judgments made in connection with the preparation of financial
statements. Specifically, the independent public accountants will report to the
Committee (i) all critical accounting policies and practices used by the
Company, (ii) all material alternative accounting treatments of financial
information within generally accepted accounting principles that have been
discussed with management, including the ramifications of the use of such
alternative treatments and disclosures and the treatment preferred by the
independent public accountants, (iii) other material written communications
between the independent public accountants and management, and (iv) any
accounting or auditing issues at the Company on which the independent public
accountants consulted its national office.
The Committee will review the interim financial statements and disclosures under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" with management and the independent public accountants prior to the
filing of the Company's Quarterly Report on Form 10-Q. The Chief Executive
Officer, Chief Financial Officer, and Chief Auditor must be present at this
review. Also, the Committee will discuss the results of the quarterly review and
any other matters required to be communicated to the Committee by the
independent public accountants under generally accepted auditing standards,
including Statement on Auditing Standards No. 61. The Chairman of the Committee
may represent the entire Committee for the purposes of this review.
In conjunction with the reviews of the Company's Forms 10-K and 10-Q, the
Committee will also receive a report from the Disclosure Committee and review
the process for the Chief Executive Officer and Chief Financial Officer
quarterly certifications of the SEC filings, as well as the Company's disclosure
controls and procedures, including any changes or deficiencies. The Committee
will receive and consider reports from the CEO and CFO made in connection with
their certification of the Company's Form 10-K and 10-Q about (i) any
significant deficiencies in the design or operation of
B-3
internal controls or material weaknesses therein and (ii) any fraud involving
management or other employees who have a significant role in the Company's
internal controls.
The Committee will obtain from the independent public accountants assurance that
the audit was conducted in a manner consistent with Section 10A of the
Securities Exchange Act of 1934.
The Committee will prepare and review with the independent public accountants
the report relating to its oversight role, as required by the Securities and
Exchange Commission, for inclusion in the Company's Annual Proxy Statement.
The Committee will review with management and the independent public accountants
the content and the basis for reports relating to internal control over
financial reporting as required under the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA).
At least annually, the Committee will obtain and review a report by the
independent public accountants describing: the independent public accountants'
internal quality-control procedures; any material issues raised by the most
recent internal quality-control review, or peer review of the firm, or by any
inquiry or investigation by governmental or professional authorities, within the
preceding five years, respecting one or more independent audits carried out by
the firm, and any steps taken to deal with any such issues; and (to assess the
auditor's independence) all relationships between the independent public
accountants and the Company.
The Committee will review with management, the General Counsel, the Chief
Compliance Officer, and the Chief Auditor the Company's compliance with laws and
regulations, including the laws and regulations relating to safety and soundness
designated by responsible banking agencies and will also review management's
assertions with respect to laws and regulations.
The Committee will receive from management and review the results of all
unsatisfactory regulatory examination reports, if there be any, and management's
responses thereto.
The Committee will review and discuss policies with respect to risk management
and risk assessment. The Committee may discharge this duty by receiving and
discussing at least annually a report from the Risk Committee of the Board of
Directors summarizing their reviews of the Company's methods for identifying and
managing risks.
The Committee will review and discuss any reports received from attorneys with
respect to securities law violations and/or breaches of fiduciary duties which
were reported to the General Counsel or the Chief Executive Officer and not
resolved to the satisfaction of the reporting attorney.
The Committee will establish and maintain procedures for the receipt, treatment
and retention of complaints related to accounting, internal accounting controls,
auditing matters, and other situations which affect or could potentially affect
the accuracy of the books and records of the Company. The Chairman of the Audit
and Examining Committee will review such complaints, if material, and take
appropriate action.
The Committee will receive from the Chief Compliance Officer each year a report
on compliance with the Code of Conduct.
B. THE COMMITTEE'S RELATIONSHIP WITH THE INDEPENDENT PUBLIC ACCOUNTANTS
The Committee has direct responsibility to select and appoint the independent
public accountants. Annually, the Committee will recommend that the Board
request shareholder ratification of the appointment of the independent public
accountants. The independent public accountants are to report to the Committee.
The Committee also has the responsibility to evaluate and, when appropriate, to
remove the independent public accountants. The Committee is responsible for
setting the compensation of the independent public accountants, and the
Committee shall periodically review the fees charged by the independent public
accountants for all audit services and permitted audit-related, tax and other
services.
The Committee is responsible for oversight of the independent public
accountants' work as it pertains to the audit of the Company's financial
statements and related disclosures, and other audit or attest
B-4
services. The Committee will discuss with the independent public accountants the
overall scope and plans for their audit, including the adequacy of staffing. The
independent public accountants will also report to the Committee on the results
of the audit, and the Committee will discuss any management or internal control
letter issued or proposed to be issued by the independent public accountants.
The Committee will perform an annual evaluation of the independent public
accountant's qualifications, performance, and independence, as well as evaluate
the performance of the lead engagement partner.
Annually, the Committee will receive from the independent public accountants
written disclosures about their independence and discuss with them any factors
that might detract from their independence. Public accountants will not be
independent if, at any point during the audit and professional engagement
period, any audit partner earns or receives compensation based on that partner's
procuring engagements with the Company to provide any services other than audit,
review, or attest services. The lead and concurring partner must rotate after
five years and be subject to a five-year "time-out" period after rotation. Audit
partners, other than the lead and concurring partner, will be subject to
rotation and time-out periods as prescribed by regulation.
The Committee is responsible for the pre-approval of all audit and permitted
non-audit services performed by the independent public accountants, and the
Committee will not engage the independent public accountants to perform the
specific non-audit services proscribed by law or regulation. The Committee may
delegate authority for the pre-approval of all audit and non-audit services to a
member of the Committee. All such approvals will be reported at the next
subsequent Committee meeting. As an alternative to pre-approving each non-audit
service, the Committee may establish and disclose policies and procedures for
pre-approval, provided they are consistent with requirements of applicable laws
and regulations.
The Committee will require the independent public accountants to certify
annually that they are in compliance with all applicable legal and regulatory
requirements including those addressing rotation of lead and concurring
partners, provisions of prohibited services, document retention, and the
submission of timely reports.
The Committee will prohibit management from hiring as a manager overseeing
financial reporting matters of the Company, any person who was employed by the
independent public accountants and was the lead partner, concurring partner, or
any other member of the audit engagement team who provided more than ten hours
of audit, review or attest services for the Company within the one-year period
preceding the commencement of the audit of the current year's financial
statements.
The Committee will review with the independent public accountants any material
audit problems or difficulties and management's response and will consider
disagreements between management and the independent public accountants, if any
arise, and oversee any process for resolution.
C. DUTIES WITH RESPECT TO INTERNAL AUDIT
The Committee will receive annually from the Chief Auditor the internal audit
plan, including the purpose, scope, and authority of the internal audit
function, organizational reporting lines, and budget and staffing. This plan is
subject to Committee approval. Periodically, the Committee will review the Chief
Auditor's reports describing progress against this plan and describing
significant deficiencies in the system of internal controls, significant
operating issues, or other matters of interest to the Committee.
The Committee will review recommendations of management with respect to the
appointment, compensation, and replacement of the Chief Auditor prior to
management's taking actions to hire, set compensation or replace the Chief
Auditor. The Chief Auditor is accountable to the Committee. The Committee will
advise the Chief Auditor that he or she is expected to provide the Committee
with summaries of significant reports to management prepared by the Internal
Auditing Division and management's responses thereto, and in some cases, the
Committee may require the actual reports. In addition, the Chief Auditor will
report to the Committee on the follow-up of significant issues raised in reports
and the resolution thereof.
B-5
---------------- ----------------------------------------------------
THE
BANK OF
NEW A REMINDER ABOUT OUR ANNUAL REPORT
YORK
COMPANY, INC.
---------------- ----------------------------------------------------
You are receiving this proxy card to vote the shares of The Bank of New York
Company, Inc. stock that you own through your Company benefit plan(s). The Bank
of New York Company, Inc. Annual Report will not be distributed to active
employees who own Company stock through any of the Company's benefit plans.
Employees who separately own Company stock outside of the benefit plans,
registered in their name(s) or in street name, will continue to receive a copy
of the Annual Report.
We encourage you to review the 2004 Annual Report, which is now available
electronically on our website at www.bankofny.com/annualreport.
You may also request a paper copy of the 2004 Annual Report by sending an e-mail
to pr@bankofny.com or by sending a written request, along with a self-addressed
interoffice envelope to:
Kathleen F. Juliano, Public Relations, BN-OWS-31
|_| o DETACH PROXY CARD HERE o
--------------------------------------------------------------------------------
SIGN, DATE AND RETURN THIS VOTES MUST BE
PROXY CARD PROMPTLY USING INDICATED (X) IN [X]
THE ENCLOSED ENVELOPE. BLACK OR BLUE INK.
--------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2:
--------------------------------------------------------------------------------
1.ELECTION OF DIRECTORS:
FOR WITHHOLD
ALL |_| FOR ALL |_| EXCEPTIONS* |_|
Nominees: Messrs. 01 - Biondi, 02 - Donofrio, 03 - Hassell, 04 - Kogan,
05 - Kowalski, 06 - Luke, 07 - Malone, 08 - Myners, 09 - Ms. Rein, Messrs.
10 - Renyi, 11 - Richardson, 12 - Roberts and 13 - Scott
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS*" BOX AND WRITE THAT NOMINEE'S NAME ON THE FOLLOWING BLANK
LINE.)
Exceptions* _______________________________________________________________
FOR AGAINST ABSTAIN
2. Ratification of Auditors. |_| |_| |_|
--------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE AGAINST PROPOSALS 3 AND 4:
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
3. Shareholder Proposal with respect to
cumulative voting. |_| |_| |_|
4. Shareholder Proposal with respect to
executive compensation. |_| |_| |_|
I agree to access future Proxy Statements and Annual Reports
electronically. |_|
Indicate Address Change and/or Comments
on the back of the card and Mark Here |_|
_
| -----------------------------
SCAN LINE
_| -----------------------------
Please sign exactly as the name
appears hereon. ------------------------------------------
Date Employee Signature
YOUR VOTE IS IMPORTANT
PLEASE VOTE TODAY
--------------------------------------------------------------------------------
THE EMPLOYEE SAVINGS & INVESTMENT PLAN
EMPLOYEES' STOCK OWNERSHIP PLAN
THE RETIREMENT SAVINGS PLAN OF BNY BROKERAGE INC. AND __
THE RETIREMENT SAVINGS PLAN OF PERSHING LLC |
THE BANK OF NEW YORK COMPANY, INC.
ONE WALL STREET, NEW YORK, NY 10286
PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This card provides voting instructions for shares held in in the Company
Stock Fund of: The Employee Savings & Investment Plan, The Employees' Stock
Ownership Plan, The Retirement Savings Plan of BNY Brokerage Inc., and The
Retirement Savings Plan of Pershing LLC. The undersigned hereby directs the
respective fiduciary of each plan in which the undersigned holds shares of The
Bank of New York Company, Inc. Common Stock to vote all whole shares of The Bank
of New York Company, Inc. Common Stock held in the undersigned's name and / or
account under such plan on February 22, 2005 in accordance with the instructions
given on the reverse hereof, at the Annual Meeting of Shareholders to be held on
April 12, 2005 or any adjournment thereof.
UNLESS OTHERWISE SPECIFIED, THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTORS, FOR PROPOSAL (2) AND
AGAINST PROPOSALS (3) AND(4). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF. PLEASE NOTE THAT IF THIS VOTING INSTRUCTION CARD IS NOT
PROPERLY COMPLETED AND SIGNED, OR IF IT IS NOT RECEIVED, SHARES ALLOCATED TO
YOUR ACCOUNT WILL BE VOTED INDIRECT PROPORTION AS SHARES IN THE APPLICABLE PLAN,
FOR WHICH DIRECTIONS HAVE BEEN RECEIVED.
Address Changes/Comments
THE BANK OF NEW YORK COMPANY, INC.
101 BARCLAY ST --------------------------------
A-LEVEL - PROXY DEPT. --------------------------------
--------------------------------
Please complete, sign and date this proxy on
the reverse side and return it promptly in the
accompanying envelope.
---------------- ----------------------------------------------------
THE
BANK OF
NEW A REMINDER ABOUT OUR ANNUAL REPORT
YORK
COMPANY, INC.
---------------- ----------------------------------------------------
You are receiving this proxy card to vote the shares of The Bank of New York
Company, Inc. stock that you own through your Company benefit plan(s). The Bank
of New York Company, Inc. Annual Report will not be distributed to active
employees who own Company stock through any of the Company's benefit plans.
Employees who separately own Company stock outside of the benefit plans,
registered in their name(s) or in street name, will continue to receive a copy
of the Annual Report.
We encourage you to review the 2004 Annual Report, which is now available
electronically on our website at www.bankofny.com/annualreport.
You may also request a paper copy of the 2004 Annual Report by sending an e-mail
to pr@bankofny.com or by sending a written request, along with a self-addressed
interoffice envelope to:
Kathleen F. Juliano, Public Relations, BN-OWS-31
|_| o DETACH PROXY CARD HERE o
--------------------------------------------------------------------------------
SIGN, DATE AND RETURN THIS VOTES MUST BE
PROXY CARD PROMPTLY USING INDICATED (X) IN [X]
THE ENCLOSED ENVELOPE. BLACK OR BLUE INK.
--------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2:
--------------------------------------------------------------------------------
1.ELECTION OF DIRECTORS:
FOR WITHHOLD
ALL |_| FOR ALL |_| EXCEPTIONS* |_|
Nominees: Messrs. 01 - Biondi, 02 - Donofrio, 03 - Hassell, 04 - Kogan,
05 - Kowalski, 06 - Luke, 07 - Malone, 08 - Myners, 09 - Ms. Rein, Messrs.
10 - Renyi, 11 - Richardson, 12 - Roberts and 13 - Scott
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS*" BOX AND WRITE THAT NOMINEE'S NAME ON THE FOLLOWING BLANK
LINE.)
Exceptions* _______________________________________________________________
FOR AGAINST ABSTAIN
2. Ratification of Auditors. |_| |_| |_|
--------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE AGAINST PROPOSALS 3 AND 4:
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
3. Shareholder Proposal with respect to
cumulative voting. |_| |_| |_|
4. Shareholder Proposal with respect to
executive compensation. |_| |_| |_|
I agree to access future Proxy Statements and Annual Reports
electronically. |_|
Indicate Address Change and/or Comments
on the back of the card and Mark Here |_|
_
| -----------------------------
SCAN LINE
_| -----------------------------
Please sign exactly as the name
appears hereon. ------------------------------------------
Date Employee Signature
YOUR VOTE IS IMPORTANT
PLEASE VOTE TODAY
--------------------------------------------------------------------------------
EMPLOYEES' STOCK PURCHASE PLAN
THE BANK OF NEW YORK COMPANY, INC. __
ONE WALL STREET, NEW YORK, NY 10286 |
PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas J. Mastro, Kevin C. Piccoli and
Bruce W. Van Saun as proxies each with the power to appoint his substitute and
hereby authorizes each of them to represent and to vote, as designated on the
reverse hereof, all the shares of Common Stock of The Bank of New York Company,
Inc. held of record by the undersigned on February 22, 2005 at the Annual
Meeting of Shareholders to be held on April 12, 2005 or any adjournment thereof.
UNLESS OTHERWISE SPECIFIED, THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTORS, FOR PROPOSAL (2) AND
AGAINST PROPOSALS (3) AND (4). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
THE BANK OF NEW YORK COMPANY, INC.
101 BARCLAY ST
A-LEVEL - PROXY DEPT.
Please complete, sign and date this proxy on the reverse side and return it
promptly in the accompanying envelope.
---------------- ----------------------------------------------------
THE THREE ALTERNATE WAYS TO VOTE YOUR SHARES
BANK OF VOTE BY TELEPHONE, INTERNET OR MAIL
NEW
YORK 24 HOURS A DAY - 7 DAYS A WEEK
COMPANY, INC. SAVE YOUR COMPANY MONEY - IT'S FAST AND CONVENIENT
---------------- ----------------------------------------------------
INTERNET TELEPHONE MAIL
https://www.proxyvotenow.com/bny 1-866-814-2812 o Mark, sign and date your proxy
card.
o Go to the website address listed o Use any touch-tone telephone. o Detach your proxy card.
above. OR o HAVE YOUR PROXY CARD READY. OR o Return your proxy card in the
o HAVE YOUR PROXY CARD READY. o Follow the simple recorded postage-paid envelope provided.
o Follow the simple instructions instructions.
that appear on your computer
screen.
Your telephone or internet vote
authorizes the named proxies to
vote your shares in the same manner
as if you marked, signed and
returned the proxy card. IF YOU
SUBMIT YOUR PROXY BY TELEPHONE OR
THE INTERNET THERE IS NO NEED FOR
YOU TO MAIL BACK YOUR PROXY CARD.
1-866-814-2812
CALL TOLL-FREE TO VOTE
-----------------------------------
-----------------------------------
|_| o DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET o
--------------------------------------------------------------------------------
SIGN, DATE AND RETURN THIS VOTES MUST BE
PROXY CARD PROMPTLY USING INDICATED (X) IN [X]
THE ENCLOSED ENVELOPE. BLACK OR BLUE INK.
--------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2:
--------------------------------------------------------------------------------
1.ELECTION OF DIRECTORS:
FOR WITHHOLD
ALL |_| FOR ALL |_| EXCEPTIONS* |_|
Nominees: Messrs. 01 - Biondi, 02 - Donofrio, 03 - Hassell, 04 - Kogan,
05 - Kowalski, 06 - Luke, 07 - Malone, 08 - Myners, 09 - Ms. Rein, Messrs.
10 - Renyi, 11 - Richardson, 12 - Roberts and 13 - Scott
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS*" BOX AND WRITE THAT NOMINEE'S NAME ON THE FOLLOWING BLANK
LINE.)
Exceptions* _______________________________________________________________
FOR AGAINST ABSTAIN
2. Ratification of Auditors. |_| |_| |_|
--------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE AGAINST PROPOSALS 3 AND 4:
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
3. Shareholder Proposal with respect to
cumulative voting. |_| |_| |_|
4. Shareholder Proposal with respect to
executive compensation. |_| |_| |_|
I agree to access future Proxy Statements and Annual Reports
electronically. |_|
Indicate Address Change and/or Comments
on the back of the card and Mark Here |_|
_
| -----------------------------
SCAN LINE
_| -----------------------------
Please sign exactly as
the name appears hereon. If
stock is held in names of
joint owners, both should
sign. ---------------------------- -------------------
Date Share Owner sign here Co-Owner sign here
YOUR VOTE IS IMPORTANT
PLEASE VOTE TODAY
--------------------------------------------------------------------------------
THE BANK OF NEW YORK COMPANY, INC.
ONE WALL STREET, NEW YORK, NY 10286 __
|
PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas J. Mastro, Kevin C. Piccoli and
Bruce W. Van Saun as proxies each with the power to appoint his substitute and
hereby authorizes each of them to represent and to vote, as designated on the
reverse hereof, all the shares of Common Stock of The Bank of New York Company,
Inc. held of record by the undersigned on February 22, 2005 at the Annual
Meeting of Shareholders to be held on April 12, 2005 or any adjournment thereof.
UNLESS OTHERWISE SPECIFIED, THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTORS, FOR PROPOSAL (2) AND
AGAINST PROPOSALS (3) AND (4). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
THE BANK OF NEW YORK COMPANY, INC.
P.O. BOX 11198
NEW YORK, N.Y. 10203-0198
Address Changes/Comments
--------------------------------
--------------------------------
--------------------------------
Please complete, sign and date this proxy on the reverse side and return it
promptly in the accompanying envelope.
THE
BANK OF
============ NEW ============================================================
YORK
COMPANY, INC.
TO PARTICIPANTS IN THE EMPLOYEES' STOCK PURCHASE PLAN, EMPLOYEE SAVINGS &
INVESTMENT PLAN, EMPLOYEES' STOCK OWNERSHIP PLAN, THE RETIREMENT SAVINGS PLAN OF
BNY BROKERAGE INC. AND THE RETIREMENT SAVINGS PLAN OF PERSHING LLC
ENCLOSED IS THE PROXY STATEMENT FOR THE 2005 ANNUAL MEETING OF SHAREHOLDERS OF
THE BANK OF NEW YORK COMPANY, INC.
ALSO ENCLOSED ARE ONE OR MORE PROXY CARDS ENABLING YOU TO VOTE THE FULL SHARES
HELD FOR YOUR ACCOUNT IN THE COMPANY STOCK FUND IN EACH PLAN IN WHICH YOU ARE A
PARTICIPANT (FRACTIONAL SHARE INTERESTS ARE NOT VOTED).
EMPLOYEES' STOCK PURCHASE PLAN
Please mark your vote, sign and date the enclosed proxy card to vote whole
shares held in your account in the Employees' Stock Purchase Plan.
EMPLOYEE SAVINGS & INVESTMENT PLAN, EMPLOYEES' STOCK OWNERSHIP PLAN, THE
RETIREMENT SAVINGS PLAN OF BNY BROKERAGE INC. AND THE RETIREMENT SAVINGS PLAN OF
PERSHING LLC.
Shares held in these accounts are voted by the trustee(s) of each plan. You
instruct the trustee(s) how to vote the whole shares in your account in these
plans by marking your vote, signing and returning the proxy card(s) in the
enclosed envelope. Please note that if this Voting Instruction Card is not
properly completed and signed, or if it is not received, shares allocated to
your account will be voted in direct proportion as shares in the applicable
plan, for which directions have been received.
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY CARD(S) TODAY!
RAYMOND J. DORADO
Assistant Secretary
TO EMPLOYEES WHO OWN THE BANK OF NEW YORK COMPANY, INC. COMMON STOCK
YOUR VOTE IS IMPORTANT
IF YOU HAVE NOT ALREADY VOTED, PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY.
Raymond J. Dorado
Assistant Secretary
NOTE: The company is sending this email to all employees. If you do not own
Company shares, please disregard this notice.
Thank you.